A new analysis conducted by researchers from Harvard Business School, the German Institute for Economic Research, Technische Universität Berlin, and Imperial College Business School highlights a significant change in the freelance job market. It concludes that the launch of ChatGPT has resulted in a 21 percent drop in job postings for writing and coding roles on a major freelance platform.
The team examined data from a prominent global freelancing platform and compared it with Google Trends data. This thorough approach enabled them to draw conclusions about AI's impact on freelance jobs.
Decline in Writing and Coding Jobs
Researchers Ozge Demirci, Jonas Hannane, and Xinrong Zhu revealed a notable reduction in the demand for freelancers with skills in writing and coding. The study attributes this decline to advancements in generative AI such as ChatGPT, which can efficiently handle these tasks. They write:
“Using data from a global freelancer platform, we quantify a 21% greater decline in demand for automation-prone jobs compared to manual-intensive jobs after ChatGPT introduction. Writing is the job category most affected by ChatGPT, followed by software, app and web development, and engineering.”
Interestingly, the study shows that jobs requiring manual labor have remained steady. This indicates that while AI has taken over certain cognitive tasks, it has not yet made inroads into jobs that require physical skills.
Impact of Image-Generating AI
The rise of AI technologies that generate images has also influenced the market, causing a 17 percent decrease in job postings for image creation. This aspect further demonstrates AI's growing role in automating traditionally human-driven creative tasks, say the authors:
“We also find a 17% more pronounced decrease in demand for graphic design and 3D odeling jobs following the release of Image-generating AI technologies. Our findings also suggest that freelancers with certain skills may face more competition after the introduction of GenAI tools. Given the already intense competition for job opportunities in online labor markets […], the increased substitutability between freelancer jobs and GenAI could further decrease earnings in the short term.”
The study's findings emphasize how generative AI is reshaping the freelancing landscape. Fields, where AI can replace human workers, are witnessing a significant reduction in job opportunities for freelancers.
Other Research
Henley Wing Chiu, an analyst at Bloomberry, reports similar findings regarding generative AI's impact on the freelance sector. He analyzed real freelancing positions on Upwork, the prominent freelance platform, from November 1, 2022—a month prior to the release of ChatGPT—until February 14, 2024, to determine which jobs have been most adversely affected.
The 3 categories with the largest declines were writing, translation and customer service jobs. The # of writing jobs declined 33%, translation jobs declined 19%, and customer service jobs declined 16%. Outside of these 3-4 job categories, most of the other job categories were not negatively impacted.
Regarding pay, there have also been substantial shifts since ChatGPT and other generative AI tools emerged. Translation jobs were the worst hit, with more than a 20% decrease in hourly rates, followed by video editing/production and market research. Graphic design and web design jobs were the most resilient. Both of them not only increased in volume but also increased in hourly pay a bit.
Upwork: AI Skills in High Demand
Research from Upwork also highlights the significant impact of generative AI on the freelance job market. According to an internal study, there has been a remarkable increase in job posts and searches related to generative AI on the platform. From Q1 to Q2 of 2023, job posts in this category surged by over 1000%, while related searches grew by more than 1500%. This indicates a growing recognition of the value and potential applications of generative AI among businesses.
Key findings from the research include the top generative AI-related skills in demand, such as ChatGPT, BERT, Stable Diffusion, TensorFlow, and in general AI chatbots. The demand is not limited to specific tools but extends to comprehensive applications and services that utilize these technologies. This shift shows that businesses are moving beyond searching for singular AI tools to exploring broader applications and services that can enhance various aspects of their operations.
Upwork has responded to this trend by launching a new AI Services Hub, which connects businesses with skilled AI professionals and offers tools like the AI-powered job post generator and enhanced chat features to streamline the hiring process. Additionally, Upwork has partnered with Jasper, a leading generative AI content generation platform, to provide freelancers with advanced tools that boost productivity and quality of work.
