Globally, the co-working business is in a major uptrend. According to industry tracker Deskmag.com, flexible working spaces around the world grew ﬁve times during 2010- 13. That’s just three years. The work space model is now also serving a growing number of major corporates as they realize the beneﬁts it brings in terms of worker wellbeing and productivity.
Types of workspace
There are 3 types of workspace:
2) accelerator and
3) co-working spaces
*Collectively known as the IACs
1) INCUBATOR SPACE
Provide work space designed to actively support the growth start-ups or a business in its early stage of development. A distinguishing feature of an incubator is the provision of business support. Businesses leasing space in an incubator are chosen through a competitive application process and do so to access business support facilities which may be provided by the incubator management or their partners. This support is provided in return for a share in proﬁt or minor equity stake in the business.
Support offered includes services such as training and assistance in areas such as business management (including cash ﬂow, marketing), business mentoring and help with access to funding. The level of support is often down to how much businesses require. Incubator providers or their backers may ask for a proﬁt share in the future or require a minority stake in the business as a pre-requisite to taking space and accessing support services. Competitive processes are utilised to select new users.
Space in incubators is therefore intended for start-up businesses which are in the pre-revenue or early growth phase. Incubators typically provide support for start-up businesses for a period of one to two years during the early stage of development. There is not necessarily a time limit on the support services but generally businesses stay within incubator environments for 18 months to ﬁve years. Leases for incubator spaces are therefore often short term and highly flexible (easy in/out conditions). If the business succeeds and grows it might then be expected to move to a more traditional form of property and there may be clauses in contracts to ensure businesses do not overstay. Incubators are therefore often part of a larger property offering (e.g. a business park or managed ofﬁce) or part of a larger institution (e.g. a university), though they can be standalone.
Given that provision is focused on start-up and early stage businesses, incubators tend to offer space and support at reduced rents, though it is typical that as the company becomes proﬁtable/improves its economic performance, rental levels rise or other models are used to ensure a ﬁnancial return to the incubator host. Some providers may also offer ﬁnancial support for start-up businesses to help them purchase equipment.
The format of space within an incubator tends to be dedicated and personal compared to that of a co- working space. This is because there is a need for different companies to establish their own identity and maintain their conﬁdentiality than in co-working space, although this may be changing and may be less relevant to some sectors.
Many incubators support arrangements for co-working and networking, which provide peer-to-peer learning that can beneﬁt businesses. This is the case even where an element of competition exists. Possible exceptions may include life science incubators, for which the facilities do not generally promote a coworking environment by their nature (individual specialised laboratories). The number and size of units within the space incubator will be ﬂexible, depending upon demand.
2) ACCELERATOR SPACE
Typically provides space to start-up businesses or existing businesses (which may need been operating for several years) with the potential for fast growth and good ﬁnancial returns. A key characteristic is that the fiercely competitive nature of the choice process and dedicated support provided by the space management and/or investors who working closely with the business to guide their growth. reciprocally for access to space and business support an accelerator would require an equity stake. This support lasts for a deﬁned short period, at which era the investor will plan to expand their involvement or exit the business, either of which can end in the business moving on from the accelerator space.
Accelerator spaces cannot always be easily differentiated from incubator spaces. A key characteristic is that accelerators focus on start-ups businesses and SMEs (which might have been operating for several years) that have the potential to achieve high growth, typically within products or services which have a national or international market. The potential to achieve rapid growth means that the high level of support provided within an accelerator space, as opposed to an incubator space, will typically involve more direct, hands-on involvement from the accelerator managers (the provider of the space is not necessarily the accelerator managers and the managers are not necessarily the investors). To take up space and access the tailored business support services managers will typically require equity in the business. The potential for high growth can typically be tested and determined within a short time period and for this reason accelerators provide business support for a limited time period, typically up to twelve months. As such the contract for an accelerator space is generally in the form of a licence, which will provide an informal contract, without landlord and occupier arrangements and other such obligations. It is also typically based on monthly rather than quarterly payments with a simple exit route.
3) CO-WORKING SPACE
The spaces provide a mixture of workplace and supporting facilities at affordable rates with easy in-out contractual conditions. The renting of space is about up to draw in users who require unplanned and short-term access to workstations and supporting facilities like meeting rooms. The format of space is primarily open plan and of an off-the-cuff setting, aimed toward facilitating an interactive and artistic networking environment to make a way of community among users.
Co-working facilities provide space where multiple businesses can operate from, may it be for desk-based working or more physical making/prototyping activities or hybrid versions of these. The provision of space and facilities is orientated towards micro businesses – INFINITE 創.聚. Many of which are in their start-up phase. The format of a co-working space tends to be that of a large open plan area offering shared desks where businesses can work (or make things) alongside but not with one another, meeting areas (and potentially breakout spaces), a shared reception and facilities such as workshops/labs with shared machines, café and/or vending facilities. The sharing of space, equipment and facilities means that the cost of renting space in a coworking spaces can be lower than the market rate for ofﬁce space. Desks in co-working spaces offer access to workstations computers, phones, power and broadband connectivity. Co-working spaces typically offers some ﬂexibility in terms of working hours and type of residency (different types of memberships). The space often allows for drop-ins and visitors.
Co-working spaces are differentiated from the offer of a traditional business centre by the emphasis on supporting or facilitating the potential for interaction between users of the space including networking, topic clubs and social events. Attention is paid to the design and animation of space as part of creating the right physical environment for the community of users.
The intention is to generate interaction and enhance creativity among users and formulate a sense of place and community. As such the layout of desk space may be centred around café or kitchen functions.
Often there is engagement by the provider with users of the space to understand how to create a sense of community among users. This may include locating the provider’s management team within the space so that they sit alongside business. This support can be termed community management with the community being the users of the space. Co-working spaces will sometimes provide opportunities for networking among businesses and also become involved in events that engage with local people and other co-working spaces through a multinational network (e.g. hubs). There are also examples of the providers facilitating trading between businesses located within the co-working spaces, where businesses are encouraged to make use of the services offered by other co-located businesses.
Co-working spaces are occupied by businesses from a number of sectors, though in some parts of san po kong office rental host digital technology, media and the arts related sectors. Co-working spaces which develop a sectoral focus may help facilitate greater interaction and knowledge exchange and improve the likelihood for business success, as well as enhancing the sense of belonging and place which users may derive. Users of such co-working spaces may also be more likely to employ each other’s services.
Co-working spaces do not necessarily explicitly focus on supporting fast growth businesses but provide space for all businesses of various levels of proﬁtability and performance. Users of co-working spaces will therefore include businesses which can be considered to be in a steady state. Research conducted as part of this study found many examples of small businesses located within co-working spaces that had no further plans to grow.
Co-working space may also be provided as part of a larger commercial offer which includes larger units for more established businesses. This is sometimes used as grow-on space for businesses that have out-growth their co-working space and wish to move to a larger, more formal set-up.