Not the gig economy: UK productivity would collapse without £104bn project sector

Freelancers working in the project sector contribute more to the economy than the creative industries and drive wider economic performance, new research from the CRSE (Centre for Research on Self-Employment) has found.

The ‘project economy’, made up of freelancers brought in for individual projects such as new products, innovation and infrastructure, contributes approximately £104bn to the UK economy every year, according to the CRSE’s ‘Freelance Project and Gig Economies’ report. That is more than the £100bn of the creative industries and close to the £110bn contributed by the construction sector.

The CRSE’s report shows how the project economy supports businesses and helps to boost productivity across the country. Qualitative research found that project freelancers add value by giving businesses flexible expertise beyond their permanent employees, enabling innovation and entrepreneurship as well as by helping them to navigate peaks and troughs in demand.

The report identified digital tech advances and new product development as key areas that would be far more challenging for businesses without freelancers working on projects.

Andrew Burke, chairman of the CRSE and the report’s author, said: “The research finds that the UK economy would be far less entrepreneurial, innovative and ultimately would be more sluggish if firms did not have access to high-skilled freelancers. It shows that freelancers add a huge amount of value to firms both through their flexibility and their specialist skills.

“Our research shows that the high-skilled freelancer project economy is an essential part of the wider economy, adding five times more than equivalent gig-based work. That’s why it’s time for government policy to catch up with this rapidly developing sector and design policies that will give it the support and encouragement it needs.”

Chloé Jepps, deputy head of research at the Association of Independent Professionals and the Self-Employed (IPSE), commented: “This research confirms just how important freelancers are for driving innovation among UK businesses and the wider economy. Without them, it is likely that advances in productivity would collapse and we could be left behind by other nations.

“The report is a major step forward not only in terms of understanding the composition of the skilled freelance sector, but also in terms of appreciating its vital contribution. Too often, attention has been focused almost entirely on the ‘gig economy’. This shows how much attention the highly-skilled freelancer project economy deserves too.”

The ‘project economy’ accounts for 73% of the UK’s highly skilled freelancers – nearly five times the 15% working in a ‘gig’ capacity.