The first coworking community in Indonesia, Hackerspace Bandung, was founded only six years ago in 2010. While the growth was not too fast in the first half of the decade, the number of coworking spaces has increased exponentially since 2014.
Currently, there are at least 65 coworking spaces and creative hubs in the country, and it is predicted that Indonesia will have more than 100 such spaces by 2017. The coworking industry in Indonesia is on a rising trend, yet it is still fairly new. With it comes opportunities and, of course, challenges.
Here are three main opportunities in Indonesia’s coworking industry:
Opportunity #1: An increasingly important role in the creative and digital economy and ecosystem
The cognitive process of innovation is in the DNA of coworking. Sharing ideas and interacting within a community with diverse and supportive members of different professions can give inputs and feedback from different perspectives.
All of these are the essence of coworking communities, and these are the factors that can help the growth of each coworker, whether as an entrepreneur, freelancer, or startup member.
Also Read: Faye Alund: Running a coworking space in Indonesia is like promoting a gym membership
Indonesia aspires to be the Digital Energy of South East Asia by 2020, and since we had the Coworking Indonesia conference and association in 2016, national-level and local government, as well as big corporations are starting to see the link between the coworking industry and economic development.
We hope we can get more support, not only in partnerships and programs, but most importantly to have a big role in shaping public policies related to entrepreneurship and the creative and digital economy.
Opportunity #2: A growing market
Eighty per cent of the coworking spaces and creative hubs are currently established in Java. Along with the development of infrastructure in the eastern part of Indonesia — e.g. Palapa Ring project — it will open up the market, and the number of coworking spaces in Indonesia will definitely grow even faster. Currently, Indonesia has more than 100 million internet users, and it is forecast that we will have 160 million internet users by 2020.
The push to grow entrepreneurship and startups, combined with exposure to technology, will result in growing numbers of location-independent workers. If Indonesia’s 260 million population has 2 per cent entrepreneurs and say only a quarter from that number is location-independent, that is 1.3 million people who that can be a market for coworking spaces, makerspace and creative hubs in Indonesia alone.
Opportunity #3: A bridge to the community
People often come to a coworking space wanting to ‘pitch’ their business, research, cause, or access professional talents they might need, but not necessarily want to join the community itself.
Coworking Commodity, which is our community, is an abstract concept that most people find difficult to understand. Well, sometimes I compare our business to a restaurant business. People out there are the raw ingredients you can buy in the market.
The coworking space is like a kitchen that has the recipe and makes the food look and taste good. Asking to take whatever you need from the community in a coworking space without being part of it is the same like going to a restaurant and ask to eat the meal for free.
Communities and the skill to identify and access it are highly valuable — hence it is the number one capital of coworking spaces that we can leverage to create programmes, explore opportunities and connections, and to bring more value to our community.
Also Read: In Southeast Asia, coworking spaces are no longer just for startups and freelancers
Information and access to certain communities in Indonesia are still not very clear and available. Before coworking spaces existed, big corporations, government and civil society organisations had to create their own links and networks, and they spent a lot of energy managing it. In the last one to two years, coworking spaces have proved that we can play a crucial part in linking them with relevant target audience and communities.
Apart from the opportunities, there are also three main challenges that Indonesia’s coworking space industry has to face:
Challenge #1: Awareness and culture
The concept of coworking mainly comes from the west, and most Indonesians do not know yet what coworking is, let alone know the options that they can have from working at a coworking space.
The difference between coworking space and a simple working space is also still very blurry, even for some coworking operators. But even after they are introduced with the concept, conducted trials, and attended many events, many were still unsure, and the conversion rate for memberships has remained low.
Another analogy I often use when explaining coworking spaces is to compare it with a gym 20 years ago. When the first gyms opened, people asked: Why don’t you just do push ups at home? Or, why don’t you run around your housing complex instead of on the treadmill?
But how many people are disciplined enough to do that? People go to the gym because they will be more focused in exercising, they can use equipment that are normally too expensive for one person to have, and they can meet other people with similar values.
It’s a community. A coworking space is like a gym, but instead of exercising, you are working and networking.
Coworking in the western world is (probably) a huge success, because in a world where privacy and self-driven motives are highly valued, it comes with the longing to be part of something: A cause, or a community. That is not necessarily the case for Indonesia. Indonesians are very communal, especially in smaller cities.
In Bali, where we started Kumpul Coworking Space and where I live, social and religious obligations consume people’s time, energy and money. The family will decide what is best for you, and often older generation prefers to choose ‘safer’ paths for their offsprings — such as getting an employment at hotels, running the conventional family business, or being a civil servant. Hence the ecosystem that encourages innovation, starting a new venture, and trying a new way of working (e.g., coworking), is still very vulnerable.
Challenge #2: Sustainability and business model
Since the coworking market in Indonesia is not yet mature, many spaces still struggle with occupancy level. Income from memberships is hardly enough. Therefore, almost all spaces are pivoting to cater events for the public.
These events are usually something that the space runs by itself, or we just help to organise somebody else’s event in our space. Then one day someone I just knew asked me: “So what is it that you’re doing? Are you an EO (events organiser)?”
Also Read: Indonesia’s association for coworking spaces is officially launched
That caught me off-guard. I did not start a coworking space to run around and spend most of my energy taking care of people’s events. But somehow coworking spaces in Indonesia seem to think that it is completely normal to run public events and use their space as an event venue, since everybody else is doing that.
Ideally, coworking space is all about your own community. So events such as workshops and skill-sharing sessions are used as tools to bring together members with the same interests and/or skills and done internally for the benefit of our members.
Challenge #3: Operations
People are often surprised when they find out the cost of running a coworking space in Indonesia. It is not that big a difference compared to running a coworking space in the US. The biggest costs for coworking spaces are, sadly, rent and internet, and not staff. Average cost for 1 Mbps DSL internet is around US$100.
Moreover, for us who started this business in the last five years, there was no support from property owners nor the local government in the form of cheaper rent. I’m happy to hear that there is now a higher awareness about the direct link between coworking businesses and economic development, and that government and corporates are starting to offer their under-utilised property or areas to coworking operators — either for free or at cheaper rent.
It is also a challenge to find staff for coworking spaces, since this is a very new industry and there are not many talents with coworking experiences. When you have more than one to two years experience in Indonesia’s coworking scene, you are already considered an expert.
The difficulty in acquiring and maintaining staff is also due to the spaces being unsure of their management style and business model. Usually, the best selection process and training is when a potential staff hire had been a member of a coworking space before, so they already share the values and style.
The trend of coworking in Indonesia is rising, but it seems it does not go in parallel with market awareness. This was why some key players in the coworking industry got together and decided that we need to join forces to accommodate the needs and struggles of the spaces, so it becomes more sustainable and so we can focus our energy more on programmes and community building.
Coworking Indonesia was launched in August 2016, and with the spirit of collaboration it will work with spaces across the country to increase awareness about coworking as new way of work. We also want to showcase that there is clear link between coworking communities with active citizenship and the growth of economic development in Indonesia.
Faye Alund is the President of Coworking Indonesia, a national association of coworking operators in Indonesia, as well as the co-founder of Kumpul Coworking Space in Bali. She had more than a decade experience working in the area of active citizenship and community development, and she is currently using her skills and passions to push forward the entrepreneurship and economic development growth through the coworking movement.
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