The rise of the

The rise of the gig economy

By Jon Beale

The “gig economy” refers to the growing amount of independent and self-employed work that uses the internet and digital technology to match freelance workers with customers and service providers. Some of the most prominent examples of this are companies like Uber and Airbnb that have created online platforms to transform traditional jobs into independent, self-directed work.

A new report released by the Brookings Institution called Tracking the Gig Economy dives deeper into this changing economic landscape to explore if the headlines around the gig economy match up to the facts. Drawing data from the United States Census Bureau on “non-employer” firms (a measure of contractor and freelance individuals), the report looks at data from the US to estimate the extent and reach of the gig economy and the geographies most impacted by these changes.

Not surprisingly, the report finds that gig-economy firms grew by 60% over the past 15 years, adding nearly 10 million new “firms” to the economic landscape (from 15 million in 1997 to 24 million in 2014). Payroll jobs (i.e. non-freelance work) during the same period grew by 12.4% from 129 million to 145 million.

The vast majority of this rapid growth in gig-economy firms has been concentrated in the largest metropolitan areas of the US in cities like San Jose (Silicon Valley), San Francisco, and Austin. While it’s not surprising that cities renowned for being leading technology hubs would have rapid growth, other cities less known for technology are also seeing rapid growth. These include Nashville, Las Vegas, Pittsburgh, Sacramento, Oklahoma City, Charlotte, Columbus, and Indianapolis. All saw at least 60% growth of gig-economy firms from 1997 to 2014.

These statistics highlight just how quickly the gig economy is growing and that it’s playing a more pervasive role in America’s urban economies. For economic development professionals, it’s important to recognize how the rise of the gig economy has and continues to disrupt the fabric of cities. Looking to the future, it’s important to consider how the gig economy will continue to change the ways people live, work, socialize, and interact with one another, and what roles institutions can play in these transitions.

This post first appeared in TINAN 76. Subscribe to TINAN for the latest economic development news and resources.