As the chart below illustrates (click to enlarge), after a fall in 2020 due to business shutdowns, the number of independent workers (freelancers, solopreneurs, self-employed, gig workers, etc.) grew dramatically, increasing by 89% between 2020 - 2023.
This is roughly a 10x increase in the growth rate compared to its pre-pandemic trend line growth rate.
The data comes from the 2023 MBO Partners State of Independence study, the 13th year this study has been conducted.
But it's not just data from this study showing this shift. The U.S. Census collects monthly data on new business applications (tax ID applications).
Their data also shows a surge in new business applications, with most coming from what the Census calls "applications other than high-propensity".
These are applications that the Census thinks are unlikely to lead to businesses with employees - in other words, solopreneur applications (in blue in the chart below).
Making this continued surge more interesting is that many trends initially accelerated by the pandemic have reverted to their prior trend lines.
One example is ecommerce. There was much discussion in 2020 and 2021 that the pandemic had accelerated ecommerce by 10 years or more.
But as the data below shows, ecommerce has reverted to its pre-pandemic trend line. So have things like dining out, travel, attendance at sporting events and others.
We're forecasting continued growth in the number of independent workers over the next 5 years, but we expect the growth rate to slow.
The reasons are straightforward - the big one is that the independent workforce has grown so large that its growth rate naturally will slow. Also, labor markets don't move as fast as they have over the last 3 years, and we expect to see some reversion to prior growth rates in the coming years.
But it's clear the shift to independent work has been accelerated - and we believe this shift will continue.
Emergent Research (that's us) worked with MBO Partners on this study.
