By Ben Ornstein, Jerry Fung, and Robby Carre — RBL1 Fellows and Members of the RBL1 Network

The On-Demand Workforce is a Defining Trend in the Future of Work

On-Demand Economy Market Size

The on-demand economy has grown significantly since the introduction of Web 2.0 (i.e. the shift to mobile). According to Brodmin, the global economy is worth $347B¹. The expected market value is $455B by 2023. Upwork² estimates that there will be 87 million Americans involved in the on-demand economy by 2027 (59 million today).

The pandemic changed the future of work in many aspects. Most importantly, it was proven that remote work is not only viable but more efficient in many cases. 59 million Americans freelanced in the past year (36% of the workforce). Dynamics have shifted as technology has become more widespread, online connectivity and shared workspaces have become prevalent and efficient. This is shown in the statistics: 18.5M Americans freelanced as a long-term career choice in 2014, this is up to 27.7M in 2021 (47.7% of freelancers).

Freelancers are making notable income as well. The average annual pay³ for a freelance worker in the US is $67,169 a year. This is the equivalent of $1,292/week or $5,597/month. Pay range percentiles include $40,500 (25th percentile) to $78,000 (75th percentile) with top earners in the 90th percentile making $114,500 annually.

The top sub-sectors in the on-demand economy include transportation-based services $117.8B (57.8%), asset-sharing services $68.1B (30.3%), handmade goods, household & misc services $16.7B (8.2%), professional services $7.7B (3.8%).

On-Demand Workforce Industry Trends

When taking a deeper look into the growth of the on-demand workforce and gig economy market size, there are several trends emerging that will shape the future of work.

Freelancers are becoming more skilled.

Freelancers are becoming increasingly more aware of the skill sets that are in demand within the gig economy, and they are self-developing in order to remain competitive. 51% of freelancers participated in skills training throughout 2020 compared to only 28% of non-freelancers⁴. In fact, the current freelancer market consists of a majority of skilled workers and is increasing YoY.

References

1. https://brodmin.com/case-studies/gig-economy-case-study/
2. https://www.upwork.com/documents/freelance-forward-2020
3. https://www.ziprecruiter.com/Salaries/Freelance-Salary
4. https://www.upwork.com/documents/freelance-forward-2020
5. https://www.upwork.com/documents/freelance-forward-2020
6. https://www.hbs.edu/managing-the-future-of-work/Documents/Building_The_On-Demand_Workforce.pdf
7. https://www.forbes.com/sites/forbestechcouncil/2020/03/04/how-the-on-demand-workforce-is-changing-the-world/?sh=2d0376181d23
8. https://www.idc.com/tracker/showproductinfo.jsp?containerId=IDC_P41393
9. https://www.businesswire.com/news/home/20210630005098/en/Organizations-Are-Forecast-to-Spend-Nearly-656-Billion-on-Future-of-Work-Technologies-in-2021-According-to-New-IDC-Spending-Guide
10. https://www.forbes.com/sites/ellevate/2020/02/11/culture-matters-how-great-startups-will-thrive-in-2020/?sh=3b3220367c76