[Viewpoint] Gig Economy and One-Person Creative Enterprises

The prolonged COVID-19 pandemic has accelerated changes in the business sector. In particular, the transition to the 'gig economy' era is speeding up. The gig economy originates from 'gig work,' which began in the early 1920s in American jazz clubs where performers were hired on the spot for shows.

A representative form of the gig economy is the free agent. A free agent is a type of employment where individuals enter into temporary contracts on-site to perform tasks. Recently, free agents have evolved into one-person creative enterprises under the gig economy, connected through the hyper-connected structure of the Fourth Industrial Revolution. This is due to the reduced startup costs. In Silicon Valley, for example, the average startup cost has dropped from $5 million in 2000 to $5,000 recently, opening an era of lightweight startups accessible to anyone.

One-person creative enterprises are solo entrepreneurs with creativity and expertise who operate their businesses without regular employees. Joint ventures with fewer than five people also qualify as one-person creative enterprises. According to the Act on the Promotion of One-Person Creative Enterprises, these enterprises refer to individuals or joint ventures with fewer than five people possessing creativity and expertise in knowledge service and manufacturing sectors, operating without regular employees. The applicable industries include 43 sectors such as manufacturing, e-commerce, publishing, broadcasting, and telecommunications.

It is important to understand that 'one-person' refers to small scale, not strictly limited to a single individual. In this era, anyone with an idea can create products or services using maker spaces like Fab Lab and TechShop, open-source platforms like GitHub, raise funds through crowdfunding on Kickstarter, and market via platforms like Amazon, based on knowledge, experience, and creativity.

In fact, the number of one-person creative enterprises is increasing in South Korea as well. According to the Ministry of SMEs and Startups' '2019 One-Person Creative Enterprise Survey,' the number of such enterprises reached 280,856 last year, a 3.5% increase from the previous year. This growth is attributed to more young people choosing entrepreneurship over employment. The rising importance of knowledge service sectors and strengthened government startup support policies have also contributed. These enterprises mainly engage in technology- and knowledge-based industries such as manufacturing (35.4%) and educational services (24.2%). Total sales increased by 10.6955 trillion KRW (19.4%) from 54.9697 trillion KRW in 2018 to 65.6652 trillion KRW last year. Average sales per enterprise rose 19.2% to 242 million KRW.

One-person creative enterprises are expected to be key jobs in the post-COVID-19 era. Several support policies are needed to help them grow into long-tail one-person creative enterprises.

First, they should be included in the social safety net. The UK’s policy for one-person enterprises focuses on equalizing occupational insurance and providing better incentives when transitioning from self-employment to corporate status. The largest beneficiaries of UK social insurance are such one-person enterprises. As a result, gig work in the UK increased more than fourfold within four years after 2012, helping to solve employment issues.

Second, a cross-ministerial cooperation program to promote one-person creative enterprise startups is necessary. In the Netherlands, where one-person enterprises grow overwhelmingly faster than other companies, 40,000 to 50,000 such startups annually have become an alternative to employment. Support policies for excellent entrepreneurs, activation of accelerator programs, and other measures have been helpful. Currently, South Korea has 55 one-person creative enterprise support centers nationwide, but the related budget is only about 6 billion KRW, which is insufficient and overlaps inefficiently with existing SME support policies, especially those for small business owners.

Third, universities should operate education and support programs for one-person creative enterprises. Current government startup support policies focus on technology startups, which are not easily accessible to university students who compete in the same league as the general public. Expanding support programs and educational opportunities for university students’ one-person startups is necessary. Seoul’s Campus Town project over the past five years is a good example that has promoted one-person creative enterprise startups among university students. One-person creative enterprises can secure future jobs for young people. The answer lies in expanding one-person creative enterprises rather than public jobs. / Kyunghwan Kim, Professor, Graduate School of Global Entrepreneurship, Sungkyunkwan University