Behind Boston’s innovation district obsession

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BOSTON – The Hub certainly isn’t the only city with a neighborhood set aside for new, innovative startups dubbed an “innovation district,” but Boston has quickly garnered a reputation as a leading promoter of such enclaves.

The economic capital of New England is simply obsessed with the idea, whether publicly designated like the city’s Seaport District, or more organically and less formally, like Kendall Square in Cambridge. The late Thomas Menino, Boston’s longtime mayor, spurred the initiative to designate South Boston’s Seaport area as the city’s innovation district, and his successor, Mayor Marty Walsh, used the district to lure U.S. industrial giant General Electric to commit to relocating there earlier this year. Walsh has cited a six-fold increase in tax revenue from the district, to $101 million this year from $16 million in 2005, as reason enough for pursuing the development strategy there.

So what’s all the fuss about? In short, an innovation district amounts to a micro-community within a city – a relatively small geographic area where the brightest and most creative minds in a given industry congregate to work, live and play.

Huddled on the Boston Harbor waterfront, the city’s designated innovation district spreads over a relatively large tract, 1,000 acres, adjacent to the junction of Interstates 93 and 90. It contains the biggest slices of underdeveloped land in the city, including parts of the Fort Point neighborhood, Fan Pier and the Marine Industrial Park.

Within that territory, eight coworking spaces welcome new companies, including District Hall, the first public innovation center in the world. There are also event spaces ranging from the hangar-sized Boston Convention & Exhibition Center and the sprawling Seaport World Trade Center to eight smaller venues.

The overarching idea of an innovation district is that it forms a nexus that attracts like-minded people who don’t want to leave, by creating a neighborhood with aesthetically pleasing residences, cutting-edge resources and entertainment offerings all within walking distance.

“We not only want vibrant places in which people want to live and work, but also places that fuel connectivity and idea exchange,” said Jennifer Vey, co-director of the Bass Initiative on Innovation and Placemaking at the Brookings Institution. “These include formal and informal spaces that allow people to gather and connect with each other, and programming to help that happen. District Hall is a great example.”

Kendall Square in Cambridge has developed that structure since at least the formation of the Cambridge Innovation Center in a building owned by the Massachusetts Institute of Technology in 1999, according to a study of innovation districts from the Brookings Institution in Washington. But the city across the Charles River from Boston has taken a less active role in promoting the aggregation of inventive entrepreneurs, venture capital investors and scientific talent. In recent years, MIT has been negotiating with the city on a plan to expand the district by adding six buildings with more than 500 residential units and new research space, according to the school.

In October, Walsh celebrated the opening of an innovation center in Roxbury’s Dudley Square, to help bring startup businesses to the economically challenged neighborhood.

In a 2014 book, “The Rise of Innovation Districts,” researchers Bruce Katz and Julie Wagner define the concept as “geographic areas where leading-edge anchor institutions and companies cluster and connect with startups, business incubators, and accelerators. They are also physically compact, transit-accessible, and technically wired and offer mixed-use housing, office and retail.” In their Brookings study, the researchers refer to Kendall Square as an “iconic example.”

Katz and Wagner also define common amenities in these areas as “all connected by transit, powered by clean energy, wired for digital technology, and fueled by caffeine” in their 2014 Brookings report. The study concludes that benefits such neighborhoods can bring include job growth, entrepreneurial empowerment and carbon-emission reduction, among other things.

Writing on the website, which features news about urban development, Brady Dale theorized in 2014 that not only do successful startup companies often sprout more entrepreneurs, but easy access to venture capital is also a major staple.

But it’s not all work and no play. Along the Seaport waterfront, hot spots like the Harpoon Brewery, the Lawn on D park coupled with older venues such as the Bank of America Pavilion, offer settings for nearby workers to relax and be entertained.

While Barcelona, Spain’s 22@ hub helped lead the way globally, Boston is also considered a leader domestically. Boston was able to publicly label its district with various civic and private stakeholders, and generated public support, Vey said.

“The Boston region is very innovative,” Vey said in an interview, adding that Kendall Square’s growth, coupled with the transportation improvements made by the Big Dig and the Silver Line projects, likely made more innovation possible, along with a lot of Boston’s unique and high concentration of resources. “A lot of other areas might not have been able to pull that off.”

As in Cambridge and Boston, other cities have pursued similar concepts, including Atlanta, Baltimore, Buffalo, New York, Cleveland, Chicago, Detroit, Houston, Philadelphia, Pittsburgh, Portland, Oregon, Providence, Rhode Island, St. Louis, San Diego, San Francisco and Seattle, the Brookings report shows.

Researchers divided innovation districts into three types – one develops from surrounding anchor institutions, organizations and companies, as in Kendall Square; another type is purpose-built as planners “re-imagine” urban tracts, often near historic waterfronts like the Seaport District, and the third type they refer to are “urbanized science parks,” like the Raleigh-Durham Research Triangle Park in North Carolina.

The trend likely started more than a decade ago, Vey said, but researchers like those at Brookings have only been paying close attention to it for about five to 10 years. She said many of the same principles that bring these clusters together are reflected even as far back as the industrial age of the 19th century.

When they’re successful, they spin out new businesses and jobs.

In Kendall Square, the Cambridge Innovation Center now houses 800 companies, according to its website. Earlier reports say it has fostered the creation of more than 1,200 startups since it began.

Boston’s Seaport District has become home to about 200 new or recently formed companies that have brought along or created more than 5,000 jobs, according to the district’s website. About a third of those are in technology startups and a fifth in creative industries like design or advertising. A quarter of the companies have fewer than 10 employees.

By creating the innovation district in 2010, Menino sought to boost economic growth in the nascent Seaport neighborhood and attract startups. So far, the strategy has worked, with G.E.’s decision to move there and leave behind its current headquarters in leafy Fairfield, Connecticut, being the most recent prime example. Another is the move by Vertex Pharmaceuticals from Cambridge, putting its previously spread-out operations in a new waterfront tower. And even one of the city’s oldest enterprises, the Boston Herald, moved in from the South End as its industry increasingly pushes beyond manufacturing newspapers into a digital, multimedia age.

Walsh, meanwhile, has laid out plans to add a pilot innovation center in Dorchester’s Uphams Corner, based on a report by his Neighborhood Innovation District Committee, which he formed in the summer of 2014. The committee was led by John Barros, now the city’s Chief of Economic Development, and Edward Glaeser, an economics professor at Harvard University. Walsh’s first move to spread the innovation bug developed into the Roxbury Innovation Center, in a new municipal building in Dudley Square. The Venture Café Foundation runs the center.

Some argue that the downfall of such projects can be gentrification, when they displace longtime residents instead of including them and by driving real estate values to unaffordable heights. But some economists disagree that innovation districts alone spur such escalations.

Vey thinks that’s a question worth asking.

“How can you both design and program these places as they grow so that people feel comfortable being there?” she said. “These are very important questions on the minds of these cities as they’re growing.”

Although affordability and displacement are valid concerns, especially as real estate markets rise, Vey says the broader issue boils down to inclusion. “The bigger issue,” she said, is the extent to which “the people in these surrounding communities are going to be included in the growth.”

But each district will face its own challenges, she said.

“Any district needs to understand their competitive advantages, their economic and quality of place assets, and the extent to which they are a diverse and inclusive place,” she said.

Collaboration is also key.

“That’s why we care, that’s why these trends matter,” Vey said. Density – the concentration of people, firms and institutions – and connectivity together fuel idea exchange and innovation.”

Contact Kara Bettis at [email protected] or on Twitter @karabettis.