Small Business Labs

Freelancers are All Programmers Now

Harvard Business Review's We're All Programmers Now explains that thanks generative AI (like ChatGPT), anyone can code. 

Key quote from the article summary:

"Generative AI and other easy-to-use software tools can help employees with no coding background become adept programmers, or what the authors call citizen developers. By simply describing what they want in a prompt, citizen developers can collaborate with these tools to build entire applications—a process that until recently would have required advanced programming fluency."

The article focuses on what this means for corporations, their IT organizations and employees.  

Freelancers are also becoming citizen developers. And based on the results of a recent survey we conducted, many are already using or experimenting with generative AI.

We're still working on our research project on the use of generative AI by freelancers, but several early findings jumped out at us:

• Freelancer awareness of these tools is quite high, with 88% of surveyed independent workers saying they have at least some awareness of generative AI.
• Close to half said they have at least experimented with ChatGPT or one of the other generative AI tools.
• About half of those who have used generative AI said it has been useful in their work.

Given the most common platform for generative AI - ChatGPT - has been available for less than a year, it's clear generative AI usage by freelancers is growing rapidly. 

And usage will continue to grow, especially since most software vendors are feverishly working on adding generative AI to their programs. Examples include everything from specialized plug-ins for ChatGPT to Microsoft adding generative AI capabilities to Word, Excel, and their other Office products.

Harvard Business Review has another article on what the growing use of AI means. The title is AI Won't Replace Humans — But Humans With AI Will Replace Humans Without AI.

We think the path forward for freelancers is clear. Learn how to use generative AI to increase your productivity and add value for your clients or risk replacement by freelancers who do.

We'll have more on our generative AI and freelancers research project in the near future.    

What are Digitally Native Franchises?

Forerunner Ventures is best known for funding early direct-to-consumer, online brands like Warby Parker. Bonobos and others.  

Their latest investment thesis is "digitally native franchises," which they describe as online platforms that enable people to start their own business with meaningful ownership and flexibility, but also the playbook and support of a centralized platform.

As the Forerunner chart below shows (click to enlarge), they see digitally native franchises as providing independent workers more control, freedom, and financial upside than gig workers - and greater support and less risk than traditional small business ownership provides.

Forerunner says the drivers of digitally native franchises are:

• Broad, rising interest for people to be able to work themselves (though current market conditions can make that daunting)
• An unbundling of historical service industries (healthcare, education, personal finance, home services, and more)
• New tech making structures more efficient and scalable (yes, AI)

Forerunner uses Fora Travel, which they have invested in, as an example. Forerunner describes Fora as:

"a unified platform enabling anyone with a passion for travel to monetize that expertise as a modern travel agent."

We're not sure how different a digitally native franchise like Fora is from the many existing online platforms that connect small businesses and solopreneurs to customers.

But given Forerunner's success at spotting and building new businesses, we think following their efforts in the digitally native franchise space is well worth doing. 

TechCrunch has a good article on digitally native franchises and Forerunner has a detailed white paper on the topic.

McKinsey 2023 Technology Trends

McKinsey recently released their 2023 Technology Trends Outlook. The list is pretty similar to last year's, which we also covered.

The one big difference from last year, unsurprisingly, is the addition of generative AI. The other 14 trends on this year's list are repeats from last year.

McKinsey has, in our opinion, one of the better descriptions of generative AI:

"Generative AI can automate, augment, and accelerate work by tapping into unstructured mixed-modality data sets to enable the creation of new content in various forms, such as text, video, code, and even protein sequences."

Although generative AI is new to their trends list this year, McKinsey, like everyone else, is forecasting it to have a significant economic impact. Key quote:

"Generative AI is poised to add as much as $4.4 trillion in economic value from a combination of specific use cases and more diffuse uses—such as assisting with email drafts—that increase productivity."

McKinsey ranks the trends on three metrics:

• Innovation: based on related patents and research efforts
• Interest in the technology: based on recent news and web searches.  
• Amount of investment in the technology in 2022 (size of bubble in the chart)

McKinsey also provides an adoption rate score for each technology.  

As the McKinsey chart below shows (click to enlarge), applied AI is the leading technology with a high innovation score and relatively strong interest and investment scores.

Looking closely, you will find generative AI bottom-left on the chart. And if you were rank-order the technologies, generative AI would come in 14th out of 15, just edging ahead of quantum technologies.

The McKinsey article provides a detailed analysis of each of the 15 technologies on their list.  

We like McKinsey's approach because they go beyond just looking at the technology and include data on the drivers of adoption.  

Anyone interested in tech trends will find McKinsey's list well worth reading. In addition to the summary, there is a more comprehensive 81-page report.

Bain on The Rapidly Rising Number of Older Workers

Bain & Company is one of the Big 3 strategy consulting firms (along with McKinsey and BCG).

We follow all these firms because they do excellent research, and their work with leaders in both the private and public sectors means they have a lot of influence.

Bain's Better with Age: The Rising Importance of Older Workers covers the demographic reality that workforces worldwide are rapidly aging.

As the Bain chart below shows (click to enlarge), in the U.S., one-quarter of the workforce will be 55 or older by 2031.

Japan is even older, with almost 40% of its 2031 workforce 55 or older.

Bain's research found that the motivations and attitudes of workers change as they age. Key quote:

"Before age 60, the average worker in developed markets is primarily motivated by good compensation. Averages are often misleading, but not in this case. In nearly all developed markets, good compensation is the top priority across archetypes.

Around 60, there's a tipping point. Interesting work becomes the No. 1 job attribute, and both autonomy and flexibility significantly increase in importance."

Bain also found that older workers are more likely to be self-employed - something regular readers know from our past coverage of this topic. Key quote:

"The increasing desire for autonomy and flexibility at work is often expressed in efforts to control hours ... Managing the transition to fewer hours might come through working part-time, self-employment, or doing freelance work. Our research shows a very significant increase in these forms of employment among the 55-and-over age group, compared with those in midcareer."

Age discrimination also plays a role in the increased rates of self-employment as workers age.

Simply put, because of age discrimination, self-employment is often the best, or even only option, for many older workers.

Demographers like to say that "demographics is destiny".  

And at least in the case of self-employment, they're right - growing numbers of older workers means more self-employed workers.  

See our Baby Boomer section for more older workers.  And also see the New York Times recent article How a Vast Demographic Shift Will Reshape the World. 

Pew Research Finds Self-employed More Likely Than Other Worker to be Highly Satisfied With Their Jobs

The key quote from Pew Research's Self-employed people in the U.S. are more likely than other workers to be highly satisfied with their jobs is:

"Most self-employed workers (62%) say they are extremely or very satisfied with their job, compared with 51% of those who are not self-employed. They also express higher levels of enjoyment and fulfillment with their job."

As the Pew Chart below shows (click to enlarge), the self-employed also are more likely to find their job more enjoyable and fulfilling than other workers.

Regular readers know that almost all studies on the self-employed have found similar results.

But it's nice to get confirmation from Pew Research - they're considered one of the world's top research think tanks.  

See the Pew study for more details.  

The Advantages of Semi-Retirement

Yahoo Finance's Could Semi-Retirement Be Right For Me defines semi-retirement as:

"a transition stage to full retirement during which people usually work fewer hours, either at their former employers or in a new part-time job. Semi-retirement can generate additional income while also providing engagement, satisfaction and even better mental and physical health."

Generating income is a key reason many are semi-retired. 

But as The Atlantic's Semi-Retirees Know the Key to Work-Life Balance points out, most semi-retirees seek more than income from their semi-retirement work.

And they especially value work flexibility. Key quote:

"...semi-retirees tend to look for roles that grant a sense of purpose, the ability to keep learning, and, perhaps more than anything, flexibility."

Historically, flexible work the semi-retired look for was hard to find. The vast majority of full-time and even part-time jobs required a commitment to fixed schedules.

But thanks to the growth of the gig economy, various forms of self-employment, and more flexible traditional jobs, semi-retirement is much easier than in the past.

But it still requires research and planning.

Fidelity's Guide to Working Less and Living More suggests 4 key things to consider before jumping into semi-retirement:

• Think through your long-term financial needs before embarking on semi-retirement.
• To make it work, know exactly how much money you spend and where you can cut back if necessary.
• Understand the costs of health care once you leave an employer's plan.
• Do some self-reflection to determine what you want to get out of semi-retirement.

Fidelity also suggests starting thinking and planning about semi-retirement well before you plan to semi-retire. Key quote:

"It's best to begin planning—and saving—during your wealth accumulation years to capitalize on employer benefits and the power of compounding."

We regularly interview people who fit the description (but rarely self-describe) as semi-retired. And based on what we've heard, Fidelity's planning advice rings true.

A key reason we study semi-retirement is that older workers have the highest levels of self-employment.  

And more baby boomers looking to semi-retire instead of fully retiring means more independent workers.

Only About Half of Americans Stay Employed Through Their 50s

Barron's Only Half of People Stay Employed Through Their 50s. How to Prepare covers research showing that about half of Americans work continuously throughout their 50s, 

As the chart below (click to enlarge) from the TIAA Institute study Should women just delay retirement and work longer? shows, women are even less likely to stay continuously employed in their 50s than men are.

Insecure jobs, caregiving requirements, health issues, and, of course, age discrimination are listed as the reasons for the lack of continuous work.  

And if you don't work continuously in your 50s, you're much less likely to work in your 60s. Key quote from Barron's article:

Eighty percent of those who worked continuously in their 50s continued to work into their next decade of life, versus just 35% of those who were intermittently employed ...

We often hear about these reasons in our research on independent workers.  

And we often hear these are reasons many in their 50s and 60s choose independent work. It provides both the flexibility to deal with life's issues and a way to at least reduce the impact of age discrimination.  

These are part of the reason older Americans have the highest self-employment rates.  

America's Factory Boom

Recent Census data shows that construction spending by US manufacturers more than doubled over the past year. 

The chart below (click to enlarge) is from Axios' A manufacturing investment supercycle is starting. It shows "spending on manufacturing construction — new factories — is tracking at a $189 billion annual rate, triple the average rate in the 2010s ($63 billion)."

According to Axios, the main driver of this boom is incentives provided by recent federal legislation - the Inflation Reduction Act, the Infrastructure Law, and the CHIPS and Science Act. Key quote:

".. there are billions flooding into large, expensive megaprojects to manufacture batteries, solar cells, semiconductors and much more."

Another factor is the reshoring of manufacturing. This is a longer-term trend accelerated by the pandemic and trade issues with China.  

America's factory boom will not just benefit the owners of manufacturing megaprojects. Small manufacturers will also benefit from the incentives - as suppliers to the new megaproject manufacturing facilities.

And once the factories are built, manufacturing output and  employment will increase, which is good for the overall economy.

Ho, Hum - Yet Another Strong Month for New Business Applications

May was yet another strong month for new business applications, with 436,048 new applications for a federal tax ID.  

As the U.S. Census chart below shows (click to enlarge), May's new business applications continued their 3-year run of being about 40% higher than pre-pandemic levels.  

This leads us to believe that the higher level of new business applications is the new normal.  

So while we'll continue to report on this data, we'll no longer use terms like "surge" or "huge" to describe the numbers as long as they continue in the 400,000 - 5000,000 per month range.

As with all our articles on this topic, it's important to point out that:

New business applications are applications for a federal tax ID. And only about 20% of those who apply for a federal tax I.D. start a business.

So no, and despite what you may read, 436,000 new businesses were not started in May.

But around 80,000 will likely be started over the next 1-2 years based on May's applications. By historical standards, this is still a big number.

May's numbers also continue the long-term shift to solopreneur applications, with about two-thirds coming from solopreneur applications (called applications other than high-propensity by the Census).  

This means most of the new businesses formed from May's applications will be freelance, gig economy, or other types of solopreneur businesses.  

Granfluencers - Seniors Join the Creator Economy

Over the past few weeks, there's been a flurry of articles on "granfluencers" - older people earning money in the creator economy by posting on TikTok and other social media platforms.

Key quote from the New York Times article As Older TikTok Creators Flourish, Brands Are Signing Them Up:

"Older influencers have popped in popularity recently," Ms. Karwowski said. Over the past year to 18 months, she added, "it's really been accelerating‌."

CNN's Forget retirement. These Baby Boomers are amassing huge social media followings says a key driver is that more and more older people are spending time on social media. Key quote:

"... the number of people 65-plus on social media grows each year: In 2014, 21% of those in that age group were on social media, a figure that more than doubled to 45% by 2021, according to Pew Research."

Grandfluencers are becoming influencers for similar reasons as younger folks are doing so - to pursue a passion, supplement their income, and/or just for fun.  

Brit+Co's 12 Granfluencers That Prove Aging Is Fun has a list of their favorite granfluencers.  

While granfluencers are growing in numbers and impact, they are still a relatively small part of the creator economy.

The 2022 MBO Partners Creator Economy study (we worked with MBO Partners on this study) showed that only about 6% of those earning money in the creator economy were 55 or older. So online influencing is still dominated by younger folks.  

We'll have the results of our 2023 Creator Economy study in the fall.  And while we expect younger influencers to continue to dominate, we also expect strong growth in the number of older influencers.  

Excellent Schwab Podcast Explains Survey Selection Bias

Every so often, we write an article knowing few people will read it.  And let's face it, survey sample selection bias is not a hot topic.

But you should read this article because survey selection bias is a growing problem.

This is because easy-to-use online survey tools allow people who are untrained in survey methods to easily and quickly create and field surveys.

Schwab's Choiceology podcast Survey Says covers what selection bias is and why it's a problem.  

The podcast starts with the story of the 1936 presidential election, which Franklin Roosevelt won in a landslide over Republican Alf Landon.

What few know about that election is that the Literary Digest presidential poll, considered the gold standard of presidential polls at the time, predicted Alf Landon would not just win - he would win in a landslide. 

This, of course, was a huge miss. Key quote from Social Science History's "President" Landon and the 1936 Literary Digest Poll:

"The disastrous prediction of an Alf Landon victory in the 1936 presidential election by the Literary Digest poll is a landmark event in the history of American survey research in general and polling in particular."

The prediction was so bad that the Literary Digest - a respected and successful magazine - went out of business two years later.

The failure was due to selection bias. Simply put, the Literary Digest's survey sample heavily overweighted Landon supporters. This led to an erroneous prediction that Landon would win.  

Because we're industry analysts, we review dozens of surveys yearly. More than a few suffer from selection bias, and we know not to trust their results.

So if you're a user of surveys or someone who fields surveys, you need to know about selection bias - and how to identify and avoid it.

And listening to the Schwab podcast is a quick and easy way to do this.  

Harvard Business Review on Personal Branding

Creating and maintaining a personal brand is important for everyone. But it's especially important for freelancers and independent workers - their brand is crucial to securing and keeping customers.  

Harvard Business Review's A New Approach to Building Your Personal Brand provides the best overview of the steps needed to create a personal brand we've seen.

It also nicely describes why you need one. Key quote:

For better or worse, in today's world everyone is a brand. Whether you're applying for a job, asking for a promotion, or writing a dating profile, your success will depend on getting others to recognize your value. So you need to get comfortable marketing yourself.

The article covers a seven-step process for personal branding. The steps are:

1. Define your purpose by exploring your mission, passion, and strengths, and thinking about whom you want to make a difference to and how.
2. Audit your personal brand equity by cataloging your credentials, doing a self-assessment, and researching how other people view you.
3. Construct your personal narrative by identifying memorable, resonant stories that will best convey your brand.
4. Embody your brand by paying attention to the message you're sending in every social interaction.
5. Communicate your brand story through speeches, social media, the press, and other channels.
6. Socialize your brand by getting influential people to share your stories.
7. Reevaluate and adjust your brand by doing an annual audit to find deficits to fix and strengths to build on.

The article goes into greater detail on how to accomplish each of the seven steps.  

We've used a similar approach since we started our business over two decades ago. For example, we started this blog in 2007 to help communicate and socialize our brand.  

And we completely agree with the article's conclusion and believe it's particularly true for small businesses and independent workers:

The personal branding process takes work. But we know from research and experience that it will allow you to better control your professional and personal image and thus the success and impact that you can have in the world.

Americans' Retirement Confidence Declined in 2023

According to Employee Benefits Research Institute (EBRI), Americans' confidence in a comfortable retirement declined the most in 2023 since the 2008-09 financial crisis.  

As the EBRI's chart below shows (click to enlarge), only sixty-four percent of workers feel at least somewhat confident about living a comfortable retirement, down from 73% in 2022.

The reasons, according to Barron's The Baby Boomer Retirement Crisis Is Here. Why the Richest Generation Is Struggling, are:

• A lack of retirement savings by many baby boomers
• Debt levels at retirement age are higher than in prior generations 
• Recent stock market declines
• Rising costs, especially for healthcare and long-term care
• Concerns about the viability of social security and Medicare

One way to help, according to many sources, is to work a bit longer - full-time or part-time - in retirement.  

The New York Time's How a Solo Gig Can Give You a Stronger Retirement says:

Adding a few more years of work to your retirement plan can be one of the best ways to improve retirement security, and some find that the best way to keep income flowing in one's later years is a sole proprietor business. 

The Motley Fool's Here's Why It Pays to Join the Gig Economy Before You Retire suggest starting a side gig before retirement. This gives you time to build the side gig into a successful business before entering retirement.

As we've noted in the past, older Americans have the highest rate of self-employment.  

And the growing interest -and need - by baby boomers to work in retirement is one of the reasons we continue to forecast growing numbers of independent workers.

See our Baby Boomer section for more on this topic.

Is the Metaverse Dead?

Yes, generative AI has replaced the metaverse as tech's next big thing. Despite that, we think the answer to the title's question is a resounding no.

But there are lots of articles proclaiming that the metaverse is dead. Our favorite is Insider's RIP Metaverse. Key quote:

"The Metaverse, the once-buzzy technology that promised to allow users to hang out awkwardly in a disorientating video-game-like world, has died after being abandoned by the business world. It was three years old."

We also like The Guardian's A moment's silence, please, for the death of Mark Zuckerberg's metaverse. It focuses on the vast sums of money Meta has spent on its metaverse vision, which has yet to generate much revenue or excitement.

Couple these views with the enormous hype around generative AI, and you can see why many think, as the Insider article puts it, the metaverse is "the latest fad to join the tech graveyard."

But the reasons we disagree are simple:

First, the metaverse includes a wide variety of very successful online games (think Roblox, Fortnite, etc.). So the gaming metaverse is already a large and growing industry.  

Second, the use of metaverse tools for industrial applications continues to expand. As the Harvard Business Review article Yes, the Metaverse is Still Happening points out:

"Look at how many companies are adopting "digital twins," or a virtual representation of a physical object, person, or place that is created using real-time data and advanced simulation models to provide a comprehensive, digital view of a real-world process.

At the moment, digital twins are most apparent at work, enabling a new world of possibilities across industries ranging from automotive to architecture, manufacturing, retail, telecommunications, and beyond."

The digital twin market is already large and expected to grow rapidly over the next decade. 

And third, the metaverse is already making headway as a tool for education and training. Again, this is a potentially large metaverse market.

We agree that the hyperbolic noise and expectations about the metaverse are over.  

But we believe the metaverse will continue growing - and be an important technology - especially in the abovementioned areas.

NPR's The Indicator on the Influencer Industry

The Indicator is an NPR radio show focusing on economics, work, and business. The shows are only about 9 minutes long and generally cover a single topic.

Recently, The Indicator did a week-long deep dive on the Influencer Industry- which is a big part of the creator economy - and one of the faster-growing segments of independent work.

The episodes are:

• Monday: The origins of the influencer industry
• Tuesday: The economics of the influencer industry
• Wednesday: Gen Z's dream job in the influencer industry
• Thursday: The dark side of the influencer industry
• Friday: Final thoughts on the influencer industry

The series provides an excellent overview of the influencer industry, and the key issues influencers face pursuing this path.

See our creator economy section for more details on influencers and the broader creator economy.

Also see The Creator Economy: Staking out New Territory, a recent research report from MBO Partners (we worked with MBO Partners on this study). 

Commercial Real Estate Industry Facing The Perfect Storm

Commercial real estate is getting a lot of media attention, with most articles forecasting stormy weather ahead for the industry.

For example, the title of Goldman Sachs's recent podcast on this topic is Navigating the 'perfect storm' in commercial real estate.

The Wall Street Journal's Commercial Real-Estate Woes Run Deeper Than in Past Downturns is also gloomy. Key quote: 

"Landlords are contending simultaneously with a cyclical market downturn and with secular changes in the way people work, live and shop. The sudden surge in interest rates caused property values to fall, while the rise of remote work and e-commerce are reducing demand for office and retail space."

Fortune's Office vacancy will increase by 55% by the end of the decade as hybrid and remote work push real estate to an 'inflection point' again paints a grim picture. Key quote:

"As much as 330 million square feet of U.S. office space could become vacant and unused by 2030 due to remote and hybrid work, according to a report released Wednesday by global real estate firm Cushman & Wakefield. When added to another 740 million square feet of space that will become vacant from "natural" causes, the total is around 1 billion square feet of unused office space building up over the next seven years."

And the retail industry continues to get hit by the shift to online shopping - and has to also deal with challenges related to remote work.  

Yahoo Finance's Retail store closures 'to sharply accelerate going forward': UBS research covers a study that estimates that "50,000 retail stores will close out of the current base of 940,000 stores in the United States by 2027, excluding gas and food service stations."  

If things turn out to be as dire as these articles are saying, it will have significant negative impacts on the overall economy.

We're more optimistic than these articles.  

But small businesses and independent workers with exposure to the commercial real estate industry should think through how they will deal with a major downturn in the commercial real estate market. 

Update The New York Times published A Bleak Outlook for Manhattan’s Office Space May Signal a Bigger Problem this morning.  It's hard to keep up with all the gloom and doom commercial real estate stories these days.  

The Surge in New Business Applications Shows No Sign of Slowing

The March 2023 Business Formation Statistics were released yesterday by the U.S. Census. And it was another strong month.

As the Census chart below shows (click to enlarge), there were 451,752 new business applications in March.

This continues the surge in new business applications that started during the pandemic in 2020. 

Prior to the pandemic. applications averaged around 300,000 per month. Since Q3 2020, they've averaged around 450,000 per month.  

About 300,000 of March's applications come from what the wordsmiths at Census call "applications other than high propensity."

These are applications from people not planning to hire employees - in other words, freelancers and other kinds of solopreneurs.

This continues the long-term shift in applications to nonemployers businesses. In 2005, about 60% of all applications were from businesses planning to have employees. Since the surge, about 2/3rds of all applications are from firms planning to be solopreneur businesses.

It's important to note that new business applications are applications for a federal tax I.D. And only about 20% of those who apply for a federal tax I.D. end up starting a business.

So if you read somewhere there were 450,000 new businesses started in March, it's wrong.

But a surge in applications also means a surge in new small and solopreneur businesses - with March's applications leading to about another 90,000 new businesses over the next year or so.

We're two and a half years into this surge in new business applications. We think it's now safe to say it's real.

Tupperware's Troubles

Tupperware, the iconic maker of food-storage goods, said it could go out of business.  

Founded by Earl Tupper in 1946, Tupperware was one of the first direct selling companies. Their sales channel innovation was independent sellers holding "Tupperware" parties, where primarily women hosts sold the product to their friends and family.  

The picture below (click to enlarge) is from the company's website.  It shows the title character from Amazon's popular series The Marvelous Mrs. Maisel hosting a Tupperware party (the show takes place in the 1950s).  

Nice Hats!

The direct selling industry is quite large. According to the latest statistics from The Direct Selling Association, 7.3 million Americans earn money as independent direct sellers.

Almost all direct sellers do it part-time (6.8 million), with most looking to direct selling as a flexible way to supplement their income.

But Tupperware has run into a couple of problems.

First, thanks to the gig economy, there are many more flexible, independent work options for people looking to supplement their income. This has resulted in fewer sellers choosing to work for Tupperware.  

Second, organizing parties and in-person selling is much harder due to today's time-challenged adults. Because of this, much of direct selling has moved online (and called social selling). 

But Tupperware has not effectively made the transition to online sales.

This is partly due to Tupperware being viewed as an old, stodgy brand by younger consumers.  This hurts their sales and their ability to attract younger sellers.  

The bottom line is Tupperware's sales are falling, their stock price is falling faster, and, adding to their troubles, they have a large amount of debt.

Despite Tupperware's troubles, the direct selling industry continues to do reasonably well overall. And we expect it to continue to attract millions of Americans looking for a flexible way to supplement their income.

The Creator Economy Continues to Grow and Despite Challenges, Creators are Highly Satisfied

MBO Partners recently released The Creator Economy: Staking Out New Territory, the third year of their ongoing tracking study of digital content creators.

A key finding is that the number of U.S. independent digital content creators (self-employed, solopreneurs, freelancers, etc.) who earn money by creating and distributing digital content increased by 14% in 2022, reaching 8.1 million. (click to enlarge the study chart below).

Creators report some of the highest satisfaction rates of all workers.  Over nine in ten (92%) report being highly satisfied (83%) or satisfied (9%) with their work.  

They're also passionate about being a creator - over two-thirds (68%) say pursuing a passion is the main reason they became creators.

And the vast majority plan to continue as digital content creators - 83% plan to continue as independent creators (57%) or build a bigger creator business (26%) over the next 2-3 years.

Regarding demographics, most creators are young - 71% are aged 40 or younger - and 57% are male. About 2/3rds report working in the creator economy part-time.

But despite the high satisfaction levels, creators face a number of challenges.

The well-known issue around creators' struggles to earn a living is evident from the study findings. Over half of the creators (61%) report earning less than $25,000 from their creator economy work, with 44% reporting earning less than $10,000.

Two other challenges jump out from the findings.

Almost four in ten independent creators (39%) say it's hard to be successful, and over one-third of all content creators (38%) report struggling with boundaries and burnout. These shares are substantially higher than reported by other types of independent workers.

But despite the challenges, many aspire to join the creator economy. The study found that 4.9 million Americans who say they are participating in the creator economy have yet to earn income from their creator economy activities.

And a stunning 41% of those with traditional jobs said they want to become digital content creators. Few of these workers will follow through, but these numbers illustrate how aspirational the creator economy is.

Despite the challenges and issues creators face, we expect their numbers to continue to increase over the next 3-5 years.

Becoming a content creator is easier and cheaper than even a few years ago - and the number of people aspiring to be creators is too large for the creator economy not to grow.

Emergent Research (that's us) worked with MBO Partners on this study.

Academic Paper Defines Digital Nomadism and the Five Types of Digital Nomads

An excellent academic paper - What is a digital nomad? Definition and taxonomy in the era of mainstream remote work - was recently published by the World Leisure Journal. 

Based on extensive research, the paper provides a detailed definition of digital nomadism. Key quote:

Digital nomads use digital technologies to work remotely, they have the ability to work and travel simultaneously, have autonomy over frequency and choice of location, and visit at least three locations a year that are not their own or a friend's or family home.

We like this definition because it provides more specificity than other definitions, including the one we use. In particular, we think "have autonomy over frequency and choice of location" is an important addition to the definition of digital nomads.

Clarity around trend definitions is an underappreciated issue. Since we study emerging trends, we regularly see the problems associated with the lack of consistent trend definitions. 

For example, the lack of a clear, consistently used definition of the "gig economy" continues to cause problems - especially confusion among policymakers.  

The paper also defines five types of digital nomads, illustrated in the paper's chart below (click to enlarge).

Like most academic journal articles, the paper extensively reviews academic research (with links) on digital nomads. 

Literature reviews are often one of the most beneficial parts of academic papers. We often find new sources of useful information in these reviews. 

We were interviewed by the author, anthropologist Dave Cook, and some of our work on digital nomads is cited.  

Fiverr's Creator Economy Guide

Fiverr released a Creator Economy Guide, which is designed to help aspiring and existing content creators "handle the ups and downs of the creator economy."

To compile the report, Fiverr interviewed ten successful content creators and, based on these interviews, put together a top 10 list of tips for creator economy success.

The ten are:

1. Know the right time to start your own business.
2. Position yourself as a leader, not just a creator/influencer.
3. Find other team members who can help you.
4. Be prepared to handle the ups and downs of the creator economy.
5. Focus on your skills—let experts do the rest.
6. Don't just create for fans—create for yourself, too! 
7. Be prepared to scale your business.
8. Finding the best opportunities in the creator economy.
9. Learn to collaborate with other businesses.
10. A final word of advice.

Our favorites are the teaming tips (3,5, and 9). 

Our research shows that the creator economy is a team sport, and successful creators partner, subcontract, and hire others at much higher rates than most freelancers and solopreneurs. So we agree it's very important for creators to team up with others.

We also like 4 - Be prepared to handle the ups and downs of the creator economy - because there will be ups and downs.

The Fiverr guide provides an excellent set of qualitative research on what it takes to be successful in the creator economy. And while targeted at aspiring content creators, even experienced creators will find the advice useful. 

Why Freelancers Need to Experiment with ChatGPT (and other AIs)

The history of technical innovation is consistent.

Initially, new technologies cause both economic dislocations and new opportunities. But the longer-term net effects of the vast majority of technical innovations are positive due to the creation of new opportunities and jobs.

We think that ChatGPT, and other forms of AI, will follow the same path - at least for the next 5-10 years.   

In other words, AI will create economic winners and losers, but the net economic and job impacts will be positive.  

We've been experimenting with ChatGPT for months and found it improves our productivity, cuts our costs, and frees us to spend more time on value added activities.

Even better, after working with ChatGPT, we're not worried about AI replacing us anytime soon (by that we mean at least for the next 5 years or so). 

The reason is that our work is helping clients discern signals from noise.

And while ChatGPT is great at generating content (noise), it's not good at discerning signals - at least for the kind of work we do.

Like us, many other freelancers will benefit from ChatGPT and AI.  

But there will also be freelancers replaced by AI. 

Workers doing low to medium-skilled knowledge work, especially in content creation, will be at the most risk. AIs will provide the most significant productivity gains in these areas, reducing the demand for freelancers to do this type of work.

We think all freelancers and independent workers should be experimenting with ChatGPT and, if appropriate, other forms of AI. 

The objectives of these experiments are to understand the following:  

1. Can AI can automate some or all of your work?
2. If so, can you use AI to automate some of your work, freeing time to provide additional or higher-value services?  

If the answer to (1) is no, your business is unlikely to be impacted by AI.

If the answer to (1) is yes, and (2) is no, you are at risk of being replaced by AI. You need to figure out how to provide different services or higher-value services.

If the answers are yes to (1) and yes to (2), you have an opportunity to benefit from AI.

The good news is that ChatGPT is a very approachable technology. 

Getting started doesn't require specialized knowledge or training - although getting proficient takes time and practice.  

ChatGPT is a game-changing technology for many jobs and industries.

Freelancers need to understand this technology - and how it will impact their business.  

The End of Dream Jobs Means More independent Workers

Two work and job-related articles jumped out at us recently.

The first is Buzzfeed News' The Fantasy of the Dream Job is Gone covers the growing number of layoffs in tech and finance. Key quote:

Layoffs at some of the country's most prestigious companies are the latest sign that no one's job is ever safe.

The second is Fast Company's From the Great Resignation to the Great Refusal—here's what the 5 'Great Rs' mean for the future of work. Key quote:

We are no longer centered on where we work, but rather on where work fits in our lives, and there is no putting this genie back in the bottle.

Because we study why people choose to be independent workers and small business owners, we spend a lot of time on how workers compare traditional jobs with independent work.

We've found the teeter-totter is a good metaphor for how workers compare and choose between traditional jobs and independent work.  

At a high level, workers choosing between the two balance the security, predictable income, benefits, and career paths of traditional work versus the autonomy, control, and flexibility of working independently.

The recent tech and finance industry layoffs and the massive pandemic-related layoffs have made it clear that no job - and the predictable income and benefits that come with it - is completely secure.

Also, the pandemic accelerated existing trends toward people wanting more flexibility, autonomy, and control over their lives and work.

Both of these shifts make traditional jobs less attractive - tilting worker decisions towards independent work.  This is true even for "dream jobs." 

And this likely means more people will choose independent work, and the recent surge in independent workers will continue.   

Mastercard on the Creator Economy

Mastercard's study - The creator class: How micro business is fueling the next wave of entrepreneurialism - provides an excellent overview of those identifying as digital content creators. Key quote:

Scaling up from a hobbyist to a full-time entrepreneur has never been easier, thanks to democratization around social media, as well as advances in payment technology, Web3 principles, and monetization models. 

We don't know what "Web3 principles" refers to, but we still like the quote - mainly because we agree that scaling a hobby into a business has never been easier.

The report chart below (click to enlarge) shows the primary motivations for becoming a creator. These are consistent with why people give to becoming independent workers or small business owners.

The report covers the challenges creators face. They are not surprising to anyone following the creator economy - burnout, inconsistent income, and lack of control. Key quote from the report:

The pressure to always be creating is intense, as 89% of creators report experiencing burnout. A similarly high percentage feel beholden to algorithms and platforms that are constantly shifting, as 86% of creators feel they do not have control over their content. Financial challenges — from rising costs to inconsistent income streams — are also pervasive for over eight in ten creators.

Our one quibble with the study is that it doesn't actually say how many income-earning creators there are.

The report says there are 22 million content creators in the U.S., but also says "nearly two-thirds of creators envision turning their endeavors into businesses."

This leads us to believe the study found about 7-8 million content creators who consider their content creation activities to be a business, with the rest considering it a hobby or potentially a pre-business.

But that's a minor quibble, and we like the study overall and recommend it to anyone interested in the creator economy.

What is Synthetic Media (Hint: AI is Involved)?

So many new AI buzzwords, so little time.  

"Synthetic media" is media (text, pictures, videos, etc.) that is produced, in whole or part, by some form of AI technology.  

Synthetic media has been around for years. But not surprisingly, the publicity around ChatGPT and generative AI has dramatically increased the creation of synthetic media and the term's usage. 

The NBC News article AI-generated 'synthetic media' is starting to permeate the internet covers the good and bad of synthetic media. Key quote:

"The question some AI researchers say they are grappling with is whether AI-generated content is enhancing internet creativity or squandering it."

The article references the firm UNEEQ, which is "an artificial intelligence company, developing the most advanced autonomous digital human platform available for customer interactions ..." 

Their URL is digitalhumans.com. 

UNEEQ provides "personalized digital humans" designed to be used in customer service and support roles. 

These digital humans are AI chatbots with an AI-generated human as their user interface. These digital human chatbots interact much like humans do.

The picture below shows the digital human Kate answering a support question (the Bot, BTW, looks, acts and talks like a human). 

Generative AI - and ChatGPT in particular - has resulted in a seismic shift in the creation of synthetic media. And expect much, much more in the future.

For example, we used two forms of AI to write this article - ChatGPT helped with the first draft and Grammarly with editing.

And if we can do it, anyone can.