We are at a point of pivotal change in the nature of employment. In last month’s budget, George Osborne committed to updating the guidance given to Job Centres so that jobseekers are signposted towards both time banks, like Echo, and commercial task sharing platforms in order to boost ‘skills, experience and income’. Similar encouragement is to be given to new and established businesses to use these platforms.
It’s fantastic that the Government has recognised the value and potential here, but I’m concerned about this space more broadly and the type of employment it might be preparing for our children.
Those in my parents’ generation grew up in an age where they could expect a job for life - hard to imagine for those of my own generation. For the main part we enjoyed the freedom, variety and flexibility that a market of shorter-term contracts can bring.
But as contracts continue to shrink, we’re seeing the rapid and seemingly symbiotic growth of both self-employment and online platforms that facilitate singular task-based jobs, often described as the ‘gig economy’. There is a distinct risk that school leavers, sole traders and microbusinesses will be drawn into an ever reductive vortex of smaller, lower-skilled tasks, with little access to training and no development of transferable social capital.
PwC estimate that ‘online staffing’ will expand by 37% globally over the next decade, making it one of the fastest growing parts of a larger peer-to-peer ‘sharing economy’ sector that could be valued at £9 billion in the UK by 2025. There’s also a growing body of balanced research into task-based work that is facilitated by online providers (Amazon’s Mechanical Turk being an early example), which suggests that on the part of the client, a drive towards ‘intellectual efficiency’ matched with that towards lowest cost will drive down the size and skill-level of offerings.
Those delivering gig services might experience the same lack of training as other self-employed groups, but this will be compounded if their only social (or ‘reputation’) capital developed is their platform ‘feedback’, leaving them stuck in a single-task environment with little opportunity for career development and all the associated positives.
This is certainly bad for them and, in the longer term, potentially bad for the economy too. As part of the RSA’s Self-employment Summit, Vicky Pryceargued that this kind of reduction in task size/skill level leads the economy down an overall ‘lower productivity path’.
So far, so bleak. But it needn’t be.
Take the experience of Echo, an online marketplace that uses a time currency, the Echo, rather than pounds and pence. Echo users range from local residents to corporates and even government departments but the majority are sole traders and microbusinesses. They are buying and selling services like book-keeping, graphic design, project management and web development – all at the universal rate of one Echo for one hour’s service delivered. And it’s growing faster than its commercial counterparts.
We’ve found that, given initial ‘enabling’ support, new entrants to the Echo marketplace can vastly increase their trading power, buying and selling many more services than those who haven’t received any assistance (about 20 times as much, in fact). This support consists of help in identifying saleable offerings within a skills portfolio, then marketing those offerings efficiently in a succinct and appropriate way for an online platform. It also pinpoints suitable in-house training opportunities that will enable users to develop both inside and outside of an online marketplace.
Crucially, bringing users together regularly offline for both training and networking ‘socials’ helps to develop the social capital and relationships they need to trade outside of Echo, aiding the development of resilient local communities, which is a key driver for us. Echo users are now going on to develop commercial relationships outside of the platform – hard to track but a great early outcome.
For individuals and microbusinesses, flourishing within the gig economy is dependent on the development of a skillset specific to it, as well as the development of complementary infrastructure. If we provide the grounding and framework for them to navigate through this new landscape there is every opportunity to gain professional autonomy, flexibility and variety. If we don’t, I suspect many will remain at first base, carrying out low skilled tasks and making themselves available 24/7 in order to make ends meet.
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As a ‘think and do’ tank, we want the reports we write to have practical impact. We see RSA Fellows as playing a crucial role in this. Mark Pallis, Head of Project Engagement at the RSA explains what you can do to help bring about change for the Self Employed.