Digital Nomads in a Gig Economy
Updated: Nov 30, 2018
Below is an excerpt from my soon-to-be-released book: PIVOT - 20 Trends in 2020 That Will Change Your Life Forever...and what you can do it
Trend # 9
Digital Nomads Living in a Gig Economy
In November 2018, GM announced they were laying off 14,000 workers, including 25% of its executives. This particular corporate announcement wasn’t like all the other big company layoffs we’ve heard about in recent years. This declarative event was a glimpse into the future. On the surface, business journalists wanted to highlight that GM had been hurt by steel tariffs that had been haphazardly imposed by the U.S. And while that obviously impacted GM's margins, the real reason they cut these jobs was to pivot wholeheartedly to electric vehicles (EVs) and autonomous vehicles (AVs). How do we know that? They said it. They plan to double the amount of money they are spending on EVs and AVs in the coming years.
So, what does this have to do with digital nomads? If you really examine what GM did, they used an inflection point (pivot to EVs) to restructure their workforce. This wasn’t your standard “shop floor” cost cutting maneuver. By cutting 25% of their “executives” they were making a statement that GM had gotten incredibly fat and had thousands of people doing things that simply aren’t needed to function on a day-to-day basis. The term “executive” can be taken as any VP or associate VP or any Director of this or that. Whether it is Corporate Communications, IT, Marketing, Graphic Design or any number of other departments, people with a wide-range of skill sets lost their jobs...through no fault of their own. A combination of geo- political issues, advancing technology and poor corporate management (see GM’s multi-billion dollar stock buyback program) created a situation where thousands of people are out-of-work, scared and uncertain what their future holds.
In 2020, we will see an explosion of small business start-ups. This trend has been building for a long time. According to the 2016 U.S. Census Bureau’s annual survey, there were 5.6 million employer entities. 98% of those entities had fewer than 100 employees. And firms with fewer than 20 employees make-up 89% of the employers in the U.S.
While those numbers alone are telling, the truly staggering number is this... if you include the 24.8 million individually owned and operated companies, the percentage of U.S. businesses with less than 20 employees climbs to 98% !! By the end of 2020, I believe 99.5% of people in the U.S. will work for a small business with less than 20 employees.
Why is this trend impacting nearly every working person, whether they are young or old? Below are the key contributing factors:
Having a college degree no longer means you will get a great job...or any job.
The notion of loyalty to a company or loyalty from your employer is history. Employers and employees simply have a financial relationship. And if that relationship doesn’t make sense anymore for either party, it will cease.
Real wage growth (avg. hourly earnings vs. inflation) is flat. And some economists model a declining real wage. If your wages aren’t growing versus the cost of living, you can’t save for retirement. You can’t pay for college tuition. And forget about traveling the world.
It is easier than it has ever been to start a business. From something as simple as posting a resume on outsourcing websites to starting an online drop-shipping business, people of all ages are starting new businesses (side-gigs) every minute of every day!
And people are not just starting one business, they are starting multiple small business ventures in order to create multiple revenue streams!
More people every day are realizing they actually hate their job and are mostly making their companies wealthy while their future hangs in the balance, typically at the discretion of a single person, their supervisor!
Employees are realizing their extra effort does not make them extra money. If you are a salaried employee or are working for an hourly wage, you get paid at a rate that is determined by your boss or your company. Entrepreneurs all over the world are realizing if they work harder they can make more money.
And most importantly, skilled workers are tapping into the reality that it is simply better for them to work for multiple employers as a contractor, than it is to do the SAME kind of work for just one employer. Providing services as a 1099 contractor vs. a W-2 employee creates multiple advantages including; unlimited income opportunities, better tax treatment and more control over the work they do and for whom they do it!
Knowledge workers are realizing they can be Digital Nomads! Why allow your career to be tied to living in one location? If you like to travel while you work, there are a multitude of jobs that can be done anywhere in the world as long as you have a laptop and an internet connection.
One of the exciting aspects of this move to personal satisfaction and security is you don’t have to conform to what you’ve done in the past or be limited by your formal education choices you made in your teens! If you want to be a landscape architect, be one. If you want to be a yoga instructor, learn the craft, get certified and go for it. And if you have to start these new careers as side-gigs, so be it. You can earn extra income, protect yourself from the next layoff and build your business into a full-time gig sometime in the future.
2020 Pivot - Gig Economy - Personal, Career and Investment Opportunities
Below are 20 skills you can turn into a small biz gig:
Social Media Manager
Online Mental Health Counselor
From an investment perspective, recognize this trend is already in play. Even if you don’t want to start a new career, recognize that millions of other people do...and that fact has an impact on the market. And when the market is impacted, it creates investment opportunities. In this case, the investment opportunities come from the companies that are creating tools to support the Gig Economy.
Below are 10 companies that are helping to drive this trend forward (invest at your own risk):
If you don’t enjoy getting up at the same time everyday, driving to work, sitting in the same cube and having lunch with the same people, then don’t. For MANY of you, you can take the exact same skills you currently possess and turn them into a digital nomad career! Good luck...see you on the beach!