We are at a moment in time where so many people have lost their jobs or are underemployed that life as the 1099 employee or freelancer has become the only option. We do a little bit of this and a little bit of that and together we cobble together something we call a living. Freelancers are 1 out of every 3 worker now and hold the keys to igniting the future direction of our economy.
Last month, the founder of The Freelancers Union, Sarah Horowitz, spoke at The Economist‘s Ideas Economy: Human Potential Conference about how freelancers are making choices to build meaningful independent lives. The Human Potential Conference explored the changing face of work as disruptive innovation shapes new ways to be productive, find jobs, and build a life.
“Why Work?” was Sarah’s topic which she presented. Really, a surprisingly poignant idea upon reflection. And freelancers are well poised to take this question and fuel a cultural shift in our workforce, ultimately leading the way to a more meaningful independence. A more meaningful life and truly their own lifestyle branding.
And yet, according to the Kauffman Foundation, the pace of business startups has exhibited a long-run decline that dates back to the 1980s (see Business Dynamics Statistics Briefing, e.g., Haltiwanger, Jarmin, and Miranda  and Litan and Reedy )
It is evident that the decline in job creation from startups accelerated in the recent recession. The declining job creation from business startups reflects a declining firm startup rate. A consequence of this drop in the pace of business startups is that the share of activity accounted for by young firms (defined here as firms aged five or less) has steadily declined over time.
So what is the missing ingredient to turn this quiet independent movement into a lifestyle movement?
I think our answer can be found in exploring crowd and group behavior in the financial investment industry. Historically, one aspect of financial investing that has received little attention is emotional contagion. The term contagion has had a negative connotation from its customarily application in both the financial industry and the field of medicine and disease because by definition it is the communication of a “disease” from one person to another person by close contact. As such, contagion frequently leads to irrational or what some might call imprudent behavior. Contagion has gotten a bad name because in the financial investment arena it supposedly prevents “healthy” evaluations of investment opportunities, and gets in the way of sound judgment in decision-making. As the term suggests, people can infect each other behaviorally.
In the financial investing arena, contagion leads to the classic blunders associated with following the crowd – buying into the market when prices are high, and fleeing in panic when they drop. And yet contrarian behavior, is, as we know, generally the best (or even, arguably, the only) way to really make money. We all know that those who make the biggest sum invest early- before everyone else has figured out their investment is the next big thing. By the time everyone realizes it is, the chance for a high return is too late.
And yet when it comes to financial investment we have been taught that contagion is a bad thing. And yet in the context of building individual lifestyle brands to refuel our economy, everyone uniquely can win.
All we need is to start using some logic to determine our personal risk tolerance and to manage it to move forward. Logic is the antidote to emotional contagion when it comes to investing. And freelancers increasingly are betting on themselves and becoming more tolerant and less risk adverse. While emotional contagion is relatively automatic, and inevitably entails the suppression of conventional rationality and caution, it seems to be the right time to leverage it.
The negative impact of our economy is awakening our hearts and minds and eliciting a strong emotional, behavioral and cognitive response from freelancers in particular. Why? Because human nature shows us that people tend to imitate those who seem to be successful or are simply able to survive. Emotions help people to adapt to the circumstances, and contagion can thus aid in survival.
And if people see others work hard to earn a living, and the results are there to be seen, the mimicry is a purely positive reaction. The opportunity to use emotional contagion positively is upon us.
There is a quiet revolution- a lifestyle movement happening- beginning with freelancers. Let’s leverage it into a strategy to live the lives we want to lead and truly launch this movement. Let’s give starting stuff up a new name, a new face, a new destiny.
It’s time to go from making lemonade from lemons to building a strategy where 1 + 1 can equal 4. Contagion is a natural emotional process that can be advantageous, and is, especially in our world right now. Lets take advantage of it and use it to fuel sustainable creative productivity and build a new kind of creative economy- one that can benefit everyone.
About Lisa Canning
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