In 2010, Spain had the highest number of coworking environments per capita in Europe. This fact is surprising, given that the makeup of Spain’s economy is not one that would be expected to lead the market in coworking, especially when compared with neighbouring countries like Germany or the United Kingdom.
It’s a statistic that jumped out at me when I was trying to explain why, globally in 2010, the coworking industry hit a tipping point and suddenly began to expand at pace. Spain in particular was hit hard by the 2007-2008 financial crisis with massive youth unemployment and an economy that teetered on the brink of financial ruin for years.
While being ravaged by an economic downturn doesn’t sound like the incubator of a new industry, those factors and a few more were exactly why Spain became a center of coworking in Europe when it did, in my opinion.
Let’s start first with Spain’s youthful population. The median age in Spain in 2010 was just forty-two years old. In fact, in terms of population distribution, over 60 percent of the population falls in between the working ages of fifteen to sixty-four.
When you look at the population pyramid for Spain, you have a shape unlike any other country in Europe, where populations tend to be aging. The peak of the distribution in Spanish population falls between twenty and forty-nine years old. With around 26 percent of the population between the ages of twenty-four and thirty, Spain has a massive Gen Y, the people that were most affected by the global financial crisis.
According to 2014 EU census figures, youth unemployment in Spain for that period was at the highest level in Europe with over 53.5 percent of young Spanish people unemployed. This was double the European average of 23.7 percent for the same period and these figures looked specifically at unemployment of those under twenty-five years of age.
The interesting part about the financial crisis was that while the jobs went away, there was still money to be made and work to be done. And when you have a country with a young, idle, educated and arguably frustrated group of people, they find a way to start achieving things. I believe coworking is the way Spanish people found to come together to fight the economic downturn.
In uncertain economic times, one of the easiest ways to find work is to take matters into your own hands and freelance.
A boom in Spanish freelancing culture neatly explains the boom in Spanish coworking. And when you combine this unprecedented market demand with the unprecedented collapse in Spanish real estate prices suddenly the concerns of supply and demand in the market have been addressed in a remarkable way.
A snapshot of the Spanish market in 2010 tells us a lot about the factors that trigger explosive growth of coworking in a market. The factors that trigger the perfect storm for coworking growth are:
- A large young working population
- High youth unemployment
- High percentage of university educated youth
- A historically social culture
- Readily available, well-located commercial rental property at affordable prices.
In 2010 those factors meant that in Spain, coworking environments could be started by younger people because the cost of entry was lowered, demand was high and the specification of the spaces didn’t need to be high to serve the market.
Looking across Europe, the story was repeated city by city as each one reached a similar state, sparking a chain reaction of coworking growth in London, Paris and Berlin. All three cities experienced high youth unemployment during the global financial crisis. Their property markets all suffered, but in 2010 none of them were in a state quite as extreme as Spain’s.
When these factors are measured, it is actually possible to predict which cities will next experience a coworking boom.