The Coworking Economy

The Coworking Economy

A new report from the Instant Group, a serviced workspace provider, documents the rapid expansion of the market for coworking spaces within the past year. Mark Eltringham at Workplace Insight explores the report’s findings:

[C]oworking grew more than 10 percent across the US over the last year and ‘combination centres’ which offer both executive suites and coworking spaces expanded by 12.9 percent as existing operators sought to take advantage of the growing demand for collaborative and agile workspace. The study claims that the occupation of flexible workspace by corporations has significantly expanded the US flexible office market over the past year, largely driven by the rise of the contingent workforce and changing workplace demands of Millennials. The total market grew by 4.3 percent and now includes 3,596 centres, the largest markets of its kind in the world with the UK following at 3,290 centres.

The study claims that “corporate demand for agile space solutions, which offer shorter deal terms and transparent, monthly pricing, are driving markets such as NYC and benefiting existing brands such as Regus and also catalyzing the rapid growth of the WeWork brand”.

In the US, the report adds, 50 percent of the flexible workplace market is concentrated in just five states, with California leading the pack: The Golden State boasts 103 work centers devoted solely to coworking. The most expensive markets for coworking spaces are New York City and Washington, DC, followed by San Francisco and Los Angeles.

Nonprofit organizations and social enterprises are major consumers of coworking space and are playing a significant role in the rise of this new type of work environment. Fast Company’s Sean Captain looks at how providers are catering specifically to this sector:

WE Labs is one of several new work spaces with public-service missions that include supporting low-income and minority entrepreneurs, artists, and social enterprises—nonprofits or for-profit companies that put social goals first. Some of these spaces, like maker-oriented Ponyride in Detroit, are nonprofits; several, like HQ Raleigh in North Carolina, and WE Labs, are for-profit social enterprises called Benefit Corporations (B Corps). …

A coworking space may not need an overt social mission to foster social good. WeWork provides a discount to nonprofit clients, which make up 6% to 7% of its member base, says VP of member engagement Erik Martin. That may not sound like a lot, but WeWork is the world’s largest coworking company, with locations in 28 cities and 12 countries. “We see examples all the time where a nonprofit or a small social venture, or even individual entrepreneurs start hanging out where they can get access to members in a certain field,” says Martin. Half of WeWork members collaborate, he says, in anything from chats by the water cooler to presentations and Q&A sessions on topics like applying for grants and using Google AdWords.

While coworking spaces are the hot new thing, like so many “new” things, they have historical precedents. In an April article at the Harvard Business Review, Piero Formica compared them to the bottegas of Renaissance Italy:

The Renaissance put knowledge at the heart of value creation, which took place in the workshops of these artisans, craftsmen, and artists. There they met and worked with painters, sculptors, and other artists; architects, mathematicians, engineers, anatomists, and other scientists; and rich merchants who were patrons. All of them gave form and life to Renaissance communities, generating aesthetic and expressive as well as social and economic values. The result was entrepreneurship that conceived revolutionary ways of working, of designing and delivering products and services, and even of seeing the world.

Florentine workshops were communities of creativity and innovation where dreams, passions, and projects could intertwine. The apprentices, workers, artisans, engineers, budding artists, and guest artists were interdependent yet independent, their disparate efforts loosely coordinated by a renowned artist at the center — the “Master.” But while he might help spot new talent, broker connections, and mentor younger artists, the Master did not define others’ work.