Earlier this year the Centre for Economics and Business Research produced a report into what it called the ‘flat-white’ economy. The report claims that this is now the most important sector in the UK in terms of the value it adds to the economy, contributing over 14 percent of Gross Value Added (GVA), a rarefied but essential economic measure defined by the ONS as the “value generated by any unit engaged in the production of goods and services”.
The number tells us an awful lot about the makeup and direction of travel of the British economy right now and it has profound implications for the way we view and use workplaces. That is because the flat-white sector consists of smaller technology and creative businesses and boasted a GVA of only 8.7 percent as recently as 2013, according to CEBR. The main driver of value in the modern economy is an army of small firms in 21st Century business domains.
The name given to these firms in the report is a dead giveaway about how they work. It reflects the idea that although they cluster in tech and creative hotspots, especially those that are home to both their own contemporaries and the larger firms with whom they would like to work and link up, they are unable to afford the costs and commitments of occupying space on a longer term basis. And so, they reverted all too often to the coffee shops that gave them their name.
More recently, however, they have started to adopt coworking as their natural habitat, although the social nature of coworking spaces may make a name change unnecessary. Indeed, many of the characteristics of coffee shops enjoyed by such businesses are apparent in coworking spaces.
It’s no coincidence that the flat white sector has grown hand in hand with coworking. In 2013, as the flat white economy was making its presence felt, the number of coworking spaces worldwide was 2,500 with 110,000 members according to Deskmag. According to data compiled by Statista, by 2022 there will be 5.1 million co-workers in the world and London now has nearly 1 million sq. ft. of office space dedicated to coworking. According to broker Office Freedom, a new coworking space opens in London every 5 days on average.
Flat white firms are attracted to such spaces by many of the features that drew them to Starbucks but with added networking potential, greater stability, an improved image and access to more spaces and more facilities. For those that have made the transition from café to coworking, it’s no surprise to find that many of the forms and functions that have nurtured them are to be found in both.
These include a greater sense of community, affordability, flexibility, a great environment, a great experience and – it should go without saying – great coffee. One of the most important of these is the sense of connection with other people. In a world in which it is perfectly possible to work from home, it is telling that people still prefer to be around others.
So, whether in a café, coworking space or more traditional office, we are seeing a greater increase in the number of communal spaces that bring people together in both informal and formal ways. Here they can share ideas and information, develop relationships and bond around common goals and cultures.
According to a report in the Harvard Business Review, people who work in coworking spaces report levels of thriving of around 6 on a 7-point scale, which is slightly over a point higher than the average for employees who do their jobs in traditional offices. So, it’s no wonder that organisations want to replicate this kind of result in their own offices.
This is having its own effect on more traditional spaces, which are increasingly coming to resemble cafes and coworking spaces as well as homes, hotels and lounges. We are seeing a growing number of products designed specifically to create these hybrid spaces, combining the best features of the office and other types of space.
The very best modern office design principles have a clear relationship with those of the coffee houses that nurtured the flat white sector and transformed it into such a dynamic element of the economy. The ideas behind this are now applied in new and exciting ways in offices all over the world. And just as flat white firms have colonised coworking spaces and other workplaces, they have brought new ideas with them that are reshaping our relationship with work and the places we do it.
By Kathryn O'Callaghan-Mills, Design Director