The average distance between buyers and sellers of services on the talent marketplace Upwork is over 1,000 miles.
If you look at transactions where the buyers and sellers are both in the U.S., 96% of the buyers and sellers are more than 50 miles apart.
These are just two of the many interesting facts found in Upwork's report The Independent Workforce in America: The Economics of an Increasingly Flexible Labor Market.
Written by Stanford professor Paul Oyer, the academically oriented study covers a lot of ground.
The first sections cover the size and scope of the independent workforce by reviewing the Freelancers Union/Upwork Freelancing in America studies.
The third section, The Independent Professionals on the Upwork Platform, really caught our eyes. Key quote from the report on this section's findings:
Online platforms such as Upwork facilitate transactions between buyers and sellers in different locations ... within the United States the buyer and seller on Upwork are more than 50 miles apart for 96% of transactions.
Even more interesting than the buyer and seller being separated by distance is the fact the buyers tend to be in wealthier areas than than the sellers. Again from the report:
On average, Upwork facilitates matches between buyers in more affluent areas than the sellers they transact with. Thus, for transactions within the United States, Upwork redistributes income from highly affluent areas to less affluent (though not, on average, very low income) areas.
Regular readers know one of our favorite trends is the paradox of place.
The paradox is even though the Internet and connective technologies have made working remotely easier than ever, people and companies are increasingly clustering together in fewer locations, mostly in cities.
This is happening because in our knowledge-intensive world, industries and people cluster in order to share information, generate ideas and cut deals. These activities are all still better done face to face.
Companies also cluster to access talent, which is attracted to urban areas due to job opportunities and options as well as the amenities urban or near-in suburban living provide.
This clustering has happened despite decades of predictions by numerous futurists that technology would lead to people and companies spreading out across the country and world with little regard for their geographic location.
The consensus view has been that people and companies would simply locate where they wanted to be and connect electronically.
While there is clearly more remote work today than in the past, overall these forecasts have been wrong - at least so far.
However, the Upwork data shows that this shift may finally be happening.
The Big 3 strategy consulting firm Bain believes this. They suggest we're entering the "the post-urban landscape" era.
This will consist of cities with large walkable urban cores that attract the wealthy, as well as highly talented creatives and other professionals that can afford these areas. Think SF, New York, London, etc.
In their view the middle class will move to "New Villages". These are "residential zones lying well outside commuting distance to urban cores". These new villages will offer lower costs, more space and many of the amenities of urban cores.
Connective technologies will connect workers in these lower cost villages with work that is mostly for companies located in higher cost cities.
This is exactly what the Upwork data shows.
We think over the next decade both shifts - clustering in cities and growing numbers of people working remotely - will continue to grow.
More jobs and work will become detached from place, but clustering will still be important.
On a somewhat related topic, we've become fascinated by economic geography.
This despite until fairly recently making fun of our friends who are geographers. Our thinking used to be since we know where all the rivers, mountains and oceans are, why do we need geographers?
But the paradox of place is just one of many interesting economic issues that come down to geography. Another good example is the recent U.S. presidential election.
So consider us geography converts.