The Social Economy of Coworking Spaces: A Focal Point Model of Coordination

22 Pages Posted: 27 Apr 2016 Last revised: 29 Sep 2016

Jason Potts

RMIT University

Julian M Waters-Lynch

School of Management, RMIT University

Date Written: April 26, 2016

Abstract

Coworking spaces are a rapidly growing feature of modern cities, and increasingly popular with freelancers, knowledge workers, start-up communities, and others engaged in non-standard creative urban work. Drawing on ethnographic data gathered in a large case study of coworking spaces in Australia, we develop an economic model of an important aspect of coworking spaces, and the economic logic of their existence, in which a coworking space is a Schelling point. This argues that the main margin of value a coworking space provides is not price competition with serviced offices, or a more pleasant environment than working at home, but as a focal (Schelling) point for finding people, ideas and other resources when you lack the information necessary for coordination. Drawing on ethnographic research, we test some specific predictions the model makes about the organizational and institutional form of successful coworking spaces (strong screening mechanisms, specific technology or problem themed, internal institutions geared to search-and-match). Finally we raise questions about the optimal business model for a Schelling point coworking space.

Keywords: coworking, focal points, ethnography, coordination problems, real estate business models

JEL Classification: D02, D83, L85, R3, Z13

Suggested Citation

Potts, Jason and Waters-Lynch, Julian M, The Social Economy of Coworking Spaces: A Focal Point Model of Coordination (April 26, 2016). Available at SSRN: https://ssrn.com/abstract=2770874 or http://dx.doi.org/10.2139/ssrn.2770874

Jason Potts (Contact Author)

RMIT University ( email )

Julian M Waters-Lynch

School of Management, RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

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