Co-working spaces are catering to a more diverse crowd of small business owners, not just tech entrepreneurs
Thursday, July 20, 2017/
The phrase “co-working spaces” may conjure up images of tech-savvy millennials working for startups in converted warehouses. Add in the obligatory ping-pong tables, bean bags and beer on tap.
But our report on the Australian co-working industry shows much more is going on in these spaces than this cliché. We found more than 300 co-working spaces are operating across Australia, up from only 60 spaces in 2013.
Rather than just catering to one type of worker, co-working spaces are used by people from different backgrounds, professions and ages. We also found the majority (53%) of Australia’s co-working spaces are in or around the CBD of our major cities. Sydney and Melbourne take the lion’s share overall, where our co-working industry first started out.
Most co-working spaces target small-business workers, who tend to be in professional services and creative or knowledge-based work. They are also more likely to be living in our major cities.
However, newer co-working spaces are emerging on city fringes (7%) and in our regional towns (15%). These spaces focus on supporting local employment opportunities and bringing businesses together for economic development.
The form and function of these regional spaces are often inspired by city-based models. As an example, The Creative Fringe in Penrith, on the outskirts of Sydney, seeks to drive local innovation and collaboration.
Beyond the tech startup hub
There’s a trend we found where co-working spaces are popping up in locations geared towards supporting lifestyle choices of professionals who want a “sea change”.
The Gold and Sunshine Coasts in Queensland and the central coast in New South Wales have a surprisingly high number of co-working spaces. Other popular seaside locations include Byron Bay and the south coast of NSW.
One example of this type of space is Cows Near the Coast. It’s on the main street in Bega, on the south coast of NSW, and actively encourages “sea-changers” to join their community.
We also found certain recurring types of spaces. One type focuses specifically on high-end professionals wanting to work in style and impress their corporate clients, often located on the top floors of CBD high-rises. Gravity co-working spaces are a good example of this type.
In contrast to this corporate atmosphere, we found some co-working spaces are also the home of social enterprises. These spaces support typically younger people to combine business know-how with their passion for community impact, specialising in supporting their altruistic visions.
These spaces have none of the gloss of many other co-working spaces. You’ll find recycled furniture and inspiring quotes emblazened on the walls in these spaces. The Common Room at Vibewire in Sydney epitomises this type.
For many smaller towns and regions, co-working spaces are where ﬁercely proud locals go to take action around the future of their community. BizBuddyHub in Point Cook, Victoria, is an example of this. This co-working community was set up with a campaign advocating for a space for locals who would otherwise have to commute into Melbourne.
Who owns and runs co-working spaces?
Around 75% of co-working spaces in Australia are owned and run as private businesses. The majority of these (54%) are run as a separate business, for profit, under private ownership.
Small business owners are also enhancing their appeal to existing and future clients by starting up these co-working spaces. In our research, we found 21% of all Australian co-working spaces are run as ancillary to an operator’s regular small business activities.
Not-for-profit co-working spaces make up 8% of Australian spaces, usually established to pursue a social causes, such as reducing youth unemployment. Some of the most well-established co-working spaces in Australia are set up as non-profit organisations.
A small numbers of co-working spaces are state or local government funded (6%) with an aim to support economic development in that region.
Recently a number of corporate-owned co-working spaces (7%) have emerged, which are primarily set up to support their own customers, such as small business customers, who use these spaces to grow their business. Good examples of these include The Village at National Australia Bank, and Australia Post’s Small Business Hive in Geelong.
Commercial real estate operators are also exploring co-working as a way to facilitate a sense of community in multi-tenanted office towers, such as Dexus Place.
Co-working spaces operated by universities (4%) are the latest addition to the industry, supporting alternative career choices for students, and deeper engagement with industry.
The future of co-working
Co-working spaces are now found in at least 89 countries, spanning six continents. Best guesses indicate that by the end of this year there will be over 14,000 spaces worldwide.
Co-working spaces facilitate work in ways that other workplaces can learn from. They go beyond simple “hot-desking” and the open plan work settings which many of us have become familiar with. They are places where people are welcomed and hosted, with regular social and learning events that engage members and their guests. This creates a real sense of community and belonging.
This is something that larger organisations are starting to look for inspiration. Recently, WeWork, the world’s largest coworking operator, has started designing workplaces on behalf of large corporations. Many Australian corporates are engaged in partnerships or sponsorship of co-working spaces, with some simply supporting their employees to work flexibly from them.
The diversity of co-working spaces we found in this study means that these spaces can cater to a variety of workers, allowing them to collaborate with other interesting businesses and professionals from all walks of life.
These co-working spaces offer examples of how work can be transformed to have a greater focus on community and belonging. The humanity we found in our co-working spaces offers us hope for the future of work which, under constant threat of disruption and automation, will no doubt continue to play an important role in our lives and in forming our work identities.
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