Creator gig economy: Gen Z loves the creator economy

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  Quantumrun Foresight
• September 29, 2022

Insight summary

Gen Z, born in a digitally interconnected era, is reshaping the workplace with a strong preference for freelance roles that align with their lifestyles and values. This shift is fueling a dynamic creator economy, where young entrepreneurs capitalize on their talents and popularity through online platforms, generating substantial incomes. The rise of this economy is prompting changes across various sectors, from venture capital and traditional advertising to government labor laws, reflecting a significant evolution in work and business models.

Creator gig economy context

Gen Z is the youngest generation entering the workplace as of 2022. There are nearly 61 million Gen Zers, born between 1997 and 2010, joining the US workforce by 2025; and due to improved technology, many may choose to work as freelancers rather than in traditional employment.

Gen Zers are digital natives, meaning they grew up in a hyperconnected world. This generation was no older than 12 years when the iPhone was first released. Consequently, they want to use these online and mobile-first technologies to make work fit their lifestyles instead of the other way around.

According to research from the freelance platform Upwork, 46 percent of Gen Zers are freelancers. Further research insights found that this generation is opting for non-traditional work arrangements more suited to their desired lifestyle than a regular 9-to-5 schedule. Gen Zers are more likely than any other generation to want a job they’re passionate about that also provides them with freedom and flexibility.

These attributes may indicate why the creator economy appeals to Gen Zers and Millennials. The Internet has birthed various platforms and digital marketplaces, all fighting for online traffic from creative minds. This economy includes different types of independent entrepreneurs who are making money from their skills, ideas, or popularity. In addition to these creators, online platforms cater to various aspects of the next-gen gig economy. Popular examples include:

• YouTube video creators.
• Live stream gamers.
• Instagram fashion and travel influencers.
• TikTok meme producers.
• Etsy craft store owners. 

Disruptive impact

Manual labor, such as mowing lawns, washing driveways, and delivering newspapers, was once a popular entrepreneurial option for young people. In 2022, Gen Zers can command their career via the Internet and become millionaires through brand partnerships. Countless popular YouTubers, Twitch streamers, and TikTok celebrities have created millions of devoted followers who consume their material for pleasure. Creators make money from these communities through advertising, merchandise sales, sponsorships, and other revenue sources. On platforms like Roblox, young game developers earn six- and seven-figure incomes by creating virtual experiences for their exclusive player communities.

The expanding ecosystem of creator-focused businesses is attracting the interest of venture capitalists, who have invested an estimated $2 billion USD in it. For example, the e-commerce platform Pietra connects designers with manufacturing and logistics partners to bring their goods to market. The startup Jellysmack helps creators grow by sharing their content on other platforms.

Meanwhile, the fintech Karat uses social media metrics like follower count and engagement to approve loans rather than traditional analytics scores. And in 2021 alone, worldwide consumer spending on social apps was estimated to be $6.78 billion USD, fueled partly by user-generated video and livestreaming.

Implications of the creator gig economy

Wider implications of the creator gig economy may include: 

• Cryptocurrency firms offering customizable non-fungible tokens (NFTs) for creators’ merchandise.
• Alternative venture capital funders and platforms that cater to social media influencers.
• Businesses finding it challenging to recruit Gen Zers for full-time jobs and creating freelance programs or talent pools instead.
• Content platforms, such as YouTube, Twitch, and TikTok, charging higher commissions and controlling how content is advertised. This development will create a backlash from their users.
• Short-video platforms, like TikTok, Instagram Reels, and YouTube Shorts, paying online creators more money for views.
•  The introduction of targeted tax incentives for creator gig economy participants, resulting in enhanced financial stability for independent creators.
• Traditional advertising agencies shifting focus towards influencer collaborations, transforming marketing strategies and consumer engagement.
• Governments crafting specific labor laws for gig economy workers, ensuring better job security and benefits for these digital-era professionals.

Questions to consider

• What are the negative implications of content creators working with large corporations?
• How else is the next-gen gig economy going to affect how companies recruit?