Coworking and the regional spread of growth companies

Coworking is a rapidly growing phenomenon in Sweden and internationally, which in Sweden sometimes is confused with terms such as office hotel or company hotel. In this report, “Coworking and the regional spread of growth companies” however, the term coworking will be used throughout.

Tillväxtanalys (2022) made a survey of the phenomenon in Sweden and found, among other things, that in February 2022 there were 649 coworking businesses distributed in 200 of Sweden's 290 municipalities. The survey also found several examples of coworking spaces being used as "landing sites" when existing companies want to establish themselves in a new city or region. This phenomenon is the focus of this report.

New locations that are growing

Based on the assumption that companies' new locations in places other than the place of origin mainly take place in regional centers, 97 coworking places in 22 regional centers were contacted. Based on their answers, we were able to map 183 new branches. More than half of the companies behind these new branches are based in the Stockholm/Uppsala region.

Based on the data for the coworking places that responded, we estimate the total number of new establishments in the country to be just over 900, with over 3,000 employees. 57% of the companies interviewed had increased the number of employees since starting in a new location. This can be assumed to influence the skill of the local workforce and regional development in a positive direction. Outsourcing of this type occurs in all industry groups, but it is dominated primarily by organizational and technology consultants and secondarily by information and communication consultants.

Competence as primary driving force

When asked why the company chose to establish themselves in a certain city or region, all respondents described that it has to do with competence in some way. The responses can be sorted into three types, but the commonality is that the choice of location has mainly been guided by recruitment and retention of competence within the company.

The respondents emphasized three factors behind the choice to use coworking environments: 1) it is easy to get started because coffee, printers, wifi and other things are readily available, 2) the contracts with the coworking places allow you to grow or shrink quickly, which means a low financial risk, and 3) respondents thought that the coworking environment offers a good psychosocial work environment for the individual employee.

Coworking places can also be assumed to lower the thresholds for opening a branch and increase the opportunities for more actors to establish themselves in a new location, since access to these environments is equal for everyone. Added to this, is access to local social networks and opportunities for knowledge exchange. The absolute majority of respondents rated the coworking space's (central) location in the town, access to important networks and the coworking space's culture/spirit as the most important when choosing a certain coworking space.

The results further indicate that the professional and social networks that coworking places offer - both internally and for external contacts - are something that both self-employed people, entrepreneurs and employees in newly located companies benefit from and demand. The coworking places thus become an entry on a micro level to what is sometimes called local entrepreneurial ecosystems, which for obvious reasons contains more actors and functions than the micro system (the coworking places) can do.

Coworking places as a new actor in the national innovation system

This study shows similarities as well as differences between incubators and coworking spaces. Coworking spaces offer, just like incubators, a professional and social work environment and various support structures, but without making a distinction between who gets access to the environment and who does not. There is no qualification process or best-before date in the same way as there is in an incubator, nor are there any obligations for the coworking space to offer a certain kind of advice or access to capital.

While an incubator's activity vis-à-vis the new companies is based on contracts and is time-bound and aims to produce a certain result, the coworking environment is significantly more informal in terms of the internal and external networks it provides access to and the activities that take place there. Another difference, with particular relevance to this study, is that incubators are aimed at new (start-up) companies, while coworking spaces are open to all sorts of companies that want an office space and a work environment, which increases diversification and creates a more equal access to entrepreneurial contexts.

The establishment of branches in new cities/regions, which are the focus of this study, therefore have no place in an incubator. This means that coworking spaces fill a void in the existing support structure for the spread of growth companies, and also create a surface where both entrepreneurs and established companies can meet. Municipalities and regions have an important role. This study shows that the establishment of companies in a new location usually has to do with individuals' choice of place of residence, rather than overall company strategies.

Tillväxtanalys (2022) also showed that relatively few municipalities had any idea which coworking places existed in the municipality. The results of this study therefore raise new questions for research on the growth and development strategies of municipalities and regions, mainly linked to business establishment.

To what extent are municipalities aware that it is not only the case that companies attract talent but also that talent attracts companies - and if so, what practical expressions does this take?

To what extent do municipalities and regions have strategies for the creation and preservation of amenities that attract certain groups?

To what extent is collaboration with coworking spaces part of the development strategies of municipalities and regions?

The answers to these questions may have great significance for which municipalities and regions that develop best in the future.

Coworking and the regional spread of growth companies

Serial number: PM 2023:04

Reference number: 2022/169

Download the report in swedish Pdf, 470.3 kB.


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