This article was inspired by discussions with stakeholders in the Distance LAB project. Here, we explore the growing trend of coworking spaces, looking at its background, market developments, and particularly how it takes shape in rural areas. We look the benefits and challenges of coworking in small towns and countryside settings and reflect on future opportunities for growth.

Authors: Heidi Myyryläinen & Maiju Vanonen

The changing world of coworking

After the 1990s recession, companies sought flexible, cost-effective workspaces instead of long-term leases, paving the way for coworking spaces, often seen as a mid-2000s innovation (Kojo & Nenonen 2016; Johns et al. 2024). Shared spaces and resources echo older practices but since then digital connectivity has reshaped the world of work. Alongside this, remote and hybrid work, the gig economy, and connected knowledge work are rising. (Data Insights Market 2025) This change is expected to keep accelerating. The sector’s market growth and future growth estimations further illustrate this. The worldwide coworking sector generated 6.89 € billion in 2021 and is projected to climb to 24 billion € by 2030. This means growth rate of almost 15% annually until 2030. (Next Move Strategy Consulting 2022)

There are different types of co-working spaces, and they can be grouped in many ways. Orel & Bennis (2021) group coworking spaces into four main types: traditional spaces for freelancers and remote workers seeking independence and community; creative spaces for specialized or artistic work; team-focused spaces for groups from different organizations; and startup spaces offering mentorship and funding. All provide work-focused spaces and support collaboration, but setups vary, from informal café meetups to specialized offices with advanced tools. Some actively build community, while others simply offer facilities, leaving the rest to users. Often members join to use shared services, connect with others, and explore opportunities. (Kojo & Nenonen 2016)

Many municipalities view coworking as a way to retain talent and support local communities, and some host open workspaces. While Danko et al. (2024) emphasize markets largely determine viability of coworking spaces. Others underline the role of public interventions bridging gaps where demand is limited (Eurofound & JRC 2024).

The rise of non-urban coworking

Knowledge-intensive work, and therefore remote work, tends to be concentrated in urban regions (Eurofound and European Commission Joint Research Centre 2024). Major urban centers are already crowded with global market options. Coworking spaces are typically located in areas where access to knowledge resources and supporting services is strongest. Important factors include proximity to universities, reliable transport and public transit, and the presence of sectors such as technology and creative industries. Large cities typically provide dynamic environments and frequent opportunities for direct interaction, even though some researchers question whether this dominance will continue. (Méndez‐Ortega et al. 2025)

In recent years, coworking spaces have expanded beyond major cities into small cities and rural areas (Knapp & Sawy 2021). This shift reflects broader changes. It was accelerated by the COVID-19 pandemic, which normalized remote work and challenged traditional office models. Alongside telework and a growing desire for proximity to nature have made non-urban locations attractive.

Co-working spaces in small cities and rural areas are different compared to cities in many ways. Rural coworking spaces often can attract remote workers from surrounding areas or beyond, remote workers combining work and travelling. (Vogl & Akhavan, 2022; Méndez‐Ortega et al. 2025; Bisello & Litardi 2024; Karn 2025) According to Méndez‐Ortega et al. (2025) they don’t cluster as tightly as in cities, they connect more broadly across regions. They help keep skilled people in rural areas, support local businesses, and create places for knowledge sharing. The local community aspect is often emphasized in rural co-working literature. According to Bisello & Litardi (2024) rural coworking spaces aim to build local communities, offering professionals a way to work globally while living locally.

For non-urban areas, co-working spaces can be important for several reasons. In their systematic literature review, Vogl & Akhavan (2022) conclude that co-working spaces support regional economies in rural areas. They support jobs in the service sector. Danko et al. (2024) observe coworking spaces succeed by connecting local businesses with remote workers, building on existing cultural assets, and growing through local initiatives rather than top-down projects. Méndez‐Ortega et al. (2025) suggest governments can boost rural coworking by offering operator incentives, adding coworking to entrepreneurship programs, and investing in digital infrastructure.

Challenges persist around financing, sustainable business strategies, and maintaining profitability in co-working spaces, and this may be highlighted in areas with less population. As Pakalén (2025) reflects, coworking spaces are growing fast in the Nordics, but making them profitable is still a big challenge. Many operators struggle because customers expect flexibility and high-quality services, which often reduce profit margins. Pakalén (2025) suggests that focusing on niche markets and using existing spaces like hotels could be smart strategies for sustainable growth.

Looking ahead

Co-working spaces are influencing the way work is organized (John et al. 2024) It has been forecasted that nearly one-third of office space will be flexible by 2030, up from just 2% in 2023 driven by the growing popularity of hybrid and remote work (Catacora 2024).

According to these estimations, co-working spaces may become a more common choice for workers in the future. Having co-working spaces in smaller cities and rural areas is likely to grow but many issues remain yet to be seen. Many people may be seeking quality of life, affordability, and stronger community ties in smaller cities and rural areas.  The service offerings and the market are likely to advance. Big global players are eager to grow, yet the future may also bring innovative solutions from closer to home. As Vogl et al (2024) observe, there are many factors at play, involving entrepreneurs, local decision-makers, and community actors, shaped by national funding programs, local networks and infrastructure like real estate and internet access, and everyday preferences for living and working near services.

Co-working spaces are curated environments shaped by inclusion and exclusion processes, economic strategies, and dynamic market forces. They are physical places that someone owns and manages. Just renting a desk and shared office sounds simple but to be viable, they need to cultivate communities and support innovations, while maintaining their own viable economic model (John et al. 2024). How will the successful business model look like in the future for co-working spaces in smaller cities and rural areas?  How could they empower workers, their firms and regions to create greater value? How can they integrate local identity in their services? What kind of service paths they could offer to support the daily life of workers? How can co-working spaces provide support for work and business? Or could there also be demand in very natural environments in minimalistic conditions, where the silence and the wilderness of the nature support innovation? This is a space for innovators the create the future of coworking spaces.

References

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Authors

Heidi Myyryläinen works as an RDI Specialist at LAB University of Applied Sciences in the Faculty of Business and Hospitality. She manages a networked Distance LAB project at LAB, funded by Interreg Baltic Sea Region -program.

Maiju Vanonen works as a trainee at LAB University of Applied Sciences in the Faculty of Business and Hospitality, in Distance LAB -project.

Illustration: https://pxhere.com/fi/photo/110374 (CC0)

Reference to this article

Myyryläinen, H. & Vanonen, M. 2025. Coworking spaces in rural areas hold opportunities and challenges. LAB Pro. Cited and date of citation. Available at https://www.labopen.fi/lab-pro/coworking-spaces-in-rural-areas-hold-opportunities-and-challenges/