The Next Wave of Innovation Districts

It has been ten years since we released The Rise of Innovation Districts and boldly declared that the spatial geography of innovation was shifting in the world towards innovation districts. Our observation was that monoculture science and research parks were no longer aligned with the nature of modern innovation. Rather, innovation districts, which concentrate in small (mostly urban) geographies a broad mix of academic institutions, corporations, researchers, startups, skills providers, and entrepreneurial support entities, were better suited to advance creativity and collaboration by leveraging physical proximity, accessibility, walkability and density.

A decade later, the rise of innovation districts has proven to be a powerful market phenomenon rather than, as some claimed, a clever marketing or land development ploy. The release of the paper spurred tremendous interest from nearly all regions across the world and galvanized a group of researchers and practitioners to establish The Global Institute on Innovation Districts (GIID), a global reaching not for profit. Today, our analysis reveals there are over 150 districts emerging and evolving worldwide, pursuing ambitious agendas to become multipliers of growth, unlocking unique R&D and place-based assets.

Unlike many office districts, innovation districts have survived the pandemic’s acceleration of remote work. Inventors in many sectors of the economy need access to technologically complex and expensive equipment and infrastructure, which is impossible to reconstruct in the proverbial garage of start-ups. As GIID research has shown, while some districts took on new roles during the pandemic—including the local manufacturing of personal protective equipment (PPE), widescale deployment of testing and vaccines and the pioneering of new health solutions—the hubs that took a hit in occupancy rebounded quite fast. Many district leaders observed how anchor institutions helped undergird and secure their position when downtowns and other areas faced significant market loss.

Investment has also not waned in these places. During the height of COVID-19, our analysis demonstrates how funding for health-related research activities, including new translational facilities, manufacturing and production sites, spiked in many districts.

In our view, the past decade and the pandemic itself have just been a prelude – a warm up – to what’s coming. Large macro forces – the de-risking of global relationships, the decarbonization of the economy and the need to diversify talent – are transforming the role and relevance of innovation districts. These macro forces demand innovation – in technology, in financial products, in regulatory policies, in business processes, in collaboration between universities, companies, startups, investors, skills providers, governments and adjacent communities. This innovation imperative, in turn, places a high premium on innovation districts where disparate players can come together to invent, test, adapt and prototype a broad range of solutions across multiple dimensions, specialized sectors, and stakeholders.

As a result, a next wave of innovation districts is beginning to emerge, catalyzed by macro forces and public and private investments. They are shifting from centers of discovery to locales that both discover and deliver. In some cases, existing districts are embracing new partners and initiatives; in other cases, entirely new districts are forming. In this piece, we try to capture the disruptive dynamics at play, showcase examples of the next wave and hypothesize about what it means for policy and practice.