From alleys to valleys: creating innovation precincts through inclusive policy

Posted April 26, 2018

SGS Economics and Planning Innovation Precinct Paper

Public policy literature overwhelmingly focuses on premium inner-city innovation precincts. However, planned innovation outside typical inner-city innovation precincts is both important and possible.

In this paper, we identify what makes planned innovation precincts successful and recommend that policymakers consider different policy mixes to support innovation in both the alleys of the cities and the valleys of the regions.

SGS Economics and Planning Laura Schmahmann

Innovation is one of the key ways to achieve much-needed productivity in Australia, but it needs to be backed by inclusive and credible policy. A lot of the research and policy drivers that support innovation don’t fully consider spatial requirements. It is important that policymakers understand that innovation outside inner-city areas is important and very possible - said SGS Economics and Planning Associate Laura Schmahmann.

Eight success drivers for innovation precincts

Our research shows there are eight key success drivers for innovation precincts:

  1. Highly accessible location is important for attracting workers. Businesses will not locate in precincts if they cannot attract workers to that location. Accessibility is also important for business-to-business connections.
  2. Credible and reputable anchor enterprises or institutions that are present, relevant to and engaged with industry. These can include hospitals, universities, research centres or large corporations. It is important they operate in industries relevant to the precinct to promote engagement.
  3. The critical mass of related enterprises to promote activity and vibrancy which will assist in creating an amenable environment.
  4. Vibrant, amenable and walkable physical environment often through mixed-use and dense development.
  5. Well connected digital environment to attract technology firms and enable highly efficient global communications.
  6. Open and democratic operating environments that promote a mindset for collaboration. The collaboration will not occur spontaneously; it is a long-curated process.
  7. Shared or collaborative spaces that facilitate collaboration such as conference facilities and meeting rooms to facilitate formal interactions.
  8. Flexible design that promotes scalability and continual evolution as firms expand or shrink. Governance arrangements that nurture the precinct’s vision and its long term economic development objectives.

Clearly, a nuanced application that considers the type of innovation precinct or cluster in question is required. Not all the success factors identified above are relevant to the same degree for each type of innovation district. We summarise which success factors are most relevant to five different innovation districts in the paper.

It is clear, however, that two pre-conditions for success have universal applicability: creating collaborative environments and strong governance structures to support innovation.

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SGS Economics Planning Marcus Spiller
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