Coworking spaces have been perceived as informal, café-like collaboration spaces – mainly for self-employed individuals looking for an excuse to get out of the home! However, in recent years, sharing work space has grown in popularity and is now a practise used by a wide range of businesses of all sizes and sectors.
Sharing office space has more direct benefits to businesses than one might think and can be carried out in many types of venues. Why has this trend evolved and how can it benefit your business? These are the questions we will answer in this article.
Coworking is on the rise
The UK and US are leading the way in coworking spaces, with London and New York, in particular, embracing collaborative working spaces. In 2017, 10,715,677 square feet of London workplace stock was categorised as a coworking spaces, whilst in Manhattan, flexible workplace represented an average of 2.9% of the market, or 5,452,900 square feet.
2017 was a record year for coworking spaces in London. Areas leased to flexible workspace providers saw an 190% increase from the previous year. According to The 2018 Global Coworking Survey, in 2018, 1.7 million people around the world will be working in coworking spaces – a 212% increase from 2015.
The shift to self-employment and the rise in freelancing has accelerated the phenomenon of businesses co-sharing spaces. In London, the volume of self-employed persons has grown by a quarter since 2009 to nearly 5 million people today. People Per Hour has predicted that one in two Londoners will be freelance by 2020.
Advances in internet connectivity, communication apps and other technologies are also contributing factors accelerating coworking.
How businesses are sharing workspaces
Sharing work space is practiced by business of all sizes and sectors, but is mainly found in office-based companies, retail stores and hospitality. Below I discuss the cases of WeWork in London, Shinola retail/The Shine in Detroit, and Free the Robot/Bitter and Love in Singapore.
In the past five years, WeWork has emerged as the largest space holder in London, with more space than giants like Google (1,344,121 sq ft) or Amazon (1,012,649 sq ft), offering shared work places for individuals and businesses. Since 2012, WeWork has acquired 2,578,000 square feet of space in London. More and more businesses choose WeWork or similar companies like Regus or Kontor, particularly start-ups or entrepreneurs who don’t use shared spaces for a long period. However, bigger companies have also found sharing space useful as 20% of WeWork’s revenues come from enterprise clients, who typically take a lease of 1-3 years.
Concept stores in the retail sector have further underlined the growing popularity of sharing commercial space. With the rise of e-commerce, traditional brick and mortar stores looking to improve their customer experience have had to shift their commercial strategies. Concept stores – the cooperation between a larger commercial store and smaller boutique cafes or retail shops in one location – has been a solution for many.
Shinola, a clothing store in Detroit which, in recent years has diversified its shopping strategy by opening their retail space to a café and newsstand run by restaurant The Smile. In this way, they offer a more comprehensive experience to customers, who can browse the Shinola clothing range while drinking a coffee from The Smile. Whilst many stores will be bound by regulation on when they can and cannot open – particularly on Sundays – this is certainly a viable option for many places looking to rent commercial space in cities.
In the hospitality sector, bars and cafes have also increasingly started sharing space. In Singapore, on 118 Telok Ayer Street, by day resides coffee shop Free the Robot. While at night, the venue transforms into a chic and trendy bar called Bitter and Love, under separate management. By sharing their spaces, both businesses increase their efficiency and put underutilized space to commercial use.
How coworking can benefit your business
Coworking spaces is typically an interesting option for businesses based in larger cities or where commercial rents are particularly high. In London, for example, sharing work place can help small businesses, start-ups, entrepreneurs and many more to enjoy the prestige of London, without the cost/commitment of renting an office.
Ann Wright, entrepreneur and co-founder of RoughHouse Media, found that renting her own space can be very isolating. To share a space and have colleagues from various different backgrounds can be more productive and allows her creativity to thrive.
Coworking spaces can serve a variety of people, which ultimately means businesses from different backgrounds can share their skills and exchange knowledge. There’s also the benefit of networking, meaning companies have the potential to expand both their client base and grow.
According to Deskmag, 71% of coworking members have collaborated with other members in some way or another. Either with small tasks, projects with and without contract, or through networking events. But most of all, coworking offers a flexibility that a regular lease would not allow for. Companies can move more freely, at a lower cost, while still enjoying the comfort of a central venue.
Coworking is increasingly becoming the dominant way of renting space in major cities around the world and isn’t forecasted to stop. People more and more are recognizing the urgency of being more efficient in terms of space, not only for cutting down on their spend but also for environmental reasons too.