How to break $1M in revenue in a business staffed only by the owners
The U.S. topped the world in the growth of freelance earnings in the second quarter, with that figure rising 78% since the same quarter in 2018, according to the global payment platform Payoneer’s Global Gig Economy Index.
The next fastest-growing markets were:
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the U.K. (59% growth)
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Brazil (48%)
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Pakistan (47% growth)
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Ukraine (36% growth)
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the Philippines (35% growth)
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India (29% growth)
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Bangladesh (27% growth)
9 Russia (20% growth)
- Serbia (19% growth).
The report was based on a sample of the more than 300,000 freelancers in Payoneer’s network.
So why is the freelance economy growing so fast in these countries? It varies by country.
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“In more mature markets like the U.S. and U.K., many companies, when they want to employ people, want to take less risk,” says Eyal Moldovan, general manager of Payoneer. “That is why freelancing continues to grow at a very high pace.”
There are also many professionals who voluntarily choose to freelance for lifestyle reasons, he said. “Platforms make it possible for them, and the work-from-home and gig economy is suitable for them,” Moldovan says.
In one sign of the increasing number of people doing independent work in the U.S., the coworking giant WeWork filed paperwork for its this past Wednesday, saying it planned to raise $1 billion in its initial public offering. Many free agents who need office space have turned to coworking spaces.
In other markets, a key driver of the growth in freelancers’ earnings is government-proposed outsourcing for industry, sometimes supported by tax breaks. “They are endorsing it,” says Moldovan.
Take Ukraine. It has created a special taxation regime for IT outsourcers and product companies that release them from the value-added tax, notes Moldovan. It also lets them employ freelancers free of labor tax as subcontractors. There are also simplified foreign exchange controls for these companies.
In the Philippines, the government-funded Rural Impact Sourcing Technical Training Project provides training for local talent with Information and Communications Technology-based knowledge to enable them to succeed as digital workers and entrepreneurs.
In India, the government provides freelancing opportunities for local talent under Digitize India Platform program. The government also provides training in digital skills through the India Skills Online program and the Ministry of Skill Development and Entrepreneurship focuses on supporting youth, women, and underrepresented groups.
Younger generations flock to freelancing
At the same time, many freelancers in developing economies are young adults looking to get a foothold in a career.
Pakistan, where many freelancers are under age 30, is a good example. “In Pakistan, there is a younger generation seeking more opportunities,” says Moldovan. “The domestic market isn’t big and developed.”
Here’s how the generations stacked up, in terms of earnings, in Payoneer’s research.
On a global level, the 35-44-year-old age group is doing the best at making money. This group contributes 32% of earnings even though it represents only 23% of freelancers.
The youngest cohort of freelancers, those ages 18-34, made up 64% of freelancers but only earned 53% of total earnings.
Those ages 45-54 made up 9% of freelancers and brought in 9.4% of earnings.
Freelancers ages 55+ made up 5% of freelancers and brought in 4.9% of earnings.
