Why Innovation Districts Matter

from Brookings Institute study
from Brookings Institute study

This week, I stumbled upon an article in EfficientGov’s blog entitled, “Why Innovation Districts Matter.” It is unfortunate that, as the community over the next 15 months will make critical choices about Davis’ economic future and decisions about three innovation parks (including Nishi), circumstances prevent Chief Innovation Officer Rob White from continuing his weekly column.

However, in the spirit of the work that Mr. White did over a 20-month period of time, I will highlight some of the points that EfficientGov highlights, as well as the Brookings Institute Study upon which it is based.

As EfficientGov notes, “In the aftermath of the recession, cities across the country are building strong foundations to support institutions and modern companies that collaborate with startups and entrepreneurs to spur growth and new ideas. These innovation districts are being integrated into the urban landscape, rather than stand alone on tech campuses or suburban research silos.”

According to the Brookings Institute, innovation districts are “geographic areas where anchor research institutions and thriving businesses take root and connect with startups, business incubators and accelerators.”

“The districts are compact, dense and easily accessible via public transit. Those involved in the districts are typically technically-wired and interspersed between mixed-use housing developments and retail space,” the blog explains. “The Brookings Institute’s latest study on innovation districts revealed them popping up in major metropolitan areas across the country. Not only do innovation districts create a link between research, business and entrepreneurs, but also spur productivity, sustainable economic development and collaboration. They enable researchers, companies and startups to share resources and inspiration to produce more discoveries in numerous markets.”

Innovation Districts not only encourage new ideas in business “but also public services and facilities to accommodate the new population – such as bike lanes and kickstarter campaigns”

The blog notes, “Innovation districts are defined by their economic, physical and networking assets that, when combined, accelerate commercialization and idea growth.”

These include:

  • Economic assets: Firms, institutions and organizations that are innovation drivers, cultivators or neighborhood-building amenities
  • Physical assets: Public or private pen spaces, infrastructure or streets designed to stimulate connectivity and growth
  • Networking assets: Relationships between individuals, firms and institutions to accelerate idea growth and cross-industry collaboration

The Brookings Institute Study notes, “Innovation districts are a key part of the new wave of local economic development and advance several critical objectives.” It lays out five key objectives.

  • First, innovation districts further the ability of cities and metropolitan areas to grow jobs in ways that both align with disruptive forces in the economy and leverage their distinct economic position. Innovation districts enable companies, entrepreneurs, workers, researchers and investors to work across disparate sectors and institutions to commercialize ideas and co-invent and co-produce new discoveries for the market. They foster innovation across industries by concentrating people with different knowledge and expertise in dense urbanized areas; experts in technology, for example, work closely with experts in bioscience, finance, education, and energy. Innovation districts are, in essence, the vanguard of a new “convergence economy” which is galvanizing the growth of more competi­tive firms and higher quality jobs and spurring expansion in supportive professional and commercial service sectors.
  • Second, innovation districts can specifically empower entrepreneurs as a key vehicle for economic growth and job creation. Studies show the important role that entrepreneurs and start-up companies play in urban and metropolitan job growth and innovation districts can support this trend in several ways. The rise of collaborative facilities and spaces can, for instance, reduce overhead costs by offering below rate, low risk work spaces and providing technical spaces where exorbitantly expensive technologies are shared. At the same time, imaginative programming and networking can support idea generation and efficiently link young firms to mentors, advisors with specialized expertise, and potential investors.
  • Third, innovation districts can grow better and more accessible jobs at a time of rising pov­erty and social inequality. A substantial number of emerging innovation districts across the United States are close to low- and moderate-income neighborhoods, offering the prospect of expanding employment and educational opportunities for disadvantaged populations. Leaders in cutting edge innovation districts are already dedicating resources to revitalize neighborhoods directly through investments in affordable housing, education, infrastructure and improved internet connectivity, and indirectly via enhanced tax revenues. Leaders in these districts are particularly focused on increasing labor market participation of local residents through training for jobs in both the STEM sector as well as retail and service firms.
  • Fourth, innovation districts can reduce carbon emissions and drive denser residential and employment patterns at a time of growing concern with environmentally unsustainable devel­opment. Innovation districts are potential engines for sustainable development since they embrace residential and employment density via the strategic use of transit, historic buildings, traditional street grids, and existing infrastructure. Some districts are going further by using renewable energy as their primary power source and by transforming their buildings, streets, and parks into living labs to test cutting edge sustainable projects in concert with technology firms and entrepreneurs.
  • Finally, innovation districts can help cities and metropolitan areas raise revenues and repair their balance sheets at a time when federal resources are diminishing and many state govern­ments are adrift. Municipal governments generally rely on property, business, and sales taxes for revenue. Innovation districts can generate revenues through increased economic activity, rising housing values and increased demand for goods and services. Increased revenues can then be used to make necessary investments in infrastructure, public safety, affordable housing, local schools, and other necessary services. At time when federal resources are shifting to entitlement programs (e.g., Social Security) and many states are otherwise focused, these types of investments disproportionately fall on local governments.

The Brookings study also highlights the question of “why now.” They write, “Innovation districts maintain elements of these earlier models but embody a new interplay of form and function that the modern innovation economy demands, and in turn supports. Like their predecessors, these districts grow out of a powerful set of economic, cultural, and demographic forces that are reshaping both how and where people live and work.”

Brookings lists several factors:

  1. The evolution of a knowledge and technology driven economy is altering the value and function of density and proximity.
  2. An economy increasingly oriented toward open innovation is changing both where firms locate and how buildings and larger districts—from research labs to collaborative spaces to mixed-use developments—are designed.
  3. Shifting demographic and household dynamics are fueling demand for more walkable neighbor­hoods where housing, work, and amenities intermix.

As EfficientGov notes, “The Brookings Institute report identified five best practices for municipalities interested in growing an innovation district.”

  1. Build a collaborative leadership network
    Look to leaders from institutions, firms and influential sectors to create a collaborative environment between research, business and government.
  2. Set a vision for growth
    Set growth goals with best practices for the short, medium and long term, clearing defining economic, physical and social dimensions. Play off the unique strengths of the players involved.
  3. Pursue talent and technology
    Attract and retain talent by integrating technology with innovative organizations and sustainable amenities.
  4. Promote inclusive growth
    Use the innovation district to promote growth and advancement in nearby neighborhoods with special consideration for low-income residents, education opportunities and jobs growth to support the district.
  5. Enhance access to capital
    Support research, commercialization, urbanization, education, entrepreneurialism and training facilities with financial support in the short and long term.

EfficientGov adds, “Several major cities such as Boston and Seattle have reported significant success in growing innovation districts, which go beyond technology startups and support projects such as urban farming and clean energy.”

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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4 Comments

  1. Davis Progressive

    As EfficientGov notes, “In the aftermath of the recession, cities across the country are building strong foundations to support institutions and modern companies that collaborate with startups and entrepreneurs to spur growth and new ideas. These innovation districts are being integrated into the urban landscape, rather than stand alone on tech campuses or suburban research silos.”

    this is kind of the most interesting point here.  the rise of innovation parks was born out of the recession.  so the question is how is that going to change us into the future?

  2. Tia Will

    1. Promote inclusive growth
      Use the innovation district to promote growth and advancement in nearby neighborhoods with special consideration for low-income residents, education opportunities and jobs growth to support the district.” I thought that this point was also interesting . I would greatly appreciate any examples of how these projects have benefitted those in the lower socioeconomic groups, not just those in the upper middle class.
    1. Anon

      If the innovation parks generate enough tax revenue, there could be money for affordable housing for low income.  Also the county benefits from the tax sharing agreement, and the country provides services to low income.

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