Growing Demand For Co-Working

Everyone is aware of the congestion in corporate office spaces where
cubicles is the only thing that separates you from others. When it comes
to introducing coworking, 2017 was the year that large media
conglomerates and newly crowned tech giants started emulating several
aspects of the startup MO. From integrating the open office layout into
their own buildings to implementing happy hours and other cultural shifts,
corporations are trying different workplace models.
https://nxtstartup.in/business-news/growing-demand-coworking

Coworking has been a hot topic for corporates now since they easily
promote flexible working. Until this past year, Coworking in New
York City was mostly renting space to freelancers and startups but
not anymore. Fortune 500 tech companies are moving in and taking
over spaces. Corporations partner with coworking spaces to
support innovation. One trend coming out of coworking spaces
like Galvanize, The Alley, and Rise NYC is integrating incubators into
their business development strategies. By offering space and an
environment with resources, they are able to cater and retain
members who are launching startups.

Corporations are forming partnerships with coworking spaces by making it
easier for them to stay on top of technological innovations and top talent
while they also want to keep an ear to the ground when it comes to
potential disruptions in their industry, and they need to closely monitor
potential acquisition targets.

On the other hand, IBM partnered with coworking operator
Galvanize at their recently launched New York office space in West
Soho. In March 2017, IBM announced a new curriculum that
involves innovation by tapping into Galvanize’s immersive learning
environment called IBM Cognitive Course, which brings AI cognitive
skills and data science to the next generation of machine learning
scientists and developers interested in some of the most lucrative
careers in tech.

• Huge companies like Microsoft also made headlines at the end of
2016 with their decision to give 30 percent of their employees of
the sales departments in New York City access
to WeWork locations. Microsoft had felt their desire to tap into the
startup culture in a more flexible coworking office arrangement.
• WeWork just announced a major acquisition of a NYC coding
bootcamp called Flatiron School for themselves which is aimed at
helping to facilitate junior developers getting hired by WeWork’s
corporate members. They have also been moving away from only
catering to the startup and small business sector, while at the same
time becoming increasingly focused on partnering with enterprise
tenants.

• June 2017, Alley announced its partnership with Verizon. This Verizon
partnership has allowed for Alley to open up three new locations in New
York, Cambridge, and Washington, D.C. This partnership is more than just
a revenue sharing real estate deal. John Vazquez, Senior VCP and head of
global real estate at Verizon said that for them the real value is what they
get by bringing entrepreneurs into the building and having them meet
their team. They also realize that things will be invented outside of Verizon
and they want to be a part of that. With this partnership, Alley is attracting
a growing number of corporations in addition to earlier stage startups.
• This growth is likely to continue to change the landscape of office real
estate.

• A recent Q3 Occupier Survey by the commercial brokerage firm CBRE
indicated that almost half (44 percent) of corporations are already using
some type of flexible open platform office solution. Data from the survey
which tracks and covers leaders of corporate real estate departments for
major corporations, found that they expect their usage and demand for
flexible office space will continue to increase over the next few years.
• Over the last several years there has been a steady stream of
announcements for new corporate headquarters and in order to improve
productivity among millennial employees, Pricewaterhouse Cooper (PwC)
recently converted all of their US offices into open layout coworking
spaces with no assigned
desks. Apple, Google, Facebook, Linkedin, GE, SalesForce, American
Airlines, and Workday all completed or unveiled plans for new offices.

• The announcement of a new Amazon headquarters gained much of the attention, the
growth of these companies and their appetite for space is also happening far from their
home offices. The motivations for creating a widespread workforce range from a desire
to be close to key partners to the need to tap into additional talent pools. Fueling
company growth in different market locations makes using flexible office space as a
useful expansion tool.
• Big companies trying to enter into new markets usually start with relatively
small and agile teams. In these scenarios, shared workspaces make sense in
order to keep costs under control and the logistics easier. Even as the office
scales, a rapid team expansion favors the ability to add space on-demand. As a
final thought on this, uncertainty around team growth rates can sometimes
push companies, such as American Express, Merck and Business Insider, to
look for semi-permanent spaces to give their employees the same feel of a
fully-stocked, traditional office environment, but do not have the traditional
five to 10 year commercial office leasing commitments.

• Zoltan Szalas partners at the coworking app Croissant said that
corporations are recognizing coworking as a viable option for their
employees. There are a lot of benefits for a corporation to divest real
estate and use complete end-to-end turnkey solutions like WeWork or
Knotel. Croissant has seen this demand and is building a new product that
caters to a corporate worker who tends to work remotely and travels
often.
• Consulting firms like McKinsey & Company have thousands of consultants
that travel 3 to 4 days a week to client offices. Croissant helps these
traveling consultants on the days when they are not working onsite to
replace the lackluster coffee shop experience with flexible curated
workspaces, where they hop into private meetings with clients and book a
conference room through the app.

• A number of factors drive the demand for co-working. Telecommuting
keeps growing, and independent workers contractors, developers,
freelancers make up a bigger part of the of the growing labor force.
Corporations are able to see opportunities in the growing coworking space
trend and are able to tap into the local innovation and recruit top talent by
partnering with co-working spaces and forming partnerships to provide
startups with resources. At the same time keeping their eyes open to new
and potentially disruptive technologies that could either be competitive or
useful as an acquisition target.
• On the other hand, India has also introduced amazing coworking spaces
like WeWork, 91Springboard, Awfis, Regus who are growing rapidly in the
metropolitan cities like Bangalore, Delhi, Mumbai, Chennai and Kolkata.
This is definitely making a huge impact on the Indian Startup Ecosystem.

Growing Demand For Co-Working

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