Innovation Districts – What are they and why do they matter?

Varun Mallapragada
4 min readNov 5, 2018


- Steve Jobs

Innovation has become a buzz word that people love to hate. Every business founder/leader agrees that it is important but no one can agree on one definition for the word.

Innovation is turning an idea into a solution that adds value in a customer’s perspective.

Innovation is staying relevant — sustaining the Product-Market Fit.

Innovation is the introduction of new products/services of value.

If Creativity is to think of something new, then Innovation is to implement that something new!

I believe that every definition of Innovation is true and it does not really matter as long as people continue to innovate.

What causes innovation? Mostly, necessity. How does one cultivate the culture of Innovation? By providing an ecosystem or an environment or a platform that promotes, supports and facilitates Innovation.

Where does one find such environments? They have to be built! What are these environments called? Innovation Districts! Ta Da!

What is an Innovation District?

Textbooks say that an innovation district is a place-based urban development strategy that aims to regenerate an under-performing downtown neighbourhood into a desirable location for innovative and creative companies and workers.

One can define an Innovation District in many ways, but I believe that an Innovation District is a platform for all kinds of activity that stimulates innovation while offering value to entities that drive the economy.

Katz and Wagner, authors of the paper “The Rise of Innovation Districts”, argue that successful innovation districts emerge in areas with the right mix of economic assets(universities and research institutes), physical assets(transport, and a mix of buildings), and networking assets(formal/informal arrangements for knowledge exchange and collaboration). Essentially, the role of innovation districts are to transform economies from industrial-based to technology-driven places.

Innovation Districts have proven to be practical solutions for cities to modernise their economies and pivot from traditional industrial-based production to technology-driven services. A wave of academic research is also emerging analysing innovation districts positive effects on job creation and economic development.

The Brooking Institution defines innovation district as “geographical areas where leading- edge anchor institutions and companies cluster and connect with start-ups, business incubators, and accelerators”.

Why Innovation Districts matter?

  1. Employment Opportunities — facilitates the ability of cities/metropolitan areas to generate more jobs, especially accessible jobs
  2. Upskilling Residents — helps to provide educational opportunities through programs
  3. Economic Growth — activity in R&D in tech & creative sectors will contribute to economic growth by helping generate revenue
  4. A Sense of Place & Shared Assets — define and implement a vision for inclusive growth

Who are the key players in an Innovation District?

  • Local Governments
  • Advanced Research Institutes
  • Incubators, Accelerators and Cultivators of Innovation
  • Startups
  • Anchor Companies and SMEs
  • Investors
  • Real Estate Developers

What are the 3 forces that come together for an Innovation District to form?

Composition of an Innovation District

Economic assets are the firms, institutions and organisations that drive, cultivate or support an innovation-rich environment.

Financial assets can be separated into three categories:

  1. Innovation drivers are the research and medical institutions, the large firms, start-ups and entrepreneurs focused on developing cutting-edge technologies, products and services for the market
  2. Innovation cultivators are the companies, organisations or groups that support the growth of individuals, firms and their ideas. They include incubators, accelerators, proof-of-concept centres, tech transfer offices, shared working spaces and local high schools, job training firms and community colleges advancing specific skill sets for the innovation-driven economy
  3. Neighbourhood-Building amenities provide essential support services to residents and workers in the district. This ranges from medical offices to grocery stores, restaurants, coffee shops, small hotels and local retail

Physical assets are the public/privately-owned spaces, streets and other infrastructure designed and organised to stimulate new and higher levels of connectivity, collaboration and innovation.

Tech Revolution versus Human Evolution (on the basis of Moore’s Law)

I would like to conclude this short read by stating that Innovation Districts are essential for any economy and to push the human race forward. These environments, as I’d like to call them, are a boon for entrepreneurs and anyone who is looking to build something of value. I also do believe that one cannot put a stop to Innovation but creating a supporting environment, such as an Innovation District, just makes the whole process of innovation more effective and efficient!

Please do leave your responses, would love to understand what you think about this whole idea of Innovation Districts!



Varun Mallapragada

I write about entrepreneurship, business strategy and innovation.