More than 1.1 million people used coworking spaces last year, a number that’s expected to rise to 1.7 million by the end of 2018. In fact, Entrepreneur studied the meteoric rise of coworking and came to this conclusion: If all coworking spaces were owned by the same company, it would now be bigger than Walmart.
Although there are now 13,800 coworking environments buzzing along with activity every day, some people are still unfamiliar with – or even skeptical about – how they work. Here’s a look at the current status of coworking and how the industry will likely look in the coming years.
A Recent Revolution
Although coworking spaces have been around since the late 1990s, they didn’t hit their boom-time until 2005, when San Francisco entrepreneur Brad Neuberg began to drum up interest in shared workspaces. Still, his concept got off to a slow start, with fewer than 5,000 – mostly west-coasters – coworking by 2006.
Google and Wikipedia publicly acknowledged coworking in 2007 as it suddenly became a trending term in business news. The number of U.S. coworking spaces began growing exponentially, doubling every year. By 2016 there were about 10,000 coworking businesses being used by 735,000 people.
Between 2016 and today, coworking gained a massive amount of new joiners, hitting the 1 million-member mark in 2017 and rolling right past it. Some estimates predict that there will be 5 million or more coworking members by 2020 – and Statista projects that it will be an $11 billion-dollar business by 2025.
Why the Fast Growth?
The advances in telecommunication in the past few decades have made it easier for people to be physically distant from one another and join meetings through conference calls. Coworking’s early popularity was a counterbalance to the work-from-home environment, where the needs of children and family often clash with work.
Over time, it’s become clear that coworking isn’t just an alternative to working from home. Many big corporations have embraced coworking environments for their employees, finding benefits like increased focus, flex schedules, and strong appeal among younger hires.
In 2016, Microsoft and Barclay’s bank both rented large coworking spaces to house portions of their workforces. IBM made headlines in 2017 by renting an entire coworking building for 600 employees – an effort to add flexibility and innovation to the work environment.
Coworking appeals to a new generation of workers who won’t settle for drab, uninspiring cubicles. Millennials, who will make up 75% of the workforce by 2030, and Gen Z workers are far more likely than previous generations to be self-employed and/or entrepreneurs. Coworking environments are the right fit for these up-and-coming business owners, who need the kind of support and feedback they find in shared workspaces.
Thriving in Coworking Spaces
Defying the gloom-and-doom predictions of some early naysayers, coworking has proven to be productive, inspiring, and ready to stick around for the long haul. Solid research shows that people succeed in coworking spaces because they find a good blend of “me time” and “we time” – both quiet, focused work time and social conversation.
Coworking supports people psychologically, helping them overcome emotional barriers often faced by busy professionals:
- Lack of motivation
- Fear of change or failure
- Mental blocks, like writer’s block
- Creative blocks, for artists and designers
- Feeling that nobody understands
A coworking environment addresses all of the obstacles above, offering a supportive and welcoming place where people can talk about their challenges and find innovative solutions. They’re communities unto themselves.
Need to bounce an idea off someone? A colleague is steps away in the communal chatting area. Looking for investors? Maybe there’s an upcoming event on the coworking calendar. Just need to kick back and relax? Grab a cup of coffee and chill on the couch, so you can refuel for the rest of a productive day.
This is the type of work style/lifestyle blend that feels right for a new generation. Experts at the brokerage firm JLL predict that by 2030, 30% of office space will either be coworking spaces or newly-remodeled spaces that closely mimic these successful environments.