How is the Co-Work Sharing Industry Growing and What Will be the Future in India?
The real beauty of a coworking space is the community, a dynamic and diverse environment that facilitates exchange of ideas and promotes collaboration and discovery.
It is common parlance that coworking spaces and startups go hand in hand. Bombay Connect was the first coworking space in India, opened its doors in 2008 (it was then called ‘HUB Mumbai’). It started out as a space for social entrepreneurs to work and collaborate together. Realising the potential of the model, in a city like Mumbai, where real-estate costs are notoriously high, HUB Mumbai became Bombay Connect and opened its doors to all – social entrepreneurs, freelancers, startups and small businesses looking for a footprint in Mumbai.
Of course the model lends itself well to the startup world, as startups don’t often have the funds to pay large deposits or cash-flow visibility to commit to long-term rental contracts. But, the benefits are much more than cheap rent for startups. The real beauty of a coworking space is the community, a dynamic and diverse environment that facilitates exchange of ideas and promotes collaboration and discovery.
The growth in the startup ecosystem across India has also led to exponential grown in the number of coworking spaces here. In 2008, there were a handful of coworking spaces in India, and now there are over 500, including funded chains operating across multiple cities. As per the statistics, with the current growth rate of startups in India, it is predicted that by 2020 the number of startups will reach up to 12000. The coworking industry should continue to grow in line with this growth trajectory.
There is no doubt that the Indian start-up ecosystem has come a long way, and is now being supported by a slew of initiatives, like the central government’s Startup India. Coworking spaces act as a lynchpin of this ecosystem. Aside from providing flexible, convenient and affordable space, coworking spaces provide ample opportunities for young entrepreneurs to learn, network and grow. Through targeted workshops, networking events, introductions and mentoring sessions; the coworking space acts as a hub for all things an aspiring entrepreneur needs to become a successful one. As it takes a village to raise a child – in today’s India, it takes a collaborative community to raise a startup. These collaborative communities reside in coworking spaces; no wonder coworking has become the new buzzword.
Many large corporates are also looking at taking up desks in such centers, to provide flexible working options to their millennial employees – now largely being referred to as the enterprise space. The corporates also realise that innovation may not come from within their corporate offices, and relocating some employees into these collaborative and creative environments could lead to interesting opportunities for corporates to invest in, ideas for them to incubate and therefore import innovation from coworking environments. Some large innovative corporates like Godrej have even built coworking spaces within their campuses and opened it up to their employees (and their friends and family).
Digital/business nomads, expats and others travelling to India for work for a few months are also joining the coworking revolution. So are large IT & BFSI companies to cope with rising rentals and shortage of ready-to-move grade A offices in prime property markets across India. In fact, some companies now base their client project teams out of coworking spaces, to let them remain close to the clients. Making use of coworking space reduces about 30% cost of the company. Rising cost consciousness, new generation collaboration and delivery platforms, digital workflows, dependable tech infrastructure and a thriving start-up eco-system are expected to continue to boost the trend of co-work sharing spaces in the country.
Ashish Goenka believes that coworking is here to stay, but the market is going through a difficult phase right now. There is over-supply in the market and there is a fundamental mismatch between the ability of early-stage startups to pay the fees required for coworking spaces to remain profitable. There has to be a realization that coworking is not just a cheap office. The flexibility and ecosystem support comes at a cost, and coworkers must pay for the value added services they enjoy at a coworking space.
As far as coworking operators go, there are several who are following a simple rental arbitrage model – the old business centre/serviced office model. Although there is a market for this, I believe we are at the cusp of change. In every industry, customers now need to be engaged, not just sold to – they need to feel a connection with who they work with, and also where they work. Commercial spaces are going through this very change, and coworking is the disruptor that will bring engagement and sexy back to the commercial real-estate space.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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