The state is looking to help launch coworking spaces in cities across Massachusetts as part of Governor Deval Patrick’s proposed economic development plan.
The proposal is part of the same bill that would ban noncompete clauses in the state.
The plan calls for establishing a fund between $1.5 million and $3.75 million to be distributed to property owners or operators, who would apply for the funding along with the municipality in which they’re based, across the state’s 21 designated “gateway cities.” Gateway cities include cities such as Brockton, Fall River, Salem, and Holyoke, and are thought to carry economic potential despite recent struggles.
As the workforce shifts to one increasingly characterized by freelancers and remote workers, and as Boston grows as a hotspot for entrepreneurs and startups, collaborative workspaces—such as Workbar and WeWork in Boston—have gained traction by serving all those populations.
According to the Bureau of Labor Statistics, as reported by Forbes, by 2020 about 40 percent of the workforce will be comprised of temps, independent contractors, freelancers, and “solopreneurs”—or those who run a business singlehandedly. Meanwhile, 2010 census data showed that about 9.4 percent of U.S. workers worked from home at least once a week in 2010.
Massachusetts Creative Economy Industry Director Helena Fruscio tells Boston.com that if the proposal passes, the funds would be dispersed to as many as three separate coworking spaces per gateway city. Proposals would not need to be specific to any one industry, she says. For instance, while coworking spaces are often associated with tech, the state might be willing to help fund anything from a manufacturing-focused “maker space” to shared kitchen space.
“The end use should be dictated by the end users,” Fruscio says.
The fund would be run by the state’s semi-public finance and development agency MassDevelopment.
Collaborative workspaces, which tend to (but don’t always) operate on a membership model where individuals or companies pay to make use of shared office space, offer those without a traditional office a place to work, network, and collaborate—generally at a much cheaper rate than office real estate. Some larger companies with remote workers also secure memberships for those employees. Theory has it that coworking spaces foster community entrepreneurism, and bringing them to communities in need of an economic boost could help grow those local economies.
Not everybody is sold; Babson professor and entrepreneurship expert Daniel Isenberg recently suggested in a Harvard Business Review article that there is “no systematic evidence” that coworking helps to develop economies.
Still, the demand is there. The Boston Business Journal recently reported on a study showing that nationally, coworking spaces have ballooned from a few to nearly 800 since 2005, and increased 83 percent between 2012 and 2013.
And recent news with two Boston coworking companies shows demand continues to skyrocket.
For starters, the idea that demand remains “up” can be taken literally at WeWork. The New York-based coworking company, with locations in cities including Seattle, San Francisco, and LA, launched two locations in Boston this winter—one near South Station on Atlantic Avenue, and one in Fort Point. The 745 Atlantic Ave. location originally leased two floors of the building but the space has filled fast enough that WeWork decided to lease six additional floors overhead. The company is currently preparing those floors for occupancy, and once complete the location will be the largest in WeWork’s entire existing portfolio, according to WeWork Boston lead Hunter Perry.
WeWork could not offer projected total capacity or current membership numbers in Boston, but notes it has more than 10,000 members globally, and says its first floor in the Atlantic Avenue space, which has room for more than 300 members, is nearly full.
Meanwhile, Workbar—whose flagship space is located just down the street on Atlantic Avenue from WeWork—opened a second location in Cambridge last year. And this month, the company announced the formation of the Workbar network, wherein it partners with other coworking spaces. So far, those partnerships are with Work Station in Cohasset and the Entrepreneur Innovation Center at Framingham State University. Workbar will also partner with a third location in Providence when it opens this summer, according to Devin Cole, Workbar’s director of business development for the Workbar network.
Members of those partner locations can visit Workbar, and members of Workbar can visit the networked spaces. Cole says this will be useful to the Cohasset or Framingham spaces’ members when they come into the city for business, and vise versa.
In the past year Workbar’s membership has grown from 175 to about 600 between the Boston and Cambridge locations, Cole said.
WeWork and Workbar differentiate from one another in that WeWork offers designated desks and offices for entrepreneurs and their teams. While Workbar does offer dedicated office space as well, its locations are more focused on their open, unassigned spaces. Other collaborative spaces in the region include the Cambridge Innovation Center, which is geared toward small startups but has housed teams as big as 200, and Greentown Labs in Somerville, which functions as shared space for cleantech companies.
The state’s proposal would not require the spaces to fit any one model, Fruscio says.
“It doesn’t have to be tech,” she says. “(The goal is) the clustering of businesses in underutilized business buildings in Gateway cities.”