By Hui Chai and Adar Schneider, Urban Economic Development, The Bartlett Development Planning Unit, University College London
With the rise of agile working and increased mobility in the modern economy, the spaces people work in are quickly changing. Our research looked into shared workspaces in Singapore, Hong Kong, Shanghai, New York City, San Francisco and Paris, examining how businesses benefit from them, ways city governments are supporting their development and what lessons London may learn. The first part of this two-part blog looks at the growth in shared workspaces and the ways that businesses are benefitting from them.
The Rise in Sharing Workspaces
The shared workspace market is rapidly growing. Businesses that run coworking spaces, a particular type of membership-based workspaces, are increasing in number and in membership.
Source: Deskmag Global Coworking Survey
There are several kinds of shared workspaces, which differ in leasing arrangement, membership requirements, services and primary users. Coworking spaces, incubators, accelerators and serviced offices all meet major needs for businesses, such as convenient access to resources, peer-to-peer interactions and business support services.
Users of shared workspaces
Although there is a prominence of tech and digital media sectors currently using shared workspaces, businesses of all types are using them. From food entrepreneurship to music producers, fintech companies to hand creme makers, shared workspaces are catering to a diverse array of businesses. While many incubators and accelerators are curated to particular industries, most coworking spaces foster diversity. Shared workspaces are used by businesses at all stages. Coworking spaces are primarily used by stable micro-businesses, freelancers and those in the seedling stage. Incubators and accelerators are commonly used by startups and entrepreneurs. Large or mature companies use coworking space and serviced offices as spillover space or even to get “eyes on the ground” and observe what is happening in the industry outside their campus. Mature businesses are also opening their own accelerator programs to acquire new talent.
Ways businesses benefit from shared workspace
Shared workspaces offer features that help businesses grow and prosper. We identified seven business needs that are considered by users when selecting a workspace:
> Knowledge spillover is the most significant benefit from sharing workspace. Whether it is by sitting near someone who can answer a question, getting mentorship, learning more about the market from a networking event, connecting with the right people through an accelerator program, or learning from an industry showcase organised by an incubator -- businesses are looking to gain knowledge through their workspaces.
> Sharing workspace lowers the learning curve for new businesses. By bringing experienced professionals into the same space as startups, early-stage entrepreneurs can learn from their experienced peers. This can happen naturally, if a workspace has a diverse membership base, or can be constructed with mentorship programs and workshops.
> Rent and other costs are lower. Many larger coworking spaces offer business tools, partnerships and perks for their members at a discount, such as mailing services, accounting and HR, storage, etc. These discounts would not be available to most micro businesses, but by joining a larger network they have bargaining power with service providers.
> Location matters. Even for freelancers, working in a location that is transit-accessible and within a thriving neighbourhood is attractive. Not surprisingly, many shared workspaces are located in business districts and close to public transit.
> Businesses are attracted to incubators and accelerators because they offer business growth potential. Those who look for incubators are less interested in social amenities or facilities and more interested in networking, funding, skills, and mentorship.
> Members of shared workspaces benefit from diversity. Members are able to test out ideas and products on their fellow members, or request help and collaboration for skillsets in other industries. For example, a website designer can get support from peers who may have expertise in law, accounting, marketing, etc.
> When prestige is important, businesses often choose serviced offices. While more and more coworking spaces are hosting corporate spillover teams, companies which require prestigious addresses and private, high-end meeting spaces will use serviced offices to meet clients.
The benefits listed above highlight the importance of shared workspaces to businesses. The next blog post will look further into the development of shared workspaces in other major global cities, and the lessons that London could learn from them.