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New forms of self-employment in Russia: remote work patterns and e-markets

P. 299-308.
Self-Employment in the New Economy

During industrialization self-employment steadily declined and was commonly viewed as obsolete form of economic organization withering away under the pressure of capitalist accumulation and mass production. The last four decades revealed the “partial renaissance of self-employment”. More important is however the changing nature and forms of self-employment in the post-industrial information society. Economic activity is moving to the service sector and knowledge-intensive industries. The overall rhetoric about self-employment has also substantially changed. Some commentators envision the devolution of large corporations, decay of wage-labor and the rise of independent contracting. They criticize organizational bureaucracy, glorify the “free agents” (D. Pink) and new types of “portfolio” (C. Handy) or “boundaryless careers” (M. Arthur). Ideological shift to neoliberalism promotes individualism, enterprising self and marketization of talent.

In 1998 Thomas W. Malone and Robert Laubacher portrayed the possibilities of “e-lance economy” provided by the Internet. They argued: “The fundamental unit of such an economy is not the corporation but the individual. Tasks aren’t assigned and controlled through a stable chain of management but rather are carried out autonomously by independent contractors. These electronically connected freelancers—e-lancers—join together into fluid and temporary networks to produce and sell goods and services. When the job is done—after a day, a month, a year—the network dissolves, and its members become independent agents again, circulating through the economy, seeking the next assignment” (Malone, Laubacher, 1998, p.3). The authors reflected on the infrastructure that would facilitate the new business model.

Today there are plenty of dedicated websites (online marketplaces) where freelancers offer their services and customers post projects (jobs) for which independent professionals can bid. Not only individuals and small enterprises but also large corporations use these websites to outsource required skills. The number of global talent market participants has run into six figures. For instance, Freelancer.com reports having about 3 million registered users from 234 countries.

The Russian story

Electronic self-employment is a very new phenomenon in Russia for both historical reasons and ICT lag.

In the Soviet Union independent contracting (as well as entrepreneurship in general) was illegal. All people were supposed to work for state-owned enterprises and not on their own account. There were just tiny niches for moonlighting self-employment which was completely informal. That is why Russia has no strong freelance tradition. The self-employment rate is extremely low – only about 5-6% of the labor force (in the well-established capitalist economies as well as in developing countries this figure is at least twice as much).

There is also some lag in the development of information and communication technologies. The Internet penetration rate in Russia is half as much as in advanced information societies – about 40%.

The leading Russian online marketplace is Free-lance.ru. It was founded in the mid of 2005 and has been showing an enormous growth for the last years. Now it has about one million registered users and dominates the Russian freelance market.

Research agenda and data overview

In 2007 we started a long-term research agenda with an open end date. It is devoted to phenomena of electronic self-employment in the information society. Our research subjects are self-employed professionals who work remotely (via Internet). It is important to mention that they provide professional services not produce material goods or sell them. They do the most of the work by themselves and do not hire wage labor. They also have a very strong identity and call themselves freelancers.

We have collected extensive empirical data:

  1. In-depth interviews with freelancers and their clients (2007-2011)
  2. First Russian Freelance Survey (2008, Dec), N = 12,558
  3. Employers’ Survey (2010, July), N = 1,275
  4. Second Russian Freelance Survey (2011, March), N = 10,943
  5. Freelance Survey at the global freelance websites is planned in 2012.

It could be suggested that our Freelance Surveys is the largest in the world in terms of response numbers. The questionnaire consists of about 50 questions. It involves a wide range of work and life topics.

Main findings

The data from Russian Freelance Survey allow for the first time to describe the new category of workers. Some of the main findings are:

  • Country of origin. Russian-speaking freelancers from 34 countries took part in our survey (Russia – 70%, Ukraine – 21%, Belarus 3%, other former USSR – 5%, other – 1%).
  • Age. Russian freelancers are very young. About 70% are under the age of 30 and only 6% is older than 40.
  • Education. Freelancers are very well educated. 83% have some postsecondary education (for Russian workers – 30%). One out of ten has two university degrees, MBA or PhD
  • Employment status. The freelancers for whom self-employment is their primary activity and the only income source account for 29% of our sample. The others besides freelancing have a standard job (41%), manage their own business with employees (8%), are students (14%) or have to look after their children (7%).
  • Skills. Freelancers are highly skilled professionals representing “creative class” (R. Florida). Main areas of expertise are: websites (29%), software development, computer programming (20%), graphic design and creative arts (38%), writing and editing (28%); translating (12%), audio and video (10%), engineering and manufacturing (9%), photography (5%), marketing and business consulting (5%).
  • Work values and motivation. Freelancer’s work ethics is clearly opposed to traditional forms of work behavior and corporate culture. They do not try to minimize their efforts (what is very common in Russia), express more need for achievement and initiative, are ready to face the risk. Materialist motivation is less pronounced. Freelancers are more motivated by interesting job.
  • Working hours. Freelancers are workaholic indeed. On average they work 52 hours per week comparing to 43 hours of Russian worker.
  • Future plans. Freelancing might be the first step to the real entrepreneurship: 42% of respondents are going to have their own business with employees within the next 5 years.

We believe that in Russia electronic freelancers represent the vanguard of the workforce in terms of intellectual nature of work, high ICT-competence and entrepreneurial motivation. Freelancers may play an important role in the development of the Internet, e-business, innovative entrepreneurship and therefore modernization of the Russian economy.