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Introduction

Despite being the epoch for epistemological concern, one fact is simple and clear: co-working spaces (CWSs) are shared offices. Within a chain brand, spaces and facilities are shared among its tenants/members who may have heterogeneous backgrounds (Buksh & Davidson, 2013; Spinuzzi, 2012). This is an obvious reason why co-working is regarded as an innovation in contrast to traditional offices. However, it is not sufficient to explain what distinguishes CWSs from incubators and third places like parks and cafés. On the other hand, the number of co-workers is increasing, which suggests that CWSs have more attractive features than free access. A review of existing literature shows that knowledge exchange is often highlighted as a crucial factor by scholars who claim that co-working should be analysed and understood in the context of knowledge economy.Footnote 1

Because the knowledge economy relies greatly on intellectual capabilities than on physical inputs or natural resources, knowledge work is more flexible than traditional ways of working (Powell & Snellman, 2004). Due to its significance in contemporary urban economy and lifestyles, knowledge work is believed to be a major reason behind the shift in workplace management and operations. Unlike structured cubicles and standardized production lines, new workplaces—in this case, CWSs are designed to be transparent, open, playful and with identity in accordance with the mobile, multilocational, distributed and virtual way of working (van Meel & Vos, 2001).

Why Sharing?

A review of social economic transformations indicates that the emergence of co-working and the prevalence of knowledge work are correlated. But how is knowledge exchanged and shared in CWSs? To avoid tendentious inquiry, it is better to start from a neutral investigation of co-workers’ behaviour and intention: why would they work together? This general question could be converted into two specific ones: (1) what are the expected benefits of co-working, compared to working alone and (2) what are the actual arrangements, conditions and process that guarantee these benefits?

A general perception is that flexible knowledge workers tend to work alone. Why would they give up personal space, freedom and autonomy ? For supporters of co-working, the answer is community:

Independent professionals and those with workplace flexibility work better together than they do alone. CWSs are about community-building and sustainability . Participants agree to uphold the values set forth by the movement’s founders, as well as interact and share with one another. (Coworking.com Footnote 2)

Collaboration , openness , community, accessibility and sustainability are listed as values to which co-workers should be committed. Openness , accessibility and sustainability are explicit as they are related to physical characteristics of CWSs, but how to understand the importance of collaboration and community?

First of all, technological innovations today are fundamentally based upon open source and interconnectivity. There is a general trend towards distributed, interorganizational and collaborative knowledge work (Spinuzzi, 2012). Hence, the significance of openness , collaboration , interaction and community has been strengthened (Buksh & Davidson, 2013; Parrino, 2015). Therefore, it is plausible to assume that the knowledge economy generates and also requires collaboration and community in work which constitute core values of co-working and further determines physical and functional characteristics of CWSs.

Second, there has been an increasing interest in social aspects of industrial creativity and innovation . Economists and sociologists realize that technological reforms not only take place in laboratories but also are facilitated by and implemented in specific social environments. Theoretical and empirical studies have been carried out to examine the correlation between networking and creativity. In terms of the nature of creativity, the individualism-collectivism dichotomy is criticized as an inappropriate framework. Empirical evidence proves that the opposition is oversimplified and further demonstrates that individualism and collectivism both influence idea generation and idea implementation but in different ways (Yao, Wang, Dang, & Wang, 2012). For innovation process , network analysis has recently been widely adopted to explain the flow of ideas, information and skills. For example, different network structures are carefully compared to reveal their different impacts on innovation output and diffusion (Abrahamson & Rosenkopf, 1997; Steen, Macaulay, & Kastelle, 2011).

Descriptive Definitions

Therefore, the knowledge economy has played a pivotal role in the origin and formation of co-working. Sociologically informed creativity and innovation research, namely findings about organizational and network effects, also reveal that collaboration and community are two key elements of a CWS in terms of its core values, structure and operation. Just as Kojo and Nenonen have summarized:

[C]o-working spaces are aligned in general workplace transition, where the social aspects of the work are taken into account much more than in the past. These characteristics emphasize in especially the collaborative nature of co-working spaces both in functional and spatial solutions. (Kojo & Nenonen, 2016)

Based on the earlier discussion of knowledge exchange, community and creativity, two descriptive definitions of co-working and CWSs can be proposed. First, co-working could be regarded as naturally associated with the emergence of the knowledge economy. People locate themselves in the same working environment where they collaborate, network and gradually form a community in which knowledge exchange is facilitated and strengthened, leading to the acceleration of participants’ creativity and productivity . In this case, a CWS is an environment or a platform, of which the nature is to be defined and achieved by its members, that is, the actors of knowledge exchange and community building. Or to put it in another way, a CWS’ function is to facilitate and support members’ networking, collaboration and knowledge exchange. Second, in terms of network—the key element that links knowledge exchange, collaboration and community, a crucial fact is that the initiation and growth of a network hinges on engineered processes (Dhanaraj & Parkhe, 2006). This means that a network requires a triggering entity that performs a leadership role in constructing and consolidating the network as well as an entrepreneurial role in coordinating members’ resources and actions to create and extract value from the network. Value is key to understanding CWSs because these “spaces” are fundamentally commercial organizations which possess both the intention and ability to capture profits generated by innovation in the network. In this case, a CWS is a leading actor, but this leadership is subtle (Orton & Weik, 1990) because the hierarchical structure is dissolving and ineffective in the context of technological innovation and knowledge economy.

The difference between the two definitions is obvious. However, it is not the target of this research to argue whether network formation is an emergent process or an engineered process . Instead, the researcher proposes a metaphorical way of describing CWSs either as platforms facilitating and supporting members’ networking or as triggering entities constructing and operating the network. This descriptive definition was applied as a reference during the fieldwork of this study. It enables the researcher to observe specific ideas and actual practice of co-working in Shanghai from a comprehensive and inclusive standpoint. Preliminary findings then support further discussion about the issue of localization and variation, which inspires the analysis of particularities and conundrums faced by local co-working companies.

Research Design

Research Context: Localization and Variation of Co-working

A 2012 surveyFootnote 3 shows that CWSs in two representative regions: the United States and the EU have quite distinct characteristics. For example : co-working is basically an urban phenomenon in Europe, with 54% CWSs located in densely populated metropolises (only one-third in the United States) and 70% co-workers found in big cities (only half in the United States). This global survey also made qualitative comparisons. For instance, European spaces tend to be interconnected more intensely than those in the US; European co-workers favour the flexible working time, while in the United States, community and belongingness is ranked in the first place. Those distinctions suggest that the global spread of co-working is inevitably a process of localization and variation. The distinction between CWSs in the EU and those in the US is more nuanced than their differences with CWSs in China . Therefore, by investigating representative co-working companies in Shanghai, this research seeks to contribute to a more comprehensive and deeper understanding of this pervasive workplace transition which itself is transforming as it is spreading around the globe.

According to news reports on the mainstream media, co-working entered mainland China around 2015. Since then, CWSs of a few chain brands have quickly spread all over Beijing, Shanghai, Guangzhou and Shenzhen—the so-called first-tier cities. The trend soon extended to tier two and tier three cities as the big brands are actively expanding. For the convenience of data collection and analysis, the research scope is narrowed down to Beijing and Shanghai. Eventually, Shanghai is chosen as the main research site on account of the following consideration. In Beijing, central policies and financial support for stimulating the knowledge economy are implemented promptly, which are often accompanied with supporting measures issued by local governments. As a result, a big market share has already been taken by well-developed incubators and industrial parks that have advantages in price and resources. In Shanghai, the development of CWSs is a relatively natural process because the impact of institutional arrangement is less salient.

Two forms of CWSs are identified to provide a reference for investigating specific ideas and actual practice of co-working in Shanghai. As elaborated in the former sections, their functions or in a metaphorical sense—their roles could be generalized as the facilitator and the orchestrator. Comparing to normative definitions, these metaphorical descriptions provide the researcher with a more neutral and encompassing approach to examining the localization and variation. In this way, particularities and conundrums of CWSs in Shanghai are identified to provide materials for a more fundamental inquiry of the nature and process of networking. In terms of specific motivations and behaviours of networking, Chinese co-workers are different from American and European ones. They also vary from one CWS to another according to specific conditions and atmosphere created by different brands.

These special features challenge the stereotypes which too often are associated with established co-working companies in the west. Focusing on these specificities, this study seeks to inspire more in-depth research on the localization of CWSs, thereby inspiring innovative understanding and operation of co-working in different circumstances.

Methodology and Data

This research aims to investigate the localization and variation of co-working in Shanghai, thereby informing a further analysis of the relevant particularities and conundrums. In this case, hermeneutic interpretation is adopted because of its appropriateness for this research purpose. According to the relevant ontological and epistemological assumptions, truth is not the result of a series of programmed comparisons and falsifications. Rather, it constantly reveals itself throughout the ongoing research process . Therefore, the qualitative approach is applied to depict a holistic picture based on different informants’ viewpoints and to yield context-specific findings that are open to further interpretations (Creswell, 1998).

In-depth interviews are carried out in Shanghai with managers from different CWS brands. Five major local co-working brands are chosen because of their reputation in the industry and their respective characteristics. Although the American brand WeWork is not included in the fieldwork, this titan is frequently mentioned by each interviewee as a benchmark and main competitor. Senior executives of those influential local brands are key informants because their observation from the managerial level would constitute a comprehensive view of different CWSs in Shanghai. Moreover, their strategies and concerns also reflect the particularities and conundrums of the industry in general. In addition to interview, websites and brochures of local brands are also used as important second-hand materials.

Co-working has just become a business buzzword in China . Through this preliminary study, the researcher hopes to attract more attentions to explore its implications for the analysis of changing behaviours and mentality of working. Therefore, data from five in-depth interviews are analysed to identify important themes and questions for future research. In those unstructured interviews, key informants are encouraged to talk voluntarily and freely about their understandings and attitudes. Thematic analysis (Maanen, 1998) is adopted to deal with those fuzzy, incomplete and emerging ideas.

Discussion: Particularities and Conundrums

Five Pieces of the Jigsaw: A General Induction

After being introduced to China , co-working as an innovative workplace practice has demonstrated a remarkable crowding-in effect in the office market. Local brands and numerous CWSs sprung up with heavy investment from real estate and financial industries. Evidence is found in four of the five samples chosen for this research.Footnote 4 Chairman of URWORKFootnote 5 worked many years as a senior executive for different real estate companies, including China Vanke Co., Ltd. The two chief stockholders of WEPLUSFootnote 6 are a real estate group and a private equity. The other two brands: MIXPACEFootnote 7 and CREATORFootnote 8 also rely heavily on property and financial capitals but only differ slightly in terms of their respective focus on historical building retrofitting (MIXPACE) and integrated development of cultural and creative parks (CREATOR).

Based on a general induction, a few particularities of Chinese CWSs could be summarized: (1) because the majority of local brands are closely associated with traditional sectors, co-working in China is still an ambiguous concept; (2) for the same reason, the hardware of a CWS, that is, physical qualities such as the size and location matter crucially in competition, whereas the effect of operation is less salient; (3) since scale effect is a main pursuit of most local brands, the scramble for premium properties and central locations will continue to be intense.

In early 2016, WeWork opened its first space at Shanghai by collaborating with the DoBe Group,Footnote 9 a Chinese enterprise that has a prominent position in cultural and creative industries , especially in developing and operating creative office parks. This cautious but crucial move has reshaped the chaotic market into a bipolar structure , which means that in the long run local brands would have to pinpoint their positions to survive the upcoming market segmentation and integration. The five local companies chosen in this research are characterized for their respective strengths and potentialities. During the interview process , common topics emerged. After preliminary processing , a few key themes are highlighted for further analysis. Discussion in the following sections demonstrates that interviewees’ various notions and attitudes actually reflect the divergence between those brands with regard to profit model, market positioning, core values as well as the essence of co-working. These personal and institutional disparities reify the issue of localization and variation. Thus, by viewing them from a macro angle, the researcher hopes to ponder on particularities and conundrums of CWSs in Shanghai and inspire future research of co-working as a concept and as a practice.

Co-working: Integrated or Sharing?

In China , co-working is perceived as a novel and basically American way of working by the general public. As a new catchword, co-working is often mixed with existing concepts like serviced office, incubator and hackerspace. Interestingly, translation also reflects this confusion: lianhe (联合integrated) is the accepted term frequently used in business news and research papers, whereas gongxinag (共享sharing) only appears sporadically. The nuanced difference between “integration” and “together” (co-) suggests that co-working is localized at least in conceptual sense. In practice , focus on togetherness is associated with an interaction-orientated approach that enables sharing and communication and further generates a sense of community. Contrarily, emphasis on integration leads to a resource-oriented approach that pursues interconnectivity and resources distribution as the core competence of a CWS in comparison with traditional and serviced offices.

Interviewee BFootnote 10 described their role this way: “We integrate over 1000 tenants located separately in 20 spaces of our company. Based on investigations of their business and demand, we could integrate their resources, just like the support crew.” In interviewee C’s opinion, other than attracting tenants with a low rent, a CWS must offer extra value, a vital part of which is business matchmaking. Business interconnectivity through integration is often advertised to potential customers as a main selling point. It is necessary to point out that integration is not only an extra service but also a new model of management, both of which are stressed by executives as advantages of CWSs in the office market. Interviewee A explained his understanding of “lianhe (integrated)” and summarized his statement with interesting rhetorical questions:

I think, for a chain brand, “integrated working place” applies to all of its spaces. When I purchase your service, it means that I am entitled to use all spaces and auxiliary facilities at the membership price. How could a CWS distinguish itself from any company that specializes in space design ? What is the point of running a chain brand?

Their notions of integration suggest that co-working companies in Shanghai seek to offer a package solution to meet various demands for spaces, facilities and business networking. One inherent problem of the package solution is that operators have to play paradoxical roles because customers’ requirements could be overlapping and sometimes conflicting. Interviewee D worked as brand manager and community manager for different brands. This experienced administrator summarized the dilemma faced by most companies:

We all struggle to figure out whether a CWS should be networking-oriented or service oriented. This hasn’t, perhaps would never, be clarified (laugh). The two demands are conflicting. If you cut down your services and concentrate on network building … for long time, my job is to bring in third-party services. As those services increase, the necessity of us as a platform gets weaker and weaker. Eventually, there is no need for a platform because people could make contacts by themselves.

Interviewee D believed that conceptual changes are fundamental and necessary before any business innovation or institutional transformation could be made to solve that dilemma. Managerial personnel are conservative, which partly explains why the interaction-orientated approach seems to be incompatible with the Chinese market:

The staff has to start co-working first. That was my understanding. But actually I find CWSs here are operated in an old-fashioned way. The staff churn rate is pretty high because they see their jobs as no difference to normal office administration. Space design is not thoughtful about interactions . One good thing about WeWork is that through design , they already set up topics for interaction.

On the other hand, tenants choose CWSs not for interaction , not because they are start-ups or freelancers, but are driven by other motives. Most CWSs in Shanghai are located in Grade A office buildings at central areas. Typical tenants are experienced entrepreneurs, established small and medium-sized enterprises (SMEs) and big companies, simply because the rent already set up a natural barrier . In interviewee D’s view, big companies “don’t pay attention to ‘integrated work’ but just see ‘work’; their mindset is simple: I pay so you should provide the services.” Another untold but common motivation is vanity. Interestingly, users’ “ranking” of different co-working brands manifests the bipolar structure of the local market.

I heard many people talking about circles: fancy and exclusive places could lead you into a higher circle. In my view, typical coworkers go to WeWork. It is like a threshold, a sort of accreditation. Naked HUB is a like a pidgin version. But you just spontaneously presume that teams and companies in naked HUB are superior to those in industrial parks. It satisfies your vanity. Plus, its facilities are not bad.

Thus, judging from the general understanding of co-working, it seems that operators in Shanghai and customers are not ready for the interaction-orientated approach. Apart from the above-mentioned mentality, mindset and habit, structural reasons are more sophisticated and perhaps more fundamental. Unlike American and European cases, co-working in China is a heavy investment industry. Therefore, the management of each brand has to expand and achieve a certain scale. Before that, it is not their position to select clients.

In other words, the localized concept (“lianhe,” integrated) and conservative approach (resource-oriented approach) are profoundly influenced by the internal structure of the industry and the macroeconomy. As a matter of fact, the growth of CWSs in China is boosted by the national strategy of “encouraging people to do business creatively and drive innovation (推动大众创业、万众创新 ).” Local practitioners, conservative or radical, often find themselves in an awkward position between traditional offices and incubators, which result in the conundrum of market positioning.

Competing Brands: Survival or Positioning?

Because local practitioners have to attract and keep as many tenants as possible, co-working is often advertised as a one-package solution that satisfies diverse expectations and requirements. Consequently, the general identity of local CWSs is hybrid and vague. In Shanghai, a randomly picked CWS would probably meet this profile: a designed office space equipped with quality facilities and capacious public areas and characterized by the functionality of networking and incubation.

Interviewee A argued that it was simply impossible for any brand to specify its market positioning because the majority of them were targeting the same group of customers, that is, branches of big companies and successful SME teams. This product manager believes that in order to firstly survive this fierce competition, their strategy is to strengthen cooperation with the retail business and to export management service to big groups that need to outsource their office issues, including site selection, space design , tenancy management, daily operation of spaces and facilities. With regard to competition, interviewee B’s strategy is more macroscopic and abstract:

Our vision is to go beyond the physical limit and construct a synthesis of office, residential and leisure spaces. Our company has experience and expertise in developing creative industry parks, which fits the government’s urban renewal plan. From now on, new blocks and centres will emerge in different districts of Shanghai city, so our scheme is to cooperate with the government and to undertake more renovation projects.

Interviewee E’s company also aims at the same piece of cake—urban redevelopment. In the last three decades, as this historical metropolis has undergone drastic changes, complex problems of the urban space have accumulated, awaiting for careful renovation and upgrading. Interviewee E criticized commercial operation as being shortsighted and incapable of balancing business value and social value. More specifically, to wedge in that particular market, excellent design is emphasized as their core competitiveness:

What we focus on is the living space during the daytime. Every day, 9/10 of the 24 hours are spent in offices or similar environments. We should devote most of our time and energy to design that office space. It’s as simple as that. Space is the container of life. We ought to design the container in a proper way to enrich the content. As a result, people could allocate more time on things to be done and on others they deal or encounter within that space.

In terms of the overall office market, interviewee C argued that although incubators and hackerspaces had the price advantage, they were not strong rivals. “With such a high cost, we have to optimize our products to secure the market share. It depends not on the original cost but on the perfect form of the final product, which is not easy to identify and realize (laugh). To stand out, firstly you have to survive fierce competition.” Ironically, competitors are whom you could refer to while navigating your position in the market. Sometimes, the competitor you pick may determine where you would end in. This is the way interviewee E defined the company’s vision of development:

For now, we hope to seize the third place in the co-working business. We plan to replace the other two gradually. In China , I don’t think any foreign brand could triumph over Chinese ones, not in any industry. Our advantages are obvious. We are a Chinese company run by Chinese but we are also very international. We understand new concepts, the mentality and the culture here. WeWork and naked HUB could not compete with us in terms of the sensitivity to social events or the rapport with clients. I know our strength and I believe it will become more evident over time.

Here, interviewee E is reasonable with regard to the necessity and significance of time. As money gradually withdraws from this industry and perhaps with more international brands following in the footsteps of WeWork, the following years may witness a process of market segmentation that eventually would lead to the differentiation of co-working brands.

Core Business: Service or Design?

Currently, market segmentation has not started in Shanghai. Most CWSs have not the intention or vision of specifying their core business, as long as the one-package solution is still the general practice . A few leading operators, for instance, the five interviewees’ companies, have long-term prospections which are expressed in their understanding of customers and would be realized through an already ongoing differentiation of operation.

Interviewee B reckoned that the company would maintain its stable market share of comprehensive development of cultural and creative blocks based on their expertise and reputation in urban renovation projects. Three of the other four interviewees highlighted the significance of service but interpreted it from their unique perspectives. Interviewee C perceived service as the gene that they inherited from their parent group. He claimed that it was the relaxing and homey atmosphere that differentiated them from other CWSs. Contrarily, interviewee D criticized the obsession with service, suggesting this was a main reason why both operators and tenants were accustomed to traditional office settings and habits. Essential attributes of co-working—sharing, interaction and community would hardly sprout in a space run by outdated management idea. No matter how similar a physical environment looks to a “standard” CWS, it could never be co-working in its proper sense.

Interviewee A’s opinion of service represents a pragmatic attitude. He is a believer of customer’s choice: “People come here for the service, not for regulation. No one would pay thousands per month for someone to set up rules. I don’t think operators could play the role of administrator. Service provider would be a more appropriate description.” More importantly, service is not the trivial logistic support but should be a reasonable and effective combination of products that the co-working company offers to its customers.

We could sell different services to medium and large enterprises, e.g. tenancy management, community operation and space design. Because service is very light—it doesn’t take much human and material resources. For instance, space customization covers from the consultancy of site selection, design, procurement, construction supervision, tenancy management until the end of the tenancy. Basically, the enterprise could outsource everything related to office issues to us. Normally it is the operator who set the rules. For customized spaces however, everything is based on the client’s requirements, not our assumptions of them.

In contrast to the dominance of service, interviewee E’s persistence in design seems to be quite brave and ambitious. As a relatively newly established co-working company, they have made great effort in examining, researching and improving parameters and other architectural details of their spaces.

According to interviewee E’s information, based on meticulous design, they managed to reduce the area of each workstation from 7/8 to 5.5 m2, without causing any inconvenience or uncomfortable feeling. Each space is equipped with a café, a roadshow hall and a seminar room. To keep those spacious public areas and enhance the efficiency of space utilization, meetings are moved out of individual meeting rooms to the café and other open areas. In addition, they offer their venues to event organizers with a low rent or even for free, thereby maintaining a good usage rate. Interviewee E highlighted design as the core competitiveness of their brand, not only because of the positive application effect but also because they were more fundamentally based on a unique design philosophy:

For functionally homogenized products, the additional value comes from design. Because CWSs often have similar locations, the premium of a certain space depends on its aesthetic and functional properties, both of which are closely related to design. Design is an essential element to spaces. A space without design is an incomplete product.

Interestingly, although space is defined to be a desirable product, interviewee E didn’t see their design philosophy as user oriented. This is because practically it is hard to gather users’ requirements before they could actually feel and use the “product.” What designers could do is to consider inversely for the final users because even if they indeed benefit from the well-designed product, they may not realize those details and ideas behind them. The specific methodology is in accordance with this design philosophy:

We observe users’ behaviours and habits and also listen to their feedback. Our experience gradually builds up during that process . When users feel less and less of your product, actually your design is getting better and better. Because everything is natural and smooth. My wish is that one day users will find it more comfortable and convenient to stay in our spaces than at home. That means they have developed a dependence upon our spaces.

Be it service or design, any company’s core business has to be realized through daily operation. In interviewee E’s opinion, the advantage of their brand is the application of design thinking to daily operation: “We’ve started to design their own operation manual to gradually establish a management system. The purpose is to build a standardized, flexible and efficient service system which offers user-friendly services with its systematized tools.” In this sense, design and service are not an either-or option for operators; rather, they converge at the key thing, space: “Eventually, what CWSs ought to develop is the capability of understanding, transforming and operating the space.”

Profit Source: Rent or Property?

The general view of co-working has changed since it was firstly introduced to China as a new office concept and practice . Just as interviewee A frankly stated: “For the public, the difference between hackerspaces, incubators and CWSs used to be quite ambiguous but it is getting clearer. Co-working is a commercial operation, therefore it must follow business rules.” In other words, these companies need to make profit, no matter what their core business is.

The three issues: market positioning, core business and profit source are fundamentally correlated. Because the majority of CWSs in Shanghai are providing similar products and services to the same group of target customers, their sources of profit are almost identical. More specifically, they charge tenants for their access (may be graded) to the space, facilities and services. As heavy-asset companies, the profitability is unsatisfactory, which forces them to look for other sources of income. First of all, CWSs would try different ways to fully exploit values of the space. For instance, interviewee C admitted that they would receive rental or shared revenue by leasing their spaces to other companies or event organizers. Another common practice is to get actively involved in commercial activities. This solution is consistent with the business strategy that interviewee A and interviewee B both identify with. Interviewee B explained that once user loyalty was built up, the company would start operating an electronic mall on which artists and designers residing in their spaces could present their products and potential customers—other tenants are able to trace the designers/makers . For the company, their profit is realized based on tenants’ mutual trust built through the daily operation.

Interviewee D and interviewee E acknowledge that revenues largely come from the appreciation of properties, but their attitudes are contrary. Interviewee D criticized that with the support from real estate capitals, most local CWSs made profit easily by simply playing the role of sub-lessors. In contrast, interviewee E believed that sub-leasing was definitely not the optimal choice:

This place is about 100,000 RMB per square metre, and the total value is 400 million. My yearly rental is about 2 million. If I take one third of the appreciation, once the asset rises from 400 to 500 million, I would receive 30 million automatically. How long does it take for me to earn that 30 million if I only charge the 2 million yearly rental? So the logic of this game is quite simple: through our reconstruction and operation, the service is upgraded; therefore, users are willing to pay a higher rent. Consequently, the asset value is increased, in which way the economic value of our reconstruction and operation is also realized.

Obviously, the share from the asset appreciation is the company’s core source of profit. Interviewee E further clarified that in the future they hope to function like an asset management company. This necessarily requires the capability of operating financial products. Therefore, interviewee E believed that it would become a common practice to cooperate with fund companies to guarantee that properties would stay in trading.

Community: Space–Activity–Network

Among all the topics that emerged during the interviews, community is special fundamentally because it is a node where other problems meet and converge. Interviewees’ narrations demonstrate a consensus that community is a key feature of CWSs that distinguish them from traditional offices. However, their specific notions and strategies of community building and operation still differ greatly on physical, behavioural and functional dimensions.

Firstly, with regard to the physical space, interviewees have contradictory evaluations. As was discussed in earlier sections, interviewee D criticized the design of most local CWSs because in her view the space and facilities were not arranged to encourage or facilitate interaction . According to her, WeWork is a positive example because certain things and scenes that might stimulate socializing behaviours such as casual chatting have been given thorough consideration during the stage of space design . For interviewee A and interviewee E, however, frequency and efficiency of utilization is the primary concern in terms of space design . Specifically, interviewee A emphasized convenient accessibility to all their spaces so that tenants could use public areas for different purposes (partying, meeting, etc.) with flexible time, location and billing options. As a strong supporter of engineering thinking, interviewee E believed that a good design could enhance utilization and usability of the space. He also stressed that the operation team was responsible for keeping the stage, that is, the spacious public area rotating by continuously filling in suitable activities. This leads the discussion of community from its physical conditions to the behavioural dimension: activity.

Space is rigid but activity is flexible. This means that activity is not only more crucial but also more complicated with regard to developing and maintaining a community. In fact, interviewees’ disagreements are especially obvious in terms of how to organize what kind of activities to facilitate interaction and to create a sense of community.

Interviewee C explained that they had routines such as “Lunch and Learn,” which were casual occasions they organized for old and new members to get to know each other and share information and expertise. He mentioned that members were encouraged to organize events by themselves as well, in which way they could form mutual connections voluntarily. Interviewee B told the researcher that activities were planned and provided according to the unique identity of each space. For the space where the interview took place, all kinds of art exhibitions were often held because that space was customized for tenants from art and creative industries. In interviewee A’s perspective, salons and forums introduced from outside are stiff activities if tenants don’t really need them. Therefore, they would ask for their particular requirements and then provide them with appropriate activities. He emphasized a principle of event organization : “It is vital to remember our activities are not intended to educate people but to facilitate communication and resonance between two equal subjects.” Interviewee E was very proud of the high utilization of their public areas. Like interviewee A, he also believed that operators should carefully select activities:

Activities should be carefully planned and organized. You must combine activities of different contents and themes, control the intensity, rhythm and length of time. The activity team should work like editors. Their task is to find activity organizers. When you have enough suppliers, you can do the exchange. For instance, a free venue could exchange for lots of good contents. The ideal scenario is: when our place becomes a well-known venue for activities, it will become a go to place.

Functionality is a more fundamental factor that determines the former two dimensions. In other words, why would tenants interact and network during certain activities at certain spaces, but not others? What are their motivations? What are their concerns?

It took interviewee B’s company a long time to figure out how to connect their members with communities from outside, and how to develop communities within the space. Initially they cooperated with a professional team, which brought in different communities to connect with tenants of the space by organizing thematic workshops. The advantage of this approach is that with the active atmosphere and connections built through those activities, communities would gradually emerge amongst tenants themselves. Interviewee B believed that once communities were formed, tenants would take the initiative to organize activities that suit their purposes, and CWS operators need to play only the role of a facilitator:

If a tenant has an idea of organizing an activity, we will help to improve the plan and realize it. No matter which place he/she is based in, there are actually more than 20 spaces to play with. Yes. I think our job is to amplify the influence of one site or one person, and then accomplish the goal by devoting time, energy and money. That is what our brand is doing.

The above narration shows interviewee B’s optimism about tenants’ motivation and the actual result of community building. However, a real conundrum is: no brand ever claimed to have found any formulae of community building, even though standardization of operation is crucial for achieving the scale effect that CWS brands all target for. The difficulty lies precisely in the nature of socializing in the business setting. Just like interviewee E pointed out: “Adults definitely have the sense of distance during social interaction . In commercial communities, barriers exist naturally.” Therefore, interviewee E argued that it was unnecessary to worry excessively about community construction simply because “A co-working space is not a university dormitory.” To add to his argument, interviewee E explained a more fundamental reason:

Social interaction is necessary. Community is necessary. Just like making a car, you must also make tires and saddles, etc. But eventually, you cannot say that your job is to make leather saddles. I agree that community is necessary but our core business is space construction. Community and social interaction are extra values but not the main value.

As is discussed earlier, most users of CWSs in Shanghai attach great importance to business connections and resource integration. Therefore, interconnectivity is often advertised as a main selling point of CWSs. However, interconnectivity as such is more like a consequence of structural factors, that is, the integration of resources of all spaces within the same brand. As a result, companies like WeWork and naked HUB would attract more quality customers, thereby further stabilizing their advantageous status in the market. What is described here concerns the pragmatic understanding of community and the related instrumental way of socializing, both of which are characterized for the pursuit of immediate commercial effects and the neglect of sharing and interaction processes.

Conclusion: Co-working Equals Socializing?

Deviation or Localization

Since the establishment of the first CWS in the United States, co-working has been regarded as an innovative office practice that facilitates sharing and socializing. The core competitiveness of CWSs lies in the exchange and cooperation platform formed by entrepreneurs and freelancers from various backgrounds. In other words, people choose to be co-workers based on the expected agglomeration effect of CWSs. Ideally, a CWS is a matured community in which cooperation across companies and industries are generated through exchange of resources, information and expertise.

The profile of CWSs in Shanghai seems to be a far cry from the ideal case, judging from the particularities and conundrums analysed earlier. Local CWSs are more like well-designed containers of which facilities and services are exquisite, but the soul—community—is lacking or underdeveloped. In the United States and the EU, typical co-workers are start-ups, SMEs and freelancers in the software industry or art and creative sectors. Contrarily, as a stable source of rent, tenants from traditional industries are generally welcomed by most CWS operators in Shanghai because at present survival is prior to market positioning. Generally, CWSs that facilitate community building would develop on condition of the robustness, if not the dominance, of the knowledge economy. In China , the development of CWSs are largely driven by real estate and financial capitals. Therefore, most local brands adopt the resource-oriented approach in accordance with the conventional business model.

But, if CWSs in Shanghai are treated not simply as a deviation but as an example of localization, what can be learned? In this regard, the specific profile of CWSs in Shanghai could be a relevant case for rethinking the essence of co-working—socializing in the business context.

Difficulties and Limitation of Business Socializing

In modern society, keeping a sense of propriety in socializing is a normal etiquette. Moreover, it is reasonable for anyone to stay wary and vigilant in a business environment. The propriety becomes a psychological barrier to socializing in the circumstance of co-working. Hence in a business setting, it requires great sincerity and delicate techniques to “hit” the softness of each individual. Just like interviewee A summarized: “it is almost impossible to plan and implement a networking activity while at the same time doing all in an inadvertent manner.” Natural socializing is casual, the outcome of which is contingent. This explains why replication of successful cases normally wouldn’t do. The difficulty of standardization is precisely the dilemma faced by CWS operators.

Apart from these practical difficulties, socializing in the business context has its fundamental limitation, which too often is overlooked. For instance, it is believed or advertised that business cooperation could be generated through casual chatting in the prosocial atmosphere of CWSs. In reality, the efficacy of un-utilitarian social interaction is rather limited. This is because interpersonal communication often generates small circles, which would become exclusive as the rapport grows stronger.

To summarize, it is unpractical or even impossible to combine natural socializing and commercial purposes, especially if scale effect is the pursuit of CWSs operators. As a comparison, virtual interaction is much simpler. Tenants could use social apps and other platforms developed by operators for information exchange and problem-solving. Usually, things put on posters are in rigid demand; questions will be noticed and responded by operators or other tenants. This contrast inspires the researcher to reconsider the essence and functionality of community. Yes, community building is necessary and crucial. Like interviewee A pointed out: “Community is a major factor that would determine the result of differentiation. It is fundamentally associated with the identity of a CWS brand.” A probing question would be: how to build and operate a community? But, shouldn’t we firstly ask a reflexive and perhaps more primary question? What kind of community? Do we have to copy the American model?

So far, no conclusion could be drawn because co-working as a new workplace practice is still transforming as it is spreading across the world. Nonetheless, it is certain that localization will be a main direction for future research. Interviewees’ narrations actually indicate their awareness of localization. For example, Interviewee E described the strategy of community building and operation, which could be viewed as an alternative to stereotypes that had been established and associated with western co-working brands.

A community manager must be curious about companies and members in the space, because that curiosity would turn into a driving force of the community. But this sets high requirements for people holding this position, so we hope that community operation could rely more on systematized methods and that the whole process could be controlled at a macro level. Specific techniques and tools could be taught to the staff for the purpose of effective and efficient interaction with space members. In a word, we do not look for people who are naturally good at socializing. Rather, we train responsible staff to be qualified community managers.

The above description of the systematized approach suggests an emphasis on efficiency and control, which is a common understanding of community operation shared by local operators. This is a major distinction between local and western co-working companies. In fact, the difference in community construction and operation echoes the division of two types of CWSs: (1) a CWS that is an environment or a platform, of which the nature is to be defined and achieved by its members—actors of knowledge exchange and community building, and (2) a CWS that is a leading actor but this leadership is subtle because the hierarchical structure is dissolving and ineffective in the context of technological innovation and knowledge economy. Since local users of CWSs have the particular requirement of business interconnectivity through resource integration, it is natural and reasonable for operators to play a more active role. As the particularities and conundrums of CWSs are identified in this preliminary study, future research could take this pragmatic standpoint as a reference while investigating localization of CWS in other cities and areas. After all, as CWS is a for-profit practice , it has to follow business rules. Even in this open and sharing ambience, business cooperation does not just emerge but has to be cultivated and planned.

For a long time in the industrial age, workplaces were generally perceived as the site where the act of working took place. While the nature of working is gradually transforming, conventional workplaces are also iterating. By comparing serviced office, incubator and third spaces with CWS, researchers highlight three interrelated characteristics: knowledge sharing, community and collaboration as core competitiveness of co-working. Further development of CWSs not only spread the trend of co-working but also generated its diversification. As is shown in this research, the contrast between sharing and integration questions the romanticized view of community as a natural accumulation of knowledge workers or more broadly, mobile workers. In this way, it has emphasized the importance of revisiting the origin of co-working: the relationship between work and workplace . In this sense, simple generalization of the American model could be criticized for its ignorance of the other side of that correlation: workplace innovation would also remould the nature of working. In the context of CWSs in Shanghai, this refers to the triggering and organizing role played by CWSs’ operators. A relevant question for future research is: how to define their work? If their job is to plan and cultivate business cooperation through community building, could it be considered as a new form of creative work, even if there is no knowledge production involved? Another issue relates to the physical aspect of CWSs. Although openness and accessibility are regarded as general characteristics of CWSs, little is known about how office design has fundamentally changed our working habits without us really noticing it. In this sense, more empirical studies would bridge the gap between the study of creative work and workplace research.