The term ‘coworking space’ makes you start imagining things. Oh, you think of a place where numerous people with their laptops gather, plugging into their headphones and typing on their keyboards all day. Or maybe, you think of a coworking space as a place where freelancers just go to have access to the internet and unlimited power supply.
Well, you’re not wrong. Except that your definition of a coworking space is vague. You see, while a significant portion of coworking spaces are occupied by remote workers, freelance consultants, and small startup teams, you’d actually be surprised to find how many massive corporations are taking advantage of the perks of coworking.
With so many proven benefits like increased productivity, boosted creativity, networking opportunity, increased sense of independence, and schedule flexibility, companies like Buffer and Instagram encourage remote employees to have memberships at a local coworking space.
Taking it a step further, companies like Google have even redesigned office spaces to emulate the coworking layout!
So what exactly is a coworking space?
Coworking Spaces: An In-depth Analysis
Coworking spaces are serviced offices whose members are usually comprised of independent or unconnected workers or businesses. Although these offices can also be rented out by corporate clients for one company, coworking spaces generally support a shared working environment. The majority of coworking members work in an open office environment, although team and individual offices are available in the industry, only a minority of members were based in these areas in 2015.
As Wikipedia puts it, Coworking is an arrangement in which workers of different companies share an office space, allowing cost savings and convenience through common infrastructures, such as equipment, utilities, receptionist and custodial services, and some cases refreshments and parcel acceptance services.
However, don’t forget that coworking spaces are essentially shared workspaces. They offer affordable office space for those looking to escape the isolation of a home office or coffee shop. These shared workspaces offer a suite of office-like amenities such as hot desks, private meeting rooms, kitchens, coffee, and more.
A coworking space can differ widely from location to location, for example, one space may be a floor of a high-rise building and another could be an entire repurposed warehouse. Worldwide there were around 18,700 coworking spaces in operation in 2018. This figure has risen from just three locations 14 years previous in 2005 and is predicted to reach 22,400 by the year 2019. In 2019, the region with the most coworking spaces was Asia Pacific (including India), with 11,592 spaces, followed by Europe, the Middle East, and Africa, with 6,850 spaces.
In the U.S., the two largest companies in terms of space leased were Regus and WeWork. Regus was by far the largest, with 9.4 million square feet of office space leased throughout the United States. WeWork, although larger than other companies, was somewhat smaller than Regus, leasing approximately 6.5 million square feet.
Founded in 1989 in Europe, Regus now operates in over 120 countries and 900 cities. The company offers a range of workspaces such as virtual offices, meeting facilities, corking spaces, day offices, and business centers. The startup company WeWork, on the other hand, was founded in 2010 in the United States. Its primary focus is on coworking spaces with the aim to create a community atmosphere in their company. The firm operates primarily in the U.S. but is expanding globally, with 11 international locations.
The History Of Coworking
The actual use of the word “coworking” in relation to a shared office environment was first used by Brad Neuberg in 2005. He was an intrepid entrepreneur with big dreams who created the first coworking space, as we know it today, in San Francisco.
It was called the “San Francisco Coworking Space” and was open only 2 days a week (Mondays and Tuesdays) inside Spiral Muse, a feminist collective space in the Mission district in San Francisco.
It sat empty for the first month as nobody had ever heard of a “coworking space” before.
Let’s get a glimpse into the timeline history of coworking spaces:
In 1995, the first “coworking” space was actually founded by hackers in Berlin. The idea was to share thoughts, space, and information to complete tasks with those who joined the membership. Presently, they have added seminars, classes, and a variety of social events, helping with the trend to open up more community spaces. There are hackerspaces in San Francisco, Santa Clara, and Brooklyn and they keep growing.
The word “coworking” was first used by Bernard DeKoven, who described it as “working together as equals.” Individuals who are self-employed or working for different employers but, can share ideas with tools and coordinated meetings through a computer network. Space opened up in New York that same year by a software company with a flexible desk setting.
In the year 2002, the first coworking space opened up in Schraubenfabrik, Vienna, in an old renovated factory, which began as a community center for enterprises. It expanded to include freelancers and other professionals working with cell phones and laptops. The spaces continued to grow and function under the name of Konnex Communities in 2004 — the commencement to the local network of coworking spaces.
In 2005, San Francisco hosts the first coworking space in August by Brad Neuberg — he believed that home offices and business centers were unsocial and unproductive. Space offered desks, free wifi, shared lunches, bike tours, meditation, and massages closing at 5:45 PM sharp. It closed after a year and replaced in 2006 under the name of the Hat Factory. London opened up 40 coworking spaces by a franchise network on five different continents. In Germany, St. Oberholz opened up its first cafes in Berlin and offered free internet. Presently, St. Oberholz offers a true coworking space above its cafe.
As of 2018, the market has a variety of huge players that are giving WeWork a run for its money. Coworking franchises such as Impact hub, Venture X, and Serendipity, Ehubber, etc., all started expanding throughout the space.
Fast forward to 2019, and WeWork had an unsuccessful IPO attempt with SoftBank causing WeWork’s valuation to drop from 49 billion to 8 billion allowing SoftBank to seize control of the company and fire its management team.
6 Fun Facts About Coworking Spaces
The thing is coworking spaces are now a thing. Here are some fun facts about this development:
- According to SmallBusinessGenuis, there were more than 3 million coworkers globally in 2019. This number is expected to nearly double by 2022.
- Allwork opined that by 2022, 13% of businesses outside the US will be using a shared workspace.
- According to CNBC, prior to the pandemic, co-working spaces were the fastest-growing type of office space in commercial real estate. While they currently comprise less than 5% of the market, they’re expected to make up 30% by 2030.
- Forbes states that today, the 10 largest providers of coworking and flexible office space comprise 36% of the market (Forbes).
- Allwork.space opined that the number of coworking spaces worldwide is projected to reach almost 20,000 in 2020.
- Despite the pandemic, many markets globally have shown increased demand for flexible workspace, and on shorter terms. The Instant Group forecasts flexible workspace supply growth of over 21% in 2021.
Conclusion: Coworking Spaces Are Here To Stay
The coworking industry has been hard-hit by the pandemic. But better days are ahead. Despite a slowdown in growth, research from the past year shows that the coworking industry will come out alive and strong following the COVID-19 pandemic.
Specifically, reports have found that suburban co-working spaces stand to win the most in a post-pandemic world. As remote work is adopted, many are choosing to leave big cities in favor of more suburban (and affordable) areas.
As mentioned in the preceding first introductory paragraph, coworking spaces create the best of both worlds for freelancers: The flexibility of choosing your own hours and schedule without the isolation.
These shared spaces are thus great for freelancers. A feeling of community is created for those that would otherwise be forced to work alone at home or in a coffee shop.
Start-ups appreciate the flexibility of coworking spaces. Coworking spaces don’t come with the high costs and commitments of traditional office leases. They also provide the chance for small teams to interact with others in the space. These spaces also may even help entrepreneurs find a co-founder for their start-up by connecting the right people at the right time.
Coworking spaces provide a great fit for various types of small organizations. There’s an inherent alignment between what the spaces offer and the goals of freelancers and start-ups.
Finally, with everything going digital, it’s no surprise we’ve seen a huge jump in remote workers and telecommuters over the past decade. And it’s only continuing to grow. By 2020, it’s was expected that at least 40% of the workforce will have remote capabilities, and likely move toward coworking. Well, you know the recent update to that statistics? There’s been a surge in remote work globally, that even top tier corporations now asked their workers to work from home permanently.
In all, coworking spaces are actually a real thing, you can see spaces and listings in your region at the Ehubber website, select your region, and access coworking spaces nearby to you at an affordable price.