Coworking spaces have become increasingly popular in recent years as a flexible and cost-effective workspace solution for freelancers, entrepreneurs, and small businesses. In addition to providing a professional and supportive environment for work, coworking spaces can also be important in fostering innovation.

There is no one-size-fits-all answer to this question, as the benefits and drawbacks of coworking spaces will vary depending on the specific location and industry. This is particularly important in industries that are often characterized by a high level of innovation, such as technology and engineering. In these industries, it can be difficult for employees to stay innovative if they are working on projects that are isolated from other members of their team. Coworking spaces can also help to foster creativity by providing a space where employees can experiment with new ideas. This is particularly important in industries where creativity and innovation are key to success, such as fashion and design.

Now, let’s define what I mean by innovation here. An innovation can be understood as novelty in product or service, administrative system or structure or even the production process. 

However, there is a general consensus that coworking spaces can help foster innovation by providing a communal space where employees can share ideas and collaborate. Even tech giants such as Google and Facebook promote innovation and entrepreneurship by investing in corporate coworking spaces.

To understand the “how” aspect of innovation at a coworking space, one can use a framework that relates market orientation, learning orientation and entrepreneurial orientation with innovativeness and business performance. 

In the context of an organization, innovativeness can be referred to as “the capacity to introduce some new process, product, or idea” whereas business performance refers to “the achievement of organizational goals related to profitability and growth in sales and markets share, as well as the accomplishment of general firm strategic objectives”. A prerequisite for the innovativeness process is the ‘‘openness to the innovation’’ where openness relates to how willing or resistant the members of the organization are towards innovation. 

Now, a coworking space has three actors

• Space operators
• Users
• Landlords

It is apparent that the three actors of a coworking space (space operators, users and landlords) have a complex relationship with each other through these factors. There are three antecedents to innovation in general. They are:

Market orientation:

• Market orientation refers to the action of accumulating, analyzing and applying relevant market intelligence
• Essentially, a firm’s orientation towards delivering higher value to its consumers on a continuous basis.
• As part of a firm’s culture, market orientation is expressed through values, symbols and beliefs sharing a common concern for the market

Learning orientation:

• Learning orientation refers to “the development of new knowledge or insights that have the potential to influence behavior through its values and beliefs within the culture of the organization” 
• The outcomes of all this learning depends on the willingness of different people to cooperate

Entrepreneurial orientation:

• The idea of entrepreneurial orientation for a new entry entails practices, processes and decision-making activities
• Important role of managers or entrepreneurs in dealing with problems and delivering solutions

In the context of the three actors, there are some activities that need to be synced to ensure foster innovation. The space operators, users and landlords have their own motivations and may or may not be willing to put efforts in these three antecedents. For instance, the users of the space may be motivated to just get their work done and may not be open enough to interact with others to get the ideas flowing, the space operators may or may not go the extra mile to connect new people within the community, the landlords may or may not allow the coworking community to use the workspace for some activities that may promote innovation. 

On the flip side, coworking spaces are generally populated by remote workers and like minded people who are startup founders or freelancers. The common clientele tend to be highly motivated people who are willing to stand out and think differently. Additionally, the owners of the space tend to be entrepreneurs themselves with a good network. Lastly, the landlords fit in the puzzle and stand to gain by a well performing tenant and tend to be flexible. Now, innovation can happen when there is a good enough breakthrough in either of the orientations. Thus, the odds of innovation happening in a coworking space are rather high!

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