In our last week’s blog article, we have discussed a recent survey conducted by Mckinsey, which reveals that independent workers are generally happier than perms.
Many respondents – both people in traditional jobs and those who are currently not working – say they would prefer the chance of being their own bosses. If everyone had the opportunity to pursue their preferred working style, roughly 40-50% of the working age population in the US and Europe would be independent. This is a striking figure that will completely tip the traditional perspective of how we define a normal job. So with the assistance of the uprising digital platforms, what will our future working style look like?
Where does the 9 – 5 office hour come from?
First, let’s look back into the history and assess how we define traditional work arrangement as the times changes. The 9 – 5 work arrangement from any physical location only becomes the norm since the industrial revolution. Before that, most people are self-employed by working on the family farms or selling goods on the markets. So it shouldn’t be a big surprise that our so-called traditional working style is only a recent phenomenon. The industrial revolution requires workers to perform jobs in one place in a collaborative way.
With the uprising of the service industry, this physical requirement no longer holds. However, without the tools allowing employees to collaborate remotely or allowing employees to find external services easily, the in-house 9-5 model remains as the most effective one to many companies.
So how does the digital platform change the way we work?
First of all, digital platform could transform and enable a larger share of independent work. Digital platforms have added an important twist by creating large-scale, efficient marketplaces that lower transaction costs and enable independent earners to find customers, contracts and assignments. Digital technologies have made it possible for new players to enter ecosystems of independent work and provide better matching mechanisms, in some cases creating new demand and making new types of independent earning activities possible.
Secondly, digital platforms create more efficient market places that match individual workers with demand for their services. Technology makes it conceivable that the old model of a corporation with employees organised in an elaborate hierarchy of specialised functions could one day give way to leaner core organisations that rely on a loose network of external providers for many activities. Furthermore, in this era with high smartphone and internet penetration, digital technologies are uniquely poised to have a transformational impact at large, and potentially global, scare.
Decades ago, economist Ronald Coase stepped back and asked a fundamental question about why firms exist. The answer was that it is cheaper to perform many functions within a company rather than going to the market every time something need to be done. However, the internet is bringing those costs down dramatically. Search algorithms make it possible for companies to find the talent or service they need instantly, while rating systems and user reviews send rich information signals to establish trust between unknown parties. Digital technologies change traditional business models by considerably reducing costs associated with search, coordination and monitoring.
What does it all mean for us contractors?
More choices of work according to our preferences – whether you would like to move from project to project, work with multiple clients, work on different assignments with a variety of tasks, the opportunities are going to be just one click away. A university student or retiree can use Uber to subsidise their income, a freelancer can use Upwork to find his next assignment, a merchandiser can use EBay to sell her goods, a lawyer or developer can use iContract to find your next client or project. The digital platforms will create more opportunities and more choices for us contractors to truly choose the way we like to work. It’s your Life, Make it Work!