How investments in innovation districts can combat the country’s regional divides

Last month, Robert D. Atkinson of the Information Technology & Innovation Foundation, together with our colleagues Mark Muro and Jacob Whiton, published a report calling for a renewed federal role in helping to balance the country’s growing geographic inequities. “The case for growth centers: How to spread tech innovation across America” carefully documents how and why the innovation economy—the driver of much of the nation’s growth—has become increasingly concentrated in a handful of coastal metropolitan areas, leaving much of the heartland struggling to keep pace. It also proposes a way for leaders in Washington, D.C. to boost lagging regions by selecting a small group of “growth center” metro areas (chosen via a competitive process) to receive a package of federal supports.

The “growth center” construct was originally conceived in the 1950s, but this 21^st century version acknowledges that in today’s economy, federal support for more widespread diffusion of innovative activity will not be enough to combat the entrenched economic divergence between regions. Rather, such “top-down” investment needs to be matched with “bottom-up” leadership, drive, and capacity to make the kinds of transformative investments in places and placemaking essential for growth centers to thrive.

THE “CASE FOR PLACE”

The call for federal action in “The case for growth centers” is hardly a wild proposition. The federal government has played a central role in creating America’s geography of innovation, helping propel a handful of metro areas to the “superstar” status they enjoy today. In Boston, Silicon Valley, and areas such as Research Triangle Park, the government provided significant investments in R&D, contracts, and, importantly, the establishment of federally funded research institutions. Strategic and consistent support gave these metropolitan areas unique, early advantages which helped secure their long-term growth and prosperity.

Advancing a new set of growth centers will require a similarly comprehensive set of federal investments. Yet not all places are strong contenders for Atkinson, Muro, and Whiton’s proposed program. While any metro area would be eligible to apply, the authors issue criteria for identifying those with the strongest potential, based on their size, existing innovation capacity, skill base of local labor, and distance from existing major tech hubs. Such a data-driven approach yields 35 metro areas that exemplify these attributes and represent the kinds of places the federal government might select as growth center designees.

The authors’ suggestion that these metro areas ought to have a baseline of innovation assets is based on decades’ worth of evidence on the importance of regional clusters to economic prosperity. But they go further, arguing that how and where those clusters take shape within metro areas will acutely influence their growth and development.

The proof is already there. The federal investments that catalyzed some of today’s most tech-oriented metro areas were targeted to specific local geographies rich with research-intensive anchor institutions—think Stanford, Berkeley, MIT, Duke, and North Carolina State University—while forward-thinking local actors integrated R&D activities among each area’s institutions, government, and industry.

Flash forward, and many of these institutions and actors now sit at the heart of emerging innovation districts. In 2014, Brookings chronicled the rise of these districts in both the U.S. and abroad. Found primarily in cities and walkable suburban areas, these areas cluster and connect anchors, established firms, intermediaries, and growing pools of startups and scale-ups, creating a collective consciousness aimed at driving advanced industry growth. Innovation districts also embrace the assets and attributes of “city-ness,” including density, proximity, and high levels of accessibility.

These attributes are giving cities and urbanizing areas a new competitive advantage not seen or valued during the suburban heyday of the previous century.

These attributes are giving cities and urbanizing areas a new competitive advantage not seen or valued during the suburban heyday of the previous century. Indeed, a recent Brookings analysis of 94 large metro areas found that, from 2004 to 2015, the concentration of information sector jobs increased the most within a small number of already-dense and successful regions such as San Francisco, New York, and Seattle—indicating the outsized gravitational pull of existing job hubs. Moreover, subsequent research found that metro areas where overall job concentration increased during that time period also saw faster gross metropolitan product and job growth than metro areas where jobs were more dispersed.

Recognizing these trends, Atkinson, Muro, and Whiton’s growth center selection criteria specifically include “[a] current and planned ‘placemaking’ strategy that fosters collaboration and innovation” with “urban land use that concentrates growth in compact, walkable urban centers.” In other words, to be considered for growth center designation, cities need to demonstrate that they are attentive to the spatial geography of their advanced economy firms and jobs. They also must be willing to make necessary transformative placemaking investments to create the dense, vibrant, and inclusive environments that advanced economy firms and workers increasingly demand.

CATALYZING NEW GROWTH CENTERS THROUGH INNOVATION DISTRICTS

An earlier report indicates that 15 of the 35 “promising” growth center candidates Atkinson, Muro, and Whiton identify—including Cleveland, St. Louis, and Pittsburgh—are already working to nurture such environments through investments in local innovation districts.

In Cleveland, a concentration of research-intensive universities and medical institutions (including Case Western Reserve University, University Hospitals, and the Cleveland Clinic) is at the heart of a bourgeoning innovation district, the Cleveland Health-Tech Corridor. In St. Louis, Washington University, BJC HealthCare, the University of Missouri-St. Louis, Saint Louis University, and the Missouri Botanical Garden partnered to develop the 200-acre Cortex Innovation Community, a dynamic and growing hub of advanced research, commercialization, and startup activity focused on fields such as tech and life science. And the research prowess of Carnegie Mellon University and the University of Pittsburgh—together with consistent philanthropic support—is helping the Pittsburgh Innovation District emerge as a global leader in robotics, machine learning, and immunology.

These districts and others are already positioning themselves to compete on a global scale by forging collaborations among university, industry, and public sector entities, as well as facilitating the sharing of technologies, streamlining commercialization processes, and supporting entrepreneurship, education, and skill building in their communities. And they are investing in the infrastructure, spaces, and placemaking efforts needed to support these activities.

The growth centers report makes a powerful argument for why the federal government needs to help counteract the winner-take-most dynamic that is—in the authors’ words— becoming a “grave national problem.” Innovation districts exemplify how federal action can align with local leadership to put our country on a course that is more innovative, more inclusive, and more globally competitive—and can help pull back the places and people now standing at the precipitous edge of our national divide.