Welcome to the gig economy.
In recent years, a new breed of professionals has emerged, engaging in project-based freelance work for companies seeking to keep staffing costs to a minimum. Of course, contract work is nothing new. Ask any tradesperson. But the emergence of a liquid market for the so-called “creative class” is a relatively new development, beginning in the aftermath of the global financial crisis.
At the spiritual and operational epicentre of the sharing economy is the co-working space. This slightly awkward moniker has become a ubiquitous buzzword, and sites are springing up all around the country. This is good news for freelancers and the businesses that employ them.
Coworking spaces are shared workspaces that provide a comfortable, collaborative and, most importantly, affordable environment for freelance professionals with common values to conduct their individual business in a shared environment. Rather than sign a lease for office space, freelancers can simply rent a desk and a Wi-Fi connection on a monthly basis – or hot-desk where there is room.
These 21st Century offices give a home to a new kind of entrepreneurship and connect a nomadic workforce who would otherwise be forced to work in full-time jobs or independently from home, deprived of the network effects that come with proximity to peers. They also give businesses the opportunity to find and access concentrated pools of talent, whilst helping to stabilize the cost of labour at affordable levels. Everybody wins.
Coworking spaces over the years
Contemporary coworking traces its roots back to 1995. C-base, in Berlin, was one the first “hackerspaces” in the world, promoting public access to the Internet with free Wi-Fi. The first official coworking space was launched in 2005 in the self-proclaimed home of innovation, San Francisco, where technology, new media and bohemian culture freely mixed together to create new work practices and business models. From there, spaces have diffused all over the world, benefitting – and driving – the rise of start-ups, innovation and the sharing economy.
Coworking is particularly popular in the creative districts of developed economies – urban centres where start-ups, technology, art and music tend to take make their home. The first wave came to London, Berlin, Paris, San Francisco and New York. But now they are spreading to other cities all over the world, with an estimated 2,498 spaces worldwide, including 129 spaces in Japan, 95 in Brazil, 60 in Australia and 39 in Russia. The movement is also taking off in China, as the country transitions from an export-driven economy to one orientated around internal demand.
In a sense, coworking spaces cannot exist without traditional companies and CBDs. Old and new ways of working coexist alongside each other in clusters, with larger firms attracting new businesses into the vicinity. Canary Wharf’s Level39 and Barclays Accelerator are great examples of this, where innovative fin-tech start-ups sit alongside established institutions. Another is Microsoft Accelerator London, which Capitalise attended as part of the fifth cohort. Huge multi-nationals are realising the potential of collaborating with SMEs in order to promote innovation and remain competitive, and coworking spaces are frequently seen as the crucible where the alchemy happens.
Is coworking a fad? A bubble that is set to burst?
Absolutely not. The way we do business is changing. As developed economies are becoming more saturated and competitive, companies large and small are looking for ways to reduce costs. Working with freelancers is a great way to obtain quality services whilst minimising financial and administrative overheads. It also gives talented people the flexibility and independence they increasingly crave.
Coworking is – and will continue to be – a win-win scenario for employers and workers, a product and driver of innovation in the global economy.