My Research

Tiny TNCs: the rise of micro international businesses and online self-employment

Transnational corporations (TNCs) is a term usually reserved for large enterprises with staff and offices located across several countries. Such firms have developed international markets for their exports and have grown sufficiently to afford a physical presence across borders – closer to local markets and typically taking advantage of favourable tax rates and labour costs in host nations.

But small and micro enterprises are emerging in the wake of online trade and social networking services which have many of the characteristics of TNCs but without the footprint, overhead and bank balance of their larger cousins. These firms are able to galvanise an untenured, freelance workforce and operate with little need for a substantial physical presence in any one location.

We coin the term TinyTNC to describe these businesses and suggest that such enterprises are rapidly gaining traction as web-enabled services continue to reduce the barriers to cross-border enterprise that have hitherto made international business activities prohibitive in terms of cost, administration and logistics.

Enterprise: meet your new labour force

This research area suggests the confluence of two complementary activities: small enterprises needing untenured labour, and a rising pool of freelance and self-employed agents needing clients to buy their labour and expertise.

This trade in labour is ‘new’ in the sense that it falls outside conventional arrangements for permanent, part-time, casual or contracted employment. And yet it is consistent with a general drift towards unsecured contract terms and the rise of contentious arrangements such as zero-hour contracts.

And yet many agents prefer this kind of arrangement on the grounds of flexibility and portability, and the absence of longer-term commitments to any one employer. It is akin to the “temp” secretarial services of the 1970s and 80s, and the IT contracting boom of the 1990s and 2000s – the latter being a lucrative idyl for those with in-demand skills such as programming and systems administration which dominated that market for over a decade.

freelancer.com: labour as commodity

We regard the rise of online labour pools such as freelancer.com as being pivotal to the success of labour services as traded commodities. These services facilitate employment arrangements and take care of much of the logistics of engagement. They allow freelancers to bid for specific tasks, or sell their labour hourly based on demonstrated expertise, and they allow employers to make informed choices as to who they are engaging.

Like other ‘social’ web services, notably those operating in the travel and hospitality sector, online labour pools are largely self-correcting. Employers and employees are actively encouraged to comply with regulations and operating protocols to maintain hard-won reputations and status credits. Other checks and balances ensure milestones are met before payment is delivered and attempt to reduce misunderstanding by supplying clear guidelines, encouraging language proficiency, and offering dispute resolution.

Future labour

The question we ask, then, is: can this symbiosis of freelance labour and Tiny TNCs be sustained? Is this the solution for those unable to find work in regional or developing economies? What does this mean for conventional labour statistics? Income tax? Superannuation? Work permits and visas?

Furthermore, if our choice of career and vocation reflects our sense of identity, worth, class and power, how does that correlate with cross-border freelance labour?

Leave a comment