Flexible Work, Flexible Work Spaces: The Emergence of the Coworking Industry in US Cities

by Thomas Lodato and Jennifer Clark

It is well established that flexible labor markets have changed work practices in the US. However, much less is known about how flexible work practices have produced and are producing flexible workspaces. Our research on coworking spaces illustrates how labor market flexibility has not only defined new employment practices but also created an emerging industry of coworking firms that provide workspaces — and workplace services — to a growing cohort of American workers for whom flexibility is a occupational norm rather than an occasional career condition.

Since the 1980s, economic geographers and industrial and labor relations scholars have documented how flexible work practices led to the reorganization of external and internal labor markets, redistribution of work processes, and renegotiation of employment regulations. These changes have affected how firms make strategic decisions about the spatial division of labor within the firm and how they deploy localized assets (work spaces) to manage an increasingly flexible workforce.

In our research we have constructed a database of 662 active coworking spaces within the continental United States.  From this sample, we analyzed the spatial distribution of coworking firms across the US.  From the set of 662 coworking spaces, we then created a geographically proportional subsample of 116 spaces to research more detailed information on the offerings, business models, and characteristics of coworking firms. Below we report our initial empirical findings.

Defining Coworking

First, defining coworking firms has been an empirical challenge for researchers. In an early study, Clay Spinuzzi argued that coworking — as a space — physicalizes the community and professional network many workers have been missing as freelancers, small business owners, and remote or contract workers. Here, we shift the approach to look at coworking through economic terms and focus on what coworking firms provide users.  In other words, we define coworking firms by how and in what ways they commodify workspace as a service. The table below defines the four key value propositions we identified through our analysis of the firms in our dataset: 1) Space-as-a-Service; 2) Community, 3) Professional Network, and 4) Work-Life Balance.  In our research, 100 percent of coworking firms provided 1) Space as a Service and 95 percent of coworking firms provided 2) Community. As a consequence we consider these two value propositions defining characteristics of the industry in its present form.

Value Proposition Description
Space-As-A-Service Access to affordable office space and office infrastructure (WiFi, furniture, HVAC, mailboxes, etc.)
Community Access to other workers who can provide important-yet-missing social interaction for freelancers, remote workers, contract workers, and small businesses
Professional Network Access to a network of both potential peers and clients, and access to opportunities to learn best practices and new skills, as well as find investment and new business opportunities
Work-Life Balance Access to a work style that allows for a better balance between the demands of a personal and professional identity


Mapping Coworking: Flexible Work in Cities

The first major finding from this research is that coworking is an urban phenomenon. Of the 662 spaces in our database, only one space is located outside of a US metro region. The vast majority of the remaining 661 spaces are located in major metro areas across the United States (see table and map).

We found coworking firms concentrated in large metro regions. This stands to reason because coworking firms, like temporary employment firms, will concentrate in places with large labor markets.  We tested the hypothesis that coworking firms were concentrated in places with a significant presence of “creative class” workers — the high-tech workers associated with narratives about workers who choose flexibility rather than permanent employment relationships.

We also looked at whether population growth corresponded with the rise of coworking spaces in a given region. The table below presents our initial findings.

Top 10 Metropolitan Statistical Areas with High Concentrations of Coworking Locations and Their Percent of “Creative Class” Occupations, 2016
Metropolitan Statistical Area Number of Coworking Locations Population, 2015 estimate (ranking)* Population Growth 2010-2015* Creative Class Location Quotient** Super Creative Core Location Quotient**
New York-Newark-Jersey City, NY-NJ-PA 65 20,182,305 (1st)

 

2.96%

 

1.12 1.10
San Francisco-Oakland-Hayward, CA 62 4,656,132 (11th)

 

7.15% 1.27 1.34
Seattle-Tacoma-Bellevue, WA 39 3,733,580 (15th)

 

8.26% 1.20 1.36
Los Angeles-Long Beach-Anaheim, CA 38 13,340,068 (2nd) 3.86% 1.06 1.08
Boston-Cambridge-Newton, MA-NH 32 4,774,321 (10th)

 

4.58% 1.21*** 1.10***
Washington-Arlington-Alexandria, DC-VA-MD-WV 32 6,097,684 (6th)

 

7.61% 1.48 1.53
Chicago-Naperville-Elgin, IL-IN-WI 28 9,551,031 (3rd)

 

0.84% 1.05 0.98
Denver-Aurora-Lakewood, CO 23 2,814,330 (19th)

 

10.17% 1.16 1.16
Nashville-Davidson-Murfreesboro-Franklin, TN 18 1,830,345 (36th)

 

9.21% 0.99 0.82
Atlanta-Sandy Springs-Roswell, GA 17 5,710,795 (9th)

 

7.67% 1.08 1.03
MSA Averages# 2 329,894 1.62%†† 0.92 0.92‡‡
*Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2015, Source: U.S. Census Bureau, Population Division, Release Date: March 2016
**Combination of reported counts for occupation categories originally specified by Florida (2012) and later modified (Florida 2016) [see footnote 6 & 7]
***Occupation data collected for the Boston-Cambridge-Nashua, MA-NH Metropolitan NECTA.
#MSA Averages are calculated based on data available for all MSAs (LSAD M1), except for occupational reporting. Creative class and super creative core location quotients includes a combination of MSAs and NECTAs (LSAD M5).
Average number of coworking spaces includes MSAs where no coworking spaces were recorded. Actual calculated average value mean is 1.67 (median: 0; mode: 0).
††Median MSA population change: 0.86%
Median creative class location quotient: 0.89
‡‡Median super creative core location quotient: 0.87

We concluded from this analysis that neither the presence of creative class occupation nor the pace of population growth in a given metro area fully explains the growth of coworking firms.  The map below provides some additional support for our conclusion: coworking concentrates in urban labor markets, but variation across urban labor markets has yet to be fully explained.

picture1Our second major finding is that the coworking industry is comprised of two types of firms: single-location firms and multi-sited franchises. This is consistent with the practices that emerged in the temporary employment services industry where large firms such as Adecco and Kelly set up global franchise operations while local temporary service firms emerged in individual cities working in competition and in collaboration with the larger, multi-sited firms in the industry.

Coworking Firms and Number of Individual Operating Locations (Total), 2016
  Number of Coworking Firms Number of Coworking Locations
Total Firms 468 662
Firms with one site 418 418
Firms with between 2 and 5 sites 39 119
Firms with more than 5 sites 11 125

 

Geographic Coverage of Large Coworking Firms, 2016
Firm Name Active Spaces Within US Geographic Coverage
WeWork 48 National
Impact Hub 15 National
The Cove 11 Mid-Atlantic & Northeast
Industrious 10 Northeast, Mid-Atlantic, South, & Mid-West
ActivSpace 10 Pacific Division
Make Offices 10 Mid-Atlantic & Mid-West

Coworking is still a new industry so we do not yet have evidence of how and in what ways the large firms will interact with the single site locations and whether they will compete on the basis of service offerings. We did find that most coworking spaces are private firms that allow membership-based access.  Our assessment of the variation in offerings by firm versus by site indicates that there is little variation in core services at present.  Further research is planned to ascertain whether variation in core services is, in fact, driven by variation in the labor market (geography) rather than competitive firm strategies.

Frequency of Common Coworking Offerings by Firm and Location, 2016
Coworking Offering By Firm (Percent) By Individual Site (Percent)
Office Infrastructure

(Space-As-A-Service)

78 (100%) 116 (100%)
24/7 Access 60 (77%) 88 (76%)
Furniture 76 (97%) 114 (98%)
Wireless Network Access 77 (99%) 115 (99%)
Mailbox and/or Mail Services 45 (58%) 69 (59%)
Printing 61 (78%) 99 (85%)
Conference/Meeting Rooms 74 (95%) 112 (97%)
Meeting Tools 61 (78%) 98 (84%)
Coffee and/or Tea 73 (94%) 111 (96%)
Kitchen(ette) Access 50 (64%) 86 (74%)
Community#
(Social Interaction)
73 (94%) 110 (95%)
Professional Development##
(Professional Network)
54 (69%) 90 (78%)
Work-Life Support#
(Work-Life Balance)
49 (63%) 79 (68%)
 #Social Interaction refers to language on websites that refers to the benefit of being near other workers, either in terms of camaraderie or collaboration.
##Professional Development includes informal learning (e.g. lunch-and-learns), professional panels, networking events (e.g. meet-ups), and members-only events
###Work-Life Support refers to various listed amenities such as relaxation areas, gym access, bike storage, dog-friendliness, and wellness programs (i.e. on-site yoga or massage).

 

 

 

 

 

“What Does ‘Co’ Mean in Coworking?”: Early Reflections on Fieldwork

By Thomas James Lodato

Before I officially began researching coworking spaces, I had already had exposure to what coworking spaces were. I had been to a few coworking spaces as part of research on issue-oriented hackathons. One space was near Gramercy Park on Park Avenue in Manhattan, another space was in Downtown Atlanta on Peachtree Street, and yet another was in Brooklyn, housed within an old pharmaceutical research building. At the time of that research, I did not pay much attention to these spaces as coworking spaces, but focused more on how these locations compared to other sites for hackathons. At the time, I noted that these spaces were set up with plenty of power plugs and a strong WiFi signal, as well as endless coffee, all of which were vital for hackathons to run smoothly. In these early instances, coworking spaces were a background for the activities I observed and participated in. In my current research, however, these environments have come to the foreground.

In very general terms, coworking spaces refer to a large category of short-term, privately-operated facilities that subdivide leased or owned space into smaller units. These facilities offer month-to-month memberships as well as day passes. The cost of entry is relatively low, and it priced to entice small and medium businesses, freelance and contract workers, remote employees, and other people operating with low overhead and in need of work space. While the activity of coworking often implies hot desking (non-exclusive desks or work areas that are occupied as needed), coworking spaces as an industry refer to a broader category of short-term sub-parceled office/work space. As such, coworking spaces frequently offer graduated memberships that include devoted desks and semi-private or private offices. Beyond space, members receive basic amenities with their membership, such as WiFi, printing services, coffee, and conference rooms, and can purchase additional amenities, such as mailboxes and storage. Where space and office amenities are the visible material of paid entry, coworking spaces offer many immaterial perks too.

coworking space in atlanta GA
Coworking Space in Atlanta, GA

Many spaces highlight that working in a diverse environment leads to new thinking and new opportunities. Membership, advocates and advertisements argue, buys one access to a community of like-minded people. This community is often expressed as the reason to join a coworking space. Some spaces have internal software applications to match members in search of investment, gigs, or colleagues, as well as offer a variety of programming, from Happy Hours to subject-matter panels, to encourage sociability. From these efforts, coworking spaces claim a collective identity (i.e. a community) through the many diverse workers housed within.

What initially interested me about coworking spaces was less that these were a global phenomenon (a recent survey reports there are close to 8,000 spaces worldwide with more than to 500,000 cumulative members) and more that the term coworking—particularly the co part of coworking—was confusing given what I did know. Clearly coworking in the context of coworking spaces does not refer to some traditional notion of a ‘co-worker.’ While other people may not get quite as confused or confounded by terms as I do, I have found confusion of this nature to be very productive.

Early on in my research, I scrawled a question on the board in my office “What does “co” mean exactly?” This question remained there, slowly gathering a cloud of words punctuated with question marks: Colocated? Collaborative? Cooperative? Collective? Communal? While “what does ‘co’ mean in coworking?” is not an answerable research question, it none-the-less marked the beginning of my research into this phenomenon.

The obvious answer was and is that co is just an English prefix, co- (kəʊ), that means:

    1. with : together : joint : jointly <coexist>
    2. in or to the same degree <coextensive>
    3. a:  one that is associated in an action with another :  fellow :  partner <coauthor>
      b:  having a usually lesser share in duty or responsibility :  alternate :  deputy <copilot>

Definition 3a seems the most fitting. Coworking spaces are spaces where people are “associated in an action with another,” i.e. as co(-)workers, engaged in working together with others, i.e. coworking.  While this might suffice to explain the name, such a definition seems to be but a gesture. Most people in coworking spaces do not work together as much as alongside one another, or, as Clay Spinuzzi (2012) coined, work alone together.

As the general description highlights, coworking spaces are not traditional office spaces. Typically the term ‘co-worker’ refers to people who work for the same company. To refer to someone as a co-worker indicates an association through a shared working arrangement, often mediated by a company or organization. In other words, coworker is often synonymous with colleague. However, very few of the people working in coworking spaces work for the same company, and so this traditional use of the term coworker is akin to referring to someone who shares a wall in a duplex as a roommate. While co-worker qua colleague might alternately mean working for or with a shared goal (i.e. collegiality), the working arrangements of coworking spaces offer very little of a shared goal beyond the general goal of, say, doing work and then going home. Instead, the term co-worker in these instances seems to indicate people working alongside one another, that is, colocated workers. However, co(located)working is a bad fit for other reasons.

Coworking spaces are more than the structural or infrastructural relationship amongst people in space. Coworking spaces have some sense of community (what Spinuzzi attributes, in passing, the co to in his article). From the outset of this research, I have been fascinated by mottoes and taglines for these spaces. For example, on the homepage for WeWork, a global chain of coworking spaces, is the tagline “Create Your Life’s Work.” This tagline refers to WeWork’s other common adage “Do What You Love,” embossed on their membership cards and flickering as a screensaver on the various monitors in their spaces. While these two platitudes are particular, other spaces (in fact, every space) has some form of this sentiment — work for yourself and strive to be better. Beyond being inspirational or aspirational, these mottoes and taglines of coworking spaces point to the ideological components of membership, that is, shared cultural norms. In the now months of active fieldwork, I have heard very little about the WiFi connectivity and a great deal about the social life of coworkers and the values of coworking. More than the paid transaction, true membership to coworking seems to be a cultural affiliation. This cultural membership is most apparent in mottoes like that of WeWork and quasi-transcendental comments like “coworking needs to be experienced to be understood,” a sentiment that frequents a popular coworking podcast. Referring to coworking spaces as simply colocated working overlooks coworking spaces as ideological spaces, and ignores the felt reality of those in these spaces producing and reproducing the culture they created (and happen to pay for).

posters in coworking office space in Athens GA
Posters in a Coworking Office Space in Athens, GA

As these snippets of early research illustrate, understanding coworking spaces is more complicated than answering what co means in a grammatical sense. Maybe this is most represented by my own shift in spelling the word co-working to coworking. While I certainly would rather type without a hyphen (it is fewer key strokes in a very long writing project), the change is not stylistic or practical. Instead, in surveying coworking sites, I found that coworking (no hyphen) is the preferred spelling. (There is even a site devoted to correcting the misspelling: http://doescoworkinghaveahyphen.com)  As such, this spelling is an internal assertion that coworking is not a portmanteau, but something unique in-and-of itself.

For the time being and as I continue doing fieldwork, I need to add coworking with no hyphen to my computer’s dictionary.

dictionary