Beyond the Gig EconomyHow New Technologies Are Reshaping the Future of Work | 2016

By Jon Lieber, Chief Economist, Thumbtack & Lucas Puente, Economic Analyst, Thumbtack

The Old Economy

The labor market in the 20th century was based around large employers and the manufacturing industry, but that era is gone, thanks to automation and globalization.

The Economy of the Future

Smaller businesses are playing a bigger role than ever, as more Americans are finding work in the services economy and technology has made starting a small business cheaper and easier than ever.

The 21st Century’s Economic Challenge

This shift has produced a bifurcation in the labor market; those without college degrees are far more likely to face dismal labor market conditions.

Divergent Paths in the New Economy

The New Path to the Middle Class

Skilled professionals — those with the know-how to do a specialized, non-routine job in any circumstance — are the middle class of the future.

The Rise of Skilled Pros & Non-Routine Jobs

Non-Routine Jobs: The Jobs of the Future

Cognitive Manual

Routine

• Bookkeepers • Dispatchers • Customer service reps • Secretaries • Travel agents

• Professional drivers • Machine operators, • Assemblers • Warehouse laborers • Laundry cleaners

Nonroutine

• Photographers • Architectural drafters • Nutritionists • Graphic designers • Land surveyors

• Plumbers • Electricians • Professional chefs • Dog trainers • Exterminators

Unpacking the “Gig Economy”

Marketplaces provide consumers with specialized services from skilled professionals. This gives the service provider a chance to earn flexible income and their own terms and build a business and career.

The Benefits of Skill-Based Marketplaces

The Challenges Skills Pros Face

Online marketplaces are more than 4 times more cost-effective than offline marketing in introducing skilled pros to new customers, their single biggest challenge.

Marketplaces Solve Pros’ Main Concern

Source: Thumbtack survey, June 2015 (5,000 professionals)

Where Are Workers Using Marketplaces?

We used Twitter data as a proxy for adoption rates in different markets, based on the theory that platforms with more followers on Twitter in a given area likely have more users and more service providers in that same area.

Marketplaces Are More Widely Adopted

How Policymakers Can Help Skilled Pros

1. Invest in developing skills outside of educational institutions. • Example: the Obama Administrations’s American Apprenticeship

Grants

2. Strengthen the social safety net and move away from employer-based benefits. • Example: Affordable Care Act

3. When it comes to taxes, focus on reducing burden of compliance. • Example: Ohio’s municipal tax reform

Conclusion

1. As we finalize a transition to a service-based economy, workers are presented with new challenges, but also new opportunities.

2. Technology can help workers most by empowering them to efficiently reach clients seeking their specialized skills, not by turning them into on-demand commodities.

3. Policymakers should work to help all workers in this new environment, not just those with traditional employment arrangements.

Authors

Jon Lieber is Thumbtack's Chief Economist and head of policy research, studying trends in the labor market, entrepreneurship, and the small business economy. He has spent over a decade in Washington, D.C.,advising policymakers on economic policy, and currently serves as a board member for the Center for American Entrepreneurship, a research organization dedicated to improving the environment for startups and entrepreneurs. He can be reached at jon.lieber@thumbtack.com.

Lucas Puente is the Economic Analyst at Thumbtack, where he studies Thumbtack's marketplace dynamics and the policy challenges facing small service businesses. He has a master's degree and Ph.D. from Stanford University and is a graduate of the University of Georgia. He can be reached at lucas.puente@thumbtack.com.