What role will small to medium cities play in the future of coworking?

The coworking movement has come a long way since the term was coined by programmer Brad Neuberg in the early 2000s. Over the subsequent two decades it’s gained such traction that today we can find coworking spaces almost anywhere in the world. 

In fact, the number of coworking spaces worldwide is projected to exceed the 20,000 mark and reach 25,968 by 2022 (an increase of 42% from 2019) - according to research by Coworking Resources. If we look at the figures from a density perspective, we can see that the majority of these spaces are located in big cities. 

Regional coworking vs coworking in big cities

The tides, however, are beginning to change.

In the US, less populous states are experiencing levels of coworking growth equal to or more than those of larger ones. It’s no coincidence that the states experiencing an uptick in coworking have also witnessed small business booms and an influx of tech startups moving from states with higher taxes and operating costs. 

Instant Offices’ Flexible Workspace Trends - 2019 and Beyond study highlights that demand is set to expand outside of the primary global city-based markets, driven by high living and real estate costs. According to the report, all EMEA cities have witnessed a flexspace growth of over 15% due to an increase in demand and smaller cities are pushing through.

Forbes announced that the fastest growth markets in the US (gross metro product) in 2018 were Las Vegas, Orlando and Austin, all secondary markets, while in Europe, Manchester and Toulouse topped the UK and French markets thanks to increasing investment and a growing corporate focus.” - Instant Offices’ Flexible Workspace Trends - 2019


Results of the 2019 Global Coworking Survey by Deskmag also make for an interesting read in relation to the rise of coworking in secondary cities. 

While “freelancers” made up the largest group of coworking members worldwide (at 42%) in 2019, “employers” are the biggest group in megacities. 


“Looking into different continents, employees were the largest group in Asia and North America. Freelancers, on the other hand, dominated in Europe and globally in medium and small towns.” - 2019 Global Coworking Survey by Deskmag


But is this set to change in 2020?

COVID-19 could accelerate trends

The impact of COVID-19 on real estate and travel could also prompt a dramatic increase in the number of employers utilising regional coworking spaces across the globe. Anecdotal evidence from brokers and operators points to the notion that pandemic could accelerate the “back to the suburbs” trend already present prior to the outbreak. 

It’s harder to adhere to social distancing in densely populated cities that rely on crowded transportation to get people from A to B. Leasing enquiries are down and there are indications that regional satellite offices are on the rise. People are (understandably) reluctant to commute if they don’t have to. What’s more, many firms - including famous brands like Twitter and Square - have realised that dispersed teams can be just as productive as centralised ones and are rolling out remote working for the foreseeable future.

  Twitter CEO Jack Dorsey is allowing employees to continue working from home for as long as they see fit.

Speaking to Reuters, James Ritman, an MD at brokerage Newmark Knight Frank, says: “All this demand, all this activity that is coming out of New York, is 100% based on the virus, the fact that there is an uncertainty surrounding New York City with mass transit, with buildings and spaces that are typically pretty dense.” 

Are coworking spaces profitable in small cities?

In recent years, coworking spaces have embraced the scaling economy, trying to maximise the profitability of their spaces by looking at large locations while keeping their running/management costs controlled. Considering the price per sqmt in big cities, it’s traditionally been a challenge for small operators to break even. 

Real estate pricing is not always a problem in small to medium-size cities, where there’s usually plenty of vacant office space available at a competitive price in the market. The challenges presented by the pandemic are prompting businesses to think outside the box in ways that could benefit local coworking spaces financially. 

Speaking with GCUC UK, Natasha Guerra from UK-based coworking operator, Runway East, said: “Short term, people are questioning whether hot-desking and the office is dead, but longer-term, when we come out of this, I think we, and local spaces in particular, will benefit.

In terms of attracting new members, coworking operators across the spectrum are looking to introduce ventilation systems and improve the overall air quality in their spaces.

How will coworking shape the future of work in small/medium size cities?

Health aside, with big cities becoming increasingly expensive and technology enabling people to work remotely with ease, many people see small and medium cities and towns as the solution to the work/life balance conundrum. 


It’s likely that, in the next decade, we’ll witness a migration of skilled professionals from big cities to medium-size ones. 


Coworking spaces have the potential to act as a bridge to the local community, benefiting other local businesses and individuals as well as paying members. Together with keeping innovative, entrepreneurial talent in the community, coworking spaces like Creative Works in a residential area of East London, for example, are actively working to inspire and upskill the next generation.
The growing understanding of coworking needs, combined with our innovative approach means that we can keep this coworking SaaS up-to-date with new features and improve the user experience. If you would like to read more of our helpful tips, subscribe to our free newsletter below. Thank you for reading.





Subscribe to receive our latest content and news directly to your inbox

Related stories

  • Automating spaces: can coworking software be used in other types of buildings?

    As well as being intended to manage physical assets, coworking software was designed with flexibility in mind. Considering this, and the way that it has developed drastically over the past decade, Marc Navarro explores the benefits that other industries could gain from making use of coworking's automation technology.

  • 8 Tips for Coworking Spaces in Covid Times

    The pandemic has vastly changed the way in which coworking spaces and their communities typically operate. As perceptions of what makes an ideal coworking space have shifted, adaption has never been more important. What can spaces do to adjust to this new normal?

  • Is coworking still a profitable business?

    The impact of COVID-19 and the social distancing measures that are being implemented until a vaccine or cure is discovered are having an impact on many businesses from two angles. On one hand, many are experiencing a lack of income due to closure and on the other, they are having to adjust their business models to adapt to the new transitional phase that is already happening in many countries.

  • ​Will local coworking be the end of commuting in cities?

    Although the benefits are numerous, our collective experience has also given visibility to the problems of telecommuting. Under lockdown, many of us are having to juggle work with childcare and homeschooling. Even under normal circumstances, maintaining any semblance of work-life balance can be a challenge. Of course, when looking at the pros and cons of working from home it’s important to remember that the experience is different for everyone, and it only really works if the employer has a comprehensive remote working policy in place. Is there a middle ground?

  • Preparing to re-open? Is your space as clean as you think?

    A post-COVID-19 society could require workspaces to go the extra mile to ensure that they provide quality ventilation and tighten up their hygiene practices. Here are ideas to improve hygiene and air quality in your coworking and flexible office space.

  • How will the coronavirus outbreak transform coworking spaces?

    Coworking spaces have always had to find innovative ways to drive revenue while ensuring the success of their members. Our industry is known for being versatile, dynamic and creative. In other words: with the right approach and support, we will get through this!

  • Mobile offices, levitating furniture and much more! What will coworking and flexible work-spaces look like in 2030?

    What to expect from the coworking and flexible workspace industry in 2030. A decade prediction of coworking and flexible workspace, coworking and flexible workspace ten years from now.

  • Life beyond WeWork: coworking giants to watch in 2020

    There is life beyond WeWork. Coworking spaces in 2020 are growing fast, healthy and sophisticated. Here is a list of coworking spaces to watch in 2020.

  • Where did it all begin and where is it heading? How the coworking industry is evolving.

    Ever curious about where it began, where it is going and how it is growing? The beginnings of coworking and its evolving nature is full of surprises, twists and turns! We have come a long way from the traditional cubicle office designs, dull office walls and uninspiring work environment, to flexible, collaborative open workspaces that are ergonomically designed with a sense of adaptability and are community conscious. In the words of Gouri Mirpuri, ‘if you want to tap into the future, tap into a coworking space’.

  • Before scaling up, tidy up: Interview with Marc Navarro (part II).

    Should you tidy up before scaling up? Will coworking become the standard way of working in the near future? In the second half of our exclusive interview with Marc Narravo, he sheds some light on what coworking means for small and medium-sized cities, sizing up and ways to stand out in the coworking industry and so much more! Marc is a coworking strategist and consultant and we are thrilled that we had the chance to catch up with him and share that with you!