The “gig economy” has grown massively in recent years. But according to a new report from Thumbtack, an online marketplace connecting people to local service providers, the current gig economy is not sustainable and will no longer exist in 20 years, as its focus is on low-skilled positions that can only serve supplemental income for workers and will likely become automated over time. What will be around at the end of those two decades is truly skilled professionals that can offer specific services as well as performance-based marketplaces that can connect people to these highly-skilled independent workers, according to Thumbtack.
It’s estimated there are nearly 18 million full-time independent workers in the U.S., up from about 16 million in 2011. About 12.4 million Americans work part-time as independent workers, according to a 2015 report from MBO Partners. By, 2020, it’s expected 40% of the American workforce will be independent contractors, working on a contingent basis for businesses.
The Thumbtack report says while the current state of the gig economy will cease to exist in the future, what will persist are truly skilled professionals who cannot be replaced by technology.
“Skilled professionals — those with the know-how to do a specialized job in any circumstance — are the middle class of the future,” the report said.
The Difference Between Commoditized Platforms and Skills-Based Marketplaces
In its report, Thumbtack also speaks to the difference between what it calls “skills-based marketplaces” and “commoditized platforms,” that are connecting independent workers to employers.
According to Thumbtack, it is the skills-based marketplaces that offer a highly differentiated supply of workers demonstrating a high level of skill that will survive in the future gig economy. True marketplaces give independent contracts the ability to differentiate themselves, whether it’s through individual pricing or demonstrating their skills and quality of work, the report said. These marketplaces are also more likely to connect independent contractors with full-time work, rather than part-time, supplemental income the many workers on commoditized platforms find.
Commoditized platforms, on the other hand, typically offer short-term relationships and connects a provider to a buyer in the “simplest possible way.” In these cases — think Lyft or Uber platforms — the report said the buyer is indifferent to the person providing the service, and the service does not require a high degree of specialization or skill to complete. These workers are also more likely to have their jobs automated in the future. Thumbtack cites an Oxford study stating that professional drivers have a 89% chance of being automated in the near future. Conversely, skilled service jobs are increasing, becoming one of the fastest growing occupations in the last 25 years and are unlikely to be automated.
Spend Matters’ Take
Spend Matters’ contingent workforce expert and research analyst Andrew Karpie said the Thumbtack report brings a provocative perspective to what he refers to as the “new work economy” — where independent workers increasingly connect to work through technology and digital platforms. He called Thumbtack’s distinction between “commoditized platforms” and “skills-based marketplaces” spurious and confusing. Platforms are not commoditized — work and workers are, he said, and as such, commodities are traded on highly efficient marketplaces, and non-commodities, such as skilled labor or talent, can be traded on marketplaces, but with the need to have more information to accomplish a transaction.
“The reality is that both low-skill (commoditized) work and high skill (non-commoditized) work can be traded over ‘marketplace platforms,’” Karpie said. “But in the latter case, more information and time is required to achieve a transaction. It is also true that high-skill intermediation platforms often have a managed services layer to ensure that suitable matches are made and transactions are completed.”
Another problem Karpie has with the Thumbtack report is its distinction between low-skill work, which can be automated away, and higher-skilled work, which in some occupations (including plumbers and electricians) may be resistant to automation.
“According to the report, the low-skill gig economy won’t last, only skilled work will persist in the ‘new work economy,’ Karpie said. “I suspect this may be a false dichotomy, since AI and robotics will also probably put a dent in skilled work.”