Here’s a BOLD prediction you won’t hear often.
In the future, whether it’s 10, 20, or 50 years from now, virtually everyone will be working for themselves. Every company will move to a remote first model wherever possible.
Let that sink in for a moment.
It’s a prediction made by AngelList’s CEO & Co-Founder, Naval Ravikant. The implications are enormous. It’s the END of employment as we know it, the way we live, work, and do business will change forever.
A world where the majority of businesses operate with a skeleton staff — maybe just a board of directors, a couple of key executives or a small core team of engineers.
A world where remote work is the norm. Where work is predominantly outsourced to independent professionals and groups of specialised remote service providers. Where most of us are professional nomads, switching from project to project, working whenever we want.
What’s behind this bold prediction?
Like a lot of change happening these days, it’s about technology. The information age is reversing what the industrial model created. It’s tearing down the hierarchical structure of work where employees work for bosses, within defined schedules, and in fixed office locations.
It has to do with the way technology and the Internet is tipping the balance between internal transaction costs and external transaction costs.
Here’s an example.
If you’re a company looking for developers to build a new app, do you want these developers to be direct employees of the company or an external provider?
A lot of your decision will come down to the difficulties and costs of transacting with an internal employee versus an external contractor.
Historically, outsourcing has been more difficult than hiring in-house talent. But information technology is changing this, making the hiring of external professionals an easier and more viable option.
What is the human cloud?
The human cloud is an emerging set of online marketplaces where talent and talent seekers can find and engage one another in a work arrangement.
It can be thought of as a sourcing ecosystem that holds information about on-demand workers, enabling employers to tap into virtual talent pools to find workers for a range of projects from software development to digital marketing.
“Human Cloud provides access to a scalable source of labour, skills and expertise; it reduces start-up and transaction costs compared to conventional sources of contingent labour; and it reduces conventional hiring barriers such as geography.” — Oxford Internet Institute
It is these emerging Internet-enabled platforms that are lowering external transaction costs, making the outsourcing of work online a viable option for companies and enabling more people to work for themselves.
This increased viability can be seen in Human Cloud revenues, which have almost doubled since 2017, hitting an estimated $82 billion globally, according to a Staffing Industry Analysts (SIA) survey.
Primary reasons companies are using online platforms include greater access to talent, reduced costs, expanded skills, ease of use, decreased legal risks, lessened time to deploy workers, and ability to track spending better.
Breaking down the human cloud
There are three types of Human Cloud platform models — crowdsourcing, online work services, and online staffing platforms.
Crowdsourcing: An online platform model that enables work assignments, often micro-tasks to get assigned to and completed by independent workers. Workers bid against one another to solve for jobs, with the winner selected and compensated based on agreed terms.
Online Work Services: an online platform model that enables the delivery of specialised services that are performed by a group of online workers organised and managed by the platform provider.
Online Staffing Platforms: enable hirers and workers to enter into legal work arrangements through the Internet from anywhere in the world. It is the oldest Human Cloud model, arising in the early 2000s.
What’s next for the human cloud?
There are questions as to how the Human Cloud will develop. Will we see more digital sweatshops, especially in developing nations?
Are we headed towards draconian working conditions with lackluster worker rights and low wages, but this time just moved to the digital world? Will there be more ways for people to earn a decent living, mitigate their grievances fairly, and access affordable health and employment insurance? These are all critical questions.
Other significant challenges lie ahead as well.
The reality is that services are complex and harder to trade in the digital world than goods. Purchasing services can be inefficient because it’s still relatively difficult to aggregate supply and match marketplace users based on needs, costs, and capabilities.
Creating, managing, and packaging relevant service offerings is another challenge, especially for freelancers and smaller service providers who lack the skills, time, and tools. Additionally, there’s a need for online platforms to develop better ways to create trust between buyers and sellers.
The successful marketplaces that make up the future human cloud will solve all of these problems and more. They will use AI, data analytics, and other technologies and great UX design to make it easier to connect, communicate, and do business than in the offline world.
They will enable the buying and selling of more complex services resulting in a growing number of highly skilled knowledge economy workers leaving their full-time jobs and joining the human cloud.
Ultimately, these next-generation platforms will lead the continuation of a shift to a world where independent, project-based workers and remote teams gradually take over a larger and larger share of the work currently being done by full-time in-house employees.
As this transformation plays out, companies will increasingly incorporate a flexible workforce into their strategic planning and mindset because it will become a more cost-efficient and effective way of doing business.
Eventually, whether it’s 10, 20, or 50 years from now, we may just be living in the world predicted by Naval, where virtually everyone works for themselves or in small remote teams.
Anthony is the Chief Content Officer at Intrepid, a global marketplace community to buy and sell professional technology and creative services.
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