Innovation districts can be the future of the Northern Powerhouse

6 min read

For the 21st century city, knowledge is power. Just as planners 70 years ago understood the need to cluster manufacturers together to deliver economies of scale, today’s urbanists cite agglomeration as the key to economic success.

While the modern, knowledge-rich service sector may not be as land or labour intensive as older industries, businesses continue to value locations close to suppliers, workers and competitors. Evidence on how ideas develop and spread suggests proximity remains crucial to productivity, despite rapid improvements in communication technology over the last two decades.

That’s why innovation districts are becoming increasingly important for cities across the world. By bringing together businesses, researchers and investors, cities can benefit from the uniquely vibrant and entrepreneurial environment these clusters create. With sufficient investment in infrastructure, innovation districts can provide a significant boost to urban economies. The concept is particularly relevant for the North of England.

The Northern Powerhouse agenda is built on the idea that, individually, Northern cities are strong, but collectively they are greater than the sum of their parts. By harnessing the creativity of innovation districts within major urban areas like Leeds, Sheffield and Manchester, the North can make a major contribution to increasing UK productivity.

There are a number of successful innovation districts across the world, but perhaps the most famous examples are located in Silicon Valley. Home to the world’s biggest tech companies such as Apple and Google, the area has an estimated GDP per capita of almost $130,000 compared to around $45,000 in UK. California’s celebrity entrepreneurs such as Facebook’s Mark Zuckerberg have clearly played a major role in developing Silicon Valley into what it is today. Equally important, however, is the role played by local, state and national government in promoting an environment conducive to risk-taking, innovation and, ultimately, growth.

Research from the influential, Washington DC-based Brookings Institute finds innovation districts are most successful when supported by a network of public, private and civic stakeholders united behind a clear strategy. Districts prosper when local leaders identify and develop sectors in which their city has a particular advantage. Silicon Valley is home to Stanford and Berkeley, two of the top research universities in the world, and the area grew initially due to development of the mass-produced electrical semiconductor in the 1950s. Over the last few decades, state and city authorities have remained laser-focused on promoting the area as a tech hub. Businesses have focused strongly on quality of life for employees, by improving public transport infrastructure and supplying the super high-speed broadband.

Innovation districts emerged in the USA, but businesses and political leaders in the UK are catching on. The UK Innovation Districts Group was established in 2017 to represent six areas across the UK, including the Northern cities of Leeds, Liverpool and Manchester. Plans for the Leeds Innovation District were announced earlier this year, with a £450m redevelopment of Leeds General Infirmary proposed. The new district will release land for commercial and research development, bringing some of the UK’s most innovative health researchers together at the heart of the city. Manchester also recently announced plans for its own £1.5bn innovation district, on the site of the University of Manchester’s north campus. Elsewhere in the city, researchers and investors are well on the way to creating Graphene City, a thriving district built around Manchester’s own revolutionary material.

The benefits of innovation districts are clear, and there is evidently ambition to create more in the UK. Government can and should play a role in promoting innovation districts as a route to improving productivity and rebalancing the economy. There is huge potential to utilise publicly owned land, as outlined by the Local Government Association’s One Public Estate programme. This initiative is set to create 44,000 jobs, release land for 25,000 homes and raise £615m for local authorities. There is scope to expand this and similar programmes to utilise currently underused sites - many of which are well located in town and city centres - for more productive purposes. Northern cities are particularly fortunate in this respect, with many underused publicly owned sites in and around city centres that could be regenerated with innovation in mind.

The government’s emerging Industrial Strategy sets out the need to drive investment to areas with potential to deliver the greatest return. Cities should utilise public funds, for example those delivered through devolution deals, to invest in social and physical infrastructure in and around innovation districts and also to assist education providers in delivering the skills that these industries need. UK government, meanwhile, should ensure money is available to local leaders with the vision and ambition to promote key sectors and industries. Leeds has already demonstrated the kind of entrepreneurial spirit that helps innovation to thrive, and government should support this kind of activity across the Northern Powerhouse.

This article was originally published by the Yorkshire Post