What is powering the rise of coworking and why

Graham Lauren
Jun 15, 2017 · 6 min read

Coworking serves the real estate needs of a growing community of small businesses. But our own interests suggest it offers plenty of scope for the creation and development of distinctive, differentiated startup business accommodation.

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Why coworking has our particular interest

As architects of pedigree, we have the skills to design exciting and hospitable coworking spaces, but that aside, there is a distinctive reason these environments appeal to our combined expertise.

As a product of my master’s degree — an MBA (Technology) from the University of New South Wales — I have been interested for the last 10 years in organisational learning, and particularly in that which can be built and delivered via social technologies across a workplace. (More here…)

In our view, if coworking has a special application, it is the promise that a space can make its resident companies smarter. These are the knowledge factories of the future.

Because the occupants in such a space may be younger startups, as my own research suggests, it is probably a fair bet that not all of them will have business degrees or even that much prior commercial experience.

By getting the most from the insights of a diverse set of minds, coworking spaces can deliver such critical new learning to them.

These are potentially fast-learning spaces, and as I have written elsewhere, asking good questions opens people to new ideas and possibilities that provoke new thinking and learning.

To this end, a custom curriculum can be developed and deployed to residents on site.

As a former editor with first-hand experience who has given a lot of time and thought to this, and effort to content development, I have a recipe for how this can be delivered as a central resource to guide their essential learning.

In the digitised knowledge economy, we have a view that an absolute focus should be placed on producing knowledge-generating workplace assets.

There is a new business opportunity to be built here (see here and here) by an enterprising property developer-owner.

Coworking’s power is collaboration

Collaboration is an inevitable end state for the modern working environment for two good reasons. First, it gets more done: collaboration represents the history of success in our species. Second, we have technologies increasingly capable of enabling it in and beyond the physical workplace. Delivered via the cloud, these can of course be used from anywhere.

The desire on the part of large businesses to get their teams working more effectively together is the force driving the uptake of in-house corporate activity based working (ABW) workspaces. ABW spaces often emulate coworking in their ambitions.

But, these days, who says collaboration must stop at the company boundary? This is the spirit driving the growing uptake of coworking, a response to the desire of many running the smallest businesses wanting the freedom and independence of working for themselves, combined with the structure and community of working with others.

A coworking commission

I was recently commissioned by another company to write a white paper about coworking in a property context. Having spoken both to those running a handful of Sydney’s leading coworking spaces and their residents, I can claim first-hand reporting knowledge of this form of workplace strategy.

Cooperation between diverse businesses is a major factor driving uptake of coworking among kindred spirits, but its spaces have to meet a range of emerging needs.

As a simplified summary, my findings suggest they have to be well located if they are to attract the right people. They must be constantly and reliably connected via high bandwidth pipes to the internet. To uphold their intended spirit, they must be well and appropriately managed and mindful of which businesses are let in to work in them. They must be learning spaces. They must be communities with appropriate working, self-catering and mix of meeting facilities. And they must be able to foster collaboration between companies.

People can find working with like minds as part of a community or wider team encouraging and motivating. Proximity can also be essential for growing business in terms of connections and shared ideas, and closeness to like-minded creatives and entrepreneurs has never been more important in helping businesses get a lift-up.

Coworking is growing

Driven largely by the software industry, property agency JLL wrote in its 2016 report, A New Era of Coworking that the number of members using coworking spaces globally would reach one million by 2018.

Specialist providers such as WeWork now operate globally. It has local investment by Australian property giant GPT and sites in 47 cities worldwide, including New York, London, Hong Kong, Sydney and Melbourne.

In April 2017, Business Insider reported IBM agreeing to sign a membership deal for all desks in WeWork’s 88 University Place, New York building. It was set to move up to 600 employees there, with it essentially becoming an IBM corporate office, but designed and managed by WeWork.

I’ve written here how coworking is unbundling the workplace, and I believe it represents the biggest challenge to date to the business models of the dominant incumbent CBD commercial property owners.

Driven by the internet, the costs for businesses of occupying office space, with individuals renting a desk on demand by the month are reshaping the economies of starting and accommodating businesses.

Just as software-centric companies don’t install their own servers these days but use the far more convenient services of Amazon Web Services, they now also want to buy workspace as a service.

Coworking’s growing diversity

In my research, Chris Kirk of Stone & Chalk told me that while when it started there were only a handful of coworking operators, he now thought there were probably 50 in Sydney alone.

We will increasingly see new coworking spaces emerge focusing on specific industry verticals and sectors. The ecosystem in Australia now comprises every other specialised permutation of such space, including coworking with child care for mums, for freelancers, for businesses in educational and medical technology.

There is even a variant emerging in Sweden, known as “Hoffice”, which aims to help freelancers by transforming apartments and homes into temporary coworking spaces.

Specialisation means that coworking done well grows the affinity of peers around a business using it.

Mixed coworking ambitions

Critical to the success of a coworking facility will be the nature of the expert support and advice that spaces will offer, as the expertise of those within and managing a space can greatly enhance the prospects for residents and affinity with those businesses around them.

For those occupying technology-oriented startup spaces, there is often explicit hope and promise that association with spaces such as these will lead to new commercial opportunities.

The more specialised those facilities, the more important this will be, as is demonstrated by Sydney’s Tank Stream Labs and Stone & Chalk and their access to corporate customers, investors and venture capital.

Tank Stream Labs is supported by Ernst and Young (EY), while Stone & Chalk has investment from all the major financial institutions of Australia eager to know how its work, focused on fostering innovations in financial services technology, will disrupt the banking, investment and insurance industries.

Comfort in coworking

Coworking spaces have to offer distinctive facilities or benefits of concern to their residents, such as gyms or child care spaces. A variant is also emerging in co-living, in which affordable office space and accommodation combine ensuring people will be living alongside each other, in a specifically designed startup hub. It is not hard to imagine companies wishing to bring specialised project teams together in such circumstances for short bursts of group activity.

But whatever else their merits, such spaces must be well appointed, hospitable and comfortable. That, with our growing body of hospitality and educational experience and Japanese architectural lineage lends itself to many exciting workplace design possibilities.

When even Virgin’s Richard Branson starts to write about it, you know coworking is no longer just an obscure fashion but something entering mainstream workplace consciousness.

Workplace strategy is where building design, modern…

Graham Lauren

Written by

Workplace strategy
Graham Lauren

Written by

Shiro Architects director and business writer, writing, reading and researching workplace strategy, learning organisations and knowledge architecture.

Workplace strategy

Workplace strategy is where building design, modern technology and new ways of working come together to deliver the future of work. Shiro Architects’ research focuses on understanding how to create a better workplace-design briefing for the future occupants of commercial space.

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