follow us on twitter @elitebizmag find us on facebook connect with us on linkedin google+ page

The innovation ecology

Written by Josh Russell on Monday, 03 June 2013. Posted in Insight, Analysis

Coworking and innovation hubs are rapidly changing the way entrepreneurs work together. But the really interesting thing is how they are altering the way we view the business environment as a whole

The innovation ecology
ClubRooms Warnford Court

It’s undeniable that our approach to working environments is changing. You only have to look at employers like Google or Silicon Roundabout success story Mind Candy to see that employers are attempting to approach space and innovation in a different manner. While, at points in the last decade, home working was touted as being the future of how we would work, it’s becoming increasingly clear that this isolated, asocial method of working is somewhat counterintuitive. 

“Caged animals are not very healthy – why are we any different?” asks Olly Olsen, co-CEO of office provider The Office Group and shared working space ClubRooms. “Why aren’t we in a big social environment with lots of other animals and seeing what else is happening on this planet?” 

Coworking spaces and innovation hubs have sprung up to help us do this, keeping us in contact with each other and connected with the ideas. Olsen believes that, in part, what sparked the coworking movement was  a desire to regain the value of this natural social connection. Additionally, tech firms  in cities such as New York were finding they had over-expanded and had additional real estate they weren’t making use of. “What did they do with their space?” asks Olsen. “They let it to their friends: they all decided to work together and make salads together, calling it coworking.” 

Since then, and with the help of offerings such as eOffice, the HUB and Central Working, the coworking scene has exploded. From small, creative-focused outlets and fashion workshops right through to internationally networked business centres, coworking environments  are radically changing the way we work. But given our existing business structures seem to have pottered along just fine for the best part of a century, it may seem hard to imagine why the last decade has suddenly  seen such an epic shift. 

“It’s a representation of a way in which work needs to change in order to address the wider forces of the world outside,” explains Jenni Lloyd, strategy director at social business, innovation and digital culture agency NixonMcInnes. Originally coined by the American Military in the 1990s, the acronym VUCA was intended to describe the increasingly capricious forces affecting organisations in the modern world: volatility, uncertainty, complexity and ambiguity. Lloyd feels this provides an excellent framework to understand why, suddenly, confidence in the old way of doing things has begun to evaporate. She continues, “In that environment, the structures that we’ve had in place for work generally aren’t best placed to perform effectively.” 

And this is perhaps business’s worst kept secret. “The World Economic Forum four years ago said that growth for growth’s sake was done,” comments Araceli Camargo, qualified neuroscientist and co-founder of innovation and coworking space The Cube London. Given that unequivocal growth has had its day, a lot of businesses are starting  to find themselves with problems they aren’t entirely sure how to solve. “We’re starting to get a lot of businesses that are coming to us asking for us to answer those questions because they’re facing problems that they don’t even know yet how to identify.” 

The Cube London

Perhaps this is why coworking spaces and innovation hubs have  so firmly caught the imagination of the corporate world. The lines between coworking environments and incubators are becoming increasingly blurred as the corporate world recognises the value of collaborative working; some of the brightest examples of the UK’s tech incubators are  those that embrace and make the most of coworking. And this attitude is what keeps the heart of London’s tech scene, Silicon Roundabout, beating. 

Built into the DNA of hubs such as Wayra and Google Campus London is a belief in the power of collaboration and coworking for driving innovation and supporting a new generation of building. “I’ve worked in very large organisations in the past and lived in silos,” comments Brian Taylor, CEO and founder at PixelPin, the cyber-security company that allows users to use personal pictures to replace passwords. “What I’ve found out having to moved to London is that within this tech scene people are very happy  to provide feedback, help, support or point  you in the right direction.” 

PixelPin is just one of the many organisations that has passed through the doors of Telefonica’s Wayra. Another, Qudini, has learned first hand how invaluable this sort of collaborative environment can be. “It was really helpful to be next to people who all seemed to be going through the same things at the same time,” says Imogen Wethered, the virtual queue management start-up’s co-founder. “That was great; you can always just turn around and ask someone a question.” But it would be misguided to assume coworking’s only function is to serve as a stepping stone on the way to creating a new generation of isolated, incommunicative businesses. Indeed, some of the recent poor health of UK enterprise can be attributed to excessive siloisation and the creation of overly isolated, incestuous communities. 

“This isn’t about solving a problem with real estate or even necessarily the way people work,” says Camargo. “This is solving a problem about how we go back anthropologically to the beginning and create communities that are healthy.” 

A natural approach is what is needed and places such as members’ club Adam Street are about much more than creating a space for corporate types to bat around a few ideas. “Most innovation comes from mixing people with different skills,” says James Minter, founder and general manager of Adam Street. “Although it’s an amazing melting pot of different ideas, professions, races and all sorts of things, most people in London seem to hang out where they’re surrounded by people who are exactly the same as them.” 

The opportunity to rub shoulders with people from different walks of life and with different ways of addressing problems is what makes coworking spaces so effective  for innovating and creating new solutions to problems. “There are a lot of people who come into that environment and end up meeting people that they wouldn’t have met before or being introduced to ideas that they wouldn’t have had before,” says Lloyd. And this helps create a much more well-rounded approach to innovation. “Diversity brings strength to what they’re doing.” 

Coworking spaces, more than anything else, are about bringing this sense of diversity of community. The HUB – one of the world’s largest communities, innovation lab and business incubator with some 43 HUBs in 37 cities around the globe – has community built into its very core. 

“When people want to open a HUB, we always make sure they have a community behind them,” says Maria Trindade, general manager of the HUB Kings Cross. Internationally, the HUBs are networked; members can cross collaborate and support each other no matter what their location. But  the seed from which each HUB grows is a pool of individuals innovating and working as a collective. “We get the community to animate themselves,” she explains. “That’s the way we grow.” 

ClubRooms Euston

Perhaps the most interesting thing, however, is what happens next. Although most HUBs begin with the same genesis, they have the autonomy to develop in the manner that  best suits the needs of the projects and innovators operating within them. “They have different approaches according to the needs of the different community,” comments Trindade. Ultimately, each HUB is shaped over time by the people within it. “The environment you work in becomes a reflection of the community.” 

And this is a vital metaphor for understanding the coworking movement. It’s not a product of economic forces but a product of ecological ones. When a diverse range of individual innovators and entrepreneurs are able to act freely within a larger, self-regulating system, they are free to develop, not as dictated by external regulation, but by the requirements and needs of their environment. “These communities are now turning into ecosystems,” reveals Camargo. “They are almost going through a biological evolution – and that is what’s really interesting.” 

Given the aformentioned VUCA criteria, it isn’t hard to understand why an international economic model led by ecological diversity might be a useful development. And because they aren’t subject to the same risks as some of the bigger organisations, the individuals working in these environments can innovate without being hampered by risk aversion.  “The diversity of these communities, the diversity of skills and the camaraderie of  these communities are allowing for that type of cognition to happen because there’s no competition,” says Camargo. “It’s all about how you work at it together.” 

Particularly when entrepreneurs and innovators are acting as individual and autonomous cells, adapting and dealing  with the requirements of their environment becomes much more immediate and intuitive. “You’re surrounded by people; your problem-solving process is a bit quicker, because you swap theories,” explains Trindade. “You can avoid making the same mistakes people have already made.” 

There are, of course, inevitable questions  that have been raised around this movement. Monetisation is one such area that, for some individuals, is something of a question mark. “Until we can prove that this is a viable business model, I’m not convinced that everyone in this sector is making money from it,” comments The Office Group’s Olsen. However, it does seem inevitable, with crowdfunding and crowdsourcing seeing an increasing engagement of the public with enterprise, that finding revenue to support these projects may become less reliant on traditional capital models. 

But perhaps a bigger question is, with such a proliferation of highly adaptive micro-organisms, should some of the bigger beasts be feeling somewhat worried that their ecological niche is being eroded? 

There may be some cause for worry. NixonMcInnes’s Lloyd refers to an infographic that has been circulated recently, demonstrating how the lifespan of a Fortune 500 company has decreased over the last 100 years, with the corporations having far less time in the sun. “Those bigger companies don’t have the tenure that they used to,” she says. “Presumably because you can have smaller, newer, more flexible and more organic entrants into the market and they can grow and challenge at speeds that would have been unthought of some time ago.” 

Camargo agrees that we’ve seen the popularity of high-inertia enterprises wane. “No one’s building monolithic structures anymore,” she says. Even among the traditional incubators there is a recognition that building weighty organisations isn’t the best model for sustainable growth. “They’re saying they’re no longer wanting to set up these big VCs because the money has run out,” she explains. “They want to start incubating small businesses and really make them sustainable.” 

ClubRooms Warnford Court

However, viewing things in apocalyptic terms really isn’t appropriate. While coworking spaces are handling talent and innovation in ways that can easily out-adapt the megafauna of our economic ecosystem, their purpose is not necessarily to compete with other entities. In ecological terms, the phrase that sums up the relationship between these smaller organisms and their larger brethren isn’t competition: it’s mutualism. 

Mutualism is a form of symbiosis in which both organisms mutually benefit from their relationship. It has held some currency in economic and social circles ever since the explosion of mutual funds and cooperatives  in the 19th century, but, with the recent rise of socially driven marketplaces, peer-to-peer lending and skills-pooling websites, interest in these ideas has exploded. This new tech-driven movement has been dubbed by Sara Horowitz, MacArthur Fellowship recipient and founder and executive director of US-based Freelancers Union, as ‘new mutualism’. 

And this is the phenomenon driving the changing attitudes embodied by the coworking movement. There is a dawning realisation that, because all enterprises  and individuals are affected by the health  of the economy, what is in the interest of individual innovators, enterprises or projects is also in the interest of the ecosystem as whole. “That’s what’s interesting about these communities in working with businesses,” explains Camargo. “Essentially, I think  we’re all starting to realise that with these problems we’re all in it together.” 

Ultimately, this is the point we’re at. While individual organisations may have to compete for a niche, the more evolutionary diversity  we have in our business ecosystem, the better placed we are to survive. And, as with any microorganisms, the networked entrepreneurs of coworking and innovation spaces are able  to diversify in ways unimaginable by their larger cousins. The health of our ecosystem has never looked stronger. 

About the Author

Josh Russell

Josh Russell

As editor, Russell is the man in charge of properly apostrophising our publication and ensuring Oxford commas are mercilessly excised. Our digital doyen, he’s also a Photoshop Pro, a dab hand with InDesign and the man to go to if you need a four-hour soliloquy about the UK's best silicon startups.

Twitter | Google | Portfolio | Contact

Proud Partners

Strategic Media Partners

Event Media Partners