Indonesia’s journey in the coworking space industry began in 2010 with the launch of Hackerspace Bandung, and growth had been slow until it soared in 2014.
“Since 2014, growth has been exponential with new coworking spaces being launched every month. Even in Bali, in the past three months, there were at least four new spaces opened. With it comes its own challenges and opportunities,” explained Faye Alund, Chairwoman of coworking space association Coworking Indonesia (CI), who is also the co-founder of Bali-based Kumpul.
As Indonesia moves toward making its ‘Digital Energy of Asia’ ambition come true, coworking spaces play an even greater role. But many challenges remain for the industry — and the government — to face.
Follow Alund’s conversation with e27 about the rise and fall of coworking spaces in the country. Some of the facts might surprise you.
What are the main challenges faced by coworking spaces in Indonesia, and what are the opportunities?
The opportunity is that there are not many people who know about coworking spaces and its industry, so we have a greater opportunity in playing a greater role — especially in the matter of building creative economy, digital economy ecosystem.
While other industries may have a harder time tapping into help from government and corporations … we are quite capable in bridging the access to decision makers, who have the power to direct the growth of this ecosystem. We have quite a voice.
As for challenges, there are a lot.
We are not entirely sure if the coworking space concept fits the working culture in Indonesia; I don’t want to sound too pessimistic, but the concept that we are taking here comes from the West. It is not yet tested with Indonesian culture.
Indonesians are very communal. We all have hang-out friends — communities we are strongly involved in. We don’t have that longing feeling to be part of something. Meanwhile, in the US and Europe, loneliness is an issue. If you are not going to a coworking space, you wouldn’t have a friend to work with. If you’re a freelancer or if you just started a new business, you’re very isolated.
Maybe that’s the reason why the coworking business did not immediately become a trend here.
All coworking spaces targeting local communities … we are all struggling.
To promote the concept to Indonesians?
Because the market is not yet opened, that is one thing. Now how about Jakarta: do people have the awareness about the whole idea of working in coworking spaces?
It’s common among startup communitites. Most young professionals are aware of it, but they are sceptical. For them, there seems to be no difference with renting a meeting room.
I often compare it to gym membership. In Indonesia, 20 to 30 years ago, people were questioning the need to go to the gym. If you want to exercise, can’t you just do sit-ups at home? Or run around the block?
Yes, but the reality is, do you actually do that? How disciplined and productive are you doing exercise at home?
But if you have a gym membership, you go there and meet like-minded people — those who value the lifestyle. Thus, there is a greater motivation to do it. You also get to meet experts that can explain to you, for example: how do I strengthen my ab muscles?
There is also an element of sharing economy. You go there, and you share the equipment/facilities.
The challenges do not lie only in the market itself. Even coworking space owners are often confused between coworking spaces and virtual offices. We always say the difference lies in the “co-“ before the word “working”: community.
If there is no community, then it is just a working space.
Then how do you build this awareness?
That will be the focus of CI in the next year: to build awareness. We can do it by fostering partnerships with different parties. It will be a social campaign, and we will involve both the media and social media.
The focus here should be creating an understanding of the value that comes with it. You can never sell New Zealand tenderloin beef to a vegetarian, right, no matter how you discount it?
How is the future prospect for coworking spaces in Indonesia, considering places like Comma have met its end earlier this year?
This is one of the reasons why CI was founded. We gathered in April 2016, and our primary concern was sustainability.
If you notice, coworking spaces operating in Indonesia are all under three years old. Normally, a business should be able to take off after three years. Founders just cannot keep on chipping in, like they do in charities.
This is also where the government can step in to ensure its sustainability. If the government does have an interest, why can’t they help keep coworking spaces open?
So, they must create a holistic approach.
[Kumpul Co-Founder] Dennis Alund is Swedish, so we learn some things about how it is being run in Sweden. They can have three unicorns — Skype, Spotify, MySQL — from one city, Stockholm, because the government had started working since 20 years ago. They provided fibre optic internet all the way to the rural areas. They give tax cuts for families to purchase PCs for their home, so that they can eventually take it for granted that tech is a part of daily life. We are still struggling to do that.
Coworking spaces have already been seen as a bridge to digital economy growth. They are being given tax cuts or subsidy for rent, or being allocated places in under-utilised areas, so that it will push for economic growth in that particular area. It helps with fostering entrepreneurship.
This has to be the work of all departments.
Your thoughts on unhealthy competition reflected by manic discounts?
It’s a common thing in all business lines, but it’s a lazy way to market.
For coworking spaces, it is better to come back to what we offer as a community, because every individual has his or her own community. The right question to ask when joining a coworking space is: What kind of people I’m going to meet there?
Because the business itself is still redundant, even many players in the sector are not aware of this yet. Many of them created cool events, but they forget that the core of the business is community. The focus of the events should be internal, for the interests of the members.
So far, no coworking space is able to survive solely on membership fee.
It used to stress me out. Why do I feel like an event organiser? (Laughs.) But in the end, this must be done.
Indonesian coworking spaces have begun seeing this as the norm, though I can’t say that it is a wrong thing.
What kind of government support does the community expect?
Starting from this year, there have been talks about support, but nothing concrete has happened yet.
If they really believe that coworking spaces are necessary in supporting the growth of Indonesia as the Digital Energy of Asia, then there has to be a push from them. We do not even ask for funding. But help us build the awareness.
Can you believe that for legal matters, Kumpul is still registered as an internet café? That’s because this business model is not yet recognised by the regulation, and regulation often lags behind.
Image Credit: Faye Alund