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Maine's Expanding Gig Economy

August 31, 2020 1:21 PM | Terry Johnson (Administrator)

Gig workers are independent contractors, typically service providers.  They run the gamut from Uber drivers to freelancers to highly paid professional consultants.  They are paid by the project…. the “gig.”  The Gig Economy is the sum of those contractors, the work they perform, and the businesses that pay them.

Entrepreneurs are the foundation of the Gig Economy, and when you join you become an entrepreneur. You are starting your own business and becoming a member of the start-up community. You are also an essential contributor to the health of the startup world.

Remote work and an Economic Downturn Set the Stage for Expanding the Gig Economy

Before the COVID pandemic, Upwork, a leading digital platform, projected that by 2027 more than half of U.S. workers would be self-employed.  The pandemic added two key drivers to this trend: 1) a pivot to remote work; and 2) an economic downturn.

Remote work is here to stay. Never have so many employers and employees tooled up for remote work.  According to Dr. Ryan Wallace, Director of the Maine Center for Business and Economic Research at the Muskie School of Public Service, from 2000 to 2016, before COVID, remote work expanded 123% nationwide, compared to 18% for non-remote work. By 2016, more Maine workers worked remotely than worked in the entire forest products industry. As a share of overall in-migrants, in 2018 mid-coast Maine had the highest concentration remote workers than anywhere else in the US, while two other regions in Maine also made the top 20.  As remote strategies post-COVID have succeeded, both employers and employees have warmed to the idea that work can get done outside a traditional workplace.

Live + Work in Maine, a non-profit initiative designed to increase awareness about Maine career opportunities, has watched this trend carefully and considered its potential to attract talent to Maine and to keep it here.  Director of Engagement, Katie Shorey says “Maine ranks high on things that matter: healthcare, educated workforce, public education, safety.  Talented people with high-level skills have been thrown into the deep end of remote work because of COVID, and they like it.  They find it more efficient, and less stressful. If being close to the office doesn’t matter anymore, they ask themselves why they shouldn’t live where they want to. Maine’s quality of life naturally supports remote work and deepened interest in moving here.

Gig work makes sense for skilled workers in an uncertain economy. Unemployment numbers are high due to the pandemic. There are more skilled service employees looking for work, willing to accept – even embrace – contract work.  

Technological innovations allowing employers to pivot to remote work are essential to gig workers’ ability to be in more (virtual) places at a time, for more than one client.  Instead of moving for work, once again placing all eggs in a single employment basket, why not stay put for the quality of life, and take on discrete projects for a larger number of businesses…including businesses outside Maine that have embraced remote workers?

What does this mean for Maine?

If remote workers who relocate here already work for out-of-state employers, how does that help Maine employers fill positions?  If they are traditional employees, how can they be members of the Gig Economy? Aside from adding a few employees from away, how does it foster new business?

If you bring them, they will mingle. Isolation is a challenge in remote work; work may be possible from a distance, but workers continue to crave human connection.  Shorey notes that nearly 100 freelancers and remote employees attended a social networking event for remote workers in Portland last winter. The event was organized by Luke Thomas, Founder of Friday - a South Portland software startup focusing on how remote workers can improve communication.

Economies are dynamic.  Talent stands out.  Workers change jobs.  Employers lose employees.  All other things being equal, personal connections count in hiring decisions, and personal connections are easier to make….in person.  If talented remote workers come to Maine, it is just a matter of time before they will become known and available to Maine employers.

They will also develop new businesses.  According to Wallace, it’s a matter of critical mass and proximity.  “When enough talented people are in one place at one time you get ‘knowledge spillover.’ This leads to more opportunities and more new business.”

When gig workers come to Maine, they will also settle in and raise families which adds future generations to the workforce and entrepreneurial environment, thus providing long-term sustainability.

Fluidity.  Participation in the gig economy is fluid.  Side hustles abound and may be a wise financial hedge in an economic downturn. Side-hustles evolve into full time self-employment, by themselves, or with a nudge from a declining economy. From an employer’s perspective, in the same way that  “just-in-time” supply strategies save manufacturing costs, independent contractors, hired on a project basis, and free to take on other gigs may make more sense than a full-time hire in a bad economy.

Start-ups, by necessity, rely on the gig economy. Skilled professionals, available on a contract basis, are essential for launch, and ultimately for scale-up.  It is not financially feasible to hire the skilled talent a start-up needs, but the start-up still needs the talent. The Maine Center for Entrepreneurs relies on its Mentor Network to support its TopGun, Cultivator and MarketShare programs. Members of the network are largely independent consultants, and many go on to a continuing role with the companies they mentor. Technical grants are often available to pay for contracted professional services for promising new companies.

Conclusion

Gig workers are within seven years of becoming most of the US workforce. Traditional job opportunities have shrunk, and skilled service workers have an incentive to become entrepreneurs. Remote work has long been the norm for talented skilled independents; COVID has altered employer perceptions that physical workplaces are superior, and they have responded by retooling infrastructure to retain skilled employees.  Remote workers are now looking at Maine as a lifestyle choice, adding to a talented pool of potential independents whose knowledge will spill over into new ventures.  Start-ups particularly need access to skills outside of a traditional employment relationship.

This is an ideal set-up for expanding Maine's Gig Economy.



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