The gig economy is changing the nature of work, of investing money, and of wealth creation. Nowadays, in this flexible labor market, people opt for short-term job or contract work rather than traditional full-time work. As per Statista, 2023 data shows more than 58 million gig workers in the U.S. It is making a vital contribution to the world economy. Technology is at the heart of facilitating this change because, not only does it create job opportunities, but it also opens new investment opportunities. With crowdfunding sites and micro-investment apps, technology is breaking access to investment opportunities into those once available only to Wall Street heavyweights. In this article, we’ll explore how technology is promoting investment opportunities in the gig economy and why these matters for investors and gig workers alike.

Gig Platforms as Business Incubators

Gig platforms (e.g., Upwork, Fiverr) have also switched beyond job seekers. They are now a platform for startups and fund creations. These platforms empower gig workers to create a personal brand, generate client bases, and, in the end, build a scalable business. For example, Upwork freelancers who consistently generate high-quality work can raise their hourly fees by more than 50% over time. Not only this, but it also makes investors come around with the hope of a rewarding business relationship. A McKinsey Company report revealed that 20% of the gig workers in that market use the platform earnings to fuel their own entrepreneurial ventures, which in turn lead to more investment opportunities.

• Early Access to Startups: Investors can identify investment opportunities in promising gig workers who could become entrepreneurs.
• Crowdfunding and Peer-to-Peer (P2P) Lending: Crowdfunding websites such as Kickstarter, Indiegogo and GoFundMe have made the investment landscape open to everyone. These platforms facilitate fundraising by a large audience for gig workers and small businesses, and investment diversification by small amounts for investors. For example, a tech product developer working on the gig economy may raise $50,000 crowdfunding, providing early investors with equity or product benefits. According to Crowdfunding Insider, the global crowdfunding market reached $114 billion in 2021, with 60% of campaigns initiated by individual entrepreneurs and gig workers.
• Low Entry Barriers: For minimal investments as low as $100 dollars, investors can take part of many campaigns and thereby disperse risk in different industry areas.

Micro-Investing Apps for Gig Workers

Micro-investing platforms such as Acorns, Robinhood, and Stash have democratized investment among gig workers, allowing them to market their incomes in stocks, ETFs and/or crypto currencies. These apps enable users to enter with a low capital, thereby making investment available also to people with intermittent wage. For example, a gig worker employing Acorns can invest daily spare change from purchases, which, over the course of a year, could lead to $1,500 in portfolio size. According to Bankrate's 2022 survey, 40% of gig workers are making use of the micro-investing apps, with average monthly contributions of $75. As micro-investing apps become increasingly popular among gig workers, wider market participation is assembled, resulting in a more dynamic and diverse investment ecosystem.

Blockchain and Smart Contracts: A New Frontier

Blockchain technology and smart contracts are revolutionizing the gig economy by offering secure, transparent, and efficient payment systems. These technologies disrupt the workflow of intermediaries, reduce transaction costs and introduce new investment models, such as tokenized assets and DeFi platforms. For instance, a freelance platform in blockchain technology, a gig worker can receive the payment as soon as the task is presented by leveraging a smart contract, which can break the traditional, slow payment process. According to Deloitte, the blockchain industry has a potential to reduce transaction costs of the gig economy between 15% and 20%, which makes it a hot pocket for venture capital and private equity investors. Blockchain opens the possibility of investing in tokenized gig economy projects, allowing new diversified portfolio applications.

AI and Automation: Enhancing Investment Insights

Artificial intelligence (AI) is changing data analysis of the gig economy. AI-based platforms can leverage the performance metrics of gig workers, predict the trend of the market, and find out the good points where to invest. Consequently, the depth of this understanding was, until now, accessible only to institutional investors. For example, AI-driven tools can be utilized to analyze profiles of Upwork users to predict who will be the more successful freelancers, taking into account all feedback received from clients, project completion, and revenue increase, in order to provide investors with a well-informed decision. AI tools enable more accurate risk assessments and identify emerging trends in the gig economy, providing a competitive edge.

Virtual Networking and Global Reach

Technology has cut down economic and social barriers, so that gig workers and investors can now associate with each other regardless of country boundaries. Virtual networking sites, including LinkedIn and specialist networking forum sites, enable the formation of alliances, mentoring relationships and investment syndicates that were previously limited by geographical constraints. For example, a digital design studio in India can be implemented by a graphic designer with the assistance of a U.S.-based investor, administered via virtual networking tools to enable communication that does not require the physical presence of the individual. As the LinkedIn Global Talent Trends Report suggests, online networking has emerged as a key factor in 35% of professionals using it to secure funding or angel investors. The chance to obtain global talent business presents the possibility to make high-return investments at market level.

Future Outlook: Technology as the Catalyst for Inclusive Investment

Technology is changing the dynamics of the gig economy with regards to investment return. Progress in crowdfunding, micro-investments, blockchain technology and AI based decision-making reduces entry barriers, enhances transparency and expands access to the investment world for new social strata of individuals. This will give, for instance, gig workers, additional means of financing their activities. For investors, it is access to a very large, very active market. This comprehension and utilization of these underutilized technological tools has the potential to overcome the division between formal investing and the gig economy, generating a new age of financial partnership and prosperity.