Startup Boom and the Rapid Rise in Co-Working Spaces

Over the last three years, shared workspaces have grown from just over 2% in 2017 to nearly 8% of the global rental office space. This growth has been attributed to several factors, but startups top that list.

Ideally, shared office spaces provide workers with a fully-services workspace that comes loaded with free internet, mailing services, on-demand boardroom access, a desk and a chair, and many more. To some people, it would appear that these add-ons are the driving force behind the increasing demand for co-working spaces.

However, according to selected surveys, there are far better benefits than free internet and mailing services. In fact, these add-ons are technically not free because they are covered in the rental fees. Depending on the package you choose, the list of add-ons can be shorter or longer as seen in offices.net, a shared office agency platform. This shows that at the end of the day, they are paid for.

Why people like shared workspaces

But there is more to working in a shared office space. According to an infographic published by Visual Capitalist, the ability to interact with others in a community of like-minded individuals is one of the primary forces behind the rapid growth of shared workspaces.

In a 2018 survey, 59% of the co-workers indicated that a social and enjoyable atmosphere was the biggest influence in the decision to stick to continue using workspaces. This was closely followed by interaction with others and community with 56% and 55% respectively.

Clearly, this shows that the idea of working within a like-minded, yet a well-diversified community of people had the biggest impact. Other factors like cost-saving techniques, wireless security and connectivity also played a part. This is what brings us to the topical feature, startup boom.

How startups are driving demand for shared office space

In the current times, most businesses are created with technological advances in mind. As such, you will hardly come across several startups that require large warehouses to store inventory and gigantic plants for manufacturing. Many startups today target the fintech sector, business analytics, digital transformation, artificial intelligence, and other closely related disciplines.

These companies do not require a lot of space in order to operate. A few desks and laptops and they are ready to go. In addition, most startups do not make money at the beginning. This makes it ideal to apply cost-cutting measures in order to break-even quicker. As such, cutting on fixed costs like rent could be the difference between success and failure. This is because the additional cash from savings on rent can provide much-needed flexibility when sales fail to meet the target.

Conclusion

Co-working spaces have benefited from the tech-driven start-up boom. Most of these startups are targeting highly competitive markets, which means that they must cut costs as much as possible. Renting a shared office space where most fo the services required to run a company are offered as an add-on can help to bridge the gap.

The shared office space industry has also benefited from the rapid rise in the outsourced workforce. Several companies, large and small are now using freelance contractors to remotely perform duties that do not require physical presence. This means that these contractors can work from the comfort of their homes or from a shared office space.

As discussed at the beginning, a shared office space provides additional benefits, which again highlights why freelances boosting the demand for co-working spaces in the market.