By Kelly Kiakou
In recent years, a significant shift has occurred in the world of freelancing. Freelancers are increasingly becoming digital nomads, and this transformation is not only reshaping the way they work but also influencing the global economy in profound ways. In this article, we will delve into the phenomenon of freelancers embracing nomadic lifestyles, explore its economic implications, and provide insights into how freelancers can successfully make this transition while shaping the future of the digital economy.
The Rise of the Digital Nomad Freelancer
The traditional idea of a freelancer often involved working from a fixed location, typically a home office or a local co-working space. However, freelancers are now breaking free from these constraints and taking their work on the road. This shift is driven by a combination of factors, including the rise of remote work technologies, the desire for greater work-life balance, and the allure of exploring new places.
The idea of freelancing is not a new one, but it has experienced a significant surge in popularity in recent years. This growth trend is expected to continue, with experts projecting that by 2027, approximately 86.5 million Americans will embrace freelancing, and a substantial portion of them will identify as digital nomads.
So, what has caused this notable shift, and what does it imply for future workers? Here’s a comprehensive overview of the situation:
Why Choose Digital Nomadism?
Digital nomads are individuals who earn their livelihood by working online, free from a fixed physical workspace. Essentially, they combine travel with digital work, often freelancing for various clients.
Currently, there are more than 35 million digital nomads worldwide, and some demographic details might surprise you. Notably, over 61% of this group is married, and 80% tend to stay in a single location for up to nine months before moving on. The average age of a digital nomad is 32.
Working as a digital nomad offers numerous appealing perks, including:
- The ability to travel the world while maintaining a successful career.
- Flexibility in choosing work hours and locations.
- Competitive income, with over 44% earning at least $75,000 per year.
- The freedom to work with preferred clients and avoid long-term commitments with challenging ones.
- The absence of commuting or dress code restrictions.
Today, people are increasingly committed to achieving a robust work-life balance, seeking happiness during work hours while still earning a substantial income. In theory, this concept has been enticing for years, but now, it’s also a practical reality.
Improvements in the Freelancing Landscape
For a long time, digital nomads faced challenges accessing the internet. In 2012, only 34.7% of the world had online access. Today, that figure has surged to over 63%, reaching 90% in developed countries. Combined with cloud computing solutions and tech accessories like portable chargers, the situation is far more convenient than in previous generations.
Moreover, the gig economy is thriving as never before. The COVID-19 pandemic demonstrated that remote work can yield outstanding results, prompting businesses to embrace such job opportunities. The combination of increased demand for digital nomads and a growing number of remote positions has positioned freelancers more favorably.
Employers have also recognized their responsibility to foster better working relationships with remote staff, resulting in improved setups for everyone involved. For digital nomads, the future appears brighter than ever before.
2023 marks a year of significant expansion for many freelancers. While hiring within companies may experience pauses, the freelance sector continues to flourish. According to Fiverr’s research, a staggering 78% of companies are opting to rely on freelancers throughout 2023 rather than expanding their in-house staff. This shift is facilitated by the enduring impact of post-pandemic remote work policies, which make it increasingly seamless to integrate freelancers into various projects.
The presence of critical talent gaps further underscores the necessity of this freelance reliance. Although marketplaces faced uncertainties during Q3 of 2022, sparking volatility in financial markets, the forecast for 2023 is notably optimistic. It is important to note that the growth of freelancing is not uniform, and while it is on the rise, it won’t necessarily benefit all participants equally. Nevertheless, it’s clear that the freelance revolution is progressing ahead of schedule.
The rise of full-time freelancers.
According to MBO Partners, full-time freelancing in the United States has surged by an impressive 59%, bringing the total number of full-time freelancers to 21.6 million, constituting one-third of the entire freelancing workforce. This growth in full-time freelancing is substantial, addressing concerns that part-time freelancers can pose challenges for larger corporations. In fact, around 80% of corporate requests from Danish company Jelber specify a preference for full-time freelancers. The increasing prevalence of full-time freelancers is encouraging more enterprises to engage with freelancing on a larger scale. It is worth noting that the challenges in freelancing lie more in supply than demand.
Marketplaces for Freelancers
Another aspect to consider is the size of talent marketplaces. The race to establish mega-sized platforms appears to be slowing down. While Freelancer.com currently leads the pack with 58 million members, surpassing the population of many countries, maintaining such extensive platforms can be financially burdensome. Additionally, few platforms are designed to leverage network effects and claims about platform size often exaggerate their actual impact. Typically, less than 20% of platform members secure work through these platforms. Harvard’s Michael Porter reminds us of two fundamental business strategies: low cost and differentiation. Therefore, achieving a larger size for its own sake doesn’t necessarily equate to better outcomes.
An emerging trend is a shift towards prioritizing the success of freelancers on these platforms. Marketplaces are increasingly investing in freelancer intelligence, client intelligence, and operational intelligence.
For instance, Uncompany is a prime example of operational intelligence, systematically reducing friction points for both creatives and clients. Gigged.ai employs automation to simplify project scoping and budgeting. In the realm of freelancer intelligence, platforms like Toptal.com and Wethos.co offer data-driven guidance on pricing, while Talmix.com and Onemansupport.com provide access to industry databases. AdevaIT.com schedules monthly “fireside chats” on technical topics, and Torc.dev offers Fitbit-like productivity metrics for developers. Beentheredonethat.co shares its strategy methodology with its freelancers.
Regarding client intelligence, Catalant has a robust client onboarding process, while Uplink.tech offers tips to clients for effectively collaborating with freelancers. Howdy.com conducts regular progress reviews with key clients employing freelance Latam developers.
Supporting New Freelancers
Support for first-year freelancers is also on the rise, aiming to help them “start out strong” in their freelance careers. While 33% of U.S. workers perceive freelancing as the less risky option, transitioning into freelancing can still be challenging for many newcomers. Only 44% of newcomers felt fairly compensated, and merely 38% believed that work deliverables and timelines were realistic. In contrast, veteran freelancers tend to have a more positive outlook. Providing education, coaching, and early mentorship with experienced freelancers can significantly ease the transition. For instance, FreelancerClub.net has recently launched ‘Rise, Freelancer,’ offering basic educational resources, and 10Xmanagement recommends beginning with a side gig to gain valuable experience.
Company-Owned Talent Platforms: Disrupting the Landscape
Companies are increasingly developing proprietary freelance platforms in hopes of securing direct access to top-tier talent. However, talent identification, attraction, and retention remain complex processes. Some freelancers have found these proprietary platforms to be uninspiring job boards, but companies are persistent in their efforts to harness top talent directly.
Exploring New Income Sources
While traditional marketplaces offer only a small percentage of freelancers regular work, smart marketplaces are now supporting “adjacent revenue opportunities.” Platforms like Contra.com hire freelancers as needed, and companies like Catalant offer independent consultants opportunities in interim management and expert networks. These initiatives open doors to new income sources beyond traditional freelancing.
The Freelance-Lite Employee
In a changing employment landscape, 45% of U.S. employees are engaging in side gigs, often unappreciated by their employers. These side gigs provide valuable experience, competence, and confidence, as well as a safety net for those considering a transition, as demonstrated during the “great resignation”.
Independent Business Owner Platforms (IBOs)
Platforms like Honeybook.com, Wethos.co, and Collective.com are gaining traction among freelancers. These platforms cater to B2C solopreneurs and creatives, offering tools, services, and vibrant communities. Networking plays a pivotal role, fostering connections and collaboration among members.
Regional Collaborations and the Freelance Market
Freelance marketplaces are forming regional alliances, with Spanish freelance marketplaces and UK-based marketplaces leading the way. Latin America, the Middle East, and Africa are also exploring cooperative approaches, recognizing the strength in unity.
Supporting the Freelance Ecosystem
While income volatility, loss of benefits, and fear of loneliness have deterred some from embracing full-time freelancing, the support ecosystem is maturing. Banks are partnering with marketplaces to offer income-smoothing solutions, providers are offering group benefits, and co-working spaces are expanding and diversifying services. Online freelancer education platforms are becoming increasingly accessible, and provide a collaborative space for freelancers, investors, and academics.
Is your unique skillset in high demand?
Is your expertise sought after? If so, you can expect to secure more consistent work, have a wider range of options, and command better compensation. According to TechRepublic, there has been remarkable year-on-year growth in fields like web programming (43%), web design (31%), and social media marketing (25%). The World Economic Forum (WEF) anticipates revolutionary transformations in areas such as biology, artificial intelligence (AI), programming, clean technologies, new materials, the Internet of Things (IoT), and cybersecurity.
Impact on the Economy
1. Economic Benefits for Freelancers
Turning into a digital nomad can offer freelancers several economic advantages. Firstly, it allows them to tap into a global client base. As they are no longer bound by geographic restrictions, they can seek out higher-paying clients from different parts of the world. This can lead to increased income and financial stability.
Moreover, digital nomads often enjoy a lower cost of living in countries with a lower cost of living. This can stretch their earnings further, enabling them to save more and invest in their businesses or personal development.
2. How to Make the Transition
Transitioning from a conventional freelancer to a digital nomad requires careful planning and consideration. Here are some essential steps to make the shift successfully:
Build a Strong Online Presence: Freelancers should establish a robust online presence, including a professional website and profiles on freelance platforms. This helps in attracting clients from different parts of the world.
Financial Planning: Plan for financial stability during the transition. Consider factors like health insurance, taxes, and emergency savings.
Remote Work Tools: Familiarize yourself with the tools and technologies needed for remote work, such as project management software, video conferencing tools, and reliable internet connectivity.
Research Destinations: Choose nomad-friendly destinations that offer a good balance of cost of living, infrastructure, and lifestyle.
Networking: Connect with other digital nomads and freelancers to learn from their experiences and gain insights into the lifestyle.
3. The New Digital Economy
The rise of digital nomads is closely tied to the growth of the digital economy. As more businesses embrace remote work and tap into the global talent pool, the digital economy is evolving rapidly. Freelancers are at the forefront of this transformation, providing specialized skills and services to companies worldwide.
Shaping the Future Digital Economy
Freelancers-turned-digital nomads are poised to play a crucial role in shaping the future of the digital economy. Here are some ways they can contribute:
Innovation: Digital nomads often bring fresh perspectives and ideas from their travels. They can contribute to innovation and problem-solving in various industries.
Flexibility: Their ability to adapt to different work environments and time zones can enhance the flexibility of the digital economy, making it more resilient.
Global Collaboration: Digital nomads can facilitate global collaborations and partnerships, connecting businesses and individuals from diverse backgrounds.
Work-Life Integration: By prioritizing work-life balance, they can set an example for a healthier and more sustainable approach to work.
The freelance landscape is evolving at an unprecedented pace, offering opportunities and challenges for both freelancers and the businesses they serve. As the freelance revolution gathers momentum, freelancers are redefining work, driving economic shifts, and contributing to the future of the digital economy. With a supportive ecosystem and innovative solutions on the horizon, the freelance journey is becoming more accessible and promising than ever before.