Just a few years ago, mentions of coworking spaces were rare, and only a few cities had buildings dedicated to it. Today, coworking spaces like Novel Coworking are everywhere, existing in just about every major city in the United States.
So how exactly did coworking spaces become so popular, and will they remain popular indefinitely?
What's Pushing the Popularity of Coworking Spaces?
There are several factors working together to make coworking spaces more popular and more attractive to today’s workforce:
- Rising office real estate costs. Office space has always been expensive, and it isn’t getting any cheaper. In fact, office space in major metropolitan areas is getting more expensive with each passing year. This is making it less affordable for new startups and small business owners to sustain themselves with a conventional business model and traditional office. Coworking spaces provide a suitable alternative, greatly reducing office costs while still providing a traditional office environment to businesses wanting it.
- Increased freelancing. Thanks to the gig economy, freelancing is becoming increasingly common. More people are working for themselves, serving as independent contractors for a number of different clients instead of working as full-time employees. This often leaves them without a formal workplace, but in need of a structured work environment — coworking spaces serve this need perfectly.
- Increased remote working opportunities. Businesses are also starting to realize the benefits of allowing their employees to work from home. Millions of Americans now work from home full-time, skipping the daily commute and enjoying the flexibility associated with remote work. However, for millions of people, working from home isn’t the ideal 100 percent of the time. Coworking spaces give them the option to work in a traditional office environment while still giving them as much flexibility as they want or need.
- Mobile devices and travel. Mobile devices are more common than ever before, with most professionals having some combination of a laptop, tablet, and smartphone to do work while traveling. It’s possible to handle emails or update tasks in project management platforms with a smartphone and a Wi-Fi network, but if you’re traveling, it’s better to find a place more conducive to productive work. Coworking spaces occupy this niche as well.
- Millennial preferences. Millennials are becoming leaders in the modern workforce, and accordingly, they’re driving workplace trends. Most millennials prefer communal, collaborative spaces to isolated, independent ones, and prefer novel approaches to workspaces to traditional ones. In line with these preferences, they gravitate toward coworking spaces, enabling them to thrive.
- Trend development and proof of concept. We also have to consider the fact that early coworking spaces proved that the concept works — and have helped to influence their own competition. Thousands of entrepreneurs and real estate investors are now trying to launch their own coworking spaces, seeing this as a tremendous business opportunity too lucrative to pass up.
Is This Sustainable?
Coworking spaces seem to be extremely viable as a business concept, and people remain enthusiastic about using them for a variety of purposes; part of their staying power is related to this incredible versatility. However, there are some factors that could jeopardize the sustainability of coworking spaces, including:
- Oversaturation. With most major cities offering many different coworking spaces in close proximity to one another, there’s a reasonable concern that the market could soon become oversaturated. With too many coworking spaces competing, prices could fall to unsustainable levels, membership rates per space could drop, and eventually, owners may find the endeavor unprofitable. This could lead to a sharp decline in the number of coworking spaces available — though these numbers would likely drop to sustainable levels, rather than disappearing altogether.
- Free spaces. Some cities are now offering free spaces that can be used for remote work, serving many of the functions of a full coworking space, but without any of the expenses. If these free, open spaces become more popular, it could completely jeopardize the business model. However, free spaces are still somewhat rare, and even if they become more popular, they likely won’t offer all the amenities that a full coworking space could.
- Companies with flexible options. Companies may respond to the encroachment of coworking spaces by making their own offices open for remote workers and freelancers. Essentially, this would mean hybridizing the coworking space model with other conventional businesses. In this way, the coworking space concept would evolve into something new.
It’s likely that the coworking trend will continue, at least for the foreseeable future. Remote working opportunities, freelancing, and entrepreneurship are all increasing at tremendous rates. Even the rapid emergence of new coworking spaces may not be enough to handle them. Expect to see more coworking spaces and places like them in the years to come.
Larry Alton is a professional blogger, writer, and researcher. A graduate of Iowa State University, he's now a full-time freelance writer and business consultant.Currently, Larry writes for Entrepreneur.com, Inc.com, and Forbes.com, among others. In addition to journalism, technical writing and in-depth research, he’s also active in his community and spends weekends volunteering with a local non-profit literacy organization and rock climbing. Follow him on Twitter (@LarryAlton3), at LinkedIn.com/in/larryalton, and on his website, LarryAlton.com. To read more of his reports — Click Here Now.