BRIDGING THE ‘INFORMAL’ TO ‘FORMAL’: Using coworking spaces as ‘bridges’ to improve the uptake of Business Innovation Support Services in England

This report addresses how formal business innovation support services (BISSs) provided by local growth hubs (LGHs) can better reach early-stage founders by leveraging coworking spaces (CWSs), especially in peripheral areas (e.g. coastal, rural and old industrial areas) where entrepreneurial activity is geographically dispersed.

In 2023, only 26% of SMEs sought external advice from BISS with LGHs being the designated first point of call for all businesses irrespective of stage of growth or maturity. We found early-stage founders do not seek BISS because: the language BISS providers use is unfamiliar/lacks resonance, founders lack confidence and clarity to express their needs or have not established trust in formal advisors. Most rely upon friends and family, who provide psychological safety but potentially limited business expertise. CWSs in peripheral areas offer low-cost workspace predominantly hosting local businesses (not digital nomads or remote-mode corporate employees). Increasingly, such CWSs provide wider social infrastructure for local entrepreneurship not just space. They foster community-based knowledge sharing, informal mentoring, may offer tailored training events to members, thereby providing access to a rich environment of informal business support. Within this setting, founders build their confidence and become empowered to seek more specialist formal BISS support.

CWSs help early-stage businesses bridge the gap between informal and formal support. We conclude by offering policy recommendations that would support CWSs in this role and the strengthening of LGHs relationships with them.