FREELANCING IN THE CONTEXT OF DIGITAL TRANSFORMATION: TRENDS, CHALLENGES AND INSTITUTIONAL FRAMEWORKS

Abstract

This article examines the phenomenon of freelancing as a crucial component of the modern labor market in the context of digital transformation. The study analyses key factors influencing the development of the freelance economy, including regulatory frameworks, tax policies, social security mechanisms, and international practices. Special attention is given to the European experience in regulating freelance activities and the possibilities of its adaptation in Ukraine. The research outlines the main stages of professional development for freelancers, highlighting associated risks and opportunities linked to non-traditional employment models. It also discusses the role of freelancing in enhancing labour market flexibility, fostering innovation, and ensuring economic sustainability in the era of Industry 5.0. The study underscores the significance of balancing market flexibility with social guarantees to ensure the sustainable growth of freelancing as a legitimate form of employment. It is argued that freelancing should not only be viewed as a means of temporary income generation but also as an essential infrastructure for integrating technological advancements into traditional industries. The research further explores the impact of digital platforms on the organization of labour, contractual relations, and financial transactions, emphasizing the need for clear regulatory mechanisms. To improve state regulation of freelancing in Ukraine, the article proposes several policy recommendations. These include the simplification of tax regimes, the automation of business registration through digital services, and the introduction of transparent taxation mechanisms for foreign earnings. Additionally, it advocates for the establishment of voluntary social security schemes, flexible pension contributions, and the development of legal protection mechanisms against fraud. The paper also suggests the creation of standardized contract templates for freelancers, the digitalization of agreements, and the implementation of government-supported educational programs to enhance digital skills and financial literacy. By incorporating these measures, Ukraine can facilitate the legalization of freelancing, improve social protections, and create favourable conditions for the sustainable development of the freelance economy. The findings of this study contribute to the broader discourse on labour market transformation, emphasizing the need for comprehensive policies that balance economic dynamism with social responsibility.