Over the recent years, coworking spaces have become a standalone industry in themselves, with a global market value of $26 billion. The real estate industry has undergone massive change owing to the practice of coworking. The area occupied by shared office spaces around the world is a whopping 521 million square feet. Landlords and real estate developers have shown keen interest in the trend.
Research by jllindicates that:
- By 2030, coworking spaces may constitute 30% of commercial real estate.
- The percentage of coworking spaces is expected to have an annual growth rate of approximately 13% in 2020.
- 14% of employees employed by large enterprises will be based out of shared office spaces.
These hybrid workspaces allow for productivity and innovation through collaboration. Earlier coworking spaces were popular among freelancers, startups and small & medium enterprises only. Now even big companies are indulging in the idea of shared office spaces. There is a growing demand in India as well, especially the demand for coworking spaces in Bangalore is on a surge since it is called the Silicon Valley of India.
Large enterprises born out of coworking spaces
Big dreams are often dreamt in small spaces. A number of large corporations have proved that success can be achieved in unconventional spaces, including some that you may be well aware of:
Cofounders of popular transport-related services provider, Travis Kalanick and Garrett Camp, started Uber in a coworking space offered by RocketSpace in New York and later, San Francisco. A total of 8 team members built this worldwide sharing economy pioneer in shared workspaces and it has now expanded to 80 countries worldwide.
The $8 billion startup which caters to the need for music of 159 million users also relied on coworking spaces offered by RocketSpace. The streaming service giant raked in annual revenue of $5billion with upward of 71 million paid subscriptions.
Kevin Systrom and Mike Krieger conceptualized the social media platform, Instagram, in the coworking spaces offered by Dogpatch labs. This successful start, now under the banner of Facebook, revolutionized the notion of social media.
Benefits of coworking spaces
The successful journey of these businesses has naturally prompted many other large corporations to seriously consider the idea of coworking spaces. Breaking away from the conventional business practices may be challenging for large corporations, but the benefits do seem to far outweigh the difficulties. There are, after all, multiple legitimate factors behind the shift from traditional workspaces to coworking spaces:
1. Easy accessibility to resources
Conventionally, major tech companies had to often hunt for innovators and top talent, who were often reluctant to integrate themselves with traditional office spaces. The comparatively relaxed environment of coworking spaces allows for interaction to take place more naturally and effortlessly.
2. Consistent motivation leads to improved productivity
Employees feel entrapped in traditional cubicles. Moreover, due to the large size of organisations and greater levels of hierarchy, it has been noted that employees at large organisations tend to become lethargic and unproductive. Collaborative working in shared workspaces keeps employees motivated at work and thus results in improved productivity.
3. Lowered expenses
Large corporations are often burdened with expenses that can be hard to shake off due to the scale of operations. This is despite organisations always being on the lookout to cut costs. Coworking spaces are a boon in the financial sense to organisations of all sizes – freelancers, small enterprises and big corporations. A recurring payment towards the shared office space is far less than the cost of furniture, utilities, rent, and the administrative staff combined. This also comes with the added advantage of not having to allocate resources to non-core activities of the organization.
4. The convenience of multiple locations
Shared office spaces are available at multiple locations, facilitating employees to work from whichever location is nearest to them. For example, there is a coworking space called iKeva which offers a plethora of coworking spaces in metropolitan areas across India. They have multiple locations spread across the country – Bengaluru, Chennai, Gurugram, Hyderabad and Mumbai. Round the clock services are available at each of its centres, where you can expand your professional network and work uninhibited.
In the past decade, workforce dynamics have been naturally evolving towards a shared space culture. Many find the flexible and convenient atmosphere of coworking spaces more appealing than the rigid environment at conventional offices.
As we move into 2020, expect the coworking space industry to continue to have a significant impact on business ecosystems. While freelancers and startups will, of course, continue to utilise shared office spaces, the adoption of coworking spaces, as a concept, by larger enterprises is certain to see a noticeable rise. Safe to say – 2020 will be the year of coworking spaces.