2012 Inflection Point Report Trend Two Outsourced Labor: Major trends research notes


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Major trends research notes:
The Cambrian Explosion was an inflection point in biological experimentation, innovation and diversification. The Cambrian Cloud is a metaphor that seeks to capture a similar transformative period of rapid experimentation and innovation.

The Cambrian Cloud is a low friction, emergent social space in which innovation, collaboration, science, entrepreneurship, complexity, non-linear systems, resources and the diffusion of opportunities all intersect.

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2012 Inflection Point Report Trend Two Outsourced Labor: Major trends research notes

  1. 1. 2012 Inflection Point ReportTen Converging Global Trends impacting the social space ofideation, collaboration and innovation Trend Two: Outsourced Labor Contact: Chris Jones Chris@omnipresentmedia.com) Copyright 2012 The Cambrian Cloud 1
  2. 2. 2012 Inflection Point ReportAboutThe 2012 Inflection Point Report seeks to identify emerging macro trendsand report on their impact in the areas of ideation, collaboration andinnovation. Copyright 2012 The Cambrian Cloud 2
  3. 3. “The Information and CommunicationTechnology Industry is in the midst of a"once every 20–25 years" shift to a newtechnology platform for growth andinnovation — we call it the third platform— built on mobile devices and apps, cloudservices, mobile broadband networks, bigdata analytics, and social technologies” ~Frank Gens, Chief Analyst IDC Copyright 2012 The Cambrian Cloud 3
  4. 4. “This Great Inflection”“We’re at the start of a nonlinear move in innovation thanks to the hyper connecting of the world — through social media, mobile/wireless devices and cloud computing — which is putting cheap innovation devices into the hands of so many morepeople, enabling them to collaborate on invention in so many new ways.” ~Tom Friedman, New York Times Columnist Copyright 2012 The Cambrian Cloud 4
  5. 5. Inflection Point“An inflection point occurs where the old strategicpicture dissolves and gives way to the new“.~Andy Grove, Former CEO Intel Inflection Point Copyright 2012 The Cambrian Cloud 5~Source: Only The Paranoid Survive, Andy Grove 1996
  6. 6. Convergence of 10 Major Trends All Location Independent Innovation Ecosystem Innovation Ecosystem • Labor markets are changing • Rise of a global contingent labor force CrowdSourced • Elance, oDesk, Guru, Freelancer Labor • New Digital Entrepreneurs • International opportunity seekers 6 Copyright 2012 The Cambrian Cloud
  7. 7. The Labor Market Is ChangingGlobal labor markets are adjusting to reflect the opportunitiesafforded through online employment.• Online employment is location independent, enabling more efficient matching between opportunities and talent, including a growing reliance on talent sourced from emerging economies• Companies favoring flexible cost structure. Companies are moving away from traditional, high fixed labor cost structures in favor of a lighter and more flexible cost framework afforded by contingent and outsource employment.• Global employees are mobile and flexible. A growing number of global employees are reflective of emerging trends and tend to be mobile , enjoy flexible work routines as well as more frequent job changes.• Online job markets facilitate part-time work. On demand work makes it easier for part-time and side employment opportunities Copyright 2012 The Cambrian Cloud 7
  8. 8. 2011 CIO IT Insight SurveyCompanies increasingly emphasize flexible labor practices • 45% expect to increase their outsourcing spend in 2012 • 76% use “flex work” options- such as contractual employees, temps and offshore talent- to account for up to one quarter of their entire staff • 84% are looking to increase or maintain their current user of “flex” labor • Nearly one third will spend up to 25% of their entire IT budget this year on outsourced activity Copyright 2012 The Cambrian Cloud 8
  9. 9. The Outsource Labor Market “We estimate that 160Freelance labor will exceed $1 billion in 2012 million jobs, or about 11 percent of the projected 1.46 billion service jobs worldwide, could in theory be carried out remotely, barring any constraints on Supply.” ~Source: McKinsey Global Institute Report: The Emerging Global Labor Market Copyright 2012 The Cambrian Cloud 9
  10. 10. oDesk CEO Gary Swartexpects the market for onlinework to exceed $1 Billion by theend of this year Over 600,000 Billable Hours per WeekMonth of March 2012March 1, 2012-March 31, 2012 • Revenue has grown by 100 % each yearContractors Earned $28,537,099.00 since 2007Average Job Size $4,176.00 • Over 600,000 Billable Hours per WeekJobs Posted 149,768Hours Worked 2,806,774 • Contractors earning more than $300 million a year Copyright 2012 The Cambrian Cloud 10 ~Source: oDesk Blog, March 31 2012
  11. 11. oDesk enables both employers and contractors of technical, businessand creative services to build successful work relationships across theglobe. This is possible due to a “pay by the hour” service model whichguarantees payment to contractors and allows employers to verify workas it happens. Employers can hire, manage and pay contractors aroundthe world similarly to those working in the same office. Copyright 2012 The Cambrian Cloud 11
  12. 12. “We have reached a tippingpoint”“Our first quarter this year willbe the fastest growth we’ve hadin our company’s history.”Elance CEO Fabio Rosati ~source: Mashable Graph Period August 2011-February 2012 source: eLanceMarch 20122012 Q1 Report Elance and oDesk’s customers include well-knownContractor Earnings $43,000,000.00Jobs Posted 193,000 companies such as Google, Microsoft, Dell, Cisco, HPNew Contractors 180,000 and AOL.Annual Platform Spend $173,000,000.00 Copyright 2012 The Cambrian Cloud 12source: eLance
  13. 13. Matt Barrie, CEO Freelancer.com“We have over 400 Freelancer Project Traffic Graph: Red Project Request Green Project Fulfillmentcategories and can service the Besides organic growth, Freelancer.com aggressively accretive growth throughneeds of just about anything you acquisition. CEO Matt Barrie describes Freelancer.com as an Ebay for services with acan think of! I posted a job for focus on low cost fulfillment. 90 % of the site’s contract workers are from Indiaa lion tamer as a joke one timeand managed to find a guy who To Date:worked in a circus and someone • 3.2 million users and 1.5 million jobs posted on Freelancer.com.that worked in a zoo bidding on it! • Over 1 million projects have been completed on the site.There really is no limit to whatyou can get done.” It costs $5 to post a project listing, which is refunded when the employer chooses a~Source: 2011 interview freelancer. Freelancer.com takes 10 per cent of the freelancer’s fee, or $5, whichever isiTechReport.com.au higher. ~Source: Freelancer Copyright 2012 The Cambrian Cloud 13
  14. 14. Freelancing Means More Than Developing Web Pages For The BBC & Smartphone Apps Copyright 2012 The Cambrian Cloud 14 Source:
  15. 15. Global Sourcing Disrupts IndustriesGlobal sourcing for talent is becoming more mainstream and is broadening from traditionaltechnology jobs to include more diverse industries, such as engineering.“Engineering Services Outsourcing (ESO)is a rapidly evolving economy.Global spending for engineeringservices is $750 billion per year, anamount nearly equal to India’sentire gross domestic product. By2020, the worldwide spend onengineering services is expected toincrease to more than $1 trillion.Of the $750 Billion spent today,only $10-15 billion is currentlybeing offshored-a tiny fraction ofthe total. “~Source: Booz Allen Hamilton: Globalization ofEngineering Services Copyright 2012 The Cambrian Cloud 15
  16. 16. The Future of Online Work 1 in 3 people will be hired online by 2020. 1 in 2 businesses will have online teams by 2020. Global professional guilds will emerge online. The increased adoption of social technologies will foster a new level of community building within the online workforce.predicts there will be three industry trends Guilds will begin to form onlinethat will shape the future of online work: around similar career interests, industries, and skill sets, mirroring traditional associations or networking groups. Professionals will tap these new social organizations to improve Copyright 2012 The Cambrian Cloud work practices and standards.16 ~Source Elance March 27, 2012
  17. 17. Freelancers Are A Fluid Talent Pool 22% of freelancers say finding clients is a top challenge ~Source: 2011 Freelance Industry Report Most freelancers report having either experimented on a number of freelancing websites or actively maintain multiple accounts on a number of freelance platforms ~Source: 2011 Freelance Industry Report The labor pool is dynamic, uses the Internet and word of mouth to cast a broad net to connect with opportunities and goes where opportunities are available Copyright 2012 The Cambrian Cloud 17
  18. 18. The Rise of Global Entrepreneurs The freelance / contingent talent market represents a growing pool of workers who exhibit entrepreneurial-like characteristics and embody its culture. Flexible time schedules permit the pursuit of more jobs or alternative opportunities. Collectively, freelancers seek opportunity and novelty and have marketable skills that lend themselves to the new, digital economy. In short, they are new digital entrepreneurs in an emerging global economy. Copyright 2012 The Cambrian Cloud 18
  19. 19. The Cambrian Cloud Inflection Points Freelance / Offshoring• Millions in developed and emerging economies are finding employment opportunities online• Companies are seeking a lighter, more flexible labor structure• The freelance market is approaching a tipping point and will exceed $1 billion in market transactions in 2012• A growing, deepening and diversifying pool of opportunities and talent• The online employment marketplaces enable individuals to supplement their income or work on a contingency basis• 160 million jobs (11%) of the estimated 1.46 billion service jobs could theoretically be carried out remotely• The global contingent labor market embodies entrepreneurial ethos and culture and is growing a global talent pool acclimated to opportunity discovery, remote work and an awareness of available online tools and resources. Copyright 2012 The Cambrian Cloud 19