Nearly a Quarter of American Knowledge Workers Have Transitioned to Freelancing, Raking in an Estimated $1.5 Trillion by 2024: Report
Freelancing: The Future of Work is Now
Upwork's new report, the Future Workforce Index, paints a vivid picture of the changing landscape of work in the United States. It reveals that a staggering 28% of U.S. knowledge workers - over 20 million individuals - are now freelancers, contributing $1.5 trillion to the economy in 2024.
These independent workers are leading the charge when it comes to adopting newer, AI-driven work models. The report underlines the growing trend towards flexible, technology-driven work and highlights freelancers as the pioneers in embracing AI and future-ready skills.
Kelly Monahan, managing director of the Upwork Research Institute, emphasized, "The traditional 9-to-5 is fast fading. Skilled freelancers are ditching corporate structures for flexibility, financial control, and meaningful work. Companies that cling to old hiring practices risk falling behind, while those embracing freelancing are driving growth and innovation."
Freelancers: The Engine of the Economy and Innovation
According to Upwork's data, these self-employed professionals are earning a Median income of $85,000 - higher than the $80,000 median for full-time employees. Interestingly, 37% of freelancers hold postgraduate degrees, compared to 20% of full-time employees. The report identifies various roles among freelancers, including Freelance Business Owners, Agency Freelancers, Managed Services Freelancers, and AI-Enabled Freelancers.
Freelancers not only excel in AI but also in crucial human skills like problem-solving, critical thinking, adaptability, and communication. The report indicates that more than half (54%) of freelancers are proficient in AI, compared to 38% of full-time employees. Additionally, 29% of freelancers have extensive experience building, training, and fine-tuning machine learning models, compared to 18% of full-time workers.
"Freelancers are the nexus of innovation, AI, and workforce transformation," said Gabby Burlacu, senior research manager at the Upwork Research Institute. "As they continue to evolve, they are shaping the way work is structured and businesses operate. Skilled freelancers are thriving on platforms like Upwork, where we see their adaptability, AI proficiency, and outcome-focused mindset."
Corporate embracing of Non-Traditional Talent Models
The report also highlights corporate adoption of non-traditional talent models. Companies in the top 25% for revenue growth are more likely to integrate freelancers (45%), managed services (50%), agencies (39%), and human+AI collaboration (41%) into their workforce strategies. However, barriers remain; 59% of business leaders express concern about multi-company work, and 41% are skeptical about AI tools.
The report suggests a rapid acceleration in the shift towards freelancing. Thirty-six percent of current full-time employees are considering freelance work, while only 10% of freelancers want to return to traditional employment. Gen Z leads this trend, with 53% of skilled workers in this demographic already freelancing. As Gen Z is expected to account for 30% of the U.S. workforce by 2030, this shift may transform the employment landscape significantly.
Despite challenges, optimism remains high, with 84% of freelancers and 77% of full-time employees confident that freelancing's prospects will improve further. Moreover, 82% of skilled freelancers report more work opportunities now than a year ago, compared to 63% of full-time workers, indicating a robust and expanding freelance market.
The report was based on a survey of 3,000 U.S.-based skilled knowledge workers conducted between December 2024 and February 2025, with a margin of error of ±1.8% at a 95% confidence level. A separate survey of 502 C-level executives from publicly traded companies provided insights into hiring and workforce strategy trends.
In essence, Upwork's Future Workforce Index underscores the significant and accelerating shift towards freelancing among U.S. knowledge workers. This shift is marked by a workforce increasingly oriented to flexibility, continuous learning, AI skills, and innovative work structures, reshaping traditional employment models and serving as a driver for economic growth and workforce transformation.
- Entrepreneurship and small-business opportunities for freelancers are becoming more prevalent, with 54% of freelancers being proficient in AI and 29% having extensive experience in building, training, and fine-tuning machine learning models, as highlighted by the Upwork report.
- As the trend towards freelancing continues to rise, digital technology is playing an increasingly significant role, with companies embracing AI-driven work models and human+AI collaboration to drive growth and innovation, according to the Upwork Future Workforce Index.
- For those pursuing careers in business and finance, the report suggests that focusing on developing future-ready skills like AI proficiency, flexibility, and adaptability will be crucial in the changing landscape of work, where freelancing and freelancers are playing an increasingly important role in the economy.
