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Economy & Business

Geography Of Innovation Shifting As Companies Seek More Collaborative Environments

A recent report from the Brookings Institution shows that across the U.S. the geography of innovation is shifting dramatically, especially in larger cities. What is emerging are so-called innovation districts, geographic areas where companies, research institutions, start-ups and business incubators are located in close proximity.

“If we thought about where innovation was created 20 years ago, you would get in a car in the middle of downtown, you’d drive 30 minutes to a research park and there you would find corporations with isolated campuses, basically doing their inventions in secret,” said Bruce Katz, vice president at the Brookings Institution.

Moving away from that closed innovation model, many corporations today are locating near anchor institutions were talent is located and ideas are being generated.

“So why is Google in Pittsburgh? They want to be near Carnegie Mellon,” Katz said. “So the geography of innovation is shifting really from research parks to these innovation districts that are congregating around advanced research institutions.”

The innovation districts are often physically compact, transit-accessible, and offer housing, office and retail. Katz points to Bakery Square as one such area. But while the area immediately surrounding Bakery Square is seeing revitalization, blocks away neighborhoods are still struggling. Katz said that will change as innovation districts grow, and added that such growth will have to come locally, not from the federal government.

“A lot of this is going to have to happen at the city level and at the state level,” said Katz. “The more jobs you have within your city, both the innovative jobs and all the jobs that support the innovative sector, the more people you’re going to have earning income, earning wages, the more tax revenue you’re going to have for regeneration and revitalization.”

How cities capitalize on innovation districts is unique to each municipality. Katz said not every place has assets such as UPMC and Carnegie Mellon University, so the innovation ecosystem of each place must be a factor. That is an entire system in place versus what Katz referred to as the “American myth” of one smart person inventing in a garage.

“Actually the way most regional economies work is the interaction between advanced universities, talented workers, large companies, entrepreneurs, investment capital, that’s your ecosystem, combined with a risk-taking culture,” said Katz.

Katz said Pittsburgh can look to other model cities as it develops innovation districts including Cambridge, St. Louis, Philadelphia, Copenhagen and Stockholm. The full report can be found online.