The global freelance economy is booming, projected to reach a staggering $1.5 trillion with a 15% compound annual growth rate (CAGR), according to a Ruul report. Fiverr’s 2024 Freelance Economic Impact Report further illuminates this surge, offering insights into the significance of this lucrative sector and its transformative impact on work and business operations.
This Fiverr study focuses on individuals working as independent professionals, also known as independent workers or freelancers. These individuals are self-employed business entities earning income outside of traditional employment relationships, do not have employees, and operate within the following industries:
- Creative services: artists, video producers
- Skilled technical services: architecture, computer services
- Skilled professional services: legal, accounting, marketing
Economic impact and geographic reach
This monumental figure represents a significant increase from previous years, highlighting the growing adoption of freelance work across various industries. Notably, the report indicates that 52% of freelancers offer skilled services such as marketing, programming, and writing, demonstrating the value businesses place on specialised expertise available on demand.
Geographically, the freelance economy’s influence is far-reaching. Based on additional research for this article The Freelance Informer found that the United States boasts the largest number of freelancers globally, followed by India, the Philippines and the UK. This underscores the freelance workforce’s global nature and its diverse talent pool.
Most popular way for freelancers to land work?
Referrals and reputation remain the most common method (67%) for independent professionals to acquire work across all industries. Social media (44%), freelance marketplaces (29%), and online job sites (27%) are also frequently used.
Technical freelancers tend to use a wider range of methods for business development. Additionally, generational preferences differ, with Gen Z favouring social media (68%) and Boomers relying on word-of-mouth (75%). Millennials are more likely to leverage freelance marketplaces (44%) and online job sites (39%).
While technical freelancers still rely on freelance marketplaces (44%) and online job sites (37%) more than those in creative or professional services, their use of these platforms decreased in 2023, with a corresponding increase in the use of referrals (63% from 52% in 2022). Freelance marketplace reliance was also higher among men (34%), urban dwellers (34%), and those holding additional permanent employment (44%).
Overall, Fiverr and Upwork remained the most popular platforms, with consistent year-over-year usage (59% and 52% respectively). However, freelancer.com and LinkedIn Services Marketplace experienced significant declines (39% from 53% and 27% from 36% in 2022).
Which are the biggest freelance markets in the US?
The majority of skilled independent professionals in the US are concentrated in the top 30 metropolitan areas, each with a population exceeding one million residents. These areas account for 57% of all independent professionals and generate 63% of the total revenue, estimated at $191 billion in 2023. New York, Los Angeles, and Miami lead these markets in both professional numbers and revenue.
The top 30 markets, unchanged from last year, show the fastest growth in total independent workers from 2018 to 2023 in Orlando, Miami, Las Vegas, Houston, Tampa, and Nashville. In terms of revenue growth, Miami and Orlando are the fastest-growing markets. Austin, Texas is also a big market having attracted many people during the pandemic.
There is a significant income disparity between professionals in these top markets and the national average, with the former earning an average of $4,334 more annually, regardless of their specialisation in technical, creative, or professional services. San Jose, San Francisco, and Washington, D.C. offer the highest earnings per professional, while St. Louis has the lowest.
More people looking to go freelance in some capacity
The trend towards full-time freelancing is increasing, with 71% of independent workers focusing solely on freelance work in 2023, up from 64% in 2022 and 61% in 2021. While Gen Z and Millennials are more likely to maintain a permanent job alongside freelancing, they are also transitioning towards exclusive freelancing at a growing rate.
Freelancers with full-time employment report significantly higher satisfaction with their freelance work (75%) compared to their permanent roles (47%). This disparity is driving many to reduce hours or leave their permanent jobs entirely, with 59% considering reducing hours and 60% contemplating a complete shift to freelancing.