The rise of freelancing

Increased digitalisation and the changes to the labour market brought about by the Covid-19 pandemic mean that working from anywhere has not only become possible but also acceptable to an increasing number of people. This is therefore changing the way we work, as well as how we buy, sell and share goods and services.

Familiarisation with technology, which has been necessary during the COVID-19 crisis, means that people of all ages, backgrounds and education can turn to it for more sophisticated and varied services. This environment has led to the rise of platform marketplaces which allow the effects of technology to reach more people, more quickly than ever before. Since individuals and firms need only a broadband connection to share/trade goods and services on online platforms, scale without size is possible and more economic opportunity is created.

Today, over 28 million people in Europe work through digital labour platforms. In 2025, their number is expected to reach 43 million people. Between 2016 and 2020, the revenues in the platform economy grew almost fivefold from an estimated €3 billion to around €14 billion.

Technology platforms: the path to a dream/nightmare future

To some, freelancing facilitated by technology platforms represents the glorious, utopian future where you can work from anywhere, at anytime and be easily matched with relevant jobs and projects. This represents freedom, choice and opportunity. For others, freelancing leads to a dystopian nightmare. Sceptics paint pictures of workers with less freedom, less options and less money: humans becoming slaves to algorithms and monopoly-seeking companies based in a far off country, paying no tax.

Both extreme views are quite commonly expressed in the media by thought-leaders, businessmen and politicians alike. The truth is different from person to person - depending on their skills, knowledge and network - as is the case in the traditional economy.

Opportunities for startups and entrepreneurs

The rising freelance movement presents opportunities for startups by creating a huge pool of talent that can be accessed on a needs basis. Startups and SMEs can integrate specific talents as and when they need them on an ad hoc basis. This is vital for all parties involved as more people choose flexibility and a move away from the traditional 9 to 5, while startups need flexibility and often cannot be saddled with a large full-time workforce.

Freelancing also allows people to try new ideas and test concepts - often in parallel with traditional employment - before they take the step of starting a company. Furthermore, many people are worried by the administration, reporting and bureaucracy associated with starting their own company or freelancing. This is where self-employment companies step in. These organisations allow freelancers without a company to send invoices and get paid for their work - while taking care of the payment of taxes - without the administrative, time and cost burden of starting a company.

Knowing the rules

An increasing number of rules and regulations are being debated in order to create more of a framework within which freelancers can operate. The European Commission adopted a proposal for legislation around freelancer and platform economy worker rights in December 2021, for example. Activity has also begun to tailor health and safety legislation to cover platform work. Simultaneously financial service providers are changing their approach in order to accommodate freelancers in everything from insurance products, saving schemes and providing mortgages and loans. This underlines the fact that the world is changing. Acknowledging the movement that is taking place while ensuring that freelancers are not treated as second-class citizens is vital.

There is currently a lack of understanding around freelancing - particularly the benefits that is creates  for individuals and businesses, as well as the economy and the broader society. Yet the exponential growth in freelancing means that more people will consider it as a lifestyle choice while start ups, SMEs and larger organisations will need to develop a freelancer strategy.