Life in the Gig Economy

In the early 20th century, for a city dweller in India, definition of a nice life usually meant, “He got a government job, and lived happily ever after!” Such a person studied until a certain age, usually until graduation, and then looked for a job. A good job usually meant working for the government, or for a reputed public or private company. Once hired people would work with the same employer all their life and retire with savings in their Provident Fund, and possibly a life-long pension. 

In the late 20th century definition of a great job became, “She got a job with an MNC and lived happily ever after!” The notion of ‘first learn, then work’ got challenged and to succeed in your career you constantly needed retraining. This retraining was mostly provided by the employer in the form of seminars, conferences and executive courses. Few people also took sabbaticals. People now changed jobs a few times in their career.

The answer to ‘What is a job?’ is changing again. Earlier we thought of a job as a service a person is capable of providing for which there are takers who are willing to pay a salary. Definition of a job has now become ‘your ability to add value’ to an undertaking. Say some entrepreneurs plan to start an IT company that will service the banks and you have expert knowledge of banking. You can offer your knowledge to this group to help improve their product. Your expert knowledge, talent, skill, or experience is the value you bring to the table for which you get compensated. Today compensation can be in the form of salary, retainer, fee, bonus, profit-sharing or shares.

To succeed in today’s economy, from being a passive job seeker, you have to learn to ‘invent’ a job for yourself, nicely packaging and marketing the ‘value’ you can add, 'value' being your experience, knowledge, talent, or skill.

The good news is that if you have something of value to offer you can now plug yourself into a bigger pool of demand, even into the global economy, sitting right where you are. A multitude of platforms or online marketplaces has emerged where you can offer your knowledge, skill, or talent and get rewarded.

If you make exquisite handmade things you can now sell them globally on the online marketplace Etsy - https://www.etsy.com  If you are a good artist or designer you can now get work, even from abroad on https://www.fiverr.com If you are good at coding you can offer your talent to international clients on https://www.upwork.com If you enjoy making films and are good at it, you can get freelance work on http://90seconds.co.uk

These are just a few examples, there are several other platforms that consolidate the fragmented demand for a product or service, even an esoteric one. They bring together buyers and sellers, ease the transaction process and put checks in place. Negotiations and payments are made online and buyers and sellers can rate each other. Rating puts their reputation at stake and if the buyer’s reputation gets tarnished no seller will sell to that buyer and vice-versa.

The point here is that nature of work and its economics is changing. This freelance, on-demand economy is being called the 'gig' economy. The word 'gig' as used in this context has been borrowed from the music industry where artists are not employed full-time but live from one performance (gig) to another. This is also being called ‘uberisation of work’ thanks to the success of the company Uber that has allowed anyone with a car and a driving license to become a freelance driver.

Earlier self-employed individuals and micro-enterprises could only cater to the local demand because they didn't have funds to market their offering. They relied on word-of-mouth publicity and middlemen. There was information asymmetry because the seller (individuals and micro-enterprises) didn't know the true worth of their offering and the middleman could exploit this information asymmetry. Today sellers, however small, can plug into the market via the online aggregators and offer their skill or talent globally, for a negotiated price.

To succeed in the gig economy you have to become very good at what you do because when you tap into the global market you also face tough competition.  

The gig economy offers upsides like flexibility, autonomy, creative expression and a chance to acquire mastery in what you love doing. And, autonomy, mastery, and purpose are the three drivers of intrinsic motivation. The gig economy thus offers you a chance be an intrinsically motivated participant in the emerging global economic milieu and live an exuberant life. 

However, for a fair assessment, you should also be aware of the downsides of the gig economy –  you thrive only if you are really good at what you do, you face volatility in income, it becomes difficult to plan the future because of uncertainty in inflow of funds, bank loans may be difficult to come by as banks require documents like a salary proof, there no job security, no mandatory savings and no pension.

If the downsides have dampened your enthusiasm for the gig economy, do consider that before the industrial revolution, that is just around 200 years back, before the era of mass production, the main avenues of employment were microenterprises and self-employment (in fact, in India, unorganised sector still accounts for over 90% of employment). Job security is a fairly new concept and unavailable to most people in economies where the unorganised sector dominates employment. Instead of being afraid of the on-demand, freelance economy, focus on cultivating attributes that will enable you to thrive, viz deep knowledge, creativity, innovation, and mastery.

Most people ‘work to live’ and some ‘live to work’. We tell ourselves, “I will first work, make some money and then do the stuff I really enjoy doing.” The gig economy offers you an opportunity to ‘live and work’ – do what you enjoy doing and also make money doing so! 

Go ahead, measure your risk appetite and figure out if there is a life for you in the gig economy.