How we can unlock the potential of innovation districts

Cities today face mounting pressure to attract investment, talent and businesses, competing with others worldwide while fostering inclusive, sustainable economic growth. As traditional approaches to urban development evolve, innovation districts have emerged as a compelling model, serving as vital catalysts for economic regeneration and competitiveness.

While discussions about their role and effectiveness are longstanding, the challenge remains in understanding what truly makes an innovation district thrive and how its benefits can be scaled and equitably distributed.

What does the evidence tell us about the impact of innovation districts and how can other urban regions learn from their successes and challenges?

Three core drivers of change inform innovation districts:

Cities are constantly competing to attract investment while facing economic challenges and uncertainty. To drive growth, many are turning to place-based strategies, leading to various policy approaches.

In the United Kingdom, devolution allows regions more flexibility in funding and economic planning. South Korea, on the other hand, takes a more centralized approach, with cities competing for innovation investment. Meanwhile, private sector-driven initiatives – such as Ford’s investment in Detroit – play a key role in shaping local economies in the United States.

Many national industrial strategies focus on technology, innovation and research as drivers of economic growth. But do these strategies genuinely benefit local communities?

Take Liverpool City Region and Cleveland Health Tech Corridor – thriving biomedical hubs with world-class expertise. Yet, surrounding communities still face significant health disparities. Ohio, for instance, ranks 47th in health outcomes according to the 2021 Health Value Dashboard, highlighting the gap between innovation and real local impact.

History offers important lessons. Today’s conversations about inclusive innovation echo past debates, such as the urban regeneration efforts of the 1980s, which often relied on trickle-down economics.

London’s Canary Wharf raised concerns about whether business-led development actually benefited local people, while 1990s science parks – designed as isolated, single-use spaces – missed opportunities for cross-sector collaboration. Today’s innovation districts must do better by prioritizing connectivity, inclusivity and adaptability.

Building the right thing in the right place is more crucial than ever. As cities commit to net zero targets, the hefty carbon cost of urban development must be reconciled with the need to grow.

With the built environment accounting for 40% of global carbon emissions, the traditional speculative, office-space development model struggles to deliver long-term value and local benefit to justify the high embodied carbon costs. Illustrative of broader trends, in the second quarter of 2024, the share of empty US office space reached a historic high of 20.1%.

Post-pandemic, we should reconsider the long-term value and adaptability of places and not reflexively assume that redevelopment from scratch is the answer. Instead, we must leverage existing assets and balance growth objectives with the carbon implications of building afresh.

Our increased reliance on technology and the ubiquity of digital services has fundamentally changed economic participation and our experience of place. If places cannot adapt to these expectations, they risk being left behind.

Digital infrastructure is essential for economic engagement and not only for a new generation of knowledge and digital economy workers but also for public and urban service interaction.

Ride-sharing services such as Uber have revitalized night-time economies while introducing transportation challenges.

E-commerce has disrupted high streets, contributing to congestion and upending urban logistics. Remote working has dampened office space demand, compelling cities to rethink inner core usage. These shifts highlight the growing influence of digital realities on urban and economic planning.

Moreover, innovation districts must prioritize robust digital infrastructure to support high-potential tech businesses and the technologies they develop. Testbeds are increasingly essential innovation district components, whether for testing robotics renewable energy technology, such as in Masdar City, UAE, or autonomous vehicles, such as the Jurong Innovation District, Singapore.

Together, these three drivers redefine how innovation districts can serve cities as models for place-based economic growth.

Public dialogue on innovation districts has traditionally looked at the characteristics of their successes, including leadership, critical mass and coordination. Building on research, we now have an opportunity to review global evidence and hear from innovation district pioneers about their impact and how the lessons they have learned can translate to other geographies.

Our goal is to uncover tangible and practical actions in innovation districts that have demonstrably revitalized urban areas and catalyzed growth. We seek evidence of effective urban economic policies and their interaction with the built environment and placemaking to create successful innovation districts.

The World Economic Forum’s Alliance for Urban Innovation will examine these drivers of change in its 2025 Innovation Dialogue series, bringing together perspectives from innovation districts worldwide and industry partners in three collaborative workshops. Each will explore the components of innovation districts, considering their social, environmental and economic sustainability through:

An Innovation District Toolkit will be published by the end of 2025, drawing on the best case studies and place-based innovation experts from government, the private sector and academia. Various actors will use it to help establish the next generation of innovation districts. We are aiming for practicality, accessibility and a strong dose of inspiration.

If you have a case study or want to be involved in the Innovation Dialogue series, please contact Jibran Ahmed (jibran.ahmed@weforum.org).