In recent years, coworking spaces and “flexible offices” have seen a rapid increase in the Tokyo market. In a country known for its strict regulations and intense work environment, the flexibility of these work spaces provides a welcome relief.
Increase in Coworking Spaces
Also referred to as “flexible spaces” or “flexible offices”, the number of coworking spaces in Tokyo has been slowly increasing since 2013. But since 2017, the pace has been picking up, and it is only gaining momentum with the rise in remote work and the need to avoid crowded spaces.
In fact, according to a survey by Xymax, there was already a significant increase in coworking spaces between 2020 and 2021. While 2020 boasted 569 flexible offices within the greater Tokyo area, that number shot up to 1,080 by 2022. While the majority of these are located in what is considered Tokyo’s main central wards (Chiyoda, Chuo, Minato, Shibuya, and Shinjuku wards), there was also a notable increase in the number of coworking spaces in the wider metropolitan area year on year.
Despite Japan’s strict work culture, recent years have seen a rise in the number of smaller start-up companies and location independent jobs, and the idea of a coworking space is not so far off from the existing culture of internet cafes and manga kissa (manga cafes). In these manga kissa, you can often rent out your own space for anywhere from an hour up to overnight, so it was not uncommon for people to go there and get a bit of writing or freelance work done, either. With this culture of renting a space out for a particular purpose already in place, it wasn’t too much of a stretch to convert that idea into a flexible office.
Nowadays, it’s not difficult to find somewhere to set up your laptop with a good wifi connection. Simply searching for coworking spaces in Japan online or going to one of the major coworking websites will show you a vast array of options within Tokyo, and a limited, but certainly useable, selection of offices outside the capital, too.
And with the number of coworking spaces and flexible offices on the rise throughout the world, it makes sense that Tokyo, the capital of a country known for its modern technology and research, wouldn’t be far behind. But the need is rising outside of the capital, too.
According to Asno System Inc., the need for flexible work spaces is continuing to grow, with more and more citizens outside of major cities searching the net for a remote office, resulting in more office locations opening up.
Increase in Demand
The pandemic accelerated a global shift towards remote work, resulting in large numbers of people changing jobs or moving to the freelance sector. So, it might seem unsurprising that Japan followed suit. However, for those of us living and working in Japan, it was somewhat of a surprise. This is because Japan’s work culture is extremely dependent on the 9-6 office hours and regular meetings. So when companies actually started to allow work from home, it was a welcome, but unexpected, change.
So what were the main factors leading to this increased demand in coworking spaces and flexible offices?
Increase in freelancers and gig workers
One of the most notable changes was the increase in number of freelancers and gig workers. According to research by Lancers, in 2015 there were 6.4 million freelancers in Japan, but that number had increased to 15.7 million by October 2021. That means a shocking increase of 68.3% in just six years.
Although for some the word “freelancer” may suggest bloggers and travelers in more light-hearted sectors, that certainly isn’t the case for the vast majority of freelance workers in Japan.
According to the same research, an astounding 12.2 million were “pro freelancers”, who are so named for their professional working knowledge and ongoing work in their field. Another portion came under the category of “management freelancers”, those who had previous management experience and were working as freelancers. This made up 5.2 million of the total.
Conversely, 4.3 million were doing freelance work in their free time, with housewives and students making up a large portion of this type of work.
Although the reasons behind going freelance were varied, a large portion (31.3%) stated that the main factor was to be uninhibited by time restraints, and another 19.9% wanted to be free of location restraints. Both of these factors could quite directly influence a decision to use a coworking space or flexible office. Rather than being confined to the specific working hours of a normal office, many coworking spaces are open 24 hours, or at least open and close quite late. There are also a few coworking spaces that offer memberships allowing you to visit their other locations, meaning you are not restricted to the same environment every day. Although not prominent, there is increasing number of digital nomads in Japan.
Some of the respondents also noted their wish to “reskill”, changing up their skillsets for something potentially more lucrative. This could be another factor for choosing to work as a freelancer, as they would have more time to study and improve their skills alongside earning an income, instead of being restricted to weekend studies.
Increase in start-up companies
Another factor likely contributing to the increased demand for coworking and flexible workspaces is the rise in start-ups.
Seeing as many coworking spaces offer packages that allow companies to register the coworking space as their office location, it is a very useful option for those who don’t have the funds to afford a permanent location in central Tokyo.
Although in the past, words for start-up or young venture companies were quite uncommon in Japan, in recent years the words like “venture” companies or “Startups” have become much more well-known.
Japan Federation of Economic Organizations (Keidanren) announced in March 2022 their new “10X10X” initiative, that aims to increase the number of start-up companies in Japan by 10. In doing so, the hope is that Japan’s number of “unicorn” companies will also increase by 10.Right now, Japan is far behind America in terms of its number of unicorn companies. America boasts 120 unicorn companies, where Japan has only one. Japan hopes to rectify that, and put itself in the spotlight in the coming years.
Their goal is to bring the number of startups in Japan to 100,000 by the year 2027, bringing the capital gains to 10 trillion yen ($80 billion). This is quite a lofty goal, but something the Kiedanren is very serious about achieving, backed by their refrain “Beyond Limits. Unlock Our Potential”. Undoubtedly the slogan was chosen in English rather than Japanese as a sign of understanding their competitors.
Increase in remote worker numbers
Although this might be first on the list in many other countries, as we’ve mentioned, Japan has very traditional views surrounding work culture, and was very slow to jump on the bandwagon with remote work.
In Japan before the pandemic, although some more forward-thinking companies allowed for “flex-time” – where the company chooses a core time to be in the office but employees can start and end at their own designated time – remote work was almost unheard of. It was very rare for employees to be able to work from home unless there were special circumstances.
Even with the pandemic, many companies were slow to move. Although news of the coronavirus hit Japan early on in comparison to the west, many companies made no changes, or may have only started to adopt flex time schedules. However, with the rising risk of infection, and government warnings, companies finally started to allow employees to work from home, or on reduced office time. At the height of the pandemic, trains were much less crowded during commuting hours, and even the busiest of Tokyo streets emptied out.
This finally gave Japan, or at the very least, Tokyo, the push it needed to accept a new style of work. If only this acceptance had come under better circumstances.
According to a 2021 survey, 32.3% worked full-time in the office, 59.2% worked a hybrid of office and remote work, and just 8.5% worked fully remote. However, this is a massive increase in remote workers in comparison to previous years. Even in comparison to 2020, each field saw an increase in the portion of remote workers and hybrid workers in 2021.
With this shift to hybrid work, it makes sense that there would be more demand for flexible offices and coworking spaces. This is particularly understandable when you take into consideration the living conditions of most city workers in Japan. Especially in Tokyo, even small apartments are quite expensive relative to the living wage.
Many single people living and working in Tokyo will have a small one-room apartment, not equipped for long periods of working from home. Even in apartments with multiple rooms, it can be difficult to set up a comfortable workspace. Naturally, after becoming accustomed to an office setup, people are more likely to turn to something comfortable and familiar, rather than their awkward armchair and coffee table situation.
Benefits of Coworking Spaces in Japan
With all this in mind, what are some of the benefits of working in a coworking space instead of, for example, a home office?
A coworking space is essentially an office without all the restrictions and concerns of a regular office. You don’t need to be heavily committed to the place, as many coworking spaces offer a variety of packages, ranging from as short as one-hour rental to as long as one year or more. This means you can try out different spaces to suit your needs.
Coworking spaces are also designed with productivity in mind, right down to the chairs and desks. While many can’t afford, or simply don’t have space for ergonomic chairs and large desks, coworking spaces have these already set up. There are also often break rooms or more casual lounging spaces to make sure you get some rest in between tough projects.
While coworking spaces allow you freedom of movement and don’t come with the social ties and expectations of a regular office, they also provide a great opportunity to expand your network. Many people working in coworking spaces are very open to new opportunities to mingle in the break room, or make new connections at a business event.
As a freelancer, entrepreneur, or small business, coworking spaces may even make more sense than owning a regular office or working from home, due to the ample business opportunities. Although working from home provides its own comforts, it can be a lot harder to find new clients and audiences when you’re just starting out. Having the face to face element and access to word of mouth marketing can be much more effective in the early stages.
Takeaways
In the end, although Japan has been slower to adopt remote work as a norm, it is clearly the direction things are going. With 1,080 coworking spaces in Tokyo alone, that number is only going to increase. Hopefully, this is just the beginning of a more flexible and employee-focused work culture in Japan.