Too Few Freelance Knowledge Workers – Germany Is Giving Away Growth

Germany has only around 4 freelance knowledge workers for every 100 employees. The leaders are Belgium (10), South Korea (around 10), and Italy (around 9). “Since knowledge workers play an important role in the innovation process, this means Germany is giving away growth potential,” says Oliver Falck, Director of the ifo Center for Industrial Organization and New Technologies. He is one of the authors of this study, which quantifies the growth impact of freelance knowledge work on behalf of the German Association for Freelance Knowledge Work (Bundesverband für selbständige Wissensarbeit).

Germany is about average for all nations represented in the study, which examined 31 countries over the period 1985–2018. Since 2010, the number of freelance knowledge workers in Germany has declined; over the same period, it has increased in the top three countries.

“Self-employed knowledge workers bring fresh insights to companies. They think freely and outside the established structures. This moves companies forward in terms of idea generation and innovation,” Falck explains.

The study calculated the extent to which the proportion of freelance knowledge workers is related to economic growth. It concludes that increasing a country’s share of knowledge workers by 0.24 percentage points (the average deviation among the countries studied) could boost growth by 0.4 percentage points on average. “If Germany caught up with South Korea, this would stimulate growth by 0.96 percentage points – adding up to EUR 243bn in the long term,” Falck says.