What drives demand for online gig workers? NASA’s drive for innovation

When NASA teamed up with Harvard University in 2010 to create the NASA Tournament Lab (NTL), they never anticipated that the collaboration might impact NASA’s staffing and procurement processes. The NTL started off as a set of contests on online gig platforms to create innovative solutions for NASA’s real-world challenges. However, through the NTL, NASA accessed independent freelancers with expertise and new ideas that they could not get through traditional procurement and recruiting practices.

Following NTL’s success in launching 300 projects between 2011 and 2020, NASA integrated crowdsourcing innovation into its core business. NASA currently uses a contract with 32 crowd platforms, allowing it to access up to 120 million online gig workers.

NASA: one of many organizations increasing demand for online gig work

A growing number of firms use online gig work for tasks such as graphic design or web development that workers deliver online using mainly digital tools.  According to World Bank estimates from its recent report, Working without Borders: The Promise and Peril of Online Gig Work, demand for gig work increased 41% between 2016 and the first quarter of 2023. Increased demand is also reflected in the rapid growth in global online gig platforms: the ILO reports that between 2010 and 2020, the number of platforms tripled.

Online labor demand index, 2016 (Q2) – 2023 (Q1)

Why are firms and organizations turning to online gig work?

The same World Bank report conducted a global survey of over 1,100 firms based on social media and targeted email outreach, providing a snapshot of why firms hire through gig platforms. As reflected in the chart below, key drivers include:    

1. Access to wider range of talent: According to the report, the main reason firms hire gig workers is to access specific skills that they lack in-house, with 60% of firms choosing this option (see Figure below). In the case of NASA, the skills of freelancers have met or exceeded expectations in 92% of projects. According to John Vickers, NASA Principal Technologist, “The final designs [of solutions developed through NTL] are amazing. They are far beyond our current state of knowledge and will greatly impact our lunar and Mars mission architecture for manufacturing and construction.”
2. Cost flexibility: Almost half of firms pointed more flexible costing options than hiring permanent employees as another reason to hire gig workers. These results are consistent with findings from the NTL, with cost savings for 80% of crowdsourcing projects. In particular, startups and small enterprises value cost effectiveness, especially in early stages when they struggle to establish their business models.
3. Flexibility in labor task and time allocation: Online gig platforms allow firms to adapt to rapid changes in market trends. For instance, 84% of firms hire gig workers for tasks that last up to one month, and 96% for tasks that last up to six months. For NASA, this flexibility has allowed people with different backgrounds to participate in technical and nontechnical tasks including ideation, system architecture design, algorithm performance improvement, software and applications development, graphics, and video work.
4. Time saving in procurement: NASA’s experience demonstrates the time saved using gig workers. Traditional procurement for NASA and other US federal agencies takes about nine months to a year; with NASA’s current contract with gig platforms, the whole process for a specific assignment can be completed within 3-4 weeks.

Reasons to hire gig workers according to firm surveys

NASA as a case study of increased demand for online gig work

Firms are looking for ways to remain agile and cost effective to adapt to rapid shifts in the market. As NASA illustrates, online gig platforms help firms reduce transaction costs to overcome traditional hiring constraints and access a wider talent pool to drive innovation.   Increased use of digital labor platforms as part of recruitment practices is transforming the way work is contracted, performed, managed, and remunerated. Policy makers must keep up with these labor market trends to ensure the well-being of workers while allowing the flexibility, access to talent, and innovation that firms and organizations like NASA value.

This blog is part of a Short Notes series that explores findings from the World Bank report “Working Without Borders: The Promise and Peril of Online Gig Work.”

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