Introduction
The rise of coworking (CW) has revamped the traditional office environment and invited professionals to rethink what it means to “go to the office.” A mix of dedicated offices, shared workspaces, and “hot desking,” CW offers pros and cons to business owners, employees, and freelancers/contractors as they navigate the divide between productivity and community.
According to a study by real estate brokerage JLL, CW has grown twenty-three percent annually, fueled by a specialized niche and a unique value proposition (as cited in Upsuite, 2019). The Wisconsin CW market is growing consistently with national trends—especially in response to the state’s rapidly growing startup community (Entrepreneur Resources, 2019).
The Rise of CW
Rudimental CW dates back to 1995, where Berlin hackers met in “hackerspaces” (Stevanovic, 2019, p. 3; Foertsch & Cagnol, 2018). Coined in 1999 by video game designer Bernard DeKoven, CW in the late nineties referred to a work style, not a work location (Stevanovic, 2019). In 2005, computer programmer Brad Neuberg opened the first CW space in San Francisco (Stevanovic, 2019). During the South by Southwest festivals, in 2008 and in 2009, CW meetups became popular. By 2010, CW had its own hashtag movement, #CoworkingDay. By 2013, there were more than three thousand spaces and one hundred thousand coworkers worldwide (Foertsch & Cagnol, 2018). It may have started small, but CW transformed quickly from a novelty to an in-demand workspace model (Entrepreneur Resources, 2019). The CW industry grew nearly 62% from 2017 to 2019—with nearly nineteen thousand CW spaces, more than three million coworkers globally, and more than eighty million square feet of CW space (Rothstein, 2019; Stevanovic, 2019).
CW was both elevated and hindered by infamous CW titan WeWork. Led by eccentric, cult-like CEO Adam Neumann, WeWork catapulted CW into the national spotlight; however, Neumann became a victim of hubris after he tried to diversify the company technologically, socially, and politically by rebranding as “The We Company.” This version of the company boasted a mission to “elevate the world’s consciousness,” but through waste and want, Neumann burned through capital, alienated investors, enraged the board, tarnished the brand, and ultimately stepped down as CEO (Austin, 2019, p. 71; Brown, 2020).
Today, CW is most popular in urban markets and favored by the technology sector, freelancers, artists, consultants, startup founders, and entrepreneurs (Rothstein, 2019; Romano, n.d.). Companies like Uber, Instagram, Indiegogo, and TripAdvisor operate in CW environments (Coworker, 2019). According to an Emergent Research study, there will be 3.8 million coworking professionals worldwide by 2020 and 5.1 million by 2022 (as cited in Spectrum, 2019). International Workplace Group (IWG) researchers concluded that fifty percent of global workers work outside of the main office for at least 2.5 days per week (as cited in Moreno, 2019). Increasing growth in online software and tools continues to fuel space-as-a-service growth (Stribling, 2018). CW will see a rise of independently owned spaces that will fight against CW chains for market space (Hobson, 2019).
The Formats of CW
Typical CW formats include hot-desking (working in a shared space in a first-come-first-served desk choice), fixed desks (working in an a shared space with an assigned desk), private office space (a traditional office with a closed door), suites (larger office spaces often with opportunity for expansion through adjoining doors), a day-pass/hourly shared space option, and virtual memberships (for professionals who wish to maintain a professional office address) (Serendipity Labs, n.d.; Spectrum, 2019; Mehl, 2018). CW growth has facilitated off-shoots and differentiation in formats. Emerging segments market to traveling professionals, corporate workers, independent artists, CW for parents, female-only spaces, CW kitchens, rural CW locations, photography and film studios, pop-up retail spaces, dance studios, nonprofits, event hosts, holistic, work-balance spaces (which include a gym and yoga classes), “digital nomads,” college students, solopreneurs, small teams, and pet supply entrepreneurs (Blagoev, Costas, & Karreman, 2019; Moreno, 2019; Coworker, 2018; Purcell, 2019; Orr, 2019, p.7). Franchise agreements continue to grow within the CW industry (Steele, 2020).
The Positives of CW
Executives are knocking down walls in favor of open floor plans (Levy, 2017). CW provides a break for freelancers, entrepreneurs, startups, and “gig economy” workers through low setup and overhead costs and low barriers to entry (Coworker, 2018; Rothstein, 2019; Alton, 2019, p. 5). Flexibility is cited most often in academic and industry articles, so much that is it nearly an appositive for CW. Similarly, the ability to control, plan, and customize space for business needs is another commonly referenced benefit—and investors and CW companies view buildings with a high percentage of flexible space as viable investment properties (Stribling, 2018; Colpaert, 2018). IWG researches state that eighty-five percent of respondents believe their productivity has increased as a result of CW (2019).
Additional benefits include:
• Reduced operating expenses (InWisconsin, 2019)
• Networking opportunities (Purcell, 2019)
• Stimulating innovation (Amador, 2019)
• Improved engagement and motivation (King, 2017)
• Community-based organization of culture and creativity (Brown, 2017)
• Acts as an “incubator” for new and early-stage firms (Harris, 2017, p. 1)
• Serves as a short-term “accelerator” for fledgling startups (Harris, 2017, p. 1)
The Negatives of CW
CW may be increasing in prominence, but the industry is not impervious to criticism. Critics cite a lack of privacy as a downside—particularly with communal physical and social arrangements removing metaphorical and literal barriers (Pochepan, 2018). Much like loud espresso machines and animated, coffee-shop conversations, shared spaces are open to multiple distractions. Smartphones, tables, videos, and conversations may prove distracting for open-space CW (Entrepreneur Resources & Programs, 2019). Depending on the CW company, cost can prove challenging for smaller businesses because members often overlook hidden fees or fail to negotiate favorable terms (Bennett, 2020). Some would-be coworkers may find it more cost-effective to work from home or from free spaces (Entrepreneur Resources & Programs, 2019). Invariably, naysayers may prove reticent based on WeWork’s epic fail: narcissism of c-suite types; false advertising and messaging; inconsistent mission statements; and shifting corporate priorities (Austin, 2019).
The franchisee-franchisor relationship may prove contentious as both parties differ in strategies to maximize the revenue from open desks and spaces (Moreno, 2019). King states that “coworking” is a limiting term and doesn’t reflect the industry—a disconnect because language can shift and industries must reflect trends and changes in order to grow (as cited in Amador, 2018). Blagoev, Costas, and Karreman (2019) worry that shared spaces are not always formal, standardized environments. CW may pattern the “where” and “when,” but not the “what” and the “how” (p. 907). CW members and companies exist within the digital structure; thus; a level of cyber-security is removed from members’ control (JLL, n.d.). Finally, the possibility of intellectual property theft or misappropriation may exist within highly shared spaces (JLL, n.d.).
Additional criticisms include:
• Potential for competition within the same CW space (Pochepan, 2018)
• Limited opportunity for customization (Redwood, 2018)
• Negative brand association (with CW parent company) (Redwood, 2018)
• Dissatisfaction with on-site management and staff (Detweiler, 2020)
• Personality or culture conflicts among companies (Detweiler, 2020)
The Psychology of CW
Emergent Research’s Steve King stated that CW possesses social and community facets that elevate the structured office environment—a social dimension that nullified “the pejorative view of the office” (as cited in Amador, 2018, p. 11). CW creates a shared community where freelancers and company employees benefit from a self-directed workspace based on mutual trust and common objectives and values—constructing and nurturing social relations, collaboration, and opportunity creation while eschewing silos and secrecy (Blagoev, Costas, & Karreman, 2019; Amador, 2018; Ahrne and Brunsson, 2011). Garrett, Spreitzer, and Bacevice (2017) describe a partial organization that creates a decided order within CW spaces—a meta-organizational phenomena extracts the traditional order of formal organizations and applies it to micro environments through membership, hierarchy, rules, monitoring, and sanctioning (as cited in Blagoev, Costas, & Karreman, 2019). Ultimately, a common sentiment among the literature is that CW reduces isolation and loneliness among otherwise remote workers (Johnson, 2019; Blagoev, Costas, & Karreman, 2019). King (2017) states that CW can reduce isolation because people “work alone together” in a fun and social community (p. 4).
Thus, CW fosters a relational constructionist world where participants help actively construct the world of an everyday life and constituent elements—a social order comprised of ongoing performances that creates a “form of life” of people who share similar attitudes, values, and commitments (Garrett, Spreitzer, & Bacevice, 2017, p. 9; Merkel, 2015). Shared-identity formatting may serve as an “incubator” for startups and for entrepreneurs (Rothstein, 2018). Shared community bridges urban, socio-spacial disadvantages by creating micro-cultural identities, supporting neighborhood-based development, and shrinking inequalities among a consumption-based, land-use elite (Brown, 2017)
CW can assuage business owners’ and contractors’ intimidation and fears of long-term commitments also, as most CW companies offer flexible billing cycles (Entrepreneur Resources & Programs, 2019). Finally, CW spaces often incorporate the option to network virtually and to connect teams digitally. This CW aspect ties into what Tranos and Nijkamp (2013) refer to as the “death of distance” concept: as the link between location and communication diminishes, technology transcends physical limitations and separation. Finally, CW makes professionals feel as though they belong to an organization but remain true to themselves; for example, many CW professionals bring their own smart devices and laptops to work. This “bring your own device” work culture gives coworkers the freedom to buy the brands and specifications they prefer and customize their equipment as they see fit (CDW, 2012, p. 4).
The COVID-19 Effects on CW
The current literature is brimming with prognostications about the future of CW in the post-COVID-19 world. Similar to SL, many coworking spaces have shut down during the COVID-19 pandemic. New York City REALTOR Adam Heinck states that CW has not existed long enough to witness economic shock, the industry exists in a precarious, wait-and-see position (as cited in Roepe, 2020). Negative economic and branding impacts, due to social distancing (SD), lock-downs, safer-at-home restrictions, public perception, lack of information, and inevitable member refund requests, could adversely affect both organizational and operating capital (Stangler, 2020; Vandenboss; 2020; Brown, 2020). SD strips CW of the most identifiable segmentation (community), but CW leadership can pivot by focusing on job creation and recruiting large, established companies—especially as the country heads into recovery mode (Stangler, 2020; Roepe, 2020; McAlister, 2016a). Advertising the “hot desk” piece is prudent because people can sit where they choose at random; thus, one can correct for situations perceived as unsanitary or unsatisfactory (Roepe, 2020).
Ultimately, CW firms should protect their people and their brand, according to Dallas coworking CEO Nick Clark (as cited in Brown, 2020). Stangler (2020) agrees: micro-communities and community hubs will be crucial to reconnecting, rebuilding, and recovering through the community hub as shared values. Post-COVID-19, CW leadership can determine members’ social, cultural, and lifestyle traits, assess risk perceptions of returning to the lab (social, physical, psychological, and financial), and brainstorm proactive strategies to ensure brands remains in the evoked (desirable) rather than the inert (apathetic) or the inept (negative) sets of consumer CW choices (McAlister, 2016b). California advertising executive Jason Sperling said brands have to show the “soul of the brand” and empathize with anxiety, fear, isolation, and lack of routine as they craft postCOVID-19 messaging (as cited in James, 2020, p. 16). The latter concept boosts branding, positioning, and persuasion: help consumers process information; create a unique brand image; and create hopeful and ethical messaging (McAlister, 2016a). Arenas told SL-MAD owner Ryan Jacobson that it will take at least ninety days to return to normal operating capacity (R. Jacobson, personal communication, April 10, 2020).
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