#FlexEconomy set to pump £12 billion into local economies by 2030

Flexible workspaces are set to contribute £12 billion to local economies in the UK over the next 10 years, according to the first socio-economic study of second-city and suburban workspaces. 

The study predicts that by 2029, there could be a total of just over 246,000 people working at flexible workspaces across the UK, providing a further 156,000 jobs for local residents.

The analysis, conducted by independent economists on behalf of Regus, reveals that as Brexit uncertainty and increased automation continues to impact the economic landscape, the establishment of a flexible workspace in a smaller city, town or suburban location could be a welcome lifeline for local economies, with four main benefits identified:

	1. Job creation
	2. Value creation
	3. Time saving
	4. Carbon savings

Businesses are increasingly basing employees outside of major metropolitan hubs in ‘flex spaces’, driven by cost-efficiencies, an ever-improving transport infrastructure and the rise of flexible working.

With HS2 – the high-speed railway linking London and the north of England – under review, this analysis has identified the growing importance of suburban business hubs to the UK economy.

On average, 231 jobs are created in areas that have a co-working space, currently pumping more than £15 million into the local economy as a result.

The study predicts that by 2029, there could be a total of just over 246,000 people working at flexible workspaces across the UK, providing a further 156,000 jobs for local residents.

Closing Skills Gaps

Peter Cheese, CIPD chief executive and co-chair of the Flexible Working Task Force, said: “Providing more flexible opportunities for how, when and where people work should be part of every organisation’s strategy to attract and retain the talent and skills they need.  “Employers need to consider, and address, the barriers holding them back from adopting flexible working practices more widely – be it entrenched organisational cultures or making sure line managers are trained to support and manage flexible workers. “By encouraging many more jobs to be advertised as flexible as the default option, the task force is challenging outdated attitudes to flexible working that still prevail in some organisations and laying down a marker for other employers to follow.”

Aside from the direct financial impact, local office space has been found to benefit workers and local regions in other, societal ways.

This includes reducing the time spent commuting, with access to a local office space expected to save 411,000 days per annum by 2029.

Local office space has a further advantage, by providing working opportunities for those who might otherwise be unable to travel long distances to an office. This could include people living with disabilities, as well as those with caring responsibilities.

As the labour markets tighten, local flexible workspaces could open new routes to top talent that will help close Skills Gaps.

Economic impact

As well as direct job creation, flexible workspaces benefit the local area through an uplift in Gross Value Added (GVA), the measure of the value of goods and services produced in an area. The study found that an average coworking centre in the UK will generate £20 billion GVA each year by 2029, of which over £12 billion will go directly into the local economy.

This is in part explained by “the sandwich economy”, but also created by improved career and earning prospects for residents and companies within the centre doing more business locally.

Steve Lucas of Development Economics, and report author, says:

“This study reveals a shift in jobs and capital-growth 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, says:

“When people commute into major cities, their wallets commute with them. 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. Businesses also recognise the benefits and we are seeing increasing demand from companies of all sizes for flexible space in smaller cities and towns. Larger businesses are opting for a ‘hub and spoke’ real estate model. At the same time, smaller enterprises want to cluster and collaborate, and so choose flexible workspaces to be near other businesses.

“We already have hundreds of centres in these types of locations, some of which have populations as little as ten thousand people and we plan to open many more in the near future as this trend continues. Our vision is that, in the near future, there will be a professional workspace available on every corner.”

The Regus study analysed the socio-economic impact of flexible working in 19 countries:

1. Australia
2. Austria
3. Belgium
4. Brazil
5. Canada
6. China
7. France
8. Germany
9. India
10. Italy
11. Japan
12. Netherlands
13. New Zealand
14. the Philippines
15. South Africa
16. Spain
17. Switzerland
18. the United Kingdom, and
19. the United States