Flexible workspaces to contribute R7.3bn to local economies in the next decade
Economy / 20 November 2019, 7:00pm / Dhivana Rajgopaul
DURBAN – The increasing migration of flexible office space and coworking locations to areas outside of major metropolitan cities globally is creating a "flex economy" that could contribute more than R3.8 trillion to global local economies in the next decade, according to the first comprehensive socio-economic study of second-city and suburban workspaces.
It also revealed that in South Africa, on average 265 new jobs are created in communities that contain a flexible workspace, with an extra R30.8 million per workspace going directly into the local economy.
This rise in local working is being largely driven by big companies adopting flexible working policies; moving away from relying on a single, central HQ and increasingly basing employees outside of the major metropolitan hubs in flex spaces. Most are doing so to improve employee wellbeing by allowing their people to work closer to home, and also to save money and boost productivity.
Jobs creation and the ‘sandwich economy’
Across the 19 countries analysed, the average individual workspace sustains 218 jobs. This includes temporary jobs created during the fitting-out stage of the office space, permanent jobs to run the office, including reception, maintenance and cleaning among others, plus the jobs associated with the occupancy of the workspace.
As well as direct job creation, flexible workspaces benefit the local area through an uplift in Gross Value Added (GVA), the measure of the value of goods and services produced in an area.
For the greater good
Aside from the direct financial impact, local office space has been found to benefit workers and local regions in other, societal ways.
The next 10 years
As well as assessing the impact of individual centres, Regus also looked at the estimated potential of each market to host a larger, national portfolio of local flexible workspaces.
Mark Dixon, chief executive for Regus’ parent company IWG said when people commute into major cities their wallets commute with them. "Working locally keeps that spending power closer to home. What this study shows is that providing more opportunities for people to work closer to home can have a tremendous effect, not just on them, but on their local area too."
The demand for flexible workspace across the world has seen record growth in the past few years, with flexible working spaces set to grow up to 30 percent annually for the next five years, according to global real estate giant Jones Lang Lasalle (JLL).
These statistics could provide new franchising opportunities in the workspace industry.
Traditionally, franchises have been considered the preserve of the consumer lifestyle industries – retailers, restaurants and hotel chains are common options for property decision-makers looking to invest, because of the brand recognition that a lot of businesses in these sectors hold.
Linda Trim, Director at FutureSpace, said South Africans continued to adopt the massively popular global trend of co-working spaces. "Around the world we see a marked shift in demand for shared offices that are as well designed and sophisticated in service as five star hotels."
FutureSpace has opened its third office in as many years to meet the ever growing demand for premium shared workspaces. FutureSpace is a high-end 'pro-working' office space joint venture between Investec Property and workplace specialists Giant Leap.
Trim said: "Co-working spaces are incredibly convenient thanks to the flexibility and cost effectiveness. You can pop in to work for a few hours by yourself or your company can use the space to set up their headquarters for as long as they want at a significantly lower cost than renting."