Economy

Flexible workspaces to contribute $254 billion to local economies in the next decade: study

V Rishi Kumar Hyderabad | Updated on November 14, 2019 Published on November 14, 2019

Over 979,000 people are expected to work at flexible workspaces in India by 2029

 

The increasing migration of flexible office space and co-working locations to areas outside of major metropolitan cities globally is creating a ‘flex economy’ that could contribute more than $254 billion to local economies in the next decade, according to a comprehensive socio-economic study of second-city and suburban workspaces.

The Regus study analysed the socio-economic benefits for local economies by the growth of flexible workspaces in secondary towns and cities and suburban locations of major cities in 19 countries, including India.

It revealed that on average, 121 new jobs are created in communities that contain a flexible workspace, with an extra $9.63 million going directly into the local economy.

In India, the ‘flex economy’ is expected to contribute an annual value around $14,663 million per annum (in terms of 2019 prices), of which around $5,737million p.a. would be retained by local economies. The study also predicts, there could be a total of over 979,000 people working at local, flexible workspaces across India, providing net additional employment opportunities for residents amounting to nearly 403,000 jobs.

The analysis, commissioned by Regus and conducted by independent economists, studied 19 key countries to delve into the economic and social impact of flexible workspaces in secondary and tertiary cities and suburban areas both now and through to 2029.

This rise in local working is 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.

‘Sandwich economy’

Across the 19 countries analysed, the average individual workspace sustains 218 jobs, and in India, the average individual workspace supports 235 jobs. This includes temporary jobs created during the fitting-out stage of the office space, permanent jobs to run the office, including reception, maintenance, cleaning etc., plus the jobs associated with the occupancy of the workspace.

This additional analysis predicts that, if current trends towards flexible regional working continue, these communities could see more than three million jobs created by 2029.

Steve Lucas of Development Economics, and report author said, “This study reveals a shift in jobs and capital-growth is moving outside of city centres, where it has been focused for the last few decades, into suburban locations. This can benefit businesses and people, from improving productivity and innovation to reducing commuting time, which leads to improved health and wellbeing.”

Mark Dixon, CEO 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."

Harsh Lambah, Country Manager – India, IWG, said: “This is a great testimony to the emergence of India as one of the hottest markets for the flexible working industry. Not just metros, even tier 2 and suburban locations are also contributing to this growth which we expect will continue into the foreseeable future. The study shows the potential of flexible workspaces by highlighting economic as well as the social impact for businesses as well as people working out of such spaces.”

He added, “IWG is the only international player in the country with the largest network of 120 workspaces in 16 cities. Our customers are start-ups, small and medium-sized enterprises, and large multinationals and with shared workspaces, we provide them tailor-made options and communities to match their needs.”

Established in 1989, Regus is one of the pioneers of flexible workspace, helping businesses choose a way of working that’s best for their people.

Regus is an operating brand of IWG plc: the holding group for several leading workspace providers. Other brands in the IWG portfolio include Spaces, HQ, No18 and Signature by Regus.

Published on November 14, 2019
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