You’ve probably heard the statistic: by 2020, 40% of the work force will be made up of freelancers and solopreneurs. As it stands, there are 4.6 million self-employed workers in the UK alone, a 15% increase over the past decade, and this population is continuing to grow worldwide. Today, more and more professionals are opting to strike out on their own as contract workers, consultants, and freelancers, so what exactly is causing this cultural shift, and what will the future of work look like? Some of the answers may be found in the coworking industry.
Once upon a time (i.e. the second half of the 20th century), white collar workers enjoyed long-term careers within the same company, expecting longevity, security, and benefits. But after the recession hit in 2008, an entire generation of the workforce entered the job market in a forbidding economy that wasn’t hiring, and for many traditional full-time employment wasn’t a viable option anymore.
Ten years removed from the recession, with three generations sharing the workplace (Baby Boomers, Gen X, and Millennials), cultural attitudes toward work are changing, and along with it our expectations and priorities. While some of the growth in solopreneurship can be attributed to the increased availability contract and part-time work in the wake of economic downturn, technological advancements and evolving social attitudes about what constitutes meaningful work are all contributing factors. In other words, the recession not only impacted the job market, it also had a significant impact on the way people felt about their work. With job security and reliable benefits no longer a given, professionals of all generations began to redefine what it meant to have a “good job.” Today young professionals value flexibility, work-life integration, and time and space to think creatively – priority shifts that have led to the overwhelming rise of a new working community composed of entrepreneurs, freelancers, and small business owners.
So where is this new segment of the population getting their work done if not in traditional offices?
Where the Entrepreneurs Are
Until recently, solopreneurs and small business owners had few options when it came to work space: renting an office, working from home, or setting up shop in third locations like libraries and coffee shops. When coworking entered the scene, it sought to fill in the gaps faced by decentralized and remote workers who lack a consistent and engaging workplace. No longer surrounded by a community of colleagues in an office setting, many independent professionals find themselves looking to escape their home office and work in a more social environment.
Place, it turns out, is just as important to our work as it ever was, but our preferences and expectations for a healthy working environment have undergone major changes.
Coworking spaces provide a flexible, professional workspace that often includes a diverse membership of fellow coworkers, basic professional tools like meeting rooms and phone booths, opportunities to network and socialize, all in a deliberately facilitated and designed space.
Coworking has precipitated a number of innovations in the way we think about and utilize workspace, but one of the most impactful contributions of shared workspaces is their design. Unlike a traditional work environment, where an employee might be restricted to one dedicated desk or office on a daily basis, coworking spaces are designed with mobility in mind. Rather than hunker down in one seat for nine hours a day, coworkers are encouraged to move through a variety of different spaces, all set up to accommodate a different set of needs. Need to brainstorm and collaborate with team members? There’s a room for that. Need a break from your desk for some idle social interaction? There’s a room for that too. Need a quiet place to think and work undisturbed? Check.
In addition to the benefits of efficient and affordable workspace, coworking spaces place a strong emphasis on the social and community aspects of work life and in doing so fulfill an imperative goal of companies in the 21st century- to create a workplace that leads to human interaction. Because the majority of coworking spaces are designed for folks in creative and knowledge-driven fields, creating an environment that encourages serendipitous interactions, peer support, and collaboration is even more important. It turns out that these are also the key ingredients to fostering entrepreneurial growth.
The Future of Coworking
The idea that coworking spaces can foster economic and entrepreneurial growth is not a new one, but most of the research done on this topic has taken place in major urban centers like London, New York, and Amsterdam. This, however, doesn’t mean investment in collaborative and community-oriented workspaces can’t bring economic advantages to smaller cities. In fact, several studies even suggest that medium-sized cities will soon become the new economic drivers.
Even so, small and medium-sized cities in Europe today still face significant disadvantages when it comes to launching new business ventures. While technological advancements have made it possible to work from anywhere and entrepreneurial spirit is not limited by geography, moderately sized cities tend to have fewer opportunities for funding and fewer professional resources available for budding businesses. Here’s where coworking can step in and play a vital role in the local economy.
By providing socially-oriented workspace for professionals looking to venture out on their own, coworking spaces often play a crucial role in fostering an environment where entrepreneurship can flourish. Factors like a community of like-minded individuals, the opportunity to bump, connect, and collaborate with your peers, and access to funding and business building resources can all be game-changers when it comes to fostering an entrepreneurial climate in new regions.
It’s important to point out that one coworking model does not necessarily fit all. Like most communities, the culture and individuals who make up that community can vary greatly. What may work for a coworking space Paris or Boston might flop in the context of a city like Cardiff or Helsinki. Factors like the socio-economic context of a region, as well as the existing entrepreneurial culture, need to be taken into account. In some countries, communities form more easily solely because the culture at large values the notion of community.
Research done in the Cardiff city region in Wales, for example, showed that while they have a supportive and socially oriented culture already, confidence building and skill building were major factors in the success of local coworking spaces. Although naturally inclined to build community, coworking spaces in Cardiff functioned more like learning spaces by creating lots of opportunities to learn and connect with peers. Gentle facilitation that inspired and encouraged members to share with each other fared better than the more deliberate and direct facilitation that the general UK population requires to build social bonds.
Beyond this, coworking spaces looking to succeed in emerging markets should note that entrepreneurship in smaller cities may require more opportunities for funding and skill-building than those in big cities. Lacking some of the major resources that can be found in larger cities, entrepreneurship in economically challenged areas may require more coaxing, curation, and support.
The data overwhelmingly shows that coworking can have a major positive impact in new and emerging markets, if executed well. While a functional and attractive design provides the base value for shared workspaces, the social and cultural elements seem to be the most important factors when it comes to successful implementation. Similar initiatives designed to accelerate economic growth in the past have failed simply because they neglected the softer components of entrepreneurial infrastructure. The potential for coworking spaces is limitless if community-focused spaces work together with policy makers to help newly minted entrepreneurs increase their creativity, productivity, motivation, community life, and network growth.
This piece was written in collaboration with Anita Fuzi, Strategic Advisor for Cowork 7×24 and based on her 2016 dissertation on the effect of coworking spaces on entrepreneurship of economically challenged areas.