The Evolution of London’s Innovation Economy

By Kat Hanna, Associate Director of Urban Change

In 2014, the Brookings Institute – one of the world’s leading think tanks, published a report identifying the common features of a new type of urban geography; the innovation district. The authors observed the emergence of high-density, mixed-use clusters in secondary US cities, typically anchored by institutions such as universities and hospitals, and offering a sense of vibrancy and activity that suburban research locations tend to lack.

The urbanisation of innovation has proved, however, to extend beyond the US, and beyond secondary cities. In 2016, while at Centre for London, I authored Spaces to Think, a report looking at the role of innovation districts in reshaping London’s knowledge economy. The report found that while the presence of innovation activity in London is hardly new, collaboration, co-location and co-ordination can maximise the impact of existing assets, in terms of their contribution to local, regional and national economies, and the physical urban environment.

Two years may seem a short time when it comes the building out of major innovation districts like London Cancer Hub and White City, but it’s a veritable aeon when it comes to the political and economic factors that influence innovation activity. That’s why the most recent report looking at innovation activity, London’s Knowledge Clusters, commissioned by London Property Alliance (CPA and WPA) and sponsored by Cushman & Wakefield is so valuable. The report captures progress, identifies challenges, and draws on the expertise of those at the forefront of delivering the real estate required to support London’s innovation ecosystem. Below summarises key trends highlighted by the Knowledge Cluster report, alongside observations as to how the innovation district model in London has evolved:

The growth of the Life Sciences Sector: In recent years, the life sciences sector has emerged as the most dominant economic sector, often building on expertise in medical research with new technologies and techniques such as nano-technology and machine learning. Commercialisation of academic research and collaboration between institutions, both public, private and civic has been critical to success so far. However, specialised activity requires specialised space, which whilst in high demand in London, is costly to deliver– up to 30 per cent higher in the base build than a standard office. Commercialisation of academic research is much more common place, in the forms of start-ups and spin outs. This blurring of public and private sector-led activity both influences and is influenced by the blurring of lines between universities and other potential partners, be it major companies or teaching hospitals.

Beware the cookie-cutter: One of the most frequent debates when it comes to innovation districts is the question of scale and structure. Surely London, on one level, is one large innovation district? Or what about the capital’s many BIDs or mixed-use regeneration projects? While there are defining principles and common characteristics, there is no innovation district certification. Rather, the value of the innovation district framework is in self-examination and understanding of existing assets, untapped potential, and barriers to further success. As a result, whilst most innovation districts are mixed-use and multi-tenanted, the principles of density, permeability, proximity and a degree of active management can apply to vertical villages and corporate campuses alike.

People drive places: While the knowledge clusters identified in the report differ in composition and maturity, what they share is a reliance on human capital. As the innovation district paradigm has evolved, a focus on people has gone beyond the need to attract a concentration of highly-skilled individuals. Whether as the result of the tech backlash, or the outcome of local government engagement, many districts are increasingly focused on how they impact existing and emerging communities. This can translate into programmes for local employment opportunities, or the opening up of private and third spaces not just to occupiers, but passers-by. There’s also been an increasing focus on leadership – be it public, private, or civic. If innovation districts are to deliver on their strategic aims, whether its democratising the innovation economy, creating a sense of place, or simply reaching full occupancy, identifiable and consistent leadership is key.

The most enduring urban development forms are those which adapt and evolve without losing their identifiable characteristics and principles. They work best when employed as frameworks rather than blueprints, taking into account political, economic, and strategic differences. As a result, the success of London’s existing and emerging innovation districts will depend not just on the development of real estate, but of new ways of creating, measuring, sharing, and valuing innovation activity.

Read the report:  London’s Knowledge Clusters


Author:  Kat Hanna,  

Associate Director of Urban Change


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