Doris Albiez, Senior Vice President & General Manager Dell Germany
Working independently is hardly a new development. There have always been professions in which workers don’t have a specific employment contract, and usually don’t take on employees for the most part, if at all. Architects, graphic designers, musicians, and freelance journalists are quite often self-employed.
Freelancers with specialist knowledge in areas such as software development or SAP configuration have always been part of the IT sector. These workers really appreciate the high degree of flexibility this type of work entails: They can more or less decide how they divide up their time, can usually choose where they want to work, and – what is often the most important factor – they don’t have a boss, but a client instead, and might even have several at any given time. This model also offers these clients a great deal of flexibility – they can assign projects at short notice, without having to invest in new employees. This type of employment used to offer self-employed workers a number of financial benefits. Many people were able to earn significantly more money than they would have if they were employed in a permanent position, which in turn meant that social security wasn’t a pressing concern.
Of course, this model of freelancing continues to exist. However, it is taking on a significant, new dimension in the digital age. While self-employed workers used to (and still do) find projects through networking and referrals, the Web has now stepped in to take over this role. Dedicated platforms now put clients and freelancers in contact with one another, while platform operators provide the infrastructure, set the rules, and earn a commission for doing so.
This ‘platform economy’ has many faces, as evident by the diverse range of terms that have developed in its wake – from the gig economy, to crowd working, click working, and micro-tasking, depending on the main focus of the job. What all these models have in common is that they don’t offer an employment contract for a permanent position. Instead, they revolve around the allocation of individual commissions and projects that are taken on by people who do not have a contract with the company. That’s why the term ‘gig,’ usually reserved for musicians, offers such a fitting analogy.
While platforms such as Twago and Upwork still mainly cater to traditional self-employed workers and freelancers, others have tapped into completely new markets, or even created them from scratch. The most famous example of this type of platform is Uber, a rideshare service that brings drivers and passengers together. It functions solely as a go-between – at least officially – and is not considered a client or employer. Some platforms in the gig economy offer services that are performed onsite, such as Helpling, which advertises cleaning services, or MyHammer, which offers DIY services. These platforms have taken on the role that classified ads or the bulletin board at the supermarket used to occupy. While the Web has a wider reach, and you’ll be able to find a more suitable service provider on it, the level of competition is also higher online.
From gig to click
Platforms that serve as an intermediary for jobs that can only be done online can be considered one step further into the digital world. Clickworker, Amazon Mechanical Turk, and Textbroker offer fragmented ‘microtasks’ that you can do at home on your own computer. This can include typing up receipts, identifying pixels, or writing short texts for product catalogs. These aren’t challenging, creative projects, but quite the opposite – they’re tasks that computers are (still) not intelligent enough to do, or that are too expensive for them to carry out. Jörg Schieb[1] was right when he said that Amazon Mechanical Turk is a simulation of artificial intelligence. It’s amazing what digitalization is producing these days.
It should be obvious that you will only earn small amounts of money by doing these kind of small projects – each typed-up receipt will only earn you three cents. Even if you somehow managed to flurry through one hundred receipts, you would still only be able to rack up three euros in total. It’s no surprise then that this type of the gig economy has been cropping up in conversations recently, because anyone who wants to earn a decent salary doing these kinds of projects will have to work long and hard. To say that ‘You won’t get rich with it’ is more or less a thinly veiled euphemism. These ‘digital day laborers’[2],[3] usually do click work to gain an additional income at the most, if they don’t end up getting frustrated and turning their backs on it after a few attempts.[4] This is far from the ideal image of the creative freelancer who can flexibly and proactively choose which projects they want to take on, and for which clients they want to work. I’m doubtful as to whether we can provide the resources needed for the digital transformation in this way.
I think the most interesting thing about the gig economy is how the working world has split into very different models within a relatively short space of time. Right now, we are searching for organizational forms outside of the traditional structures, with their rigid workplaces and employment contracts. And that goes far beyond just working from home. Over the last few years, some corporations have been considering whether they should just work with a small core workforce made up of specialists – and hire freelancers, who would check in with them from anywhere in the world via a digital platform for however long their specific project needed to be carried out.[5] The fact that these kinds of models are often in great demand in times of crisis seems to be a mere side note.
I don’t think that every model the gig economy has produced is particularly sustainable. Many are characterized by the fact that they don’t offer social security. However, because many of these kinds of jobs don’t pay well, the idea that they would offer a private pension would be somewhat utopian. This would mean in the long term that society would have to step in when workers reached their autumn years – or in other words, when the respective clickworker or pizza deliveryman reached retirement age. When you look at it in those terms, we are all subsidizing the platform economy. I’m not sure if that will really work out in the long run.
Goodbye to the standard working model?
All this also goes to show how little our legal and social systems are prepared for the kind of changes that are happening in the working world. Even the question as to whether they should be considered self-employed/freelance workers or employees, and therefore which legal departments they would be assigned to, feels like an academic question more than anything else. A court in the U.K. ruled that Uber drivers were employees of Uber, but this seemed more like a stopgap solution, because it was not possible to define this phenomenon in any other way. Admittedly, despite its growth, the gig economy is still rather insignificant in terms of the overall economy. It only makes up 0.5 percent of jobs in the[6]U.S., the home of digitalization.
But numbers aren’t what matters. We are witnessing the beginning of a revolutionary upheaval. After just about 150 years, the standard employment model is, generally speaking, in the process of disappearing. To say that it’s obsolete would perhaps be going a bit too far, because this model too will continue to exist alongside traditional self-employment. Even outside of the gig economy, ‘atypical forms of employment,’ such as temping, are on the upswing, which means that the gig economy is merely one aspect of this development. More and more new models will be tested out, and we’ll just have to go back to the drawing board if they don’t stand the test of time. Different types of clickwork will also undergo this process, as AI will end up having the upper hand. And that’s also the right call to make – after all, gig work doesn’t have to be clickwork, because even the highest-paid SAP freelancer can belong to the gig economy.
At the same time, solutions that connect flexibility and creativity, which are indispensable in the digital world, with social security, and which would give society the cohesion that it needs, aren’t on the horizon yet. And there won’t just be one single solution. As always, we’ll have to achieve a lot before that happens, especially when it comes to work.
[1] https://blog.wdr.de/digitalistan/mechanical-turk-klicken-ohne-zu-wissen-warum/.
[4] The Süddeutsche Zeitung, one of the most widely-read broadsheets in Germany, carried out an interesting experiment recently: “Our author spent one week slaving away at the digital platform ‘Amazon Mechanical Turk.’ The projects are paid miserably, the pressure is high, and every worker has to fend for themselves: Is this what the work of the future will look like?”.
http://www.sueddeutsche.de/leben/arbeit-bei-onlineportal-die-mensch-maschine-1.3911727?reduced=true.
[5] Source: Spiegel 6/2012. http://www.spiegel.de/wirtschaft/unternehmen/revolutionaeres-arbeitsmodell-ibm-schafft-den-miet-jobber-a-813388.html.
[6] “About one percent of the labor force, or 446,000 people, are employed as clickworkers in Germany, according to the German Federal Ministry of Labor and Social Affairs’ latest research. Other platforms, such as Crowd Guru, Testbirds, and Streetspotr, exist alongside the market leader, clickworker.com.”
https://www.saarbruecker-zeitung.de/sz-spezial/internet/die-tageloehner-des-world-wide-web_aid-23379017
(not everyone who has signed up to this kind of platform actually uses it).
