China Adopts Shared Office Model to Increase Startup Potential

China is looking towards the U.S. for inspiration with their latest boom in real estate leasing. Fully furnished, ready-for-use offices with conference rooms and space to do business are becoming more and more popular.

The rise of startups and small businesses has provided an increase in demand for shared office space for lease. Sometimes they are used for just a couple weeks, or even days; other times companies end up staying there indefinitely, or at least until growth and expansion is required.

According to The Wall Street Journal, shared-office setups have seen a dramatic rise in China over the last year due in large part to the vast number of startups formed. Last year alone there were more than 3,200 startups founded in China compared to just 400 in 2008.

“Executive office suites will certainly help develop the Chinese entrepreneur ecosystem,” says Jorge Pena, CEO, Officelist.com. “Having access to short term office space that is professional and cost-effective will allow a new generation of business to flourish.”

Mao Daqing was the vice chairman of China Vanke Co., one of the largest real-estate companies in China, until last year when he decided to take advantage of what he saw as an opportunity in the industry. He left to create UR Work, an office-sharing business set to open in the fall.

“China’s small companies and startups are in a development environment that’s not very mature,” Mao said. “There is desperate demand for office sharing and other social services.”

These services are crucial to providing these businesses with affordable places to work, with all the amenities they need so they can try to establish themselves, and eventually determine whether or not they are headed for expansion or termination.

One of the negatives pointed out in another article from The Wall Street Journal is that of intellectual property concerns. Working in such close quarters with potential rivals could lead to a slew of problems courts may be required to sort out.

For now, though, it appears to be an overall good development in the startup landscape that will provide more opportunities to more people.