The factors shaping the old economic model have changed drastically in the last three decades.
The read-only internet transformed into the interactive internet of today, significantly increasing the range of services and goods that professionals could offer online. That shift coincided with the Great Recession, which undermined the traditional firm’s promise of security and forced many full- time professionals to work independently for the first time.Online job marketplaces like Fiverr and Upwork emerged in the early 2010s, lowering barriers to entry even more. The pandemic pushed professionals across industries into remote work: before 2020, 4% of high-paying jobs were remote, but 25% of North American jobs are expected to be by the end of 2022.
Once remote, many professionals discovered they could maximize their productivity and profitability without a large firm’s backing. Nearly half of those who went independent say they earn more than they did as employees. Professionals are now choosing to work for themselves at historic rates: In 2020, the United States saw a record 4.4 million new businesses created — a 51% increase over the previous decade’s average.
Professionals can do so because the marketplace costs of independent work have drastically decreased and job platforms have made spending on advertising and marketing less necessary. Human resource functions, including tax withholding, record keeping, and benefits, can be affordably sourced through software such as QuickBooks and digital collectives like Opolis.
Technology allows businesses to effectively engage the open market to meet marketplace costs directly, as the World Bank predicted in its 2019 report, “The Changing Nature of Work.” As those costs have fallen, so too has the need for firms and professionals to work together as employer and employee. Instead, they can work as peers, business to business.
Nearly a century ago, the economist Coase forecast two possible outcomes: one where a massive global firm controls the world economy and another where companies no longer exist and production is wholly dependent on autonomous markets.
We believe future resources will be coordinated not by monopolistic companies but by individuals forming “firms-of-one” while banding together to reduce marketplace costs under socially and economically aligned collectives. This new remote work economy isn’t served by the disjointed tools and services of the old economy. Instead, it requires a platform that prioritizes the needs of professionals by reducing their costs to engage in the marketplace even further.