- GCUC hosted an online version of the event yesterday, where over 150 attendees gathered via Zoom.
- Steve King from Emergent Research offered data-backed predictions on what’s to come in the short and long-term for the coworking industry.
- Though in the short term, the hit will be hard on coworking, once things settle down, King believes coworking is going to be in great shape.
This week, the global coworking community should have been convening in Seattle for GCUC USA 2020. We all know why that couldn’t happen, so undeterred, over 150 attendees switched over to Zoom to experience the first edition of GCUC Online.
“Today is the day that GCUC was meant to be happening in Seattle,” said Tony Bacigalupo. “When it does happen, we’re going to love and appreciate it that much more. Think about this time as an opportunity, and focus on making something great out of a difficult circumstance.”
Just how difficult are these circumstances? How long will this situation last? And what will happen to the coworking industry in the meantime?
To answer these pressing questions, Steve King from Emergent Research joined a Q&A with GCUC’s Liz Elam to offer data-backed predictions on what’s to come in the short and long-term.
The problem is, there is very little data to go on.
That’s because we are experiencing a black swan event. According to King, these are very low probability events that have an extremely high impact if they occur. The term was popularised by author Nassim Nicholas Taleb in his 2007 book, The Black Swan: The Impact of the Highly Improbable.
“In forecasting, we talk about these events but we generally call them wild cards,” said King.
“We’re in uncharted waters. There is no historical data to make forecasts, as we haven’t experienced anything like this. There are too many unknowns. Most economic forecasts, for the most part, are just guessing.”
He noted that the same goes for healthcare forecasts. Testing has been limited which means there is not enough data to work with.
“The good news is that this pandemic has a clear ending. Either a vaccine, or herd immunity, will end it. The issue is, both take time.”
The Big Question: When?
General estimates suggest that a vaccine will become available within 12-18 months. A mass vaccination will halt the crisis and the world will begin to go back to relative normality. Before then, a phased or rolled recovery will take place.
“Under a rolled recovery we see the economy coming back by late fall this year. But we are still going to have issues, and a lot of industries are going to have problems. Particularly, any industry that is associated with the close proximity of people – such as travel, restaurants, and entertainment.”
“In the fall, we will still have social distancing in place. But over the next year we will begin to shift back to normal.”
What Does this Mean for Coworking and the Future of Work?
Of course, coworking and flexible workspaces require close proximity. So what does this mean for our sector?
“Unfortunately we have social distancing, so the short term shift is hard on coworking,” said King.
“But all the long-term trends that were driving coworking have been amplified by COVID-19. Once things settle down in 18 months to 2 years, coworking is going to be in great shape.”
As for the long-term trends, King referenced a model that Emergent Research uses to analyse the type of “shocks” that we are experiencing in this current pandemic.
“Look at the trends in play prior to the shock. Are those trends being amplified or hurt by the shift? If we look at remote working, before the pandemic, approximately 7% of people in the US worked mostly full time remotely or from home. Currently it’s at 34%. It’s clear that remote work is a winner.
“Companies are now investing in remote work infrastructure, there’s a lot of investment going in, and companies are learning how to do it.
“Remote work is an example of a trend that has been amplified by the event.”
On the flip side, digital nomadism has been hurt by the event. Due to travel restrictions, it’s not in good shape and King expects that it will take “several years before it returns to where it was”, pre-pandemic.
Then there are “mega trends” that are influenced by new behaviours.
In business, King notes that people and companies were working to reduce long term commitments to become more agile and more resilient. The sudden shift to remote work means all those trends have been amplified by the pandemic, and accelerated.
These behaviours were also happening on a personal level, as people have been seeking to reduce commitments and ownerships. One example of this is the rise in the sharing economy.
There has also been a steady rise in independent work, with more freelancers and independent contractors.
“Companies are creating their own ecosystems. There’s a supply change shift and an increase in automation. The growth of remote work is teaching companies that it’s easier to integrate independent workers into their teams.”
Again, the pandemic is amplifying these trends and making them more powerful than they were before. And the good news is that all of these trends – the reduction in long term commitments, the rise of independent work, and the desire for more flexibility and agility – will eventually push more people into flexible workspace.
“So to me the long term effect for coworking is quite strong,” added King. “There’s going to be a whole lot of new people who are going to be interested in joining coworking spaces.”