Start me up: Why London needs open workspaces for creativity, innovation and growth

Open workspaces are places where businesses and professionals share space, facilities or specialist equipment. Over the last 10 years, this new kind of workspace has grown in visibility and importance in London and worldwide. They include coworking office spaces, incubators for start-ups and entrepreneurs, artists’ studios, and so-called ‘makerspaces’, providing specialist equipment for makers and designers.

They vary in purpose, business model, and how open they are to different groups. But together, they form a new and growing sector of workspace in London that mirrors shifts in how and where we work.

This interim report explores the value and role of open workspaces in London, the challenges facing these properties and their tenants and users, and the potential role of government in providing support. Our final report in the summer will suggest how the GLA and local authorities can fully assess the benefits of open workspaces, and the question of when and how to intervene.

Open workspaces can help small businesses to survive and thrive, by:

• absorbing some of the risk of starting businesses
• offering additional services to business owners
• improve users’ networks, productivity and wellbeing.

They also provide wider benefits, including by:

• forming part of the ecosystem that makes London a great place to start a business or invest
• helping to address disadvantage
• making London a more attractive place to live.

While open workspaces have proliferated across London, office space for small businesses is under extreme pressure. Reforms to permitted development rights are only intensifying this pressure. If setting up a business becomes too costly, entrepreneurs are likely to look to other cities. The current pressures risk driving out entrepreneurs, creative professionals and small business employers.

In many cases there is no need for national, regional or local government to intervene in the open workspace market, especially at the higher end. But many housing developers are unlikely to provide open workspaces without planning obligations or public-sector encouragement and promotion.

We believe that the case for government intervention may be particularly strong in two instances:

• If an open workspace provides substantial benefits to the public, such as economic growth or local regenerative effects, that are not reflected in the price that its users pay, making the open workspace unviable without public support.
• If an open workspace provides new opportunities for disadvantaged groups, such as the chance to start a business for someone who is unemployed.