Small Business Labs

HBR on Digital Nomad Visas

Harvard Business Review's How "Digital Nomad" Visas Can Boost Local Economies covers the advantages digital nomad visas provide to both digital nomads and the countries they travel to. Key quote:

"... digital nomads invest their time and money in the local economy, without taking local jobs, and build bridges with local knowledge workers — a win-win for both remote workers and local communities."

The article also points out the rapidly growing trend of companies allowing their employees to work from anywhere, at least part of the time:

"More and more companies are offering their employees the option to "work from anywhere," whether in their home office, in another state, or even halfway around the globe." 

This is in line with the findings from our digital nomad studies.

In 2021 we found that the number of American digital nomads with traditional jobs increased by 42% in 2021, growing from 6.3 million in 2020 to 10.2 million in 2021.

This was on top of the number of digital nomads with traditional jobs almost doubling in 2020 compared to 2019.

In response to their growing numbers, countries worldwide are offering special visas for digital nomads.

This mainly started with smaller countries and countries heavily dependent on tourism. But over the last couple of years, larger countries like Spain, Italy, and Germany began offering digital nomad visas. 

Below is the article's comprehensive list of countries with digital nomad visas and related requirements (click to enlarge)

       

Because of the rapidly growing number of digital nomads, corporations need to put in place policies and program to support these workers, and protect themselves from regulatory and legal risks. See our HBR article Your Company Needs a Digital Nomad Policy for more on this topic.  

And for more general information on digital nomads, see the MBO Partners report Digital Nomad: Advancing the Next Wave of Working or visit our digital nomad section.

Why Traditional Jobs are Becoming More Like Freelancing

The COVID-19 pandemic has accelerated a longer-term trend toward firms offering freelance-like flexibility and other benefits to at least some of their employees. 

Two trends are the main drivers of this shift. 

1. Workers are reevaluating what they want from work

The pandemic has caused people to rethink their jobs, personal interests, and how work fits into their larger life goals. And many want more work autonomy, control, and flexibility - attributes associated with freelancing and other forms of independent work.

Also, traditional jobs have lost one of their key selling points. Workers no longer see them as being as secure as they used to be.

This also is leading workers to prioritize work that fits their values and allows more control over how, where, and when they work - including the ability to work remotely - instead of focusing on job security.

And companies are responding. 

A great example is Unilever's U-Work program, which the company describes as:

"U-Work gives employees the freedom and flexibility associated with contract roles with the security and benefits typically linked to permanent positions... People in U-Work don't have a fixed role. They work on varying assignments and, between assignments, are free to do other things that are important to them. "

While programs as extensive as U-Work are rare, many firms are increasingly incorporating some of these features to improve their employee value proposition and attract and retain talent.

2. Work is being taskified and projectized

While not a new trend, the taskification of work has been accelerated by the pandemic. The new book Work Without Jobs describes this as "deconstructing jobs into their component parts and reconstructs these components into more optimal combinations that reflect the skills and abilities of individual workers."

This taskification of jobs leads to greater workforce agility and flexibility, which is growing in importance due to the pace of change and competitive pressures. 

Taskification also results in more project-based roles instead of the steady, regular, ongoing employee roles of the past. And these new project-based roles look a lot like freelancing.

Companies are even building internal employee gig marketplaces. The internal gig talent marketplace company Gloat describes these marketplaces as:

"... the internal talent marketplace is a two-sided platform that harnesses the power of AI to align employees (and their skills) to projects, gigs, mentorships, and full-time roles within their organization."

This is much like the descriptions provided by online freelance marketplaces like Fiverr, Upwork, and others to describe their services.

So, in essence, internal gig marketplaces turn traditional employees into employee freelancers - at least part of the time.  

Over the past couple of decades, many traditional jobs took on some of the negatives associated with freelancing - they became less secure, with reduced benefits and less predictable schedules and income.  

But labor shortages, coupled with the trends described above, are leading companies to increasingly provide traditional jobholders with the benefits of freelancing instead of just the negatives.

An important point to note is this shift mostly applies to knowledge workers, and especially those with specialized skills.  So not everyone is seeing the benefits of this shift.

But one group that is especially benefitting is retirement age workers, who especially like the flexibility, autonomy and control - and extra income - freelancing provides.

For more on the advantages of freelancing for retirement age workers, see TopTal's Redefining Retirement: The Benefits of Freelancing After 60.  

The Rapidly Growing Secondhand Apparel Market

Online consignment and thrift store ThredUp recently released their 2022 Resale Report, which focuses on the resale of apparel.

The key finding is that the U.S. resale apparel market is expected to double over the next 5 years (click on the report chart below to enlarge). 

ThredUp, who produced this forecast, is hardly an unbiased source.

But resale sales are currently booming, and second-hand goods sales were growing before the pandemic. 

Also, the trends driving the growth - sustainability, reduced costs, an opportunity to make money - continue to be strong. And added to these are inflation and ongoing supply chain issues, both of which make second-hand goods even more attractive.  

So doubling over the next five years seems like a reasonable forecast to us.

Another indication that the growth forecast is reasonable is that many traditional retailers, including LuLu Lemon and Ikea, are launching resale programs.

Sales of second-hand goods is a popular activity for many independent workers. The report claims 73 million Americans sold second-hand goods in 2021.

Most of these folks don't see this activity as a business. But many do, and many more are likely to join them in the coming years.

The Growth of the Multi-Earner Trend

Morgan Stanley's Goodbye Gig Economy. It's a Multi-Earner Era describes the long-term trend towards people having multiple sources of income instead of relying on a single traditional job.

Key quote from the article:

"The concept of working multiple jobs isn't new. But what has changed is the desire to eschew or supplement traditional employment, as well as the ability to do so cheaply and at scale using platforms that reach large and growing audiences."

The article has an interesting taxonomy describing the various online platforms used to earn money today. They call it the X to Earn Ecosystem:

• Create-to-earn platforms include everything from YouTube and TikTok posts, to original music, art, and more.
• Sell-to-earn platforms represent two categories: merchants selling or re-selling products via large marketplaces and small businesses using platforms to run or amplify their businesses.
• Deliver-to-earn platforms focus on delivery, takeout food, and other staples.
• Rent-to-earn platforms make it easy for owners to rent their vacation rentals and personal car rentals.
• Invest-to-earn platforms represent two categories—traditional and crypto investing.
• Gig-to-earn platforms are among the more established in the segment and include such areas as ride-sharing, task sharing, and professional outsourcing.
• Play-to-earn platforms, also known as P2E, have been growing in popularity, in part out of enjoyment but particularly because players are rewarded in a variety of cryptocurrency tokens for their participation.

The article also points out that many of the multi-earners hope to be able to leave their traditional job and focus on X to Earn activities. Key quote:

"An average of 40% of people earning across all X-to-Earn categories surveyed suggested that they aspire to leave their full-time jobs in the coming six months to focus on these income streams."

We've long covered the trend towards multiple sources of income.

In 2014, in conjunction with Intuit Corporation, we released Small Business Success in the Cloud. As part of that study, we discussed career portfolioists, which we described as:

"Successful cloud-adapted freelancers will bring together multiple income streams to create a career portfolio."

The chart below (click to enlarge) is from that study.

The proliferation of X to Earn platforms has made it cheaper, easier, and less financially risky to generate revenue from various activities.  

And as we know from economic theory, when things become cheaper and easier, their use tends to grow.

That's certainly the case with multi-earners.  

The Hollywood Model and Freelance Teams

A.Team is a new startup that helps companies easily and quickly assemble teams of vetted specialists to design, build, and bring digital products to market.  

Their focus on teams is referred to as the Hollywood model, which is often touted as the future of work. The 2015 New York Times article What Hollywood Can Teach Us About the Future of Work describes this model as:

"A project is identified; a team is assembled; it works together for precisely as long as is needed to complete the task; then the team disbands." 

A.Team is already described as using the Hollywood model and even has Hollywood celebrities as investors. Key quote from the Forbes article Tech Talent Startup A.Team Raises $55 Million From Investors Like Adam Grant And Jay-Z: 

"Like a Hollywood producer that brings together talent to make a movie, A.Team's business model is based on matching top-tier talent with worthy projects. That means vetting and restricting who gets on its platform, soliciting the right client work, and creating community through content, connections, and conversation."

Freelance teams are not new. We started Emergent Research two decades ago using this model - and we still use it today.

Also, large freelance talent marketplaces like Fiverr and Upwork released teaming services several years ago.  There are also many niche firms providing project teams.

For example, Communo provides creative and production teams for marketing and media projects. There are similar firms in a variety of fields.

We find A.Team interesting for several reasons.

First, as the A.Team chart below shows (click to enlarge), their focus is on larger, longer term projects (they call them "missions") that use highly skilled labor.  

Others are also doing this. But A.Team illustrates that the appetite for high end freelance teaming continues to increase.

We also like their stated focus on building community among their freelancers. Again, others are also doing this. But so far, few have cracked the code of making freelance communities genuinely effective. We'll be interested to see if A.Team figures it out.

BTW, we think A.Team should sign Mr. T as their celebrity spokesperson.  No doubt we're not the only ones suggesting this.

Most Retirees and Pre-Retirees Plan to Work in Retirement

Longevity and the New Journey of Retirement was recently released by the consulting firm Age Wave and the financial services firm Edward Jones. The report covers:

"... how the journey of retirement unfolds, the patterns of people's experience in retirement, and the keys to thriving along the way."

The report is quite comprehensive and covers a lot of ground in its 43 pages. And the entire report is well worth reading if you're interested in or thinking about retirement.

But we're most interested in work in retirement, so we'll focus on that.

As the report chart below shows (click to enlarge), 59% of retirees and pre-retirees (aged 45+) surveyed said they plan to work during their retirement years.

As we've pointed out, the highest self-employment rates are for those aged 60 and older. There are many reasons for this.

Older workers tend to want more work flexibility than younger ones. They also often have developed the skills and networks that make flexible self-employment viable. And age discrimination means self-employment may be their only choice.  

Given the size of the baby boom generation, this means a growing number of new independent workers as this large cohort continues to retire.

Interestingly enough, we dug through our archives and found a 2011 Age Wave report called Retirement 3.0. Key quote from that study:

"A productive, purposeful and challenging new chapter in life - blending work and leisure - with opportunities for personal reinvention and continued social engagement."  

So this trend has been in place for some time. And yes, we've been following this trend for too long.

See our Baby Boomer section for more on aging boomers and retirement.

HBR on the Promises and Perils of Web3

Recently Web3 has replaced Web3.0 as the preferred way of referring to Web3.  

Although we've actively followed Web3 for years - we first covered Bitcoin in 2013 and Blockchain in 2015 - we don't know when or how this name change happened.  

But we see this change as an excellent example of the constantly swirling world of Web3 world, which the Harvard Business Review article What is Web3 describes as:

"... the confusing, contested, exciting, utopian, scam-ridden, disastrous, democratizing, (maybe) decentralized world of Web3." 

HBR's What is Web3 is the opening article in a Web3 series by HBR. The chart below (click to enlarge) shows the other articles in the series.

The series covers both the potential positives and negatives of Web3.  

We're not going to attempt the summarize the series - the opening alone is about 4800 words.  

All the articles cover the promises of Web3, which can be summed up as democratizing the Internet, freeing us from Big Tech and exploitative capitalism.

They also cover the potential perils, including failure to accomplish the promises while significantly increasing fraud, scams, and other illegal activities.

Interestingly enough, these promises were pretty much the the same in the early days of the PC.  

Apple's famous 1984 ad is an example.

These promises were also made when the Internet first came out (Web 1.0) and when social media arrived (Web 2.0).

And, like these other technologies, the reality of Web3 will likely be neither as utopian as the promises, nor as dystopian and perils.  

Overall, we consider ourselves Web3 optimists and we think it will create new opportunities for businesses and users.   

Because of this, we liked articles 4 and 5 the most. They talk about tangible applications of Web3 tech.

But the others are also well worth reading because the perils are real. The recent collapse of stablecoin cryptocurrencies is a good example.  

We also suggest Wired's Paradise at the Crypto Arcade: Inside the Web3 Revolution.

It's another long article covering the potential good and bad of Web3.  

Keeping Up With The Metaverse

Activity around the metaverse continues to grow. And keeping up with it continues to get harder.

But as the activity grows, so does the coverage. And we found two recent sources on the metaverse to be quite informative.

Wunderman Thompson's New Realities: Into the Metaverse and beyond report is 80 pages long. It covers data from consumer surveys on the metaverse and details how corporations are participating in the metaverse.

The industries covered include retail, finance, health & wellness, food and drink, entertainment and sport, beauty, and government.

And the coverage of corporate metaverse early adopters is excellent.  

The report chart below (click to enlarge) illustrates where consumers are on the metaverse - 74% say they are aware of it, but only 15% can explain it.

Wunderman Thompson is a leading global consumer marketing firm. Because of this, the report is well worth reading for anyone interested in consumers and the metaverse.

Insider's article Insider's Guide to the Metaverse: How to play, make money, and party in 7 of the most popular virtual worlds right now is also quite interesting.

The seven virtual worlds covered in the article are Axie Infinity, Cryptovoxels, Decentraland, Roblox, The Sandbox, Somnium Space, and Star Atlas.

Most are games, but all are described so that metaverse novices (and non-gamers) will understand how the operate.  

The metaverse is already a big industry (most definitions include online games) and is growing very fast. 

But despite its size and growth, most small businesses don't need a metaverse presence today. But over the next few years, the metaverse will, in some way, impact most companies (especially consumer businesses).  

So we think it's worth starting to pay attention to the metaverse.

What is the Ownership Economy?

The VC firm Variant recently released The Ownership Economy - A primer on the state of Web3.  

Variant defines the ownership economy as:

"... the products and services that will define web3—and the next generation of the Internet—are those that transform users into owners. We call this the ownership economy."

The essay points to crypto tokens (also called social tokens) as the main method of transforming users into owners.

Crypto tokens are a form of cryptocurrency. Because of this, they have many features that make them a better choice than traditional equity for sharing ownership. Key quote from the essay:

"Tokens have a richer and more frictionless design space. They can be distributed programmatically, with the potential to reward participants versus those who buy-in; they are effectively free to deploy, and they can transfer value in the same way we transfer information—instantly, to anyone, anywhere in the world."

So, in theory, anyone who uses a digital product or service could buy, or be given, crypto tokens that provide ownership in the product or service - or at least some form of participation in the value created by the product or service.  

We've covered several examples of how this works in prior articles:

1. What are Social Tokens (also called Creator Coins) and Why You Should Care covers how creators use tokens to engage, build, reward, and monetize a community of fans and customers - and provide a way for the fans to benefit from being a fan financially.  
2. The Rise of Crypto Clubs covers how tokens are being used to create new member-owned social and business organizations. And because the members are also owners, they benefit financially if the organization has financial success.

The hope of the ownership economy - and Web 3.0 - is that the financial rewards generated by the Internet will become much more decentralized and democratized.  

In more simple terms, instead of VCs and company founders becoming billionaires while users get nothing, the wealth created by goods and services will be broadly shared with users.

This is hardly the first-time technology democratization claims like this have been made. So far, these claims have failed to materialize.

And although the four words most wrong in forecasting are "this time is different," this time could be different.

The essay's primary focus is to educate startups and founders on potential ownership economy opportunities.

The essay chart below (click to enlarge) shows the wide range of firms currently working in this area.

Many terms in addition to "the ownership economy" are used to describe how technology is empowering new ways for people to become entrepreneurs or solopreneurs.

These include the passion economy, the creator economy, the empowerment economy, the freelance economy, and - of course - the gig economy.  

But no matter what you call it, it's clear technology is creating more opportunities for people to become self-employed and owners.

The Shrinking American Middle Class

Pew Research's How the American middle class has changed in the past five decades reports that the share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021.

As the Pew chart above shows, while the middle-income share was falling, the upper-income tier increased from 14% in 1971 to 21% in 2021. Also rising was the share of those in the lower-income cohort, from 25% to 29%.

At first blush, these numbers don't look so bad. After all, increases in the upper-income cohort explain 63% of the decrease in the middle class.

But the Pew chart below tells a more troubling story.

In 1970, middle-income households accounted for 62% of U.S. aggregate income. But by 2021, their share had fallen to 42%. 

Meanwhile, upper-income households increased their share of U.S. aggregate income from 29% in 1970 to 50% in 2021.  

The main driver of the share growth is that the income of upper-income households increased by 38% more than the incomes of middle-income households - and by more than 50% faster than low-income households.

Pew didn't go deeper in this study, but a prior Pew report - Trends in Income and Wealth Inequality - reported that the top 5% of households saw the most rapid growth in household incomes.

In other words, much of the share growth in aggregate income by upper-income households is attributable to the fast-rising incomes of the top 5% of U.S. households.

Widening income inequality has a variety of social, political and economic impacts. Growing political polarization is one example. 

And an economic example is the growth of both dollar stores and luxury retail. 

Another is the rise of side gigs and the gig economy due to the increased need for supplemental income by lower income Americans.  

The trends driving inequality continue to be in place, and we expect income and wealth inequality to continue to increase.