22 Pages Posted: 27 Apr 2016 Last revised: 29 Sep 2016
Date Written: April 26, 2016
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: 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