A Danish expatriate who has been living in the Philippines for nearly three decades considers himself Filipino at heart and knows how it feels when commuters deal with Metro Manila traffic on a daily basis.
Lars Wittig, who first came to the Philippines in 1992, offers a solution—flexible workspace that makes it easier for businessmen, entrepreneurs and employees to work in an office space that is close to their homes.
Wittig is the country manager of Regus & Spaces by IWG, the London-listed flexible office space provider that now has 30 centers in the Philippines. He describes himself as “foreignoy”.
Regus had only four centers when Wittig joined the company eight years ago, and he oversaw the network expansion not only in the central business districts of Makati, Ortigas and Fort Bonifacio but also in the suburbs of Metro Manila as well as in Cebu, Davao, and Clark.
“The Philippines is a very successful market for us. We are in 120 countries, but according to our annual report, from 2018 the Philippines is among the top four performers in the world. We are there together with Japan, Canada, and the US in that list,” says Wittig who lives with his Filipino wife and three children in Las Piñas City.
“In the US, we have 1,200 locations. In Japan, we have 130. Here, barely 30 and still we are up there. That is very remarkable,” says Wittig, who also serves as the senior vice president of IWG for ASEAN and South Korea. While based in Manila, he also serves the country manager of IWG in Vietnam, Cambodia, Thailand and South Korea.
He first came to Manila in 1992 when the country had a population of only 65 million. “Since I was working at that time in the distribution business, I walked the barangays of Tondo and Caloocan for a big Danish company [East Asiatic Company] that was the sole distributor for Philip Morris cigarettes. It gave me a very early experience or insights on socioeconomic levels of society especially when you focus on sari-sari stores and hard-to-reach squatter areas,” he says.
He also once took a container ship bound for Manila, while working as the marketing manager for Asia of fruits producer Dole Packed Foods.
Those travels provided Wittig the proper perspective on the Philippine economy and on how to expand IWG’s business in the country. “We opened the first center in Makati more than 20 years ago. We pioneered the business. In the last seven years, we grew from four centers to now nearly 30 locations. What is remarkable is out of the 25 that we have in Metro Manila, half of them are in the suburbs. That makes it very relevant,” he says in an interview at Regus GT Tower in Makati.
“It is not only my mandate but also my obligation to expand when the demand is as high as it is. Right now, I am getting more than 1,400 inquiries per month just here in the Philippines. We have never ever had such a high occupancy as we do now. We are approaching 90-percent occupancy nationwide,” he says.
“We are seeking expansion at all levels horizontally and vertically. We are all the time looking at more locations than the more obvious CBD areas. We are looking for local partners everywhere we are going to,” he says.
“Right now, we have spaces for co-working at Spaces and Regus. We have another brand called HQ which has a lower price point. That could easily be more justifiable in some provinces, and we could be there sooner rather than later. We are exploring all opportunities. Top of mind, we have to further develop the network in Davao City,” he says.
“We want to open in General Santos and Cagayan de Oro. I would love to see more locations in Cebu, Dumaguete and Mactan Island and of course Iloilo, Bacolod, Naga and Batangas City. We are already in Clark, but we need more locations in Subic, Baguio and Laoag. I hope that very soon we will be able to be in all those locations with the right local partners. The market for flexible work space is growing so fast,” he says.
He says he made the decision to expand to the suburbs to bring the service to more people whose productivity is affected by the daily commute to the CBDs. “We look at how you can work in an office, from home and anywhere in between. That is why it is very critical for us and our customers that we are in suburbs,” he says.
“People generally do not want to work from home. It turns out that if they do not get disturbed at home, then they get lonely. And if they don’t get lonely, it is because they get disturbed. What they really need is to work near home. It is important for productivity and for people’s well-being that they don’t have to go through the commute,” says Wittig.
“If people are asked what they like the least about their jobs, the most likely answer is the commute or getting to and from work. It is a big burden on our environment and it really costs us a lot of time as detailed in our survey,” he says.
The first comprehensive socio-economic study of second-city and suburban workspaces shows that the increasing migration of flexible office space and co-working locations to areas outside of major metropolitan cities globally is creating a ‘flex economy’ that could contribute more than $254 billion to local economies in the next decade.
The analysis, commissioned by Regus and conducted by independent economists, studied 19 key countries including the Philippines to delve into the economic and social impact of flexible workspaces in secondary and tertiary cities and suburban areas both now and through to 2029.
It predicts that by 2029, there could be more than 74,000 people working at local business centers across the Philippines, providing net additional employment opportunities for local residents amounting to over 31,600 jobs.
The rise in local working is being largely driven by big companies adopting flexible working policies; moving away from relying on a single, central HQ and increasingly basing employees outside of the major metropolitan hubs in flex spaces.
It says that an individual flexible workspace or coworking center in a suburban location can benefit the local economy in numerous ways, from creating jobs both inside and outside the center, stimulating businesses and services in the nearby area, improving productivity and opening new working opportunities for those who live locally.
Across the 19 countries analyzed, in the Philippines, the average individual workspace sustains 211 jobs. This includes temporary jobs created during the fitting-out stage of the office space, permanent jobs to run the office, including reception, maintenance, cleaning, plus the jobs associated with the occupancy of the workspace.
The research also reveals that on average, 90 net additional jobs would be created in the local economy for each individual center. This is because the presence of businesses and their employees provide stimulation to the nearby area. When businesses set up in suburban locations, they bring with them local goods and services, and employees who will spend in the local area, creating a ‘sandwich economy.’
It says flexible workspaces also benefit the local area through an uplift in gross value added—the measure of the value of goods and services produced in an area. The study found that an average flexible workspace generated P186.46 million GVA each year, of which P78.70 million contributed to the local economy.
Aside from the direct financial impact, local office space has been found to benefit workers and local regions. This includes reducing the time spent commuting, with access to a local office space expected to save 8,845 hours per year for workers. Filipinos can have 4,423 hours saved to be used for personal purposes. This has wider benefits as a shorter commute has been shown to reduce stress levels, which can increase staff morale and resilience, as well as mental well-being.
At the same time, it is estimated that a total of 50 metric tons of CO2 would be saved from over 483,000 Filipino passenger kilometers that are no longer required because of shorter local commuting trips.
Regus also looked at the estimated potential of each market to host a larger, national portfolio of local flexible workspaces. It forecasts potential changes over the next decade, reflecting expected trends in workforce demography, technological change and changes in business practices.
This additional analysis predicts that, if current trends towards regional flexible working continues, these communities could see over 31,663 local jobs created by 2029. The forecast also predicts that P27.14 billion GVA will be retained by local economies.
“When people commute into major cities their wallets commute with them. Working locally keeps that spending power closer to home. What this study shows is that providing more opportunities for people to work closer to home can have a tremendous effect, not just on them, but on their local area too. Businesses also recognize the benefits, and we are seeing increasing demand from companies of all sizes for flexible space in smaller cities and towns. Larger businesses are opting for a ‘hub and spoke’ real estate model. At the same time, smaller enterprises want to cluster and collaborate, and so choose flexible workspaces to be near other businesses,” says Wittig.
Wittig says the Philippines is the only country from Southeast Asia that was included in the study. “It underscores we have a very proud history. This market is a very high priority to us,” he says.
“For the Philippines, the results are even more pronounced than in any other country. Compared to other countries in the survey, we have the worst traffic in the world, and we have some of the worst pollution which is affecting our health and our longevity,” he says.
“What we can show is we can greatly improve the human capital index by making people more productive, have them less time in the traffic, produce less C02 emissions and bring higher value to office jobs out into suburbs and Tier 2 cities. Flexible work space also means that single mother has easier access to higher-value job if she is allowed to work near home. That aids in closing the gender gap,” says Wittig.
Wittig says that once a Regus member, one gets access to all 30 locations in the Philippines and 3,400 locations in 120 countries and over 1,000 cities.
IWG has 2.5 million members across 3,400 locations in over 1,000 cities in 120 countries. Wittig estimates that in the Philippines, IWG has close to 7,000 members.
“People also become a member because they want to learn from each other. The millennials in blue jeans and white T-shirts want to interact with the baby boomers like me because they can learn from my experience. On the other hand, I have to make sure that I as a baby boomer do not become obsolete, so I also need to talk to millennials and Generation Z because I need to catch up and have the latest knowledge. That community building is very important,” he says.
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