The Value of Innovation Parks

technopark

Social innovation hub. Smart city. High-technology business district. They go by many names, these urban spaces mushrooming up all across the globe that are changing the ways we work and live. From Boston to Montréal to Shenzhen to Kigali, city managers have woken up to the benefits of creating environments where partnerships between start-ups, established businesses, knowledge centres and community-oriented initiatives can take root and flourish.

Since being declared a Special Ratings Area (SRA) in 2015, Techno Park in Stellenbosch has moved on from its history as a stand-alone science park and begun to reinvent itself as a premium district for innovation and creative business practice in South Africa. In collaboration with the world-class university on its doorstep, local municipal authorities and neighbouring communities, the Park has begun to usher in some of the advantages that have arrived with the radical shifts in urban design thinking worldwide.

But what precisely are these benefits? And what can businesses, both big and small, expect to gain from moving their operations to a business and innovation hub like Techno Park? While it wouldn’t be wise to copy too closely from other parts of the world for our own environment, which has its own distinct challenges and opportunities, we may learn something from what other people have discovered about the advantages of working, living and playing in innovation districts in other parts of the world.

In their study of the rise of innovation districts in America, Bruce Katz and Julie Wagner mention that these environments “focus extensively on creating a dynamic physical realm that strengthens proximity and knowledge spillovers.” Rather than focusing on specific kinds of industry, such districts “represent an intentional effort to create new products, technologies and market solutions through the convergence of disparate sectors and specializations.” Clearly, the networking effects, knowledge sharing perks and potential for innovative solutions to shared problems that such environments create, holds significant advantages for all the players involved in the space.

There are three types of assets unique to innovation districts, says Katz and Wagner, that need to be developed in order for these synergistic qualities to come fully into effect. These are economic assets (the firms, institutions and organisations that operate in the environment), physical assets (buildings, parks, open spaces, infrastructure) and networking assets (the relationships between all the various actors in the district). “Innovation districts reach their potential when all three types of assets, combined with a supportive, risk-taking culture, are fully developed, creating an innovation ecosystem,” they write.

If these assets are properly managed and attuned to each other, the area in question becomes an attractive address for all manner of institutions. According to this article in Fortune, there are three main reasons why CEOs and entrepreneurs would want to move their operations to environments that promise the benefits of such an innovation ecosystem.

Firstly, companies want to tap into the research and development talent that spills over from the knowledge centres near which innovation districts are ordinarily situated. That’s why, for example, Stellenbosch University and its freshly graduated engineers is such a boon to many of the companies quartered in Techno Park.

Secondly, entrepreneurs and smaller start-ups look to the benefits of resource- and risk sharing that comes from working in a collaborative environment with other creative business people. If you don’t have an enormous amount of capital to invest in your start-up, it makes sense to find a workspace where you can rub shoulders with fellow innovators and learn from the mistakes of others all day long. And if the person working at the desk next to yours happens, for example, to be running a law start-up, you may be able to benefit from his or her expertise in an informal capacity, rather than running up costs elsewhere.

Lastly, companies want to be able to draw on large talent pools, and talented people are inclined to locate themselves where the quality of life is best. Stellenbosch, lying as it does in the midst of the scenic wine route, offering world-class outdoor activities, restaurants and nightlife, and in close proximity to excellent beaches, as well as one of the world’s most vibrant cities, is clearly such a place. Fresh professionals who know they can shoot for work in competitive institutions are likely to cluster around attractive addresses like these, and companies who want to benefit need to be sure they situate themselves in a stimulating working environment near such a place.

Innovation districts have been around for a few years, but their long-term economic effects, as this article mentions, have not yet been determined. What is evident, however, is that the promise of knowledge sharing and collaborative problem solving, and the potential for sustained growth that comes from having continual access to talented minds, is something that both established businesses and start-ups can ill afford to miss out on. If you are lucky enough to be within striking distance of an innovation district, we recommend setting up shop there.

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