New Economy Jobs
In their 2009 book, Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, Eric Brynjolfsson and Andrew McAfee wrote that great job-producing opportunities exist in potential combinations and re-combinations of previous innovations, providing “more possible ways of configuring the different applications, machines, tasks, and distribution channels to create new processes and products than we could ever exhaust.”
Six years later, is there evidence that technology is producing a wealth of new jobs? If we are looking for the modern-day equivalents of disruptive technologies like steam engines or electricity and the jobs they made possible, the authors direct us to increasingly high speed computing and massive storage of digitized information. They offer the example of equipping a car “with a fast computer and a bunch of sensors . . . and a huge amount of map and street information . . . it becomes an autopiloted vehicle.”
The new economy version of disruptive technology is ICT – information and communication technology. ICT connects people to people, and people to information they can use to create economic opportunity. A story about Pierre Omidyar, who founded EBay in 1995, demonstrates the power of communication technology. One of the first items Omidyar placed on his auction site was a broken laser pointer for $14.83. When he contacted the winning bidder to be sure he knew he was bidding on a broken pointer, the buyer responded that he collected broken laser pointers. Where else could this buyer and seller have come together? That’s the beauty of the Internet: In a medium accessed daily by a significant proportion of the world’s population, the chance of finding like-minded individuals increases exponentially.
Twenty years later, EBay has hundreds of millions of buyers and sellers, with facilities in 30 countries and revenue approaching $20 billion. It has spawned numerous successful businesses, including Nasty Gal, a women’s clothing seller. Founded in 2006 by a 22-year-old college dropout to sell clothing on-line, it moved to its own site in 2008 and grew to annual sales over $130 million with 250,000 customers in 60 countries.
Ten years after EBay’s founding, Etsy made its on-line appearance to offer a sales platform for arts and crafts “makers,” whose goods traditionally traded at flea markets. Within two years the site had nearly 450,000 registered sellers and $26 million in annual sales. Etsy directly employs 750 people and its sales channel serves roughly a million independent sellers around the world; 18% of the sellers report Etsy sales as their full-time job.
In 2008 Apple set up its App Store where independent programmers could distribute applications for use on mobile devices. The App Store has grown to offer over 1.4 million apps for everything from games to calendars to flashlights to whatever can be imagined. Apps are sold or offered for free. Popular apps earn money for their developers by selling advertising space to companies wanting to expose their products and services to the millions of apps users. A single game called Flappy Bird is said to have earned its developer $50,000 per day in ad revenue. All told, developers have earned over $15 billion.
Dozens, if not hundreds, of on-line services are now available. Independent workers can earn money by offering free-lance design, writing, or web development through services such as Elance, Fiverr, and Upwork. Airbnb has 1.5 million listings in individual homes where travelers can sign up for a night’s stay in any of 30,000 cities in 190 countries. Uber connects private auto owners with people seeking local transportation. Mechanical Turk connects businesses with on-demand workers. Amazon serves writers and artists who self-publish and market their work world-wide. Most of these services have been launched since Brynjolfsson and McAfee wrote their book.
This is the new economy, sometimes called the “gig” economy, the “sharing” economy, the “on-demand” economy. By one study, one-third of American workers do some free-lance work, and the proportion is higher for younger people. As the idea of life-time employment continues to fade, more people are likely to be self-employed. And while people have been freelancing or selling arts and crafts for a long time, the distribution system is what is encouraging so many to participate and reach world-wide audiences. One can only wonder how many more combinations and re-combinations of technology and services are yet to come.