Is Co-Working The Future Of Indian IT Firms?
Co-working spaces or shared working spaces is one of the most popular trends resonating with start-ups, tech companies, media and e-commerce firms in India. The concept that was relatively new but has caught on in the country, is expected to see a spike in demand in the coming years. While the co-working concept will boost real estate in India, for companies, it is about flexibility, better connectedness and of course cutting down on expenses of a standalone office setup.
What’s driving co-working trend?
Experts believe the co-working trend will continue to accelerate in the coming years, and is likely to rise by 40-50% in the next 12-18 months, thereby making this segment lucrative. As per real-estate consultancy - JLL, the market for this segment is only set to rise with the number of such spaces reaching one million by 2018.
“As the current trend of freelancers, consultants and SMEs are picking pace, flexibility, convenience and technology at minimal cost have become integral needs and hence co-working space has become the new buzzword,” said Ramesh Nair COO for business and international director at realty consultancy at JLL India. He stated that one may believe that the main objective of these firms is to cut costs, it is also worth noting that co-working spaces have become such a norm that companies prefer it over the traditional office space.
An article published on Business Insider, that quoted a Knight Frank report mentioned, any office space maintenance and cost in Mumbai, Delhi or Bangalore can cost between US$25,000 to US$30,000 a year. The report suggested that office sharing could save new businesses between 73 percent and 76 percent of the total cost. In India as of now, there are close to 61 co-working spaces, according to startup tracking firm Traxon, of which 16 were set up in 2016 and this number keeps growing. [Read the full report here]
A new normal for SMEs, startups
As per market estimates, the co-working space industry in India will attract annual investments of around $400 million by 2018. While the Indian worker and the workplace becomes more global in nature and the next-generation workforce demands more flexibility in working style and remote work access, real-estate firms are also looking at ways to increase utilization of vacant commercial spaces.
Amit Ramani, Founder-CEO, AWFIS Space Solutions told CXOtoday, “Companies over the world are asking what are the best ways to create an office that is not just to house all their employees but also to become a strategic tool that enhances productivity, collaboration and inspiration for the company and its employees.”
“While informal office sharing has always existed, the emergence of co-working spaces has become the foundation for start-ups, entrepreneurs, consultants and freelancers seeking flexible, budget-friendly and professional work solutions,” he added. [Read the full story here]
The focus is also on providing SMEs with affordable spaces which have plug-and-play services, through shared spaces which would also have other added facilities such as mentor support.
According to Umeash Sahhaaii, Chairman & CEO, Entrepreneur Facilitation Center (EFC), the year 2017 will see that the demand for smaller and more flexible office options will grow manifold. He explained, “Co-working spaces have today evolved from simple shared offices or rented spaces on seat-basis to modular and scalable solutions with multiple options. Apart from need-base offerings (reception, meeting room, cafeteria etc.), providing ‘virtual office solutions’ will add value for businesses.”
Several workspaces are equipped with gyms, food courts and employee engagement programs like yoga and games facilities.
Bigger IT firms see gains too
The growing technology sector has demonstrated a significant capacity to utilize co-working spaces. Recently, big technology companies in the US are reaching out to entrepreneurs that they are renting spaces inside coworking spaces for some of their employees. As several small businesses are using products made by large technology companies such as IBM, Microsoft, Amazon, and Google believe, being in close proximity to small businesses allows these companies to offer their expertise and get feedback on how to make their products better.
Experts also believe working from co-working spaces allows employees at technology companies to engage in a forum where there is an open exchange of ideas. For instance, IBM encourages their employees to have discussions with their business clients, including small businesses, on how to build apps using IBM’s Bluemix cloud platform, according to a blog. Microsoft said that coworking spaces allow them to keep their teams connected and this can result in great ideas. It also enables their employees to be closer to where their clients are and have more flexibility.
Nair said that very recently, there are several large corporate in India too that are interested in providing flexible working options to their millennial employees are also looking at taking up desks. One of the recent example is e-commerce giant Snapdeal which announced their staff from a 200-capacity space in Malad, Mumbai to about 90-seats in the Awfis Space Solutions.
Whether its startups or big and mid sized IT firms, the co-working movement coupled with innovative technology is redefining office space consumption in India. As Ramani stated, “Technology integration in co-working is becoming the next big thing, enabling guided discovery and app/web based real-time bookings and community engagement. In fact, early integration of technology in the designing process with 3D visuals and new age Building Information Modeling (BIM) systems will accelerate the creation of flexible work-spaces.”
To sum up, co-working offices are becoming platforms for collaboration and exchange of ideas among entrepreneurs, creation of communities and higher networking opportunities. Going forward, experts believe, the new trend will further fuel expansion are corporate tie-ups, added services such as concierge desk and group discounts and even temporary living arrangements – suitable for the millennial workforce.
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