A boom in co-working spaces is offering freelancers flexibility. But are these business incubators a timely innovation or real-estate opportunism?
With huge latticework metal doors and a marble and stone vestibule, it is clear that the 1930s-era façade of 33 Rue La Fayette was built to impress. Today, in a lobby the size of an Olympic swimming pool, workers huddle in discussion on tan-leather sofas, sheltered by an ornate geometric glass ceiling. Others sit at long wooden tables next to a winter garden, tapping away on laptops with the uniformity of a typing pool. A zinc-clad lift whisks anyone in need of a breath of fresh air up to a terrace overlooking the Sacré-Cœur.
This lavish set-up was once the HQ of France’s largest nuclear power company, Areva. As of June it has been a co-working space: the first Parisian outpost of WeWork, a company founded in 2010 by Israeli Adam Neumann. “There’s a real energy, a professional momentum,” says Anthony Yazbeck, WeWork’s deputy head of Europe. He shows us around the building, explaining some of the services offered to 2,300 members who pay upwards of €450 a month to use the space. “We have pantries on every floor. In the afternoon we open the beer taps – and because it’s France there’s rosé too.”
Pinot noir on tap? Shared offices have come a long way from the rough-and-ready creative co-ops that sprang the concept of “co-working”. Big names in commercial real estate have entered the game, assuming the fun-professional design vernacular and adding a Germanic twist to their branding (think “haus” rather than “house”). Even Regus, the grandfather of the serviced office, has turned its hand to hot desks. The industry is no longer fringe. At its last investment round WeWork was deemed to be worth $20bn (€17bn). Its service model includes IT support, 24-hour access and a programme of cultural events. And then there’s the community, or “ecosystem”. Every lime-infused watercooler moment has potential. “Over 50 per cent of our members have done some form of business with another member,” says Yazbeck.
The success of this type of co-working concept is indicative of a whole raft of economic, cultural and social changes. Propelled by technology, the “gig economy” is evolving rapidly. A recent survey by the McKinsey Global Institute found that 162 million people in Europe and the US (20 to 30 per cent of the working-age population) engage in some form of independent work. Since the financial crisis, swathes of the workforce have chosen (or been pushed towards) a more agile, self-starting approach to earning a living. In the UK the level of self-employment increased from 3.8 million in 2008 to 4.6 million in 2015. For these people a job is no longer for life; there are no salaries, just income.
It’s not the first time in history that the concept of work has shifted dramatically. “So much of how we structure our time, of what we now conceive of as work, was set up in the wake of the industrial revolution,” says Andrew Scott, a professor of economics at the London Business School, who adds that the very notions of the office, the weekend, retirement and even leisure are relatively new inventions. Though the majority of us still hold a conventional job, he says, the trend towards more flexible work is clear – and it’s already having a fundamental effect. “What we’re seeing is a reconfiguration of time and space.”
Kathryn Myronuk, chair emeritus of finance and economics at the Silicon Valley-based Singularity University, thinks the slide towards flexible working is only in its infancy. “Slightly into the future we’ll see decentralised management too,” she says. “The equivalent of a whole corporation might be brought together for a month to tackle a problem and that might be less expensive and more nimble than the 20th-century model of corporations. In that case professions that today have certainty will become more unpredictable.”
The career, the firm and the office have been pillars of our society for decades. How will we cope without them? And are the co-working spaces that have sprung up a genuine attempt to grapple with the fundamental transformation of work as we know it – or opportunistic real-estate experiments? Indeed, some are so evangelical about the value of “eco-systems” that they smack of the hard-sell gym subscription. With rental prices so high, some companies appear to be cashing in on a new fiscally vulnerable freelance demographic. Often they’re simply selling desk space to sole operators who can’t afford it and might just be lonely.
Most economists are quick to point out the paradox of flexibility. For some it can be liberating, dynamic and lucrative; for others anxiety inducing and financially unstable. “It’s a bit like when the factory was introduced; we have to think a bit about the human side of this,” says Scott. “This is just a massive social experiment we don’t yet know the result of.”
Myronuk likens these shifts in working practices to “economic climate change” and calls for a similar risk-calculating approach to the uncertain outlook. “Right now, for the future of jobs, we’re at stage zero,” she says. “We’ve had the warnings. It’s too early to decide one way or the other about optimistic or pessimistic scenarios but we must have that open conversation about possibilities and responses.”
There are companies that appear to genuinely offer their members this vibrant community. NeueHouse opened a co-working office a few blocks from New York’s Madison Square Park five years ago and quickly amassed a members base drawing from the worlds of film, fashion, art and media. Its second venture is the cbs Radio Building on Sunset Boulevard, Los Angeles, where members have access to repurposed sound stages and recording studios once used by the likes of Orson Welles. Founder Joshua Abram insists design is very important but “the magic is in the mix”. No one industry occupies more than 12 per cent of membership (and women head up 50 per cent of firms). “The architect meets the journalist; the film-maker is in discussion with the scientist,” says Abram. “Our vision was taken directly from a good dinner party presided over by an attentive host.”
Meanwhile, others are seeking to build a meaningful social dimension into this burgeoning sector. Toronto-based entrepreneur Ashley Proctor has rolled out a Coworking Health Insurance Plan to cover an association of shared workspaces in Ontario. Trehaus on Singapore’s Orchard Road combines a nursery and co-working space. “You leave your kids to play in our crèche while you head over to the co-working space just 10 steps away,” says co-founder Elizabeth Wu.
Communal workshops that give users access to hi-tech machines such as 3D printers, laser cutters and cnc machines (as well as the training to use them) are also changing the picture. “We’re making tools available that were previously only accessed on the university campus,” says Thomas Ermacora, a trained architect and urbanist who runs Machines Room in London’s East End, one of an estimated 1,400 makerspaces globally.
Ermacora has helped to develop London’s Vyner Street into an “informal cluster”, with the shared workshop at its heart. He thinks big developers will have to start doing the same, factoring innovation space into their schemes, alongside amenities such as public parks. He argues that these spaces have social capital as forums for education and business development. Here the much-touted ecosystem can have economic value: “When people have lost their jobs and come to us to use the space, they often find another job.”
But why stop there? Entrepreneurs can also live together – and cook up business solutions while they prepare dinner. Paris’s Station F (which hosts 3,000 desks and 60 meeting rooms, making it the world’s biggest “start-up campus”) will soon provide 100 co-living apartments. “We wanted an offer that is flexible, cost-effective and doesn’t require a tonne of paperwork,” says Roxanne Varza, Station F’s director. “We also wanted to go further: we want to provide additional services so that entrepreneurs can focus more on their businesses than household tasks.”
There’s clearly a demand for such shared professional digs; the offerings range from shared biologists’ labs to chic, manicured club rooms. Varza notes that for just one of her 26 proposals (the Founders Program), there were 2,300 applicants from over 50 different countries.
In many ways co-working is a counter-cultural phenomenon come of age. The sector is now the subject of debate at big real-estate conferences, and property scions are seeking to replicate some of the most dynamic co-working projects that really did spring from an urge to collaborate (rather than just to make money). Many might find, like the best restaurants, that it is a personal, grass-roots approach that’s needed. What’s more, we’re seeing increasing numbers of corporates such as kpmg and Santander moving groups of employees into independent “spring” spaces in the hope that the can-do spirit will rub off. Rather like arts clubs that charge too much for any real artists to be able to afford the fees, the bottom could quickly fall out of creative ecosystems.
Some people really do just want a quiet space to go and work and there’s an argument that this is what libraries should provide. With some small design tweaks, public-owned reading rooms around the world could be repurposed to give agile (office-less) workers a landing pad.
In every case, though, it’s clear that a desk and a foosball table (or a supply of craft beer on tap) are not enough to ensure the co-working space survives as a business model, particularly as competition gathers pace. The issue of where we will all work in the future is far from certain; governments, architects and developers should start planning in earnest for the advent of a truly itinerant labour market. They need to plan for the unforeseeable.
“The US Department of Labor predicts that 65 per cent of today’s students will be employed in industries that don’t even yet exist,” says NeueHouse’s Abram. “Change at an ever-accelerating pace is the new normal. The salary job – and the office that went with it – is dead. Only time will tell whether the global real-estate industry has read the memo.”
From Philips to ibm, corporates are starting to take desks in co-working spaces. One motivation is recruitment: trendy café-culture interiors, a dynamic milieu and a downtown address appeal to young graduates who wouldn’t otherwise work for a straight-laced multinational. In the meantime, salaried employees get to share an entrepreneurial atmosphere.
While many of these “spring spaces” are partitioned from the hot-desking mob to guard intellectual property, they’re able to nurture relationships with the future disruptors – and later offer them jobs or mergers. For instance, German company Gruner + Jahr (one of Europe’s biggest magazine publishers with about 500 titles) has moved a team from its Berlin office to a co-working space across town, citing the working style but also the proximity to the digital start-ups of tomorrow – the very same players that the company’s venture-capitalist wing is looking to invest in.
But what about the freelancers who signed up to be surrounded by like-minded lone wolves? Will this kill the magic? Players such as WeWork insist not; they say corporations offer collaborative potential for their members. What’s more, their presence is limited to maintain a dynamic balance. If the mix goes awry it is the co-working outfit that will suffer. As Jean-Yves Huwart, founder of the Co-working Europe conference, puts it: “Operators who fail to deliver good hospitality and a good level of services, and fail to create an environment its members want to work in, won’t be successful.”
The self-proclaimed ‘disruptor’
Thinks he’s the next Elon Musk but is actually a bit of a bore with an idea that no one understands.
The bashful banker
Works for a multinational bank but has been told to be here to “soak up” the entrepreneurial spirit.
The networker supreme
At every drinks evening she will schmooze the “key” people, namely the charming venture capitalist.
The eternal procrastinator
Constantly in the middle of making a cup of tea, he always has five or six business plans on the go.
The success story
Running the only business that is turning a profit, she is the envy of everyone else in the workspace.
Lauren Malizia: Artist representative and producer at Agent Pekka; based in NeueHouse, LA
Catherine McCord: Founder of Weelicious Inc and co-founder of One Potato; based in NeueHouse, LA
Lorraine Borriello: Operation manager at Cabaia; based in Station F, Paris
Jonathan Elalouf: Co-founder and ceo at LightyShare; based in Station F, Paris
Julien Vaissieres: Co-founder of BatchWorks; based in Machines Room, London
Jenyfer Maisonneuve: General director of Les Événements eCom; based in WeWork, Paris