From the Gig Economy to the Guild Economy

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From the Gig Economy to the Guild Economy

Category:Collaboration,Community,Connections,Creation Spaces,Flow,Institutional Innovation,Learning,Opportunity,Trust,Workgroups

More and more people are talking about the future of work. In those conversations, something that’s getting quite a bit of attention is the “gig economy,” where more and more work is being done by independent contractors and not by full-time employees. While that’s certainly an interesting trend, I prefer to look ahead and anticipate what’s next. In that context, I’d suggest that we’re going to evolve from a “gig economy” to a “guild economy.”

Forces at work

The growth of the gig economy is a result of many forces coming together. A core driver of the gig economy is the evolution of the scalable efficiency model that drives most of our large institutions. As I’ve written about elsewhere, the scalable efficiency model has shaped our large institutions around the world for at least the past century.

This model is driven by the belief that the key to success is to do things faster and cheaper at scale. Enormous wealth and institutional success have been the result, which is why institutional leaders are so wedded to this model.

But there’s a problem – actually, many problems. Efficiency is a diminishing returns proposition. The more efficient we become, the longer and harder we need to work to get the next increment of efficiency. Diminishing returns is a problem on its own, but it’s compounded by the fact that we live in a Big Shift world of mounting performance pressure – competition is intensifying, change is accelerating, and extreme disruptive events occur with increasing frequency.

The early growth of the gig economy

Rather than questioning the continuing value of scalable efficiency models, institutional leaders have a natural tendency to want to squeeze harder. One approach to cost-cutting that has gained increasing traction in the past several decades is the shift from full-time employees to contract labor. If the work to be done is variable, rather than constant, why pay a full-time employee when we could turn a fixed labor cost into a variable labor cost and simply hire a contract worker when a task needs to be done?

Even better, there’s an opportunity to save on labor costs because the employer doesn’t have to pay all those expensive employee benefits like health care insurance. When the work can be done remotely, the company can save even more money by finding contract workers in parts of the world where lower wages are the norm.

These are some of the reasons why gig work has grown rapidly over the past several decades. There’s also another reason which should be a bit of a red flag. I haven’t seen any statistics on this, but anecdotally I am seeing a growing number of workers leaving large institutions and striking out on their own because they are frustrated with the worker experience in large institutions. They’re driven by a desire to learn faster. They report to me that they’re developing their capabilities much more rapidly as an independent contractor than they ever could when they were stuck within one institution.

But, while there are some exceptions, most of the “gig work” being done today is done by individuals working on a transactional, project basis. They’re on their own. That’s what’s going to change.

The Big Shift and the imperative to learn faster

As I’ve already mentioned, the Big Shift is creating mounting performance pressure on all individuals and institutions. But, at the same time, the paradox is that the Big Shift is also creating exponentially expanding opportunity – we can create far more value with far less resource and far more quickly than would have been possible a few decades ago.

As we confront the paradox of the Big Shift, the imperative is to learn faster – that’s the most effective way to respond to mounting performance pressure, while at the same time addressing exponentially expanding opportunity. By learning faster, I mean creating new knowledge through action and reflection on impact achieved. Those who master the ability to learn faster will achieve much higher impact in a rapidly changing world.

But, here’s the challenge, the scalable efficiency model of our institutions is fundamentally hostile to this form of learning. It requires taking risk and improvising when the scalable efficiency model insists on tightly specifying and highly standardizing all tasks to be performed. It also insists that everyone deliver their results predictably and reliably without failure.

The impact on the gig economy

The gig economy, as it’s currently structured, also limits the potential to learn faster. Gig workers typically work as individuals and they are very transactionally driven. While gig workers can certainly learn by engaging as individuals in project work, that’s not the optimal way to learn. If we’re serious about accelerating learning and performance improvement, we need to come together in small groups (what I call “impact groups”) of 3-15 people who develop deep, trust-based relationships with each other based on a shared commitment to increasing impact.

We’re already starting to see some of that start to happen in the gig economy. Individual workers are discovering that there are others who share their passion and coming together so that they can work on projects as a group, rather than individuals.

I anticipate this is just the beginning. As gig workers begin to realize the need to accelerate their learning and performance improvement, they’re going to be driven to come together into small groups and offer their services as a group, rather than as individuals.

On the other side, institutions are going to begin to see that the real value of contract workers is the diversity of experience and expertise that they bring to the work. These contract workers can help the institution’s employees to learn faster by exposing them to different perspectives and approaches to addressing work. These institutions will begin to expand their focus beyond just cost savings and see gig workers as an opportunity to learn faster. While some of that may be accomplished in a “one-off” project with individual contractors, there will be even greater potential for learning if enduring, trust-based relationships are developed with specific gig groups over time.

The role of guilds

That sets the stage for a new way of organizing the gig economy. We’re going to begin to see impact groups forming and coming together into broader networks that will help them to learn even faster.

That’s where guilds come in. In Medieval times, guilds were a prominent way of organizing in urban areas to bring people together who were seeking to earn a living from a particular craft or trade. These guilds had many different roles, but a key one was to help their participants become better at their craft or trade. They were powerful learning organizations where participants learned through practice, rather than sitting in classrooms.

As independent workers become more aware of the imperative for accelerating learning, they will tend to affiliate into guilds that will help to connect them with others who might become part of their impact group and, more broadly, with other impact groups that share their passion for increasing impact in a particular set of activities. These guilds can help to knit together larger and larger networks of impact groups, generating something that I call “creation spaces,” to help scale and accelerate learning. For example, think of a guild that will help graphic designers to come together and learn from each other.

These guilds can play many different roles over time. One major role would be to provide the participants in their guilds with access to a variety of benefit programs like health care and life insurance that would be much more difficult to obtain as individuals. These guilds can also help to define and manage reputation systems that will help their participants to build a broader range of trust-based relationships. They can become rich environments for mutual aid among participants.

Beyond the gig economy, there’s another area that will see the re-emergence of guilds. That’s in product and service businesses that will increasingly fragment as customers demand more and more tailored products and services to serve their specific needs (see more about fragmentation trends in the economy here). The participants in these small, but very profitable, product and service businesses will see value in connecting with others in their particular domains so that they can all learn faster and create even more value with less resource. For example, think of a guild for craft chocolate companies that are serving very specific customer niches.

The potential limitations of guilds

In Medieval times, guilds had a mixed role. In part, they helped their members to learn faster together but, in another part, they often served as barriers to entry for others who wanted to practice the craft or trade. Often acting in collaboration with city governments, they would impose severe restrictions on those who could participate in a certain craft or trade. They often became very protectionist, limiting competition. (As you can see from the picture above, many of them excluded women)

The next generation of guilds needs to avoid the temptation to erect barriers. Rather than focusing on protecting existing stocks of knowledge, they need to be committed to enhancing and scaling flows of knowledge so that everyone can learn faster.

To address the opportunity to help participants to learn faster, these guilds need to find a way to move beyond fear of competition and foster the excitement that can come from addressing the exponentially expanding opportunities created by the Big Shift. Rather than embracing a scarcity mindset, these guilds need to cultivate an abundance mindset. They need to recognize that, the more people that come together, driven by a commitment to learn faster, the more opportunity there will be for value creation. It’s a very different heartset and mindset from the ones generated by the fear that is engulfing more and more of the world’s population.

The bottom line

The imperative to learn faster is going to motivate individuals to come together in very different ways. In at least one dimension, our future may represent a return to the past, when we see the re-emergence of guilds. Rather than isolated individuals driven by fear as they confront mounting performance pressures, we are likely to see people coming together, excited about the opportunity to learn faster and embrace exponentially expanding opportunity.


10 Comments

Richard Nelson

August 27, 2020at 2:58 pm

We can be romantic when we look to the past and miss the fact that those livelihoods were prescribed by the king and the Lords of the realm, that the guilds served the ruling elite, under charters and license from the Crown. These were largely hereditary stations in life into which the individual was locked in by birth. Education, in particular, liberal education of broad scope was willfully denied to the people of all classes including the skilled trades people.

Our current great advantage, is the liberal education of the Boomer generation of America and their children and grandchildren, now inclusive In these latter generations of the diversity of humanity – and it is that commingling of the knowledge and cross-cultural experience that can now guide us collectively to the truth, and the truth will set us free.

Let’s search for the future while we learn from the past. As the inventor of SolaRoof technology and the AgriPOD vertical farming platforms, I choose global OpenSource collaboration and cooperative commercialization, mobilizing a grassroots POD Enterprise Network (PODnet.is) for the viral adoption of vital humanitarian innovation. We are distributed, independent, yet we aim for collective intelligence and set our purpose on the universal success of all of humanity.

Luc Lalande

July 28, 2020at 1:57 pm

Guilds as a post-industrial model for interactive value creation, tacit knowledge sharing, co-learning opportunities, bonded by trust-based relationships. Indeed. Perhaps community makerspaces and/or Fab Labs would be ideal environments to initiate guild-like experiments.

Jerry Edling

July 26, 2020at 10:25 pm

A very prescient article. The guild economy has major implications for higher education, which may morph into a liberal arts-apprenticeship model, with two years devoted to foundational education and two years devoted to integrating into the guild system. Or it may lead to a more ala carte approach, with college courses supplementing the guild experience.

    Mamudu Hamidu

    August 7, 2020at 10:40 pm

    What make the gig better is how the gig is able to determine that the distance between two points is a straight line and not winding round..

    Therefore, if we have more gigs forming guilds, then, i thinking it would not be about higher education but faster approaches to learn and reduce long-term durations in higher education.

    This would be good for many developing nations.

Alberto Giusti

July 24, 2020at 10:29 am

Exactly what we say in Guilds42.com . The same kind of vision and philosophy. It’s nice to see we are not alone.

Toby Trevarthen

July 24, 2020at 5:23 am

I love the revisitation of the guilds. Like the comments below, I also brought back the notion of guilds as a paradigm for my narrative work in the RPA and advanced digital worker space. The framework for how one advanced in a guild was used to demonstrate how a digital worker (a cognitive bot) could be incorporated along side humans in the workspace. A symbiosis of how work will get down when intelligent bots replace repetitive work and the notion of how an Intelligent bot could be consider a benefit just like healthcare or 401K. This has direct implications on skills and the need to continuously learn new skills as old ones become automated.

Terri Griffith

July 22, 2020at 8:23 pm

Thank you, John, for this thoughtful perspective on guilds. As you note, guilds offer opportunities to improve working conditions, especially in gig / open talent environments. (I’ll hope future paintings are a little more inclusive.) I mentioned guilds as a possible improvement in an interview with government leaders earlier in the year. I’m happy to say there was interest in the idea.

Chris Heuer

July 22, 2020at 5:51 pm

As often is the case, we are on the same wavelength. I’ve been working internally on this for the past 16 months, wish I had published more on it.

Wrote a piece that 2020’s would be “The Guilded Era” but then covid and I didn’t revisit, will have lots more to talk about soon. Reached out to Josh recently to discuss, but would love to catch up with you soon too. Will email later today.

    Tunde Adegoke

    July 30, 2020at 5:55 am

    Chris, when are you planning to publish the said guide? I am interested in it.

Ashley Friedlein

July 22, 2020at 9:01 am

Great to see this John. Your thinking very much echoes why we created Guild (https://guild.co/). We try to marry the best of the new (a messaging app for professionals) with the best of the old (craft, learning, support, trust, reciprocity etc) and provide a (digital/mobile) environment which protects and encourages quality but is not overly protective or exclusive but open to all.

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