Freelancing: A Popular Career Pathway that Needs More Policy Support

The rise of the gig economy has led to an explosion in the number of freelancers worldwide. There are currently an estimated 1.2 billion freelancers, which is nearly one-third of the total global workforce. Freelancers face a unique set of opportunities and obstacles, including the challenges of finding work, the benefits of being your own boss, freedom from a traditional 9-to-5 work model, and mobility in one’s location.

A thriving freelance economy is emerging. Countries in Eastern Europe and the Balkans have adopted policies to attract talented professionals looking to take advantage of the benefits of freelancing. Such policies consist of favorable tax systems, inclusion and social protection, and free working space. These enabling policy conditions are driven by the advocacy efforts of freelancers who gathered on platforms and in like-minded groups such as the Bosnian Freelance Association and  Association of Trade Unions in North Macedonia to articulate a desire for sustainable changes to gig work, especially after COVID-19. The changes the freelancing community is advocating for are driven by complex factors, including personal values, social justice concerns, political ideology and economic interests.

Win-win policies for the government and freelancers

Though there has been a significant rise in interest in freelancing, research has shown that freelancing still faces numerous market and institutional challenges and barriers. These include prejudices about the decency of freelance work and limited availability of services that support the progression of freelancers’ skills, portfolio development and business acumen. The main reasons for these barriers are the highly fragmented ecosystem, the low capacities of stakeholders to implement substantial policy advocacy campaigns, and a lack of knowledge on the creation of sound policy proposals. There are also significant public policy gaps that contribute to established freelancers quitting in favor of secure and stable full-time employment.

Because they are well-educated but relatively cheap, Balkan freelancers are in high demand among foreign firms. But, as detailed in this BalkanInsight article, they complain of heavy-handed efforts by governments to regulate the sector and levy taxes. Most freelancers say that laws and policies around taxation, legal status and access to (public) services are the cause of demotivation and create entry barriers for newcomers.

But there are proven policies that have resulted in win-win situations for both government and freelancers, such as:

• Lowering the tax bracket for selected freelance occupations (i.e., engineering and arts) incentivizes freelancers to exit the gray zone of informality.
• Subsidizing social contributions for the first year for newly registered sole proprietorships (as has been done in Serbia) directly lifts the biggest cost new businesses encounter after registration. This enables them to reinvest saved capital into scaling their business and becoming sustainable.
• Gaining access to public and social services as private individuals who pay income taxes would incentivize more freelancers to exit the informal economy and proactively declare their incomes.

Most freelancers face similar legal and administrative obstacles. Several approaches have been successful in advocating for better conditions, including:

• Establishing a semi-formal or formal body (e.g., alliances or associations) serves as a central place for sharing resources, knowledge and experience, and to voice concerns freelancers have regarding their legal status. This approach has had a measurably positive impact in creating a public discourse between freelancers and public sector stakeholders. Furthermore, a centralized body often represents a driving force for facilitating the improvement of existing narratives and bigger agendas, such as introducing a digital nomad program in Albania and Georgia.
• Events and conferences offer opportunities to employ advocacy and can be used as a platform for information gathering and exchange with the public sector, encouraging all stakeholders to participate in open discussions and to engage in direct communication.
• Build a common understanding between parties. Ministries have often been the primary target for freelancers to voice their issues and demands or do any form of advocacy. This is often met with limited success due to the lack of understanding of the challenges freelancers are facing. This misunderstanding creates a sense of animosity and breeds a conflicting space rather than a space for finding common ground.
• Identify the right interlocutor. It is possible to have interlocutors in the public sector who are willing to collaborate and find workable solutions, especially when this topic is approached sensitively and productively.
• Address root causes instead of symptoms. It is important to identify which laws and policies are the root cause of the problem and understand the impact they have on freelancers. Traditionally, the public sector was addressing the symptoms, but recently they have demonstrated a willingness to address core issues.

Freelance advocacy initiatives

The rise of the freelance economy has led to a growing recognition of the need for advocacy initiatives that support and protect independent workers. Development projects can play a critical role in supporting these initiatives by helping to promote economic growth, increasing access to decent work opportunities, and advancing the rights and interests of independent workers.

Helvetas’ long-term economic development and skills training projects in the region have produced lessons learned on integrating advocacy support into projects, including:

• Early stage recognition of the systemic obstacles freelancers experience is critical for acting directly to establish preventive solutions.
• Development projects can work with the public sector to create an enabling regulatory environment that recognizes freelancers as legitimate contributors to the economy and provides protection for their rights and interests.
• Development projects can support research and data collection initiatives to gather information about the size and impact of the freelance workforce on the economy, which can then be used to inform policy decisions and advocacy campaigns.
• Development projects can support freelancing by building networks and partnerships that connect independent workers with other freelancers and potential clients. This can involve initiatives to support industry-specific networks and associations, as well as platforms that enable freelancers to collaborate and share resources.

Ultimately, development projects that support freelancing can play a key role in advancing the interests of independent workers and promoting economic growth. By providing the resources, infrastructure and support freelancers need to thrive, development projects can help build a more inclusive and sustainable economy that benefits all types of workers. They can also help to create a more equitable and just society where independent workers are recognized and respected for their contributions to the economy and their communities.