What’s the actual scale of Industry 4.0 and the Gig Economy? What’s the impact for brands?
It’s nearly impossible to accurately measure the gig economy, despite the many articles otherwise. The United States is one of the only countries where there’s infrastructure in place to measure the types of work fueling the economy; however, current paperwork doesn’t account for the new positions created within Industry 4.0.
Existing reports and studies typically focus on a small fraction of the population, often misrepresenting or overlooking many demographic segments within this group. Dr. Dmitri Koutsas, Assistant Professor at University of Chicago’s Harris School of Public Policy and his team are among the few economic experts taking on the task of analyzing the forms for insights in an attempt to close the information gap.
What they found:
- There’s an anticipated ~$500,000,000 in unaccounted/undefined income revenue due to discrepancies of reporting thresholds between 1099-C (MISC) and 1099-K tax forms
- Over the last 10 years, gig-based growth has been stable, except for a 1% increase of since 2016 (~2 million people – the equivalent of all of Walmart’s domestic workforce), mostly due to ride share
- 10-11% of the US workforce operates as freelance labor
- The freelance job is supplemental to their main, full-time job
- The median person is making $2,500 annually from gig-based jobs
- One of the biggest appeals of gig-based work is the freedom and flexibility the job structure provides
What does this mean for brands?
The gig economy and Industry 4.0 are not only changing the way people work and make money, but also the way they spend money everyday.
Initial attempts are being made by brands to provide audiences with useful content, but often they only offer a singular perspective. Most frequently, they’re focused on survival-based tools for “making it” in the gig economy, when in fact the above findings show that gig-based jobs are most often an incremental growth opportunity. While there is certainly a percentage of people looking for savings recoup guidance, there’s opportunity for brands to start engaging their audiences with ways to capitalize on the opportunities tech and gig jobs present. The conversation with consumers needs to shift from “survive” to “thrive.”
In this spirit, the same conversation on finding opportunities needs to be had with brands. Executives should consider ways in which their platforms, products or services can better integrate into this more fluid working structure. As more and more consumers rework the definition of a “9-to-5,” how does their customer purchase journey change, and inevitably the cultural narrative shift, as a result? This is largely variant by brand but has universal impact.
For instance, a few initial industry-specific questions to consider:
- Quick-Service Restaurants: Brands like McDonald’s have launched promotions with UberEats. What is the inverse opportunity of activations like these with ride share companies for brands to better own and position this offering? Think exclusive ride share drive-through lanes or adding stops along your trip to pick up coffee on the way to work.
- Personal Care Products: AirBNB / VRBO hosts often offer a selection of amenities to improve their guests’ stay, and recently AirBNB started to explore shoppable homes. Where are opportunities for brands to work directly with hosts and maximize the experience with and storytelling around their products?
- Consumer Packaged Goods: Ride share drivers often offer a selection of amenities like tissues and candies/mints as a service add to their riders. What are ways these brands can better reach drivers and / or modify their positioning and messaging for in-car consumption? Consider products specific for use or sale in-ride, or ways to incorporate media and brand messaging into the ride itself.
Thoughts & conversation are welcome.
This is the first of a five-part article series that covers the five key things to know about Industry 4.0 & the Gig Economy wherein I offer my perspective on implications and considerations for brand leaders. The introduction to the series can be found here. The next four topics include:
- Ride Apps are the #1 driver of Gig Jobs: 90% of the known increase in gig workers consists of ride share; the remainder is a mix between capital platforms (i.e. AirBNB), care jobs (Care.com), arts/crafts (Etsy).
- Gig Jobs aren’t replacing jobs, but driving more demand: Rather than putting traditional industries’ full-timers out of work, ride sharing, specifically, has actually created more of a demand for driving services.
- Barriers to entry are low … but also high: Many attract to working with apps like Lyft / Uber and Etsy given the barriers to entry are extremely low — you can work when and how you need to, and don’t experience the barrier of potential discrimination through an interview process.
- We need more education & resources: There are ~500,000 open positions for computer software engineers, but only ~50,000 forecasted computer software graduates.
- This information cited is from a panel I had the opportunity to attend on 2/7/20: “Work, Employment, and the ‘App’ Economy,” hosted by Georgetown University’s McCourt School of Public Policy and The Goodfriend Group.
Issue areas panelists covered include:
- Whether the app/gig economy is creating jobs or destroying them
- Impact of the app/gig economy on “traditional” full-time jobs
- Characteristics and distribution of gig jobs and workers
- Measurement and data sources of the shifting
- If / how gig jobs should be regulated
Should you want to view the full event, find the recording linked here.
- Posted In