Coworking Spaces, Business Support and Regional Development
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Abstract:
In the UK, there is a strong industrial policy emphasis on hi-tech, STEM-based, innovation driven economic growth. This in turns concentrates public funding programmes in the Golden Triangle (Cambridge, London, Oxford) and larger City-Regions, inducing ‘Matthew effects’ (Bailey et.al, 2025). However, entrepreneurship and innovation occurs beyond both hi-tech/STEM and leading regions. Yet, Business and Innovation Support Services (BISS) – of which Local Growth Hubs (LGHs) are a ‘focal point’ - in peripheral places is often ‘insufficient and fragmented’ (ERC, 2024) and is often shunned by SMEs (HM Gov, 2025). In these regions, SMEs tend to rely upon ‘informal’ support mechanisms such as family and friends - despite evidence suggesting engagement with LGHs can be ‘critical’ to enhance innovation (BEIS, 2022, Brown et.al, 2024). There have been calls for BISS - and LGHs - to better engage with SMES (Pike et.al, 2025).
Colocation is often considered a necessary but insufficient condition to co-create an entrepreneurial culture, facilitating access to capital and appropriate skills. Social capital and connection is required, purposefully created and skilfully managed, and business support should be ongoing rather than periodic, event-based only. These entrepreneurs may benefit from being brought together in a shared ‘space’ to create a degree of “mass” (Mickiewicz et al, 2025).
In this regard, coworking spaces (CWSs) – which offer shared workspaces/amenities for (among others) freelancers and self-employed - have emerged as a popular place of work for ‘start-ups’ and budding entrepreneurs. They are increasingly found in second tier cities, peripheral and rural places (Vogl & Akhavan, 2022). Prior work has demonstrated how CWSs are akin to ‘mini-clusters’ (Capdevila, 2013, Fiorentino, 2019) due to co-location of coworkers and knowledge externalities, with some exhibiting communitarian traits akin to Marshallian districts (Fai et al, 2025). In peripheral regions, CWSs tend to be ‘independent’ (rather than neo-corporate (e.g. Regus) type) providers, are embedded in their local community and look to support resident entrepreneurs through informal training courses, networking and business/social activities. In this way, CWSs might serve as a bridge between informal business support to more formal BISS (such as the LGH).
This Innovation Research Caucus funded research explores this empirical question through a series of (in-person) interviews/focus groups with CWS owners, resident entrepreneurs and (online interviews) with their corresponding LGH, in three English regions (NorthEast, Southwest and the West Midlands). Our data reveals the variety of relationships that exist between the formal and informal business support domains and how these affect local entrepreneurs. We present three mini-cases as examples of ‘best practice’. We offer recommendations for individual users of CWSs, both organisations (CWS, LGH) and regional/national policymakers.
Bio:
Prof Phil Tomlinson is Professor of Industrial Strategy and Regional Development in the School of Management, University of Bath. He has written extensively on regional development and place-based industrial strategy and has consistently published in the world’s leading journals. His research has been funded by the EPSRC, the ESRC, the Innovation Research Caucus (IRC), the European Union and the Regional Studies Association. He is a Fellow of the Academy of Social Sciences (AcSS) and the Regional Studies Association. He is also the Policy Debates Editor at Regional Studies, and Co-Editor in Chief of Contemporary Social Science.