Co-working spaces will potentially provide more economic benefits as our industrial structure evolves, writes Linda Nazareth.
By Linda Nazareth, April 18, 2018
Thanks to technology, many people can now work from home in their pyjamas far away from annoying co-workers. Turns out, a lot of them would rather get dressed and take their chances with office mates, annoying or not. As a result, co-working spaces are flourishing and their benefits may be broader than what might first meet the eye.
Like it or not, we are in the midst of a transformation of the workplace. Although a core of people still go to work in the same place every day, many other work arrangements now exist. Telecommuting, taking a series of part-time jobs, moving from contract to contract and every model of freelancing are all the reality for an increasing part of the workforce.
As these changes take place, co-working spaces are growing rapidly. According to the Global Coworking Unconference Conference (a company that produces conferences on co-working) there were 14,411 co-working spaces globally in 2017, a figure they forecast to hit 30,000 by 2022. By that time, those spaces will house 5 million members, up from about 1.74 at present.
Companies of all sizes are attracted to co-working spaces. For large companies, they are an extension of the just-in-time mindset that now characterizes hiring. Just as you can easily adjust the number of employees you have and the hours they work, you can also go with a short-term contract for office space and adjust up or down as needed. Small business are also a fit, since co-working spaces offer that same flexibility as well as a host of shared services that might be expensive to get otherwise (think a receptionist, computer services and free candy for those mid-afternoon energy slumps).
Co-working spaces will potentially provide more economic benefits as our industrial structure evolves. Already we are in an era where we still have companies with huge market capitalization (think Apple, Amazon, Google) but who need relatively fewer workers than in the past. As much as the new Amazon headquarters will be a boon to some city, it cannot provide those benefits to all.
That is why it is significant that co-working space provider WeWork last year took over some of the unneeded office space in HBC locations in Toronto, Vancouver and New York. If sectors such as traditional retail are on the decline, it is a buffer if a company that houses non-traditional employees is growing. Co-working spaces arguably bring other economic spinoffs as well. By their calculation, WeWork has a 2x economic multiplier for cities, loosely defined as meaning that for every person who works at WeWork, another job is generated elsewhere in the area.
When it comes to lone workers and entrepreneurs, co-working spaces may also be providing an antidote to one of the less-discussed aspects of the gig economy: loneliness.
When people talk about a world without set workplaces, income insecurity and a lack of benefits and savings are usually at the top of the list. Loneliness – a kind of touchy-feely thing for economy watchers to think about – hardly comes up, but perhaps it should. More and more, studies show that social isolation and loneliness can be a trigger for illnesses, and in the extreme can even shorten lifespans. That has economic as well as social costs.
Although not a band-aid solution to the problem of isolation, co-working spaces may be providing some offset to it. A study by consultant Steve King published in the Harvard Business Review reported that 84 per cent of co-working members said that being in such a space improved their work engagement and motivation. When asked to describe their experience of co-working, three of the top-five words mentioned were community, fun and social. As much as the free candy, people are apparently choosing co-working as a way to fill a need for social interaction.
As we hurtle towards the gig economy, we will have to constantly revisit the physical and social structures that go along with it. Co-working spaces, although still in their infancy, may end up being at least a partial solution to a set of new problems that threaten to rise alongside the new efficiencies.
Linda Nazareth is the principal of Relentless Economics and Senior Fellow for economics and population change at the Macdonald-Laurier Institute.