What is the key to a successful Innovation District?

Comingling of industry and academic partners in spaces, where both the physical geography of the place and the programs and events that bring them together, integrate seemingly disparate industries and academics in such a way that it generates bumpability … “purposeful accidental interactions”.

 

Why are public-private partners important, particularly in and outside of the region.

You need to evaluate value proposition for each Innovation District. A key benefit of Innovation Districts is economic development, which requires partnerships between the university and private industry or other public entities. What is the ROI for the university and the community? There is a substantial increase in land value in areas designed for the bumpability characteristic of Innovation Districts compared to comparable spaces that lack those opportunities for creative collisions.

There are fewer state funds to support the university and fewer federal funds for research, so one goal is to build a collaborative structure that provides value to industry and resources for the university – benefits in addition to the real estate transactions. To achieve this, it is critical to design the space and place to promote interactions between industry partners and the university. This often demands that the university thinks outside of the box to provide opportunities for faculty and students while providing benefits to the industry partners.

The challenge is emphasized by a Sacramento politician describing the UC Davis Aggie Square Innovation District in downtown Sacramento:  “So often the university is like Fort Knox – it has a lot of ‘gold’ that would be valuable for the community, but it is also impenetrable. If we can change that with this Innovation District at Aggie Square, it will be a game changer for the entire city of Sacramento.”

 

What are good strategies to build an innovation district in which the multiple partners come together in a coherent whole, rather than a collection of disparate groups that are attracted by what in MV is a very attractive piece of real estate?

This could be a really great land deal, but how can it be more than a real estate transaction. It is very important to have someone who is leader of the Innovation District to have an eye on the ball and maintaining the balancing act of multiple desperate voices. Critical to have a balance of catalyzing ingenuity and cooperation to have an impact on the university and community that goes well beyond a real estate deal.

For a successful Innovation District, you need a mix of users and strategies from a program perspective to bring them together. In Oklahoma City they started off with a goal of developing a governance model and leader who understands the need for deliberate programming to bring people together. Initially just brought in food trucks at lunch in a central location that lured people out of their silos and got them talking with each other. In the University of Utah Research Park, they used a similar approach with food trucks called “heart of the park”. This is a great way to get things going in a flexible way without building bricks and mortar amenities before knowing what people really want. Subsequently they hosted stakeholder meetings to bring people together, providing input that led to new approaches for promoting interaction and innovation. That type of programming occurs in the most successful Innovation Districts. This is required for holistic thinking that builds an attractive ecosystem.

Different Innovation Districts have a wide variety of different industry partners, often reflecting the expertise of the university or particular opportunities in the region. For a good resource, check out the piece by Bruce Katz from the Brookings Institute “The Rise of Innovation Districts” <https://www.brookings.edu/essay/rise-of-innovation-districts/>.

 

What are lessons learned from "less" successful innovation districts? What makes one less versus more successful? What are the measurements of success that other districts use?

There are a couple of different aspects. Early Research Park models were built like business parks … a bunch of buildings that all look the same and each with a big parking lot out front. Many universities build Research Parks as a real estate play. But they didn’t focus on the culture side, and they didn’t focus on the economy side. They didn’t think about “placemaking”. Over time industry partners were less interested in that type of space, so many of the buildings ended up being filled with academic research departments. The anticipation that if you build-it, they will come didn’t happen. It doesn’t happen without purpose, and it doesn’t happen without being very deliberate! 

In short, the less successful are places where people think about it with a one-dimensional approach vs thinking of it as a thriving, engaging community. We have been asked by many clients to help them shift from this situation to a successful Innovation District. A good example is the University of Utah, which had a Research Park with some very successful industries. But at 5 PM the entire place went dead. They had not taken advantage of the place and the opportunities for the live, work, play community that stimulates innovation – a dynamic place where people want to be with at least an 18 hour a day active environment with people living, working, amenities, including housing for graduate students and researchers working in the district. The design brings together academic researchers and industry partners.

 

Your discussion of the different lens to utilize in planning the strengths of innovation districts included a lot of blank palates. Here in MV we have a Master Plan that has outlined locations for residential uses, innovation/campus uses, park and open space areas, a new stadium and hotel sites. Add to that Master Plan, we have built environments to the east and west, the San Diego River to the south, a 6-8 lane roadway to the north. How do these "existing conditions" help or hinder us in creating a successful innovation center?

Innovation District developments come in a wide variety of shapes and sizes. Even mature Research Parks can be modified to generate the energy of an Innovation District by expanding the connections between the spaces and the surroundings. How can you bring in the ecological and environmental context, tie together to the research expertise of the university, and connect with the city’s goals; create green spaces, walk and bike paths that make the place accessible and connect the community to the district? There are many ways that this can be done by mixing in the residential areas, entertainment in the stadium, hospitality, and green spaces like in MV. Comingling the academic, industry, and non-profits so they are not simply co-located but also interactive and collaborative.

Every innovation district has its own origin and there are unique ways to make the place authentic and successful. Sometimes the place constraints that seem restrictive can be reimagined to add to the place – look at it as an opportunity, not a challenge.

What types of key "anchors" have you seen in the initial phases of innovation districts that have successfully jumpstarted these projects?

A great example is the Mission Bay Innovation District in San Francisco. It didn’t originally start off as an Innovation District during the initial planning about 20 years ago – it was just a San Francisco neighborhood that hadn’t been developed. The San Francisco Giants needed a ballpark, and the University of California, San Francisco (UCSF) needed more space for expansion. The political leadership interacted with the developers to offer UCSF the site to start their campus. So, it was the UCSF anchor that catalyzed the process, with a variety of biotechs wanting to co-locate with UCSF because of the research coming out of the university. The ballpark brought in housing that wanted to co-locate nearby, and retail wanted to build off of the foot traffic that the events generated.

Planning involved a Live-Work environment. Over the years additional anchors wanted to co-locate because of the energy. Chase Center became a major entertainment center that provided another level of energy to the innovation district. Subsequently a lot of creative start-ups have taken ground floor spaces. Now there are many different partners that make the Innovation District vibrant.

Different Innovation Districts have can be a wide variety of anchors, often reflecting the expertise of the university or particular opportunities in the region. For a good resource, check out the piece by Bruce Katz from the Brookings Institute “The Rise of Innovation Districts” <https://www.brookings.edu/essay/rise-of-innovation-districts/>.

One of the fundamental catalysts for partners at university Innovation Districts across the country is the pipeline to an educated, skilled workforce. The research expertise of faculty and students at the university is another driver.

 

It seems that many large businesses and tech companies are rethinking how much office space they need, since so many employees are successfully working from home. How might this affect your design thinking? Also, are you seeing any empty buildings in existing districts?

One example, Austin 3.2M of sublease space available. Nevertheless, the market is holding up better than in the dot-com bust. With the encouraging news about the vaccine, some companies are beginning to due diligence to determine workplace needs in the future. Some points from recent discussions. Within the first 30 days of the pandemic one Research Park had a 30% drop in occupancy, but two months later they were up to 98% occupancy. It is clear the future will be a mixed mode reflecting hybrid activities where some portion of the employees will work from home. Need to plan flexibility so the space can be used for a variety of different uses in response to these changes and market factors.

Need an evaluation of shocks and stressors to determine resiliency. The design should occur with these shocks and stressors taken into account. Almost every Innovation District across the country is planning for interaction, collaboration, bumpability because humans are very social creatures.

Another trend to consider is that investors are becoming more interested in supporting scientific activities in Innovation District rather than just developers – there is an opportunity for capital in partnerships. The cautionary note is that you have to make sure the investors understand the market and opportunities.

The merge between Life Sciences, Pharma, Tech, and medicine are particularly powerful right now.

Sometimes large companies are joining Innovation Districts, not with the goal of moving their headquarters but to be part of the interdisciplinary innovation opportunities.

 

How can the Innovation District take our Transborder Region into account?

MCA district in El Paso<[https://www.virtualbx.com/feature-story/el-paso-perkinswill-solidifies-concept-on-440-acre-hospital-district/> … Some of our clients actually commute back and forth across the border and live in Juarez. But when they think about what they are doing in terms of the biomedical research industry biomanufacturing and fabricating, they are really looking at it holistically across the region. They are literally contiguous across the border with the Rio Grande running right through the border region. I think there are enormous cross-border opportunities for synergies in San Diego.

A few years prior to our work in MCA we had another opportunity to work in another border region in McCallan Texas on their Innovation Park with the branch of the University of Texas anchored there. What they were trying to focus on was opportunities related to nearshoring, and in some instances onshoring, but the maquiladoras that were right across the border provided manufacturing for some of the developments that were coming out of the engineering programs in the university. This was instrumental in bringing in international partners, including many partners from Asia that were bringing R&D centers to the park so their applied research was being done in a research district that is close to their manufacturing. The researchers would go back and forth across the border multiple times a week, sometimes tooling and re-tooling ideas that had been generated across the Pacific to bring practical applications on the near-shoring side to get ideas to market as quickly as possible for multiple different industries.

SDSU has a unique opportunity to think of this as a transborder ecosystem. 

 

In what ways can innovation districts be structured to incorporate / leverage cross-border economic and networking assets?

The Medical Center of the Americas Innovation District in El Paso-Juarez just hosted a medical manufacturing series titled “From Start to Finish”. Speakers were from both sides of the border, including Julio Chiu who was founder and CEO of SEISA Medical and serves as co-chair. Discussions include economic development, asset sharing, and other issues of importance to partners on both sides of the border. This is a great example of how programming can facilitate cross-border interactions.

 

Can you share examples or information in regard to the possible international partnerships with the mission valley project as we have Tijuana across the border?

The Aggie Square project in Sacramento is driven by UC Davis, which has very strong agriculture and veterinary programs. One of their proof of concepts was how they developed the neighborhood around the medical center in Sacramento. They had taken over the California State Fairgrounds and retrofitted one of the old buildings, developed high tech space and leased the space to Asian companies who wanted collaborations with UC Davis Health. They found that the ROI in an Innovation District is higher than for comparable space that lacks the purposeful bumpability built in – The stickiness factor of wanting to be near university research and an entrepreneurial environment. They quickly learned this from that first building and used this proof of concept to build interactions with Asian companies that ended up investing in Aggie Square.

Several years ago, we worked on an Innovation District with the University of Texas branch in McCallan, right across the border from Mexico. The maquiladoras just right across the border provided manufacturing for some of the developments that were coming out of the engineering programs in the university, providing opportunities for nearshoring in industries that previously were primarily occurring overseas. The proximity of the R&D with manufacturing facilitated just-in-time delivery getting the product to market as quickly as possible. This was instrumental in bringing in partners from Asia that were bringing R&D centers to the park so their applied research was being done in a research district that is close to their manufacturing. The researchers would go back and forth across the border multiple times a week, sometimes tooling and re-tooling ideas that had been generated across the Pacific to bring practical applications on the near-shoring side to get ideas to market as quickly as possible for multiple different industries.

We are seeing a lot of this also in Medical Center of the Americas, a 400-acre Innovation district in El Paso. This is a little closer to the border than between Mission Valley and Tijuana.  The Medical Center of the Americas looks at itself as a larger innovation ecosystem that includes both Juarez and El Paso. They have a strong focus on medical sciences and Life Sciences. Some of the partners in the Innovation District commute back and forth across the border regularly.

 

Can you share examples of possible opportunities with innovation districts that include Agricultural/Ag tec industries?

The University of Illinois Research Park in Champaign, Illinois, and the Purdue Innovation District both have a focus on Animal Health and Ag Tech. Another example mentioned above is Aggie Square in Sacramento.

A core question that these Innovation Districts have to ask themselves is how does agriculture embed itself into the culture of the place? Embedded in the strategy is the farm-to-market interactions with the community, providing input into the community about how to move ideas to implementation. Cross pollination is very important, and very potent in the Ag community. For example, Texas A&M started a program called One Health+ that incorporated the Ag health programs. The Ag perspective solved a core pharmaceutical problem related to providing eggs for influenza vaccine development, developing a plant-based solution.

 

What can Innovation Districts involve the K12 community as a user group? Getting K12 students exposed to SDSU, higher ed, local industry?

Innovation districts are best thought of as an Innovation Community, thinking about the people who will live there and work there, and the day-to-day needs of the community, which includes schools. I can give you the example of the Mission Bay District in San Francisco. Mission Bay doesn’t yet have an elementary school, but it has a space reserved for an elementary school. This reflects the concept that the community would be walkable and bikeable, so the people living in the community would be able to meet the needs of their families.

When we were planning the Texas A&M BioCorridor many of the future occupants said “it would be really great if we could walk nearby to get a sandwich, if there was a daycare and a K-12 school nearby where we could drop off our children, if there was open space where we could walk when we needed to get out of the building. These are all amenities that make great spaces into great places. Another example is Neo City, where the second or third building was the Neo City Academy, a magnet school focused on building the pipeline. Churchill Tech Park in New Orleans also has a STEM Academy right next door to a Community College focused on workforce development. This closely ties to the lack of diversity in academic and innovation industries. The pipeline has to start well before people get to college.

 

To what extent have the innovation districts you’ve worked on attract major business from outside the region—specifically because they see an economic, R&D, or workforce interest created by the Innovation District? Compared to primarily working with in-region or already in-state businesses.

An example from Austin is the relocation of Merck to the Innovation District associated with a new major medical research center as well as the cybertech industry. Austin is now calling itself the Silicon Hills, with a variety of industries moving into town (including Apple and Oracle). This was not because of a desire to move from Philadelphia to Austin, but because of the merger between modeling and life sciences industry to bring new insights. The Army Futures Command also ended up coming to Austin because of this market.

Working together with the local region is important also because it provides opportunities for serial entrepreneurs who are building the regional economy.

Fundamentally Innovation Districts rely on the talent pool, which is provided by the university. Innovation Districts depend upon a mix of users in different industries and workforce to support these universities. When there is a strong workforce and regional opportunities, very often external companies will want to capitalize on those Innovation District resources. There are many examples in the Bay Area and elsewhere.

 

What are examples of Innovation Districts that effectively integrate the arts? On the same note, are there examples that involve the nonprofit sector and community engagement in addition to traditional entrepreneurship?

A mix of uses is crucial for sparking creativity. For example, the Mission Bay Innovation District was started by the university locating there, which brought in industries like biomed and biotech, but it is now a complete melting pot of different uses, including the entertainment district, including the ballpark and stadium that will host live performances, retail, maker space, nonprofits (e.g. SFMade which works with minority- and women-owned businesses to help them succeed), cafes, restaurants, breweries, etc. Need to consider what is the needed return on investment for the ground floor space, either through rents or amenities for other tenants in the floors above to make sure that all people from all walks of life view the space as a destination even if not working there. [Note that the integration of arts into innovation districts was also discussed in the presentation.]

 

Can you talk about how you guarantee a successful art in public places program throughout the development?

The governance of the Innovation District has a major role in integrating public art because it develops the requirements put in place during the initial development of the Innovation District. For example, the University of Utah Research Park is trying to reinvent its successful program. The appointed Board for the Research Park is led by the VPR together with university and community members, one of the groups under this is the Director of the Research Park who is also the Director of Real Estate for the university, and the Legal counsel collaborates with Head of Real Estate on “codes, covenants, and restrictions”. The design guidelines approved by this group include integration of public art. A good, upfront approach is to build a certain percentage of costs into art.

Art is a good way to make an environment accessible, inclusive, and provides valuable markers of places. It enhances the environment and can inspire creativity. It adds to the rich experience.

How is the performance of an innovation district judged/evaluated?

There are multiple factors of evaluation to determine what success looks like. The very first one depends on “what you are trying to achieve” and why are you doing the innovation district. You should have an answer for that up front. There are many different reasons that are all valid, and there may be multiple reasons which require measuring each of the desired outcomes. We use our convergence analysis with a lot of detailed qualitative and quantitative outcomes that are measured. They can be measured on economic output, jobs creation, fiscal and financial impact, employment opportunities for students, new opportunities for research support, industry support, community engagement. Does the place close down at 5 PM and go dead, or is it a rich and vibrant community day and night where people are experiencing a high quality of life. This is a wide-open question but an important question, and the metrics can be measured a lot of different ways.

 

Is there a way to quantify “bumpability”?

Recently I was interviewed for a couple of articles where we were talking about bumpability, the different ways of measurement, and the applications. The question is how do you deliberately design space that facilitates accidental interactions? We believe those interactions can happen at a district scale and they can happen within individual office units. It is the areas where we gather, the common spaces … the third spaces. Whether a place people meet after work, the coffee shop, the lunch place, the green space. Sometimes these spaces can be programmed in a way that brings people together to socialize.  We focus on designing the space so that these spaces come together.

Translated into the COVID environment some colleagues and I participated in a panel on post-COVID strategies for Innovation Districts. The reality is that we are social creatures and want the opportunities for connectivity, so the prediction is that we will have a hybrid modality. In considering the post-COVID situation we have to be empathetic to accommodate people who may not be able to participate in person, we are designing our spaces and places in a way that is more resilient to handle the shocks in our community (possibly including the next pandemic).

 

Of the innovation districts in which you have been involved, what proportion have delivered a clear return on investment, and over what time scale?

Good example is Mission Bay Project in San Francisco, but you could consider many other Innovation Districts and much older Research Parks like Stanford and Research Triangle. You have to realize that this is a marathon, not a sprint. It is much like the process that academics go through during the research process, whether you are in the sciences, engineering, liberal arts, fine arts, or any other field. The testing and learning process involved in research is inherently similar to the process of developing an Innovation District. As mentioned above, success can be measured in multiple ways.

A recent example is the consideration of the industry partners with substantial economic impact for the Austin Innovation District. There were two measurements that were really valuable. First, we had to think about “why are you trying to do an innovation district in Austin?” We realized that there is a big piece of underdeveloped property in the heart of Austin that could be market developed or converted into an innovation District. They did an intensive analysis of what would it do for the community if it was developed in a way that integrated the nearby hospitals with medical industries as an innovation community. The job outcomes and rental rates in the buildings of the region were substantially greater if the space was developed as an Innovation District vs traditional office spaces. The second measurement that is really important is related to diversity and inclusion, and equity in jobs creation that support upward mobility. For every white-collar job created, there were many good-paying jobs as technicians and support staff for people from a two-year job training program. That can be a meaningful game changer for people in the community.

 

Potential challenges

How might the current COVID-19 pandemic environment transform innovation districts? I imagine that we will be keeping distant for another year or more.

Correct, nobody knows what will happen in the next year or so, but remember that the innovation district is not going to happen tomorrow, you are planning for the next decades. There will be very many forces that may impact our lives, but planning for an innovation district is based upon a long-term vision to make sure there is a plan to bring people together to collaborate, and integrates a rich mix of users where people live, work, and play. After the current pandemic there will be different situations that we need to consider, but there will be a continued need for the community to get together and collaborate.

 

In the current situation where many people are working from home, what do you think is the prospect for commercial real estate and Innovation Districts in particular?

Many Innovation Districts continue to stay occupied with the employees still coming to work. A reason is that the majority of the spaces are lab spaces and the work cannot be done from home, especially for the Life Sciences spaces. There is an apprehensive about office spaces, but that is the reason to push Innovation Districts as communities where people live and work -- basically 24-hour spaces. The spaces will continue to transform if they maintain this vibrant community perspective.

Just participated in a panel about “Post-COVID Strategies in Innovation Communities” at the 2020 AURP conference. Some of the lessons learned are that heavily intensive labs with special equipment are still regularly used – often the spaces were safer than the outside community. Both on R&D side and scale-up manufacturing side there was little disruption. The biggest challenge was supply chain issues. With respect to the office scene, we expect that the future will involve more hybrid mode where some people will come back and some will want to be back together because they want to be part of human interactions. As social creatures the concept of bumpability is very attractive to us. We expect that those desires will not decrease in the future.

 

How have you seen innovation districts navigate challenging economic times as we are currently facing?

There are numerous examples involving a robust marketplace with an innovation community. The 2008 recession was a last-in, first-out experience. It was a blip on the radar screen with respect to the industry and innovation community.

Despite the current COVID challenges there have been some big moves recently associated with innovation communities, e.g., Tesla move. Jobs creation in 2020 in Austin is beating 2018 jobs creation numbers. From the San Francisco Bay Area perspective, it is the culture that you build into the Innovation District that is critical, the current issues result in ups and downs, but if there is a strong culture then there will be a framework that facilitates innovation and stability regardless of the market conditions. The pandemic is one situation, but there will be many more situations in the future that can’t be predicted. It is important to enable the innovation process to help companies survive these challenges.

The versatility and diversity built into the innovation ecosystems is crucial for stability. Singular focused Innovation Districts have a much harder time. The more robust mix of partners in Innovation Districts that range from the humanities to the science and tech sectors is very important for creating that balance.

 

As these districts are not always co-located with the rest of the campus, how do you integrate them with the main campuses? Will they face risks of being siloed?  Faculty and students working in these centers may feel a bit disconnected from the main campus.

You have to be very intentional and strategic about connectivity between campus and the Innovation District, with programming that brings people together. The environment of Innovation Districts makes it attractive for faculty to want to spend time there, but there has to be an intentional effort to connect with the campus. The physical connectivity is also important to allow people to readily move from one place to another, making the travel between the campus and Innovation District as simple, convenient, and pleasant as possible.

 

Academic departments are prized for their specialization. How do you envision making departmental boundaries more permeable? Just being near each other doesn’t make it happen.

That is absolutely right. Just being next to each other doesn’t achieve permeability and bumpability. Innovation districts have to make a very intentional effort to bring people together. Programming is important. For example, how we think about the ground floor is critical. The ground floor is about people getting together, socializing, and should be inviting for people from different departments and people who think differently. This is one of the design strategies that can bridge the boundaries between departments to promote exchange and spark creativity.

 

Is there ever a tension between industrial and academic partners in an innovation district. PhDs in STEM often earn twice as much in industry as in academics. When they end up doing the same research/work, why be an academic?  My kids love innovation districts and work in them, but they would never do this as faculty-earnings are too low. Instead, they work for the companies involved.

Absolutely. Everyone has their own special niche so for some people the academic environment is more satisfying and for others working for industry is more rewarding. Done right, the two can be blended effectively. One example I like is that a colleague mentioned that working with a particular university is like Fort Knox; it is where all the gold is, and if only it could be leveraged it could have a tremendous impact on the community. However, it is impenetrable, so the impact is not accessible. So, the trick is to develop porous environments. Part of this depends upon how the university deals with IP. Mission Bay has a great model for dealing with IP for students and entrepreneurs. It is important to think outside the box … if possible, even a concept like joint appointments between the university and industry. Industry partners are looking for a workforce pipeline, but there are opportunities for integrating basic research from the university with industry partners.

What is the typical organizational & legal structure to create/run an innovation district?

There are many different models for university led Innovation Districts – one example, University of Utah structural hierarchy: 

• Board of Trustees
• President (ultimate approval of major decisions at president’s cabinet level)
• Innovation District Board chaired by VPR and includes representatives from within and outside of the institution (responsible for day-to-day activities, convening and facilitating programming to bring different groups together)
• Head of Real Estate for university (responsible for lease transactions and negotiations, working with multiple partners)
• Legal counsel (collaborates with Head of Real Estate on “codes, covenants, and restrictions” for district, guidelines for buildings)

The structure should reflect the goals of the Innovation District, what are you trying to control, what are you most concerned about and least concerned about, and how do integrate legal and institutional roles to best achieve the outcomes you are trying to implement.

 

Can you share examples of effective advisory board structures for innovation districts? How have these balanced keeping community, faculty, and other campus and business stakeholders all engaged?

We work frequently with consultant partners who do coaching and advising about governance structures of Innovation Districts. They come in all shapes and sizes, much like the comment “If you’ve seen one Innovation District, you’ve seen one Innovation District.” The models can vary widely.

What we have seen is institutional led Innovation Districts have a more effective model because of the singularity of leadership: control of the land, control of the property, codes, covenants, restrictions, guidelines, review process, consistency of management. The model is very different for a community Innovation District that is not run by a University.