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I would like to understand the total addressable market of the skilled freelancers market. We would like to focus only on freelancers providing services that can delivered remotely or online. For example, graphic designers, programmers, video editors, digital marketing experts and excluding local service providers like electricians and plumbers and excluding self employed non-skilled workforce like Uber driver and AirBnB homeowners
Trends related to the Gig economy in the form of TAM for global freelancers, estimated market size of skilled freelancers, their geographical distribution and industry-wise distribution, and percentage of online skilled freelancers have been extensively researched and presented below.
Methodology
Despite a thorough research through various industry reports, research articles, and well-trusted media sites, the requested information related to the US could not be specifically found. However, the global market (both current market size and TAM) of the skilled freelancers, along with their industry-specific share have been successfully found. The research also includes the total addressable market (TAM) for all the freelancers including both skilled and non-skilled workers. However, no attempt was made to filter out the skilled workforce share from the TAM. A deep dive into the findings are presented below.
Total Addressable Market for Freelancers
According to 2016 financial report of Freelancer Limited, due to the global financial crisis, a trend of online crowdsourcing and freelancing industries emerged all across the globe. Instead of hiring full-time staff, employers now prefer to hire freelancers, which mostly includes workers who want to use the internet as a source of their employment. The total addressable market (TAM) of such freelancers was up to $5 trillion, including 5 billion people who were earning $10 or less per day through freelancing in 2016. However, the report doesn't specifically provide the contribution of skilled or unskilled freelancer in the TAM.
Market Size of skilled freelancers
According to a recent research from the McKinsey Global Institute on the economic potential associated with such online talent platforms like Upwork, Uber, among many others, it has been found that such freelancing platforms will have a global market size of about $1.3 trillion annually by 2025, engaging a small fraction of inactive youth and adults who use these platforms to work a few hours per week. The survey also estimates that about 850 million working-age people in the United States, the United Kingdom, Germany, Japan, Brazil, China, and India are either unemployed, inactive or working only part-time. And in the U.S. about three-quarters of people who are unemployed and able to work, would be likely to work as freelancers.
According to U.S. Bureau of Labor Statistics, there are about 53 million people working independently or freelancing. And, "according to the Freelance Union data, the global market for freelancers is in excess of $1.5 trillion."
As per the recent survey conducted by the VComply Editorial on the importance of data governance in a Gig economy, it has been found that 59% people provide "professional, creative or administrative services," and 33% of people provide "skilled manual or personal services," as freelancers and hence the figure 59% can be assumed to be the market share of skilled and professional individuals in the freelancing business.
Using the data points presented above the global market size of skilled and professional freelancers can be triangulated on the basis of the following calculations,
Total Market share of skilled and professional freelancers :
GEOGRAPHICAL DISTRIBUTION OF FREELANCERS
According to a recent report by ICORating, 50.7% of global freelancers belong to North America; 29.3% belong to Europe; 11.4% belong to Asia; 4% belong to South America; 3.3% belong to Australia; and 1.4% belong to Africa.
INDUSTRY-WISE DISTRIBUTION OF FREELANCERS
According to Hubstaff’s 2017 Freelancing Trends on freelancers belonging to 151 countries, 26.4% are developers; 15.8% are from design and multimedia; 14.3% are data admins; 12.1% are content writers; 9.4% are from database and IT; 7.5% from sales and marketing; 7.9% from other industries.
All these freelancers aggregates to 93.4%
The remaining 6.6% of freelancers belong to business consulting and support. The contribution of each can be estimated to 3.3% (assuming equal contribution of each as per the pie-chart).
ONLINE FREELANCERS
According to Oxford University's report on "the international division of digital gig work", 24% of online workers were from India; 16% from Bangladesh; and 12% from the United States.
Out of all the online the jobs 55% of software development jobs are occupied by the Indians and 22% of the jobs related to professional services are by U.K. freelancers. "The top occupational category in the United States is writing and translation," and in India it is software development and technology.
Conclusions
To wrap it up, total addressable market (both online and offline) for both skilled and unskilled freelancers, is $5 trillion. The estimated market size of skilled freelancers is approximately $885 billion. While 50.7% of freelancers belongs to North America, 26.4% of freelancers belongs to the development industry. Moreover, among the online skilled freelancers the US tops the list in online writing and translation jobs.