Startups and SME’s can cut down on operational costs significantly by eliminating the obligation of renting out an entire space for limited human capital
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A decade ago, co-working spaces were only filled by freelancers and startups. Compared to the noisy and overpriced coffee-shops with wifi by the hour, these spaces were just a better alternative that offered a more conducive environment to work. Fast forward about 9 years, and you’ll notice more established firms and tech companies leaning towards shared spaces along with startups. Today many coworking spaces also act as incubators and accelerators that help guide fledgling startups with mentorship, legal counsel, resources and even seed money or funding opportunities.
There are a number of factors that contribute to this explosive demand of community workspaces in the past year, and flexibility tops the list with the booming startup ecosystem of India a close second. Startups and SME’s can cut down on operational costs significantly by eliminating the obligation of renting out an entire space for limited human capital. In addition to this, the pay-as-you-use model of co-work spaces allows them the flexibility to rent cubicles without a long-term commitment. Most co-work spaces also take care of basics such as Wi-Fi and office management allowing their customer to instead focus their time and energy on the important aspects of creating and growing their business.
Factors contributing to growing demand for co sharing workspaces
According to Cushman & Wakefield’s market research, larger enterprises have also discovered the substantial benefits this flexibility offers. With advancements in automation and technology, and ease of travel, the workforce has become distributed, enabling teams to operate from remote locations. Every so often these teams need to shuffle between different offices and cities for projects. In such cases the cost of leasing or establishing full-fledged offices for a limited duration incurs a high cost and co-work spaces are more economic options. In India’s largest economic cities like Delhi NCR, Mumbai, Bangalore or Pune, co work spaces can help reduce costs by 20-25%.
The facilities that co-working spaces today provide are an added bonus. With interiors designed to promote creativity, increase productivity and reduce stress, co-working spaces are attractive, innovative and colourful. They are fashioned keeping in mind the growing class of millennials opting for ‘cool’ office-spaces with nap-pods, foosball tables, and breakrooms further popularizing them. Careful attention to detail is given not only the aesthetic of these spaces but the infrastructure itself, with a variety options in desks, meeting rooms and any other kind of workspace you would need.
The shift from traditional closed-door to open workspaces
According to a JLL study, the top 2 drivers of co-work spaces are cost and infrastructure, the third factor is networking. The keyword here being Community Workspaces, most organizations in this sector go beyond providing a space and service, to offer both an online & offline community to interact with and learn from. The community is formed and nurtured by organizing frequent meet-ups, forums, talks and events that create opportunities to exchange ideas and network. Add the tag of an incubator or an accelerator to an established co-work space and you now have everything that a start-up or SME needs under one roof to help them grow and flourish.
What the future holds for shared workspaces?
There are currently about 300 shared workspaces in the country and this number is expected to grow by 30-40% in this year itself bringing in approximately $400 in investments. As per a report published by the CBRE Group, co-working spaces occupy about 1.5 million sq. ft. of space and is expected to touch 10 million sq. ft. by 2020. Studies show that while the current demand is coming from India’s top cities, going forward the demand will shift to tier 2 & tier 3 cities. By 2020, about 13.5 million Indians are projected to be working out of co-work spaces, and why not, they’re cost-efficient, well-designed, and conducive to innovation and networking; it’s safe to say, coworking is the office of the future.