What Does the Evidence Tell Us About Creating a Successful Innovation District?

Cityscape with building exterior of university, college, high school or public library. Vector cartoon illustration of autumn landscape with museum, government, court or academy campus building

Hope McGee

As part of IPPO’s work to equip governments and cities with the best evidence and knowledge to combat place-based and spatial inequality, our observatory is looking at the role of innovative districts in stimulating community growth.

IPPO recently held a roundtable discussion on what the evidence tells us about the best ways to create a successful innovation district, and where we need to do better in terms of drawing meaningful conclusions about ‘what works’.

In this blog, I look at the key themes raised in our conversations with experts and how we need to frame our research focus.

On July 2nd at 3pm, we’ll be holding a public, online event on How Can Innovation Districts Encourage Inclusive Growth. If you’re interested, please sign up here.

What are Innovation Districts?

Everyday we benefit from human innovation. From small improvements to make our lives more comfortable, such as the latest food delivery app, to great leaps that rid carbon-intensive processes of emissions or offer new cures for chronic illnesses.

Organisations that offer the potential for such innovations have historically developed in clusters together close to urban populations and universities, where knowledge can be shared, networks created and inventive projects accelerated. These are known as innovation districts.

Typically, innovation districts are walkable, defined neighbourhoods made up of mixed-use developments that bring together research and entrepreneurship, educational institutions and start-ups with the aim of boosting innovation.

They can take several different forms: a science park focused on manufacturing industries that you’re unlikely to pass through, a knowledge quarter brought together by a big university or an urban regeneration project that seeks to attract business, talent, investment and leisure providers.

The measure of success of these different initiatives can also take many different shapes, from rate of new high-skilled jobs that have been created, the amount of visitors coming to a revitalised area or the number of Nobel laureates created in their walls.

Often used as a model, the well-established 22@ in Barcelona brought over 200 hectares of previously industrial land back into action. The regenerated area now holds 1,500 businesses bringing creativity, innovation, design and technology to the region.

Cambridge Science Park with its vast high tech laboratory space has been around for 52 years and is now home to 170 businesses, from startups to leading technology companies. While the White City Innovation District in London is built around Imperial University’s world class science research and designed to help institutes and businesses spin out of academic projects.

You can see that even with a relatively clear definition of innovation districts, their characteristics vary greatly and this makes the collection of evidence on what works and why less easy to come by.

Of major concern to policymakers is how the value of these districts is shared among the local community. The economic and social benefits of such hubs of innovation don’t automatically disperse across the nearby areas.

Districts may attract skilled employees from outside existing communities, rather than employing the local population or create products that have little benefit to the community. The cultivation of innovation districts must therefore be accompanied by a policy framework that ensures that the value created by these districts is not removed from its location.

Policymakers must look for ways to ensure local citizens are skilled to participate in and gain from these new districts to avoid the negative effects of social challenges such as gentrification.

How do we measure (and replicate) their success?

We often lack the metrics and indicators to make meaningful comparisons between differing place-based projects. For instance, there is a lack of consensus over how we measure social value – a regular requirement from local authorities when public urban developments are being planned. Our understanding of what success looks like is often shared sporadically and through professional networks in informal settings, rather than more methodically.

Also, given that these projects are commercial propositions, information about their accomplishments are also often the product of rose-tinted reports, rather than a deeper, more systematic analysis. Mixed methodology studies, while common and often necessary for place-based initiatives – where all the idiosyncrasies of human interaction and connection play out – are difficult to analyse in bulk.

We know that a wealth of knowledge sharing is common through organisations such as the UK Innovation Districts Group and the Global Institute of Innovation Districts. They allow for discussions about where initiatives have worked, what governance works in creating a successful innovation district and how best to build social capital. While we know the right culture, governance and social infrastructure can aid the success of an innovation district – encouraging, mandating and facilitating the cross-pollination of ideas and creativity which support innovation – policy guidance requires us to draw out the evidence for replicable actions.

Some mixed methodology studies are available and IPPO has been using these as a basis for an evidence review into what makes an Innovation District effective, and how these insights could support policy development.

What we know about what’s worked

We know the right culture, governance and social infrastructure can aid the success of an innovation district. These factors encourage, mandate and facilitate the cross-pollination of ideas and creativity which support innovation. In order to support policy guidance, our team has been looking to draw out the evidence for replicable actions.

Hearing from actors in Scotland, where health innovation districts have been established, we have learned how differing NHS governance structures – boards over trusts – has limited the strength of collaboration. Developing joined-up supply chains connected industries and opportunities for business progression have also been highlighted as important success factors to these districts. However, the level of impact can differ between industries and depend on the degree of focus on areas of comparative advantage. We understand that it’s common for innovation districts to excel at groundbreaking research, but less at commercialisation and job creation, or they may foster countless successful start-ups, but then fail to provide the space and opportunities for them to grow and stay put.

What policy can do to encourage fairer place-based models

The UK Innovation Districts Group and Connected Places Catapult commissioned a report in 2022 that seeded the ideas for Inclusive Innovation Districts. This came at a time when government investment was increasing (Innovation Strategy 2021), as part of the ‘Build Back Better’ agenda sought to use innovation as a tool for levelling up. This report highlighted the importance of design, delivery and diffusion principles, such as embedding social value into procurement and committing to fair employment and a real living wage.

At IPPO, we’re looking to build on the potential of public policy to embed this agenda through engagement with a global cohort of innovation professionals. Through a broad and deep evidence review carried out by the EPPI Centre, we’re looking to draw out guidance for parties involved on how to develop successful and inclusive innovation districts. Nevertheless, in the realm of policy, many questions are still left unanswered, with different evidence needed for different stakeholders.

We’re asking what role that talent pipeline plays in the decisions of where to locate and what happens afterwards. How can the governance of Anchor Institutions promote commitment to the diffusion of innovation’s value? What role can innovation districts play in levelling the playing field for start-ups and increasing the diversity of founders?

In an era when the government has committed to increasing R&D spending to 2.4% of GDP by 2027 – its highest level ever – it is an important time to ask what policy can do to encourage fairer place-based models of innovation. Our next step is to convene international experts in the quest to further understand this complicated landscape, and where opportunities lie to embed inclusive innovation into policy and innovation districts to come. Learning from international examples, we will ask the difficult questions of how land value can be captured and distributed equitably, how innovation districts can promote cross-pollination – but also advance the skills of the broader public – and how can policy, applicable to the UK, can be used to shape the spaces, people and industries which contribute to successful innovation districts.