Small Business Labs

GCUC 2019 - Coworking's Surge Continues

The 2019 U.S. version of the Global Coworking Unconference Conference Series (GCUC) happened last week in Denver. Over 500 attendees showed up to discuss the state of the coworking industry and learn from one another.

It was clear from the discussions and presentations that the state of the coworking industry is excellent.

The industry continues to grow at a rapid pace, niche and independent coworking spaces are thriving, and the big coworking chains continue to expand. 

One thing that caught our eye was the number of attendees from coworking spaces serving new industry segments and vertical markets.

A good example is Palletized, a coworking and cowarehousing space that provides logistics services and warehouse space in addition to office space. This vertical market is quite large and because of ecommerce, growing quite rapidly. And now there's a coworking option for this industry. 

Coworking rapid growth has been driven by 3 waves of customers. The first group were freelancers and independent workers who were coworking's first customer base. Quickly following them were startups and micro businesses. More recently large corporations have embraced coworking.

Going forward we think all three of these groups will continue to drive coworking's growth. But we also see a fourth wave emerging. This wave will be driven by niche and vertical market growth (like Palletized) and geographic expansion. 

Coworking started in the urban cores of large cities. But now it's diffusing across geographies into the suburbs, smaller cities and even into rural areas. 

These areas, BTW, are the home to most Americans. About 98 million Americans live in urban core counties. But 175 million live in suburbs and small metro areas and 46 million live in the nation's rural counties. 

This means coworking is just starting to expand into markets where 2/3rds of Americans live and well over half work. 

Bottom line - the industry has a lot of room to grow.

Allwork's articles GCUC 2019: What Coworking Members Really Want and GCUC 2019: Is the Coworking Market Saturated? - quick answer - no - nicely covers several of the panels and related discussions.

We "borrowed" the picture above from Allwork's GCUC coverage.

The Rise of "Superjobs"

From Jobs to Superjobs covers the results of a Deloitte study looking at how automation and A.I are changing work and jobs.

The key finding is Deloitte sees automation changing jobs instead of simply replacing workers.

By this they mean many jobs are evolving and requiring new combinations of human skills and capabilities.

In particular, they see jobs increasingly requiring both hard and soft skills.

Deloitte see two types of jobs emerging due to increases in automation and the growing use of A.I. 

One type they call "hybrid jobs", which they describe as:

"Roles that perform work using a combination of skill sets drawing on both technical and soft skills. Historically, these types of skills have not been combined in the same job."

The other type are "superjobs", which are:

"Roles that combine work and responsibilities from multiple traditional jobs, using technology to both augment and broaden the scope of the work performed and involve a more complex set of domain, technical, and human skills."

The emergence of superjobs is going to require new types of thinking by both organizations and workers.

In particular training people for jobs that require strong hard and soft skills will not be easy. It will also require major shifts in thinking. 

It's not just traditional employees who will become super. According to Fast Company's A Growing Crop of Supertemps is Changing Work, independent workers are also becoming super.

So whether you want to be a traditional employee or an independent worker, you're gonna need a mix of skills - and a cape. 

TV Sitcom Explores the Blending of Work and Life and the Barriers Between the Professional and Amateur

Salon's Mike Schur's new sitcom "Abby's" is "Cheers" for the gig economy is an interview with the producers of a new NBC sitcom that takes places in a backyard bar. 

The interview covers what a show set in an illegal backyard bar says about modern culture. 

The interview explores multiple themes. But the most relevant to us here at Small Business Labs are the blending of work and life and break down between professional and amateur.

These shifts are happening across our society. A good example is when friends reach out to sell you something, which is increasing common thanks to the growth of side gigs.

Abby, the bar owner in the show, faces this on a regular basis because her customers are also her friends and neighbors. Key quote from the article on this:

There's one part of your question that I found interesting, and it is something that we talk about in the writer's room a lot. That is, where does the relationship between our patrons and Abby, when does it become personal and when is it professional? We dealt with that in a really explicit way in one episode with Beth [Abby’s next door neighbor] grappling with, "I thought this was a friendship and the way you're behaving, you're making me feel like you don't see me that way."

The blending of work and life is making answering this question both increasingly challenging and important.

We also find the show's view on the blurring distinctions between professionals and amateurs interesting. Again from the article:

There's also this weird thing in our culture now, where if you want go out somewhere, but you don’t want to drive, you use your phone and you get into some guy's Toyota Camry. It’s his car. It's like the barriers between what you would think of as a professional and amateur are completely broken down now, right?

These are both cultural and work shifts that are happening at least in part to the growth of the gig economy. It's interesting to see TV shows picking up on and exploring these trends.

Somewhat related, the popular online game The Sims is adding "freelancer" as a career choice. Sims will be able to be a writer, artist or programmer.

Just like in the real world, freelancing Sims can choose not to take gigs and instead take more time off.  Or, if they need more simoleons (money), they can take on extra gigs.

Having both TV shows and online games adding freelancing and alternative work arrangements illustrates the growing role independent work is playing.

Podcasting Entering the Mainstream

In case you hadn't heard, podcasting is booming. 

According to The Infinite Dial 2019, an annual survey conducted by Edison Research and Triton Digital, more than half of all adult Americans have listened to one.

And as the report chart below shows (click to enlarge), 32% of all Americans aged 12 and older listened to a podcast in the last month. This equals about 90 million people.

There are a number of drivers of podcasting's growth. These include:

• There's now a diverse array of interesting podcast content.
• Large audio/music firms like Spotify, Pandora and Apple have embraced podcasting.
• So have big media companies like the New York Times, the Wall Street Journal and the Washington Post.
• Smart speakers have made it easier to find and listen to podcasts.
• The use of internet audio in cars has become easier and more widespread.
• Successful business models are emerging.

Most revenue estimates for the podcast industry continue to be small - ranging from $500 - $700 million in 2018. But as the TechCrunch article Y Combinator Bets on the Booming Podcast Industry points out, revenues are expected to rapidly increase. 

Podcasting is interesting to us here at Small Business Labs because it's yet another example of small businesses and even individuals successfully competing with large corporations. 

In fact, many successful podcasts come from solopreneurs and micro-businesses. This is due in part to podcasting's low production and distribution costs.

The other part is creating compelling content, which a lot of solopreneurs and micro-businesses are capable of. This is especially true for podcasts designed to build community or used for content and/or influencer marketing. 

Medium's 10 Big Takeaways from 2019's Infinite Dial Research covers the study in more detail.

23% of Traditional Full-Time Job Holders Plan to Switch to Gig Work

According to MetLife's 2019 U.S. Employee Benefits Study, 23% of Americans with full-time traditional jobs intend to switch to gig work over the next 5 years. Another 14% say they are considering it. 

As the study chart below shows, younger workers more likely to say they're intending to leave their job for gig work than older workers. 

 

The reasons those with full-time jobs say they are interested in gig work are increased schedule flexibility, the ability to work where they want and the ability to take on multiple, different projects.

The high level of interest in the gig economy is tempered by the concern about the lack of financial security associated with gig work. According to the study, the top reason cited for not joining the gig economy is “I prefer the stability and security of a full-time job"

This reason is consistent with other studies. Concerns about job stability and security will also result in most of the people who say they plan to switch to gig work not doing so.

But some will - likely about 10%-15% of those saying they plan to and this still results in a lot of new gig workers. 

Another interesting finding is 1 in 5 full-time employees have a side hustle and spend on average 25 hours per month on it. Most, according to the report, do this out of financial necessity. Over half of those with with a side hustle say they are planning on turning it into full-time work.

The study reinforces findings from other studies (including ours) that interest in joining gig economy by traditional employees remains high.

Craft Brewers Continued to Gain Share on Global Brewing Giants in 2018

The small and independent Brewers Association released their 2018 Craft Beer Growth Report. Key quote:

In 2018, small and independent brewers collectively produced 25.9 million barrels and realized 4 percent total growth, increasing craft’s overall beer market share by volume to 13.2 percent. Retail dollar value was estimated at $27.6 billion, representing 24.1 percent market share and 7 percent growth over 2017. 

We first started following the craft beer industry in 2006 because we felt the industry was a good example of the growth small, niche markets. 

It's also a good example of a barbell industry structure. These are industries comprised of relatively few giant corporations on one end, a narrow middle consisting of a shrinking number of mid-sized firms, and a large and growing number of small, micro and even solopreneur firms on the other end.

As the chart below shows (click to enlarge), craft brewers have gained significant market share versus the beer industry giants over the past decade. 

And while craft brewer share gains have slowed, the industry continues to thrive. The number of U.S. craft breweries increased from 6,490 in 2017 to 7.346 in 2018.

Share gains have gotten tougher for several reasons. It's simply harder to gain share given how a large a share the craft brewers already have. Big brewers have also been buying craft brewers as well as creating their own craft brands (Blue Moon being a good example).  

As we pointed out a long time ago, the key trends driving the growth of artisan products like craft beer are:

1. Growing numbers of customers are looking for unique, unusual, personalized and/or locally produced products.  

2. The Internet and online marketing has made it much easier to find or be found by people interested in buying niche products.  

3.  Technology is lowering the costs of serving niche markets and making artisans able to compete with even the largest of firms. 

We see no slow down in these trend and believe craft breweries will continue to be able to effectively compete with the global giants.

The same is true in many other industries. See our Industry Structure section for examples. 

Half of U.S. Full-Time Employees Plan to Defer Retirement Due to Financial Reasons

MetLife recently released their 2019 U.S. Employee Benefits study. It's the 17th year they've done this study.

The study is based on a survey of 2,675 adult Americans with a full-time job at companies with at least two employees.

About 40% the respondents work for smaller businesses (those with less than 500 employees) and 60% work for larger firms, including 20% who work for firms with more than 10,000 employees.

There's a lot of good information in the study. But the study chart below (click to enlarge) really jumped out at us.

It shows that 52% of the full-time employees surveyed said they plan to postpone their retirement due to their financial situation. This is up from just 37% in 2015.

We've long often covered the trend towards delayed retirement (see our baby boomer section for many articles on this topic). But even we were surprised by these numbers.

The reason is the people who took this survey all have full-time traditional jobs. These are the people who should be the best prepared to retire. 

And yet about half believe they're going to need to delay their retirement because they don't have the financial resources not to. 

As we've pointed out in the past, for a variety of reasons Americans 55 and older have the highest rate of self-employment of any demographic cohort. 

This means deferred retirement also means a lot more older independent workers. This is especially true since the millions of Americans who don't have traditional full-time jobs are likely to be in even worse retirement shape than those that do.

Community Lenders Creating Community Spaces - Credit Unions are Opening Coworking Spaces

CreditUnions.com's article 3 Ways to Connect Through Coworking Spaces provides an excellent example of how coworking is spreading across industry verticals and niche markets.

The article highlights 3 credit unions that have opened coworking spaces. Key article quote on these spaces:

Three credit unions are building their own shared space models that reflect each institution’s strategic approach to serving their field of membership while branding themselves as not only community lenders but also community leaders.

CommunityAmerica Credit Union($2.7B, Lenexa, KS) has rented a chunk of the WeWork shared office building in a hip section of downtown Kansas City, MO, to use as work space for its own employees and for community lunch-and-learn and happy hour-style events. The picture below shows a lunch-and-learn session at the space.

Digital Federal Credit Union($8.5B, Marlborough, MA) has created the DCU FinTech Innovation Center, which it describes as a “non-profit, mission-focused fintech accelerator” in downtown Boston. 

Vermont State Employees Credit Union($778.2M, Montpelier, VT) has filled extra space in a new branch in rural Bennington, VT, with local entrepreneurs and other tinkerers and thinkers who now occupy a shared space dubbed the Lightning Jar. 

Credit unions have always been about community.

Most started as small, local savings and loan co-ops. And they continue to be member owned non-profits. 

So it's no surprise the industry is starting to extend their community efforts by embracing coworking.

This is also yet another example of the growing number of differentiated and niche coworking spaces. 

The Most Common Professions of Skilled Freelancers Working for Businesses

We're often asked what the most popular professions are for freelancers and independent workers.

This is not as easy a question to answer as it seems. Independent workers serve all industries, work with both businesses and consumers and participate in pretty much every job type and profession.

They also tend to self-identify in very specific and often idiosyncratic ways. This makes grouping them into categories difficult.

To help with this problem, the MBO Partners 2019 Client of Choice study used natural language processing tools to help categorize independent workers who provide services to businesses.

As the study chart below shows, the top three professions for these skilled independent workers are consulting, coaching, and research (17 percent), creative services (17 percent), and information technology (12 percent).

Other popular professions include education and training (9 percent), sales and marketing (8 percent), and healthcare and sciences (8 percent). 

Although we've been tracking independent worker professions for over a decade, the categorization problems make it difficult to compare this data over time. 

But a few patterns are clear.

Creative services, healthcare and sciences and project management have been fast growing fields for independent workers.

Information technology has grown, but not as fast as most would guess.

We think this is due in part to the changing nature of IT work. Some workers in project management and creative services likely would have self-described as IT workers a decade ago. But now things like web design and managing IT intensive projects are no longer viewed as IT work by many who do these kinds of jobs. 

Professions with relatively fewer independent workers include finance and accounting and admin services. Automation is likely one of the reasons for this. Another reason is many working in finance identify as consultants.

Construction is also lower, which is true for the construction industry overall. It still hasn't fully recovered from the Great Recession. 

Since this data is based on a survey of independent workers who provide services to businesses, the list is dominated by highly skilled knowledge work categories. 

But it's important to note for reasons too long to go into here, those with lower incomes and/or working in lower skilled jobs tend to be underrepresented in most surveys, likely including this one. 

Much more work needs to be done before we have definitive data on what professions are most popular for freelancers and independent workers. But the list above provides a solid estimate for skilled professionals providing services to businesses. 

MBO Partners is client of Emergent Research and we worked on 2019 Client of Choice study.

McKinsey's Bias Busters Collection

McKinsey's Bias Busters Collection covers how are decisions are often affected by cognitive and/or organizational biases. 

These include being unwilling to cut back on an under performing asset or activity, getting too distracted by shiny new initiatives, sticking with numbers or projections that are out of date or likely incorrect.

But our favorite was what they call taking an "outside view" of a project or forecast. They describe this as:

"... building a statistical view of your project based on a reference class of similar projects."

They say this is important because if you do the analysis based only on in-house data, you're likely going to miss important information that can be learned from other, similar projects.

This is what we do in our forecasting projects here at Small Business Labs.

Because we're forecasting things that usually have little or no historical data, we can't use traditional forecasting models. Instead, we use diffusion of innovation models that incorporate growth rate data from similar industries or products that are more mature. 

For example, we built our coworking forecasts in part by using the growth and expansion rates experienced by premium coffee shops and boutique hotel chains in their early years. 

This approach helped us in creating forecasts that have been fairly accurate. It also helped us forecast how coworking's industry structure would likely evolve, and in particular, the emergence and coexistence of big and niche coworking spaces. 

We learned about this approach long ago while working at a consulting firm (not McKinsey). We were unaware of McKinsey's "outside view" method, which was developed by Nobel laureate Daniel Kahneman and his colleagues in the 1990s until we read the article. 

But it's nice to know that we are using an approach similar to one designed by Kahneman and used at McKinsey. 

While McKinsey focuses on the impact of biases on corporate decision making, the same biases impact small businesses and independent workers. 

The one we see most often with smaller businesses and independent workers is an unwillingness to cut back on a activity that clearly is not adding value. 

Regular readers know we often write about biases and our efforts to avoid them.

These are some of our least read articles. But we'll continue to write about biases. 

It's too important a topic not to.

What Freelancers Want From Their Clients

As we pointed out earlier this week, firms of all sizes and types are increasing their use of freelancers and other forms of non-employee labor. 

But as companies become more reliant on external talent, they increasingly need to structure their policies, procedures, and engagement practices in order to be successful in attracting, engaging, and retaining highly skilled independent professionals. 

The reason is the majority of skilled independent professionals (defined as freelancers/independent workers who provide services to businesses) report they have choices in terms of who they work with. 

The study chart below is from the MBO Partners 2019 Client of Choice study. It shows 54% of independent professionals say they have a lot client choice and 33% say they have some choice. Only 13% say they have little or no choice.

Because of this, firms can no longer just be an employer of choice. They also need to be a client of choice.

The quick answer as to what these skilled independent professionals want from their clients is:

1. Being Treated as Part of the Team
2. Having Their Work Valued
3. A Positive Work Environment
4. The Opportunity to Learn and Build Skills
5. To be Paid Fairly and Quickly

For more details on each of these, see the MBO Partners 2019 Client of Choice study report.

MBO Partners is an Emergent Research client.

A Growing Number of Freelancers are Providing Professional Services to Businesses

MBO Partners recently released their 3rd annual Client of Choice study. 

Like prior years, the 2019 study focuses on the growing group of highly-skilled independent professionals (freelancers, independent consultants, etc.) who provide services to businesses on a regular basis.

And the number of independent professionals has grown quite rapidly. As the study chart below shows, it's increased from 4.5 million in 2011 to 5.9 million in 2014, and to 7.4 million in 2018. 

This makes it one of the fastest growing gig economy segments. Both supply and demand factors are driving this growth:

Organizations are hiring more independent professionals: The war for talent, skills shortages and the increased need for talent agility and flexibility is resulting in the greater use of external talent. Key quote from the report:

Software supplier SAP Fieldglass and the supply management analyst firm Ardent Partners each found that over 40 percent of the average corporation’s overall workforce is currently comprised of nonemployee labor. Ardent Partners also reported that nonemployee labor was only 16 percent of the average corporation’s workforce ten years ago.

It's also not just big businesses that are increasing their use of non-employee labor. Small businesses, governments at all levels and non-profit firms are also hiring more independent professionals. 

More Highly Skilled Workers are Choosing to Become Independent Professionals: Many skilled workers are attracted to the work and life autonomy, flexibility and control being an independent worker provides. This, coupled with the growing demand for skilled independent workers, is resulting in more choosing to do this work.  

This trend towards the growth of independent professionals is so powerful that Deloitte, who refers to these workers "off-balance sheet employees", calls the growth in their use one of the two most powerful trends currently impacting the future of work—along with artificial intelligence.

We'll have more from this study in the near future.

Disclosure: Emergent Research worked with MBO Partners on this study.

The Rise of "Wealth Work"

Quartz's Life coaches are the new personal trainer highlights a trend we've been tracking since 2008, the growth of personal services. 

These are what noted labor economist David Autor calls "wealth work". 

A good example is the growth are personal trainers. Back in 2000 there were so few the Bureau of Labor Statistics (BLS) didn't track them. Now there are over 300,000 in the U.S. and it continues to be a fast growing profession.

The chart below, which is from one of Autor's presentations, shows other examples of wealth work (click to enlarge).

Autor attributes the growth of wealth work to rising incomes. But in addition rising incomes and a growing group of wealthy folks, there are 4 other drivers: 

1. A Lack of Time:  Unlike the prior generations, most affluent Americans work - and work long hours.  A lack of time, coupled with high earnings, means outsourcing personal tasks makes a lot of sense.
2. Life's Growing Complexity:  Many tasks have become so complex or specialized that outside help by professionals is simply required.
3. Fear of Falling Behind:  Many wealth or well-off people are concerned about falling behind, or their children falling behind. This has led to coaching of all kinds. Think sports, academics, arts and music coaching for kids and things like life coaches, career coaches, wealth managers, etc. for adults. 
4. Wealth workers don't just cater to the wealthy. People with even modest incomes increasingly utilize personal services.

The last point is very important.

Much of what is called "the on-demand economy" and "sharing economy" falls into the personal services sector. Everything from dog walking to food delivery to running errands can now easily and cheaply be outsourced to personal services companies.

These firms have democratized the use of personal services, which means it's not just the rich driving demand.

Not everyone thinks the rise of wealth work is good. For example, Atlantic's recent article The Servant Economy is, no surprise given the title, quite negative on this trend. 

We're more positive. 

But no matter how you feel about it, the long-term outlook for high-end personal services is strong.  Life is unlikely to get easier or less complex anytime soon, so it's likely more people will utilize personal services. 

Pets Used to be for Kids. Now they are Kids.

Petcare Everywhere, from J. Walter Thompson Intelligence, covers how brands are responding to millennials increasingly choosing pets over kids.

Key quote:

"Traditional life-stage choices are shifting, seeing millennials waiting longer to have children – and choosing pets with increasing fervor. Millennials are now the primary pet-owning demographic ... What’s more, 82% of millennials see their pets as their children or as the first step towards starting a family. Pet-care brands have capitalized on this with anthropomorphic products like canine couture, feline wine and dog hotels. Now, brands beyond the pet sector are catering to this growing demographic of pet parents."

The article highlights Tesla's new Dog Mode, which keeps the car's climate control system working so pets are safe while left alone in the car. It also displays a large notice to passerby's that the animal is safe. 

But our favorite is Jaguar's Pet Pack, which is pictured below.

It includes anti-spill water bowls, upholstery protections rugs, a folding ramp to help a dog access the trunk and a portable doggie shower.

The reason brands of all kinds are adding pet products is simple. The pet industry is growing rapidly. 

According to the article, the global pet care industry is expected to grow to $164 billion by 2023 – a 31% increase from 2018. 

This is much faster than most consumer goods categories.

Pet humanization is, of course, driving this trend. Key article quote:

“Pets used to really be for the kids,” said Gabby Slome, cofounder and chief experience officer of pet wellness brand Ollie. “Now pets are becoming the kids in a whole new way. Therefore, their place in the household is sort of unprecedented.”

See our Pet Trends section for more on this topic. 

Kauffman Foundation Indicators Show U.S. Entrepreneurship Near 20 Year High

The Kauffman Foundation recently introduced the Kauffman Indicators of Early Stage Entrepreneurship. 

The indicators cover:

• Rate of new entrepreneurs: The broadest measure possible for business creation by population.
• Opportunity share of new entrepreneurs: The percentage of new entrepreneurs who created a business out of choice instead of necessity.
• Startup early job creation: The number of jobs created in the first year of business.
• Startup early survival rate: The rate of survival in the first year of business.

The indicators cover the time frame from 1996 to 2017 and will be updated annually. They replace the Kauffman Index, which was also on entrepreneurial activity but not as data intense.

We first reported on the old Kauffman Index back in 2007 and have followed it every since. We will, of course, continue to follow the new indicators.

The most interesting finding from the new indicators is that early stage entrepreneurship was near a 20 year high in 2017. 

As the study chart below (click to enlarge) shows, the rate of new entrepreneurs is fairly stable.

But after peaking in 2010, it declined until 2013 and then started to increase again. 

The Kauffman Indicators use a somewhat unusual entrepreneurship measure - the percent of the adult U.S. population who create a new business each month. 

In 2017 this worked out to be .33% of the adult population, or 330 out of 100,000 adults. This is just shy of the .34 in the peak years of 2009 and 2010.

There have been a number of reports on the decline of entrepreneurship in the U.S. over the past few years. See this Brookings Study or the Washington Post's The decline of American entrepreneurship — in five charts for examples.

The Kauffman data shows otherwise.

We agree with Kauffman that entrepreneurship is alive and well in America. We'll explain why in a future article. 

Mercer's Global Talent Trends - Disruption and Greater Use of Non-Employee Labor Ahead

The global human capital consulting and services firm Mercer recently released their annual Global Talent Trends study.

For the 2019 edition of this study, they surveyed over 7,300 business executives, HR leaders, and employees from around the world on a variety of talent and HR issues.

The major finding is 73% of the executives surveyed expect their industry will experience significant disruption over the next 3 years. 

The study chart below (click to enlarge) summarizes the main sources of disruption by industry. 

Despite this view that disruption is coming, most of the executives surveyed are optimistic about their firm's prospects - 4 out of 5 believe their company can lead their industry's disruption.   

The rest of the study findings reflect this thinking about industry disruption.

They show firms and executives are working to increase their business and talent agility and flexibility so they can quickly respond to change.

Not surprisingly, this includes the increased use of contingent labor.

What is a bit surprising is the extent to which the executives expect to increase their use contingent labor.

Key quote:

"... 79% of executives expect that contingent and freelance worker will substantially replace full-time employees in the coming years ..." 

Substantially replacing full-time employees seems unlikely to us, at least over the next decade.

But we certainly agree the use of contingent labor by corporations will increase, which means more opportunity for independent workers.

Most CFO's Use Non-Employee Labor for Major Initiatives

New research from Robert Half Management Resources found nearly seven in 10 CFOs (69 percent) use non-employee labor for major one-time business initiatives, such as an acquisition or system implementation.

As the study infographic below (click to enlarge) shows, the most common approach is using a combination of internal and external teams.

The top reason for using external talent is access to specialized skills.

This study illustrates the growing use of highly skilled independent workers by corporations.

We'll have more on this topic in the near future.

Results from the European Freelancers Study

The European online talent marketplace Malt and the European Forum for Independent Professionals recently released Freelancing in Europe, a study based on a survey of close to 1,000 European freelancers. 

The results are generally consistent with studies of U.S. freelancers.

As the study chart below (click to enlarge) shows, the main reasons for Europeans becoming freelancers are quite similar to the reasons Americans do.

The same is true for the challenges of being a freelancer. 

It's not surprising the data is consistent. The same trends and shifts driving the growth of the gig economy in the U.S. are also impacting Europe. 

So the consistency shows that the growth of freelancing and independent work is global.

For more on this study, see future of work expert Marco Torregrossa's excellent What we learnt from the first ever European Freelancers Survey. 

BTW, Malt recently raised $28.6 million. They're based in France, which means this is the second day in a row we've featured a French startup that recently raised lots of money. 

Insect Farming Company Ynsect Raises $150 Million

Ynsect, a Paris-based producer of insect protein used in fish farming and pet food, recently raised $125 million. 

The company is using the money to expand in the U.S. and build the world's largest insect farm in Northern France. They plan to grow mealworms, which are larvae of the beetle species Tenebrio molitor (not that you care) at the plant.

       

Key quote from CEO of Ynsect from the TechCrunch article Tech investors see bugs as a big business as Ÿnsect raises $125 million on why insects are a good protein choice:

“By offering an insect protein alternative to traditional animal and fish-based feed sources, Ÿnsect can help offset the growing competition for ocean fish stock required to feed two billion more people by 2050, while alleviating fish, water and soil depletion, as well as agriculture’s staggering 25 percent share of global greenhouse gas emissions,” says Hubert. “Our goal is simply to give insects back their natural place in the food chain.”

We've covered the use of insects as a food source in the past.

And while insects are popular snack foods in parts of the world, most people continue to be hesitant to embrace eating bugs. So using bugs to feed fish, pets and livestock makes a lot of sense.

Insect farming is another example of the many changes happening in the food industry. See our Small Farms section for more on this.

Food Delivery Continues to Boom

It's been an interesting couple of weeks in the food delivery industry. 

Controversy swirled around grocery delivery company Instacart and their policy on tipping, witch many called wage theft.

While this led to Instacart changing their policy, other food delivery companies so far are continuing with their tipping practices despite complaints by both drivers and customers. 

The furor over tipping overshadowed a lot of news showing that the food delivery industry continues to boom. Examples include:

• Doordash is in the process of raising roughly $500 million at a valuation of more than $6 billion. This is a substantial increase in their valuation.
• Postmates has filed to go public. This is after recently raising $100 million at a $1.85 billion valuation.
• Walmart is partnering with delivery companies to provide same-day grocery delivery to 40 percent of households across the United States.
• Uber's financials suggest its delivery service, Uber Eats, is likely going generate $1 billion or more in net revenue in 2019.

And as the chart below from the Forbes article Uber's Secret Gold Mine shows, Uber Eats is about the same size as U.S. industry leader GrubHub.

The rapid growth of food delivery is also creating opportunities for a new kind of restaurant.

Referred to as "ghost" or "cloud" Kitchens, these restaurants prepare food for off-site dining only and use firms like GrubHub and Uber Eats for delivery. 

This, BTW, is an excellent example of how digital transformation is changing industries. 

The on-demand economy continues it's rapid growth. And, of course, it's not just food on demand. Everything is on demand and everything is being delivered.

And we see no reason why delivery shouldn't continue its rapid growth.

Purpose and a Paycheck and the New Retirement

Purpose and a Paycheck is a new book from Chris Farrell, a leading expert on retirement and workforce issues facing people over the age of 50. 

The book covers the "new retirement".

This is the growing trend towards older workers delaying retirement and continuing to work, either in traditional jobs or by starting their own businesses.

Regular readers know this is a topic we cover often (see our Baby Boomer section). 

In fact, back in 2013 we wrote:

We've written so often for so long about Americans - and especially baby boomers - delaying retirement that we're honestly getting tired of the topic. 

But since then it has grown in importance. 

The reasons are encapsulated in the book's tagline: finding meaning, money and happiness in the second half of life. 

Lots of research, much of which is cited in the book, shows that staying engaged and active in retirement leads to greater levels of health and happiness. 

Older Americans have figured this out and more and more are choosing to work longer — or have to, given that many haven't adequately saved for retirement.

This makes Purpose and a Paycheck a timely look at this topic.

The book's first few chapters debunk "the myth of creative decline" by pointing to extensive research showing that older people are as creative, innovative and entrepreneurial as their younger peers.

Farrell also covers research showing that older workers are generally just as productive and younger workers, and often more productive. 

The rest of the book focuses on the different ways older workers are staying attached to the economy. This includes self-employment, entrepreneurship, full-time jobs, part-time work, flexible employment and encore careers in both the for and non-profit sectors.

Throughout the book Farrell includes personal stories of people who’ve successfully continued working well past the traditional retirement age.

These stories include practical advice that anyone considering the new retirement will find useful.

The book also contains an analysis of the economic impact of an aging society as well as policy suggestions on how to deal with ageism and other age related issues.

Anyone considering working past the age of 55 will find this book of great value.

So will anyone who is older and not working, or younger and planning on not working when they get older. 

While choosing a life of leisure sounds great. The reality is those who stay engaged and contribute to society live better lives.

"Job Crafting", Independent Work and the American Dream

"Job crafting" describes the ways in which employees redesign and customize their jobs to foster greater work satisfaction and engagement.

This is done by breaking a job into tasks and then deciding what to do less and more of. 

The New York Times article How to Make Work Better covers job crafting and suggests greater use of it by those with traditional jobs would make work much better. 

It also points out that the academic researchers who came up with the concept were "inspired by what freelancers and entrepreneurs do." 

And, of course, independent workers and entrepreneurs are natural job crafters.

Our research, and the research of others, has consistently shown having work autonomy, control and flexibility is a key reason people become and stay self-employed.

Work freedom and control means independents can craft their work to their needs and desires. They can focus on the tasks they like to do and work when, where and how they like to work. 

We don't just want flexibility, control and autonomy in our work. It's also a central part of the American dream.

Another New York Times article - The American Dream is Alive and Well - covers a study by the American Enterprise institute that included asking Americans their view on the American Dream. Key quote on what the study found:

When Americans were asked what makes the American dream a reality, they did not select as essential factors becoming wealthy, owning a home or having a successful career. Instead, 85 percent indicated that “to have freedom of choice in how to live” was essential to achieving the American dream.

The chart below is from the AEI study and shows how Americans rank the components of the American Dream.

A recent Harris Poll also found that "six in 10 Americans (60 percent) said freelancing is the modern version of the American dream."

As we pointed out last week the trend towards desiring greater levels independence - and the autonomy, control and flexibility that comes with it - takes many forms. 

Job crafting is one form. Self-employment is another. And for many, so is pursuing the American Dream.

Modern Homesteading and the Trend Towards Greater Independence

The trend towards desiring greater levels independence - and the autonomy, control and flexibility that comes with it - takes many forms. 

Since we track the future of work, we spend most of our time researching the growth of independent work (freelancing, independent contracting, self-employment, etc.).

But there are other aspects to this trend. For example, the growing FIRE (Financial Independence, Retire Early) movement is all about independence. 

Another example is modern homesteading, which the Small Town Homesteading blog defines as:

Homesteading is a lifestyle of the pursuit of self-sufficiency and sustainability. It is often characterized by subsistence agriculture, livestock production, home preservation of foodstuffs, and it may or may not also involve other tasks such as; the small scale production of textiles, clothing, and craftwork for household use or sale.

Data on how many people are pursuing this lifestyle is non-existent. But according to the book The Modern Homesteader:

Dreams of self-sufficiency, independence, and tranquility continue to pull in a new generation of modern homesteaders.

We believe the movement is growing, although it continues to be small.

We also think that much like the digital nomad movement, most followers are "armchair homesteaders" who will never become real ones.

Instead, they will do things like raising chickens in their back yards or spinning yarn. 

For those interested in modern homesteading, there are a number of events you can attend to learn more. We're going to try to go to the DIY Homesteader Festival, which is being held outside of Winnipeg, Canada this August. 

We've never been to Winnipeg and figure if we're going to go, August is the month to do so. 

Modern homesteading is an edge community that has formed, in large part, around the desire for greater independence. This makes it interesting to us. 

Colliers on Coworking - It's "Established, Expanding and Evolving"

Colliers International, a global real estate services and investment management company, recently released their 2019 U.S. Flexible Workspace Outlook Report.

According to the report's introduction, its purpose is "to help office occupiers and investors alike to better understand:

• The rationale behind using flexible workspace
• Examples of leasing models
• Types of experience models
• The volume and characteristics of flexible workspace in leading U.S. markets
• Key issues facing the sector"

This by itself is quite interesting.

It wasn't that long ago when real estate investors, enterprise occupiers and the services firms, like Colliers, that work with them weren't interested in coworking. 

But coworking and flexible workspaces have reached the size and scale that its impacting and even changing commercial real estate. So now there's lot of interest from these firms.

The growth of flexible workspaces is nicely shown in the report chart below. The amount of coworking and flexible workspace in 19 major U.S. cities grew by almost 50% in the 18 months between 2016 and Q2 2018. 

Despite this growth, coworking comprises only 1.6% of commercial office space. This means it still has a lot of room to grow.

Other key report highlights include:

• Flexible workspace continues to grow at a rapid pace, now accounting for one-third of office leasing in the last 18 months alone (bolding ours; we think it's an important point). 
• Firms are leasing shared space for everything from surge space to touchdown space for traveling executives to incubators for new products and project teams, among others.
• Flexible workspace providers are shifting their focus to target larger corporations and enterprise clients.
• Flexible workspace is impacting traditional leasing models and firms’ occupational portfolios, together with the nature of how office space is designed and utilized. Traditional owners are responding with their own flexible space and lease options.

Overall the report is quite good and well worth reading for anyone interested in coworking/flexible workspaces or the commercial real estate sector.

Rig Up and the Growth of B2B Niche and Specialty Gig Talent Marketplaces

Rig Up, an online talent marketplace that connects oilfield workers who are looking for a job with oil and gas companies, recently announced it had raised $60 million in VC funding. 

The company was founded in 2014 and it pre-qualifies contract oilfield workers and helps them find gigs quickly and easily with energy firms. 

Thanks to fracking, U.S. oil and gas production has been growing steadily for the last decade, with oil production at an all time high.

This is leading to strong demand for oilfield workers.

Rig Up's gig marketplace helps oilfield services firms find and hire workers quickly while tracking contractor compliance and minimizing administrative work.

Consumer oriented Gig platforms like Uber, Airnbnb and Lyft tend to get all the media attention.

But B2B specialty platform targeting industry niches (like oilfield services) and/or professions (like legal or accounting) are rapidly growing in number, scope and scale.

Another example is Jyve, a gig platform that connects workers with retail work.

Jyve just came out of stealth mode with their announcement they've raised $35 million. They claim to already be supplying contract talent to 4,000 stores.

At this point there are many B2B gig platforms that are as large or even larger than Uber in terms of the number of gig workers working through them (but an important caveat is they are not nearly as large in terms of gross revenue generated).

So when you think gig economy, you need to think way beyond the consumer space.