10 Years From Now, Will The Term Coworking Exist?

Published on March 7, 2018 - By Cecilia Amador de San José

• As language evolves, industry terminology moves with it.
• Steve King from Emergent Research discusses coworking as a ‘marketable’ concept, but questions whether the term will still exist in 5 – 10 years.
• “Language often shifts,” King says, “and I think the industry should begin to use a more reflective and descriptive term.”

Two years ago, Alessandro Gandini wrote a paper titled “The rise of coworking spaces: A literature review”. In his introduction he poses the following question: “should we be alerted to an emerging ‘coworking bubble’, given that coworking is being increasingly used for branding, marketing, and business purposes?”

Though modern-day coworking spaces first appeared in 2005, it wasn’t until 2007-2008 that coworking took off with “global diffusion and an impressive annual growth rate.” And although coworking continues to be widely adopted since, Gandini brings forth the idea of a “‘coworking bubble’, given that the profitability of these initiatives is often low.”

In her doctoral thesis, “Understanding coworking: Between typology and contradiction”, Silvia Ivaldi correctly notes that coworking spaces are based on a business model similar to that of serviced offices. Yet, while most coworking spaces remain unprofitable, serviced offices have proven to be a successful business model for over 30+ years.

Going back to Gandini’s introductory premise that coworking is being used for branding, marketing, and business purposes, our goal is to analyze why this happened. If both coworking and serviced offices provide similar infrastructure, why is it that coworking became a desirable concept, while serviced offices didn’t?

Ivaldi’s argument, following that of Schopfel, Roche, Hubert, and Parrino,  is that “while coworking spaces provide offices and infrastructure (just like serviced offices), they are not strictly focused on the development of new business, but do provide a working environment to independent workers where people can develop social relations with other coworkers and eventually collaborate and create business opportunities.”

Ivaldi’s position is similar to that of Gandini, who defines coworking spaces as “territories that are accessed purposely to construct and maintain network relations and perpetrate a market position.” On the other hand, “serviced offices attempt to replicate the structure and style of formal organizations and are not focused on the promotion of social dynamics between professionals” (Ivaldi.)

The “social dimension” and social dynamics

In other words, what sets apart coworking from serviced offices is “the social dimension and the focus of coworking to promote social dynamics”.

Yet, there’s more than meets the eye here.

Steve King from Emergent Research shared with Allwork.Space that “coworking is a more marketable concept: it’s hip, hot, cool, and fun.” While the social and community aspects of coworking helped it set itself apart from serviced offices, what made coworking a desirable concept was also the way it was presented to the world.

“I’ve always been a marketing guy,” King says. “When we first tripped over coworking, back in 2007, it was clear to us that it was a fundamentally different way to think about the office and work environment. At the time, I liked the word coworking; it’s always good to have a name you can easily attach to and work with in terms of branding and presentation. The word coworking helps a lot because it makes it easy to talk about it, it’s fairly easy to explain, and it has catchy taglines.”

King believes that coworking became an attractive concept to users and the media because “it countered the pejorative view of the office. Back when coworking first originated, the traditional office was already under attack and perceived very negatively. And then there comes coworking, presenting cool and fun spaces with beer and ping pong tables.

Though at the time we didn’t know whether coworking was going to become something big, we did know that it was of media value. It was newsworthy and it was easy to compare and contrast with something that people already didn’t like.”

This is where traditional serviced offices lost a battle. While coworking positioned itself as the opposite of an office, serviced offices strived to replicate the traditional corporate look and style.

“Six years ago, the ship sailed for serviced offices. They had to figure out how they were going to position themselves–either they became a part of the coworking movement or they were against it. Most serviced office providers back then chose to be against it.”

While coworking started as purely open space, they are now starting to look more like the traditional executive suite as coworking operators increasingly offer private offices.

Ivaldi observed this change, writing in her thesis that “if the coworkers at the beginning were mostly focused on the benefits that derived from the creation of connections, social relations, and community, with the diffusion of the coworking concept and spaces they became progressively more interested also in the quality of the infrastructure offered in the spaces.”

This has led to the hybridization of coworking spaces, which, according to King was a logical path. “I never really thought wide open spaces with no private offices was ever going to be successful. Most companies will not like that; and that point has been proven already with hybrid spaces. Additionally, when you look at the math, it just wasn’t sustainable.

Though coworking did win the marketing battle, financially speaking serviced offices have the upper hand.  King adds that “the jury is still out on overall industry profitability; however the executive suite (traditional serviced offices) has already proven that the original model is and can be profitable.”

Still, even as coworking spaces look more and more like traditional serviced offices, the term itself continues to be used, while terms like executive suite, business center, and serviced office slowly disappear. Even spaces that used to self-define as serviced offices are starting to adopt the coworking label.

If you can’t beat them, join them

While to some extent the above may be true, the industry must reflect on whether this is an accurate definition of what it offers. King believes that “the industry itself was never really good at positioning itself.” And it might be time to change that.

Ivaldi notes that “the evolution of coworking into different and parallel directions has caused the object of coworking to be differentiated and the conceptualization of coworking to be less clear and uniform.” Consequently, this brings forth “difficulties in constructing a shared goal and in explaining homogeneously the idea of coworking.”

So while coworking is a socially desirable concept, the question we need to ask is whether the term itself reflects and represents the industry.

King for his part believes that the term coworking “is very limited”. “Coworking is the term now, but will that be true in 5 or 10 years?”

Even today, there is much debate around that. Flexible workspaces, serviced workspaces, workspace-as-a-service, coworking, shared office; various terms are used to describe one industry.

“Language often shifts,” King says, “and I think the industry should begin to use a more reflective and descriptive term.”