Co-working Spaces: Transformational Opportunities for Small Businesses

The Co-working industry has now grown to include as many as 200 players in India today, including established global leaders and a clutch of new Indian start-ups

By Harsh Lambah


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The growing entrepreneurial ecosystem in India has had a cascading, domino-like effect on other sectors — perhaps none more than the flexible work-spaces sector (more commonly referred to as co-working spaces). A report by realty consulting firm Jones Lang LaSalle (JLL) highlighted that occupancy costs for premium office buildings have continued to rise in major global markets over the last year and affordability has become a major source of concern. Though Hong-Kong, New York and London remain the most expensive office locations in the world, Delhi has been ranked the seventh most expensive office locations in the world, higher than San Francisco and Dubai.

Often classified as an operational expense for more established companies, office rent for small businesses and start-ups becomes a liability / financial burden during the early phase of their business growth. This time is typically capital intensive for SMBs and start-ups when profits are a distant mirage. This is also the time when SMBs and start-ups face other challenges. Cost of capital, the struggle to hire and retain good talent, operational costs can be hugely daunting while institutional support by banks is low if not non-existent. Minimizing costs is, therefore, a critical attribute to breaking even.

The Transformation

This emerged as a key aspect that catalysed the growth and proliferation of co-working workspaces in a country that has been in the throes of start-up and entrepreneurial mania for the past few years. Increasing recognition by these start-ups was also that their workspaces could be a key differentiator in the battle for talent. Tech start-ups have traditionally been a strong proponent of this – so-as-to entice top talent and enhance brand equity while on the road to improving valuations. Key to entrepreneurial success is ensuring sky-high employee productivity and motivation, a catch-phrase that also emerged as one of the key mainstays of co-working.

It Is The New Way

While the concept of flexible working hours as well as "anywhere work' became centre stage by the more progressive MNCs post the dotcom boom, companies such as Google and Facebook had already gone on to redefine this completely. The concept of rows and rows of dull cubicles under monochrome lighting gave way to elaborately designed and furnished workspaces. The staid 4x4 cubicle gave way to hip lounges and workstations. The large multinationals led this transformation before it began percolating down to Indian companies.

However, for employees at small and medium companies, great office infrastructure was simply not an option. The co-working industry has helped "correct this anomaly'. While they are helping revitalize large businesses by offering it better workspace options, it is with small businesses and start-ups that the co-working phenomenon has been truly revitalizing. Co-working makes huge sense to freelancers and entrepreneurs because it gives them the option to set up shop by simply renting a cubicle, an office or suite month-to-month and get access to office resources. Rental terms can be flexible, and entrepreneurs can upgrade their space as their company expands. But what is one of the most invaluable assets is their ability to network and meet fellow entrepreneurs who're equally hungry and working equally hard. An environment that is difficult to replicate when you're working from the local coffee shop or from home. The benefits range from spotting and acquiring top talent, networking opportunities, the ability to be acquired by a larger organisation or access better fund-raising opportunities. Access to working or partnering with larger companies is also a great lure. For small businesses that choose to follow the co-working trend, it is much more than just renting a desk – it is about being part of a larger community. Working on shared tables with professionals from different industries allows among other things, the opportunity to share experiences, connections and knowledge and in the process provide alternative ways of thinking and addressing challenges as well as sparking a cross-pollination of ideas.


The Co-working industry has now grown to include as many as 200 players in India today, including established global leaders and a clutch of new Indian start-ups. A consolidation seems likely. What is interesting however is the huge economic value that the sector portends for the future. According to a recent report, India is predicted to see the greatest gross value add (GVA) increase from flexible workspaces, potentially seeing an increase of GVA of 141% which equates to US$375.8 billion for India by 2030. The future, as they say, is bright!