Recent signs of trouble at WeWork, which has so far been a poster boy of coworking spaces, raise an important question: is the ‘future of work’ dead?
When I left a “regular" job some time ago to become an entrepreneur and adviser to multiple companies, a senior leader in the company observed encouragingly: “Instead of one company-many employees, work is moving to one employee-many companies. You are going to be a part of this future of work." As if to prove his point, the very next day I settled down at my “hot desk" in the spanking new WeWork that had opened in my city and contributed my bit to its ever-expanding valuation.
It’s not only WeWork. Coworking spaces are mushrooming all around us in every city of the world. JLL estimates that coworking space in India rose three-fold to 3.4 million sq. ft over the first nine months of 2018. In Mumbai, 21% of all office rentals were those of coworking spaces. By 2020, the estimate is that 13 million people will work out of a coworking space in India. There are perhaps more than 200 companies running these spaces in the country, and WeWork is certainly not the largest. However, it is perhaps the most expensive and sought-after—the poster boy of coworking, with its funky décor, free artisanal coffee, beer on tap, and a highly aspirational brand.
Of late, though, the brand has taken quite a beating. Just a few months ago, its founder Adam Neumann and his merry men could do no wrong. WeWork had pulled in an estimated $10 billion from Softbank, was riding high atop a stratospheric valuation of $47 billion, had become the largest lessee of office space in New York, and was powering a completely new work culture across 29 countries. It had been rechristened The We Company and was calling itself a tech firm—not only selling “space-as-a-service", but also “elevating the world’s consciousness". WeWork was sailing towards the second largest tech initial public offering (IPO) ever. Then everything started falling apart. Analysts found that it was losing a lot of money and there were murky corporate governance practices. The bottom fell off the story. The company is reportedly revaluing itself at just $10 billion, management and board changes are in the offing, and the IPO may be off. Forbes has said: “WeWork might not be the largest IPO of 2019, but it is easily the most ridiculous."
So, is the “future of work" dead? Far from it, though its brand ambassador might have stumbled a bit. There are four inexorable trends shaping the future of work and all of them are going strong.
First, by 2020, millennials are expected to make up about 50% of the workforce and, by 2025, this number is projected to be 75%. Their idea of work is different from that of earlier generations. They do not want to be tied to one company. They prefer “fluid gigs" where they can move in and out of jobs and, perhaps, do a few simultaneously. There is no 9-to-5 and the workplace should not look like a typical office, but perhaps like WeWork.
Second, work is increasingly not tied to one country, or even one location. People prefer to work from where they are—home, office, Starbucks, parks, or malls. It is becoming harder to find highly skilled or specialized people living around their offices, especially in high-traffic-density places such as India. Employees want more locational flexibility, and so, one way to get talent is to allow remote working. This also means lower office costs, higher employee retention and higher productivity. Therefore, work is becoming location-neutral and decentralized workforces are the new normal. This is where coworking spaces with their multiple locations but common infrastructure have a great advantage.
Third, Artificial Intelligence (AI) is disrupting everything. It will also disrupt work as we know it. Most repetitive tasks will go away, as robotic process automation (RPA) kicks in. Natural language processing, which powers Alexa, powerful machine learning algorithms, and the onset of deep learning-led narrow and general AI will make even more jobs doable more effectively and efficiently by machines. While machines and men will work symbiotically, what humans will do far better are the jobs that require collaboration, working together, and human skills such as empathy and compassion. Human-to-human interaction, fostered by collective coworking spaces, will perhaps allow us to work better than the robots in these areas.
Finally, as blockchains drive decentralization among large centralized industries (money, logistics and finance among others), they will also drive a new kind of company, wherein rigid organization structures and centralized workspaces will lose relevance. The decentralized autonomous organizations are the early symptoms of that, as employees and partners get more empowered and senior management less and less so. This decentralization will be central to the future of work and coworking spaces will become the infrastructural centre for that.
The future of work is not going anywhere. One reason why WeWork became so valuable was that the market instinctively recognized it as the “infrastructural pivot of the future of work". The pivot has been rattled a bit, not because of external trends and forces, but because of its own internal mistakes. It might come back, or some other large coworking brand will come to take its place as the phenomenon’s poster boy.
So, while the future of WeWork might be in doubt right now, the future of work is not.
Jaspreet Bindra is the author of the forthcoming book ‘The Tech Whisperer’
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