Independent work: choice, necessity, and the gig economy

Independent work provides earning opportunities for the unemployed
Responses from MGI Survey
Share of workers who experienced unemployment or a period in which 
they did not earn income in the previous 12 months
% of respondents
24
27
8
15
EU-15
United States
Traditional workers
Independent workers
DUPLICATE of exh14

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87
McKinsey Global Institute
Independent work: Choice, necessity, and the gig economy
increase in labor productivity comes from two sources. First, a shift to independent work 
enables people to specialize in doing what they do best and raises their engagement. 
This has the potential to make them more productive, both through better skill matching 
of the right person for the right job, and higher employee engagement. Although the 
academic evidence is mixed, there is growing empirical evidence that employees who 
are more engaged are more productive in the time they are at work than those who 
are not.
84
 In addition, companies are disaggregating jobs between high-skill and low-
skill workers, enabling more specialization that should raise labor productivity. Many 
send routine tasks to independent workers so that their core team can focus on more 
challenging, collaborative problems where they add the most value.
85
 Digital platforms 
may improve the effectiveness of this strategy by using a wealth of data to improve the 
quality of the match between the worker and the task. 
There are other effects, however, that could lower labor productivity as individuals 
shift from corporate jobs to independent work. The self-employed may have lower 
productivity, in part because they must devote some of their time to performing their 
own back-office functions.
86
 Some digital platforms have taken steps to help reduce 
this burden for workers, and there is an opportunity for intermediaries to play a role in 
reducing the overhead of being an independent earner. In addition, over time, the self-
employed may find that they are not developing new skills at the same rate as people in 
large organizations, or working with the latest technology. Where this nets out is unclear, 
and further research will be needed.
 
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Stimulating consumption.
 Digitally enabled services are providing consumers 
with access to services that were once inconvenient to obtain—or that may not even 
have existed before. Many people who once would have driven themselves on local 
outings have changed their habits and will now summon a ride from Uber or Lyft on 
their smartphones. As digital matching services tap into these new markets, they may 
increase consumption across the economy. However, there is also the possibility that 
such sharing economy models could actually reduce consumption (for instance, if those 
same ride-sharing services decrease demand for cars).
87
 More data will be needed on 
these effects as digital marketplaces expand.