The freelance sector has grown dramatically since the beginning of 2020, driven by a cluster of interlocking factors including the pandemic, improved technology, inflation and the cost of living squeeze, changing priorities and social expectations, and faltering trust in conventional employers. What’s interesting is that the growth of Web3 has been assisted by many of the same trends and concerns.
Freelancing: State of the Nation
Twenty years ago it would have been harder to gain an accurate idea of how large the freelance sector really was. Today, most freelancing activity in developed countries takes place online, via popular freelance platforms, including up-and-coming Web3 services like LaborX. Consequently, it’s easier to understand just how popular freelancing has become in recent times. Collected figures from DDIY and the Exploding Statistics websites paint an interesting picture.
Firstly, we can discount the idea that freelancing is a minority endeavour. Approaching half of all global workers fall into the freelance category, in one form or another. That’s a total of almost 1.6 billion individuals. While only a percentage of that work might be the kind of online freelancing that appeals most to knowledge workers in Western economies, it shows that freelancing is not a niche status.
In the US, the freelance sector is hotting up. Annual earnings for last year increased by $100 million, and now total an incredible $1.3 trillion – over 5% of GDP. Neither is freelancing a second-best as a career choice. More than half of all freelancers have some form of postgraduate qualification, and the number is steadily rising.
The idea that freelancing is, increasingly, an elite career choice is backed up by the kind of roles freelancers are securing. Demand for freelance web designers is the highest of all occupations, and one of the better paid jobs. In fact, good freelancers pull in a better wage than most Americans. Those working in skilled services such as web and mobile development, and areas like marketing, are averaging $28 per hour, which puts them in the top third of all US earners. Skilled developers can expect a six-figure annual salary, or $50-60 per hour for freelancers.
Then there are the outliers. A freelance senior software engineer can change $150 per hour. Expensive though that might seem, it’s actually a good deal for employers. According to the Huff Post, the total cost including benefits, taxes and other extras entailed in hiring a full-timer would be $312,000 per year. The freelancer – aside from working only those hours that they’re actually needed – would come in around $18,000 cheaper. It’s win/win.
Choice, Not Necessity
All of this points to freelancing becoming a tougher but more rewarding way to earn a living. Four out of five freelancers say they choose it because it gives them greater independence, and seven out of ten say it gives them a better work-life balance than the regular grind.
What’s particularly interesting is that a growing number of people are choosing a mixed approach, in which they combine permanent employment with freelance work. There could be a number of reasons for this, including the need to supplement their regular income at a time when bills are high; the desire to create a kind of diversified employment portfolio, in which the higher pay and flexibility of freelancing supplements the regular pay cheque of a normal job; and people dipping their toes in the water from the security of their current employment, with a view to transitioning to full-time freelancing.
Either way, the number of these hybrid workers have grown by 3% since 2021, suggesting that this ‘best of both worlds’ approach might be gaining traction.
Freelancing and Web3
While crypto is more prone to boom-and-bust cycles than the freelancing movement, there’s a significant overlap between their drivers, and Web3 is, overall, on an even sharper growth trajectory. The freelance market is forecast to grow at a remarkable 15% CAGR between 2021 and 2027, by which time its global market is expected to reach more than $9 billion. Web3 blockchain revenues are predicted to increase at an incredible 40% CAGR to over $20 billion over the same period.
There is a natural affinity between the two sectors. Freelancing is extremely common in Web3, and always has been, for various reasons:
- It’s a seller’s market. There’s a shortage of experts in Web3, meaning those who are talented and experienced are in a position to pick and choose who they work with. They often won’t want to tie themselves down to a single job, preferring the freedom of freelancing in the knowledge that there will always be new opportunities.
- It’s a meritocracy. The crypto sector has a libertarian ethos that attracts self-starters and values the free market. It’s emphatically not an environment that invites clock-watchers and 9-5 grinders, and those who work hard and get results expect to be paid accordingly.
- Remote work is the norm. Decentralised protocols and communities naturally rely on decentralised workforces. Organisations may not even have a physical headquarters, and remote freelancers can be scattered all around the world.
What’s more, the largest portion of the global freelance workforce is represented by millennials and Gen-Z – those who were born roughly between 1980 and 1996, and 1997 to 2012, respectively. Almost 70% of all global freelancers are 35 or younger. It’s that same demographic – young, tech-savvy, and somewhat cynical about the extent to which traditional social structures and norms will really serve their interests – that is also most interested in crypto.
The growing Web3 sector is therefore ideally positioned to attract freelancers coming from more traditional jobs, offering them employment and the chance to learn new skills.
Put simply, the growth of freelancing is good for Web3, and the growth of Web3 is good for freelancing.