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Open Access 2024 | OriginalPaper | Buchkapitel

The (re)location of Coworking Spaces in Ukraine During the Russian Invasion

verfasst von : Vika Zhurbas, Ilaria Mariotti, Marko Orel

Erschienen in: Evolution of New Working Spaces

Verlag: Springer Nature Switzerland

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Abstract

A significant part of all firms tends to remain in the same location throughout their lives. Firm birth, death, and relocation are part of firm demography. Firm location, birth, and death are driven by several pull and push factors which also include exogenous shocks such as a foreign invasion. This paper aims to present and discuss the location of coworking spaces in Ukraine during the first year of the Russian Invasion. Several coworking spaces closed down in the Kyiv region, and others have opened in the western part of the country. The motivations driving the choice of location of three new coworking spaces in western areas are presented through interviews with the coworking spaces managers, and the role played by the coworking spaces community discussed.

1 Introduction

Manufacturing and service firms tend to remain in the same location throughout their lives. Firm location, birth, and death are driven by several pull and push factors. These can be classified into three main categories: (i) traditional location factors; (ii) environmental, social, and institutional context; (iii) policy framework; (iv) information costs [10, 11]. Specifically, disruptions such as the COVID-19 pandemic and the Russian Invasion of Ukraine belong to the third category but also affect (both directly and indirectly) the other three ones, as explained in section 2.
This chapter focuses on the location determinants of service firms, specifically those in the IT and creative sectors, representing coworking spaces (CSs)’ sector specialization. A coworking space is one of the typologies of new working spaces and collaborative spaces. Moriset [16] defined CSs as serendipity accelerators, born to accommodate knowledge workers who carry out their activities by renting a workstation for a variable period and taking advantage of the services offered (e.g., secretarial services, Wi-Fi connection, meeting rooms, kitchen, leisure spaces, training and coaching courses, babysitting) [19, 21]. The CSs users are: independent (and frequently precarious) knowledge-based, creative, and digital workers, mainly freelancers or self-employed professionals who share their workspaces.
The literature on the CSs location mainly focuses on urban areas and recently, attention has been given to peripheral and rural areas. Besides, some recent studies have made reference to the effects of the COVID-19 pandemic on CSs and their location [12], thus investigating whether and how CSs have flourished in peripheral and remote areas in this period [24]. No studies, at least to our knowledge, have been carried out on the location effects of the Russian Invasion of Ukraine on the CSs location.
This chapter aims to fill the gap in the literature by presenting and discussing the location and relocation of CSs in Ukraine in the first year of the Russian Invasion, which started in February 2022. The Invasion has led to a significant migration of IT workers to the western regions of Ukraine, which are relatively safe compared to other parts of the country and offer a more stable and secure environment for people to work and live. According to the United Nations,1 as of September 2022, over 1.5 million people were internally displaced within Ukraine because of the conflict. Many of these individuals are from the IT sector, which has been hit particularly hard by the crisis. The cases of a few CSs that have opened in the western part of the country are presented within this context. The motivations driving the choice of the location are presented through interviews with the CSs’ managers. Moreover, it is explored whether and how the CS community has helped and supported the users and the local community during the Invasion.

2 Location Factors Driven by Disruptions

According to the location theory, the location factors can be grouped into three categories: (i) traditional location factors; (ii) environmental, social, and institutional context; (iii) policy framework; (iv) information costs [10, 11]. (i) The traditional location factors concern agglomeration economies, infrastructure accessibility, market size and potential, labor costs and skills, and transportation costs [6, 9]. (ii) Firm location is affected by environmental, social, and institutional contexts. These factors can be tangible (e.g., bureaucratic efficiency) or intangible (e.g., quality of life). (iii) The policy framework category concerns several trade and competition policies, tax and environmental policies (among others, see [3]. Finally, regarding the information costs category, the literature focused on the role of geographical distance from the core cities/region, the higher amenities available, the presence of universities, airports, etc.
Disruptions like the COVID-19 pandemic and the Russian Invasion of Ukraine (i.e., the political situation) can influence (directly or indirectly) most location factors of the three categories mentioned above. For example, the lockdown measures put in place to cope with the COVID-19 pandemic caused the closing down of economic activities. Besides, the negative effect of the pandemic on CSs and the increase in remote working caused a reduction of available CSs premises or their activities to shift to online platforms. The Russian Invasion has provoked the migration of inhabitants from the bombed areas to “safer” areas, thus creating a new demand for goods and services (market size and potential). On the contrary, bombed areas lost their inhabitants, labor force, and activities, because the bombardments destroyed the principal infrastructures, thus making it impossible for firms to operate and a challenging for people to live.
Literature about disruptions primarily refers to the effects of the COVID-19 pandemic on CSs and their location. At least to our knowledge, only one study [4] was made on the impact of the pandemic and other exogenous shocks (e.g., political instability and anthropogenic disasters), and it concerns the city of Beirut, therefore, no evidence has been provided so far of these aspects in the Russian Invasion of Ukraine.
About the effects of the COVID-19 pandemic on new working spaces and CSs, and indirectly on their location, two recent books by Mariotti et al. [11] and Akhavan et al. [1] present several interesting cases. According to Gerosa and Manzini Ceinar [5], in phase I of the COVID-19 pandemic, the literature reported adverse effects on the CSs: CSs would decline in favor of multi-location strategies (e.g., work from home). According to Deskmag,2 daily users on weekdays declined from 60% in January 2020 to 40% in October–November. After phase I, CSs and the other third and fourth spaces (e.g., hybrid spaces, collaborative spaces, etc.) began to represent both temporary or permanent alternatives to traditional offices and home offices by responding to different people’s habits [12]. The CSs invested in the transition from the predominant role of face-to-face contact to online or hybrid strategies to build internal and external community ties to maintain the “community” and therefore their socio-economic sustainability. The studies also underlined a new demand for CSs in peripheral and rural areas where knowledge workers can live and work remotely [22, 23].
Mariotti and Lo Russo [13] analysed the case of Italian coworking spaces facing the COVID-9 pandemic in 2020 and 2021. Among the other effects, the pandemic has underlined the potential role of CSs in enhancing work-life balance and promoting the socio-economic development of peripheral and rural areas. Besides, during the pandemic, Southern Italy attracted remote workers (known as “southworkers”), and promoted the so-called ‘community garrisons’, willing to host them and ‘retain’ young people.
Leducq and Demaziere [7] explored the effects of the Covid-19 pandemic on CSs in France, focusing on the Centre-Val de Loire Region, Paris Metropolitan Area and other French regions marked by a metropolis-periphery interface. According to the authors, the growth of CSs in these areas was related to: (i) the increase of self-employed workers and freelancers; (ii) the need of companies to attract and retain workers, thus increasingly offering them the possibility of working in ‘third places’, close to home and preventing daily commuting. Bálint et al. [2] found that in Hungary there was a noticeable shift in locations from city centers to the outskirts of cities, especially in suburban areas.
As concerns both the effects of the pandemic and other exogenous shocks, [4] explored the case of CSs in Lebanon, a country dealing with COVID-19 pandemic, political instability, and anthropogenic disasters. The empirical analysis showed that the financial crisis and the pandemic had pushed many businesses to downsize, leaving their original big offices and choosing to work in CSs, which are financially more convenient workspaces. Despite the political instability of Lebanon and Beirut, the coworking culture is expanding, and it is appreciated for its sustainability and resilience.

3 Coworking Spaces in Ukraine in 2012–2022

Ukraine's digital economy and IT sector experienced rapid growth in the years before the Russian Invasion, leveraging highly skilled Ukrainians and investments from multinational companies [17]. IT clusters have been established in several Ukrainian cities to support this growth and foster innovation, they bring together companies, universities, and government agencies to create an ecosystem of innovation and collaboration. More than 22 Ukrainian regions have active IT clusters; the five leading clusters are in Kyiv, Kharkiv, Lviv, Dnipro, and Odesa.3
Kyiv, the capital of Ukraine, has emerged as the country's leading IT hub, with over 1,000 IT companies and startups operating in the city. In 2016 the Kyiv IT Cluster was established to support the development of the city's tech industry. Lviv is another central IT hub in Ukraine, with over 400 IT companies and startups. The Lviv IT Cluster was the first IT cluster established in Ukraine and has been instrumental in promoting the city as a hub for tech innovation. The cluster provides various services, including mentorship programs, coworking spaces, and access to investment funds. Kharkiv has over 250 IT companies and startups, and Dnipro over 100 IT companies and startups. These clusters are playing a crucial role in developing the Ukrainian tech industry, helping create jobs, attract investment, and foster innovation.
After the Russian Invasion, remote working and cloud servers, based within or outside the country, allowed many businesses to continue operations. Nevertheless, internet connectivity was very unstable in that period, thus negatively affecting the possibility for citizens and workers, both displaced and not, to access digital services. Due to the ongoing conflict, many of these workers have been forced to leave their homes and seek refuge in other parts of the country. Several highly skilled knowledge workers, mainly specialised in the IT sector, have relocated to live and work remotely in European countries. For instance, the European coworking association “One-coworking” has promoted the initiative to host Ukrainians workers in several CSs belonging to its network, for at least 3 months and free [14].
CSs have become increasingly popular in Ukraine in recent years, with many freelancers, entrepreneurs, and remote workers seeking flexible and affordable workspaces. “Chasopys” was the first coworking space in Ukraine in 2012; since 2018 the number of CSs has been increasing, especially in Kyiv [25]. In the first years, the primary users of the CSs were freelancers, local IT communities, and representatives of the creative industry. Later, as the market grew, the number of agreements and the pool of users (corporate customers, new-generation startups, and the public sector) asking for flexible offices also increased. Orel et al. [18] stated that CSs mainly belonged to the Individual-Purposed Coworking Spaces category. This category primarily supports independent workers, local IT communities, and creative industry representatives. Individual-Purposed Coworking Spaces attract and retain talent within regions, thus positively impacting local communities [20]. Besides, the other category of CSs in Ukraine are Group-Purposed model—prevalent among corporate clients—, Creation-Purposed, and Startup-Purposed CSs.
During the COVID-19 pandemic, in 2020 and 2021, small CSs closed down, while larger and long-term businesses survived [25]. Besides, in that period CSs started hosting IT companies.
In 2021 in Ukraine there were about 100 CSs (Fig. 1). They were manly located in the capital region of Kyiv (40%). During the COVID-19 pandemic, CSs played a key role in hosting remote workers, allowing IT professionals to continue their work while adhering to public health guidelines.
The situation changed dramatically in 2022, with the outbreak of the war in Ukraine. Despite the challenges and uncertainties of the conflict, some entrepreneurs remained determined to provide essential CSs to support the country's tech and creative industries. At least ten coworking spaces opened in Ukrainian cities during the Invasion. In Lviv two new CSs were opened: Nat. Coworking and W-Workspace. The city of Uzhgorod also welcomed two new spaces: Coworking KamelotHUB and Nazva. In Ternopil, K15 opened, while Kyiv hosted two new spaces: NRG. space and #CHERDAK. Other new coworking spaces are PolyanyHub in Irpin and Poverh in Odesa.
The main driver for the opening of these CSs is the internal migration from eastern to western regions. Many creative and tech industry specialists moved to the West of the country, creating a high demand for coworking spaces in these regions. The demand for coworking spaces also skyrocketed after the November 2022 attacks on Ukraine's energy infrastructure by the Russians. This resulted in days of total blackouts in several cities, which significantly increased the demand for flexible workspaces. CSs were a reliable option for many workers as their internet connections and electricity supply were more stable than in private homes. Besides, as described in chapter “Caring Practices in and Beyond Coworking Spaces” by Merkel et al. [15], the new CSs in western Ukraine are acting as caregiving spaces: they have become a crucial infrastructure not just for coworkers but also for the local community in providing mobile chargers, electricity generators, and serving as a shelter in case of bombing.
The western regions of Ukraine, including cities such as Lviv, Uzhgorod, and Ternopil, have become popular destinations for these displaced IT workers because they have a growing IT sector, high quality of life, and good infrastructure. Lviv has emerged as a key location for IT clusters, with several tech companies and startups choosing to set in the city in recent years. This has led to a growing demand for office spaces and coworking facilities and a need for more skilled workers to fill these positions in them.
Nevertheless, not all CSs survived the tumultuous events of 2022. About 50 shut down, either temporarily or permanently. Some of those located in occupied territories were destroyed. The closure of coworking spaces affected many freelancers and entrepreneurs who relied on these spaces for working and being part of a community. However, the ten new coworking spaces that opened during this period demonstrate the resilience and determination of the Ukrainian entrepreneurial spirit.

4 Narrative About Coworking Spaces Facing the Russian Invasion

The section presents the four new CSs that have opened during the Russian Invasion to meet the new demand of freelancers and entrepreneurs migrating to the West of Ukraine.
Futura Hub has been located in the city of Lviv since 2022. Lviv is the largest city in western Ukraine and the sixth largest in Ukraine (717,000 thousand inhabitants in 2022). Lviv hosts 9 CSs and the Lviv IT Cluster.4 Usually, CSs cooperate with different IT clusters in Ukraine. The building hosting Futura Hub is a hybrid space: it hosts some restaurants, an event space, hot desks, offices, and a terrace. Futura Hub also contains another space, managed by the same team, which has been opened during spring 2022. It is called nat. coworking, and it also hosts a bomb shelter.
The sector specialization of the CSs is the creative and IT industry. The primary pull factor driving the opening of these CSs is the new demand for new coworking space in Lviv. Indeed, thousands of Ukrainians moved to Lviv from temporarily occupied territories searching for a safe place in the West. The second pull factor is the sector specialisation of the city in the IT sector: Lviv hosts one of the most influential and big IT communities.
The Futura Hub CS manager, a native of Kyiv, explains what the main need of the CS users is today: “The main change in the typical behavior of our new customer was the short duration of subscriptions. Before the war, residents often chose a workspace for at least one month. Today, many people do not clearly understand where they will be tomorrow, so the demand for weekly/bi-weekly subscriptions has increased significantly.” Interviewer (1).
Coworking space K15 was opened after the Russian Invasion, on March 10, 2022. It is located in Ternopil, a city in western Ukraine with 225,000 inhabitants, and it is the only CS in the city. Ternopil hosts an IT Cluster5 with which K15 cooperates. The CS has been subsidised by Diia. Business, a governmental program for supporting SMEs. The sector specialisation is creative and IT industry. K15 is composed of an event space and offers services for the local environment. The CS also hosts a business center.
The pull factors driving the opening of K15 are: (i) the relocation of (thousands) Ukrainians that moved to Ternopil from temporarily occupied territories; (ii) the demand of companies to continue working in a true workspace and fulfil their obligations to partners on time.
The founder stated: “We are sure that coworking residents from IT companies will strengthen the Ternopil IT cluster. There are also regular events for dentists who will generate their own community! There are ideas for involving the cycling community of Ternopil in improving the local infrastructure. In general, the cool networking that takes place in a coworking space will definitely contribute to the creation of new communities” (Interview 2).
The interview with the founder underlined interesting issues concerning the coworking space's role in rebuilding the local and regional Ukrainian society after the war.
Despite the war, difficulties with relocation, hiring specialists, and the demands of foreign partners, the IT industry continues to grow and pay taxes. Companies develop projects, gain clients, increase teams, open new locations in Ukraine. Several IT companies already work in our coworking space. This is still the only comfortable workspace in our city for companies of various sizes that do not want to worry think about office repairs. You can come in and start working at once” (Interview 2).
The CS is also hosting the Norwegian Refugee Council (NRC), which began its humanitarian activities in Ukraine in the fall of 2014 with the opening of a field office in Severodonetsk. The NRC's activities are aimed at meeting the needs of internally displaced persons and the conflict-affected population.
The Nazva Uzhgorod CS was opened in April 2022 and is located in Uzhgorod, western Ukraine (approximately 115,000 inhabitants6). The founders of Nazv”a Uzhgorod CS are natives of Kyiv, Ukraine's capital city, and bring a wealth of experience in the coworking industry. This is the fifth coworking space they have opened in the country, the other four are located in Kyiv.
One of the key areas of specialization for Nazva is the IT industry. The focus on this sector aims to fulfil the demand generated by the internal migration of around 30,000 IT specialists to the region, who require high-quality workspaces and networking opportunities.
The founders stated: “Our coworking is a convenient workplace. It is quite small, more than 20 places. It is now difficult to predict the number of people coming and going, and determining the average workload of people in our space is tough. In Uzhgorod, the local population does not quite understand why coworking is needed; they have long-established places to work at home or in guest offices” (Interview 3).
The coworking space offers a range of services and amenities to support the needs of its members, including high-speed internet, meeting rooms, printing facilities, and a kitchen. It also features a comfortable and modern design, with plenty of natural light and an open-plan layout. Nazva is more than just a workplace: “It is a community of like-minded individuals passionate about innovation, collaboration, and entrepreneurship” (Interview 3). The space provides wide opportunities for networking and knowledge-sharing, as well as regular events and workshops to support the professional development of its members.
Since its opening, Nazva has quickly become a popular destination for freelancers, startups, and small businesses in the region. Its focus on the IT industry, its modern facilities, and its welcoming atmosphere make it an ideal choice for anyone looking for a productive and inspiring workspace in Uzhgorod.

5 Conclusions and Further Research

Both the COVID-19 pandemic and the Russian Invasion of Ukraine have impacted the health of workers and the ways of working of organizations, thus increasing the pace of digitization, home working and the use of third spaces as coworking spaces and hybrid spaces [8].
The empirical evidence presented in this paper extends the literature about the effects of disruptions such as the Russian Invasion on the location and relocation of CSs. The migration of IT workers to the western regions of Ukraine, already specialised in the IT sector and hosting IT clusters, has augmented the demand for workplaces (e.g., coworking and hybrid spaces). Besides, as underlined by the interviewees, these spaces are not just spaces for working but are also spaces for meeting new people, networking and collaborating; they foster the creation of a community and support and act as caregiving spaces.
The migration of IT workers to the western regions is significantly impacting the local economies, with many businesses benefiting from the new talents and ideas brought by the migration. This has led to a growing sense of innovation and entrepreneurship in the region, with several new startups and initiatives being launched in recent years, also hosted in coworking and hybrid spaces.
Despite the challenges posed by the conflict, many IT workers remain committed to building a brighter future for themselves and their communities. Through their hard work and dedication, they are helping to create a more vibrant and prosperous Ukraine and are contributing to the development of a thriving IT industry in the western regions of the country.7
The Ukrainian government has invested and is investing in the IT sector and digitalisation [17]. CSs play a role in the government strategy since they are workspaces hosting IT workers and collaborating with the IT clusters.
Since it is difficult to forecast when the war will end, further research should focus on measuring the effects of these new CSs in western areas, including less urbanised ones. These new CSs host IT workers and collaborate with the local IT clusters, and might therefore enhance the development potential of local areas. Nevertheless, policymakers and stakeholders should manage this phenomenon properly to ensure equilibrium between the newcomers and the inhabitants.
Another issue Ukraine is facing and will be facing when the war ends is that of facilitating the return of the highly skilled human capital from the western regions to the abandoned eastern areas, which will be reconstructed, and from abroad. The newly introduced “Diia city tax” regime with significantly reduced payroll taxes and social contributions should facilitate the return of highly skilled workers from abroad. It may be considered whether any additional measures could further facilitate the stimulus for the “returning brains”.
Open Access This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://​creativecommons.​org/​licenses/​by/​4.​0/​), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.
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Metadaten
Titel
The (re)location of Coworking Spaces in Ukraine During the Russian Invasion
verfasst von
Vika Zhurbas
Ilaria Mariotti
Marko Orel
Copyright-Jahr
2024
DOI
https://doi.org/10.1007/978-3-031-50868-4_12