Point of View

Doing business with high-tech freelancers

December 12, 2011 

— A new generation of entrepreneurs is leveraging the power of cloud-based computing, social networking technologies and a host of apps to provide a broad range of services in the online global marketplace. Constituting a human cloud of talent, these Internet entrepreneurs are referred to as freelancers, e-lancers, soloists, project employees or pay-as-you- go help.

Worldwide there are reportedly close to 3 million freelance entrepreneurs. The majority are based in the United States but significant concentrations also exist in India, the United Kingdom, Canada and Pakistan. Freelancers are dispersed in smaller numbers in such countries as the Philippines, Australia, Bangladesh, Romania, Indonesia, the Russian Federation and Uruguay.

Regardless of location, freelance entrepreneurs strive to offer high-quality services at globally competitive prices in such areas as computer programming, creative writing and graphic design, as well as accounting, law, engineering and sales.

U.S.-based freelancers are a diverse group. They include laid off professionals who were previously employed full-time, high school and college graduates unable to find work in the mainstream economy and boomers trying to remain economically active after retirement.

For some, freelancing is viewed as either a hedge against a pink slip or a way to weather the current economic downturn. For others, it is a source of extra income to deal with life challenges such as elder care or a not-so-recession proof retirement portfolio. And for still others - mainly millennials who saw their parents get laid off - freelancing is viewed as the "new normal" in the highly volatile global economy of the 21st century.

To date, small businesses have been the primary consumers of the services of freelance entrepreneurs. But medium- and large-sized businesses increasingly are tapping into the online entrepreneurial marketplace, largely in an effort to remain competitive in the downturn.

Conscious of the need to create jobs in America, many of these firms are outsourcing contract work specifically to U.S.-based freelancers - a trend call "home shoring" - rather than to offshore vendors. Reflecting market demand for the services offered by freelancers, 112,000 jobs were posted on one online market website during October.

One study estimates that freelancers will constitute 35 percent of the U.S. workforce within a decade. Given the accelerating pace of corporate downsizing, "rightsizing" and global sourcing for talent, this is probably a reasonable estimate of the future role of freelance entrepreneurship in the U.S. economy.

Currently how big is North Carolina's freelance economy? And what must the state do to foster further growth and development?

In absolute numbers, there are, according to one online market site, close to 6,500 freelance entrepreneurs in North Carolina. Not surprisingly, the majority are concentrated in the Charlotte and Raleigh-Durham areas. But there are also significant concentrations in Greensboro, Asheville, Fayetteville and Wilmington, as well as smaller numbers in Jacksonville, Hickory, Greenville, Rocky Mount, Burlington and Elizabeth City.

North Carolina freelance entrepreneurs offer professional services in 17 different skill categories. But across the state they are highly concentrated in five skill areas: writing, editing and translation; administrative support; programming and databases; graphic design and multimedia; and websites and e-commerce. In the Charlotte and Raleigh-Durham areas, there are also noteworthy concentrations in business consulting; illustration and art; networking and telephone systems; photography and videography; marketing and communications; and engineering and computer assisted design.

Why does this matter to North Carolina?

Freelance entrepreneurship is a viable form of job creation - in all likelihood, one of the main ways jobs will be created in the foreseeable future. Given the depth and breadth of freelance expertise in our state, government officials must make a concerted effort to ensure that North Carolina's business climate supports the continued growth and development of the freelance economy.

The necessary ingredients for a highly viable and thriving freelance economy include: statewide broadband access and affordable health care, protection for unpaid wages, retirement plans and unemployment insurance for practicing and aspiring freelance entrepreneurs.

Addressing these issues will go a long way toward ensuring that the state's online market place is globally competitive - unquestionably a good thing for small towns and rural communities where job creation and employment growth have proven to be most elusive.

James H. Johnson Jr. is the William Rand Kenan Jr. distinguished professor of entrepreneurship and strategy at UNC-Chapel Hill's Kenan-Flagler Business School.

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