A New Geography of Innovation

WASHINGTON, D.C. – The shifting geography of innovation is one of the most disruptive economic trends underway today, according to a new Brookings paper. Innovation districts are geographic areas where leading-edge companies, research institutions, start-ups, and business incubators are located in dense proximity. They are physically compact, transit-accessible, and offer housing, office, and retail. These districts facilitate new connections and ideas, accelerate the commercialization of those ideas, and support metropolitan economies.

“Innovation is moving from the late 20th century model of isolated corporate campuses to entrepreneurial and collaborative areas in the downtowns and midtowns of cities,” said Bruce Katz, vice president at Brookings and co-author of the new paper. “Big market and demographic forces are revaluing what cities offer—proximity, density and connectivity.”

“The Rise of Innovation Districts: A New Geography of Innovation in America” describes the three primary factors that contribute to this emerging trend.

• First, innovative companies now develop new ideas through open and collaborative processes with networks of other firms, often using shared resources such as laboratory equipment, co-working spaces and open code.
• Second, technology is now integrated across all sectors of the economy, not only science and engineering, but also a range of fields including media, finance and health care. The collaboration spurred by the proximity of companies across diverse sectors leads to the creation of new products, services and processes.
• Third, shifting demographics, such as the increase of people living in cities, are fueling demand for walkable neighborhoods with housing, transit and amenities near work spaces.

Burgeoning innovation districts can be found in dozens of cities and metropolitan areas across the United States. The paper identifies three models.

• First, the “anchor plus” model, as seen in Cambridge, Philadelphia and St. Louis, build mixed-use development around major anchor institutions like hospitals and universities, attracting a rich base of related firms and entrepreneurs.
• Second, the “re-imagined urban areas,” as seen in Boston and Seattle, feature industrial or warehouse districts that are undergoing a physical transformation to build a new foundation for innovative growth.
• Third, the “urbanized science park” is where traditionally isolated, sprawling areas of innovation, such as Research Triangle Park, are urbanizing by increasing density and building new retail and restaurants.

These innovation district models offer diverse benefits for metropolitan economies. For example, they help cities and metropolitan areas leverage their distinct economic position to grow jobs for workers of varying skill levels. These jobs are better and more physically accessible at a time of rising poverty and social inequality. Finally, innovation districts can help cities and metropolitan areas raise revenues at a time when federal and state resources are diminishing.

“Instead of trying to become ‘the next Silicon Valley,’ innovation districts help metropolitan leaders build on their city’s distinctive assets and advantages,” said Julie Wagner, co-author of the report and nonresident senior fellow at the Brookings Metropolitan Policy Program. “These are smart, new approaches to sustainable economic development that focus on growing jobs in the productive and traded sectors of the economy.”

The paper offers clear recommendations for metropolitan leaders to build and support innovation districts and shares seven case studies of innovation districts from cities across the United States.

The Metropolitan Policy Program at Brookings provides decision-makers with cutting-edge research and policy ideas for improving the health and prosperity of metropolitan areas, including their component cities, suburbs, and rural areas. To learn more, please visit:brookings-edu-2023.go-vip.net/metro. Follow us on Twitter at www.twitter.com/brookingsmetro.