The New Innovation Geograph(ies)

Economic geography — the study of the spatial organization of cities, metropolitan areas and regions — is taking on renewed importance given mega trends around the rise of geopolitical tensions, the reshoring of advanced manufacturing and the acceleration of next generation technologies.

Manufacturing products and processes are being fundamentally reshaped by a broad array of rapidly advancing technologies. Take the production of semiconductors, a major focus of industrial policy in the United States.  The reshoring of semiconductor production has been accompanied not only by innovations in chip design and production processes (implicating technologies that range from artificial intelligence to machine learning to advanced materials) but also innovations in the design and construction of data centers.

Or take the manufacturing of the next generation of nuclear-powered submarines, a growing part of the US defense budget. Innovations in dozens of technologies — including artificial intelligence and autonomy, robotics, quantum computing, additive manufacturing, advanced materials, digital engineering, sensors and small modular reactors — fundamentally alter the kinds of submarines we build and the way we build them.

This is not just about current production. The technologies transforming our world are permeating every sector of the economy and fusing the defense and civilian economies in unprecedented ways. To that end, many of the technologies deployed in the production of submarines have dual-use applications. Advances in 3D printing or navigation systems or cyber security or nuclear power on submarines will have implications for the civilian economy.  Large implications.  Some predictable, many not.

This is where economic geography comes in. An advanced industrial economy compels sharp thinking about the inter-connected location of advanced manufacturing companies, university researchers, skills providers, talent pools, supplier networks, start-up ecosystems and logistics and energy infrastructure, thinking which atrophied as the US and other economies de-industrialized.

For the past fifteen years, we have studied and advanced the rise of innovation districts that have dramatically pushed the envelope on medical innovation. In cities as disparate as Amsterdam, Cambridge, London, Philadelphia and St. Louis, the co-location of university researchers, large pharmaceutical companies, scrappy entrepreneurs and networked intermediaries discovered new cures, prototyped new drugs and used sophisticated data analytics to improve health delivery and perfect diagnoses. These innovation districts harvested the benefits of inter-disciplinary and multi-sectoral invention and collaboration.  All of this was underpinned by stable federal investments in research, risk-oriented private capital and smart state and local investments in quality places and infrastructure.

The result has been an economic premium –- more innovation, more firms, more jobs, more investment, more tax revenues — for the districts and cities which made the hard choice to join up disparate elements of their bio-medical ecosystem in small geographies, rather than keep them separate and disjointed.

Constellations of Innovation Geographies

It is now time to apply the benefits of innovation districts to advanced manufacturing. Ideally, the interplay between manufacturing, technology and innovation would occur naturally in places where large scale production companies, small and medium size suppliers, university researchers, skills providers and tech entrepreneurs are joined at the hip.

Our economic and spatial analysis indicates that regions are increasingly defined by constellations of innovation geographies, which include tightly bound innovation districts, manufacturing-focused hubs with R&D capabilities, and more expansive innovation corridors. These geographies are well suited to not only solve a broad array of technological, supplier and workforce challenges but also set a platform for more technological innovation and deployment.

The strength of innovation constellations lies in their ability both to invent, test, adapt and prototype breakthrough technologies as well as solve technological challenges that emerge from the accelerated surge in advanced production. They are also naturally situated to serve as ‘Living Labs’ for new technologies and approaches that can be scaled to larger areas. Their connected nature facilitates rapid experimentation, efficient implementation, validation of new strategies and interdisciplinary collaboration and engagement.

At the district level, one typology of district joins up production facilities with high quality research, tech solutions and workforce development.  The Advanced Manufacturing Innovation District in Sheffield and South Yorkshire is already a globally recognized example of this type of district.  There, the University of Sheffield’s Advanced Manufacturing Research Centre has focused on solving highly complex, cross-sectoral and “supply-chain-riddled” problems in high-precision manufacturing. Their work hinges on close engagement with global-reaching Original Equipment Manufacturers (OEMs) to resolve challenges facing “no room for error” industries such as aerospace, high-performance cars and machinery, and nuclear power facilities.

The Sheffield model is slowly being adapted in the U.S. In St. Louis, a broad-based network of companies and institutions is embracing the Sheffield applied R&D model, building an Advanced Manufacturing Innovation Center (AMICSTL) with a mix of federal, state, local and private sources of funding. Partners include Boeing, key universities (e.g., St. Louis University, the University of Missouri at St. Louis), and Greater St. Louis, Inc. (the metro’s business leadership organization). Significantly, the new Center is located in the northern part of the City of St. Louis, one of the most disinvested neighborhoods in the United States.  Significantly, AMICSTL is not the only innovation hub in the city; the Cortex Innovation District and key entities like BioSTL have been driving technological innovation in health, agriculture and advanced technology fields for over twenty years.

Innovation districts, however, are not the only spatial configuration which is emerging from this period of rapid reindustrialization and technological acceleration.

Over the past several years, an AI Innovation Corridor has grown in Pittsburgh along Penn Avenue between the Duolingo headquarters and Bakery Square.  Located one mile away from Carnegie Mellon, Bakery Square already houses Google, the U.S. Army’s Artificial Intelligence Integration Center (A2IC), Carnegie Mellon’s Tech Transfer Office, and a growing number of companies in the AI space, with applications stretching from defense to energy to the consumer market. This innovation corridor relates closely to other hubs of innovation in Pittsburgh that concentrate robotics companies.  It also builds upon the Pittsburgh Innovation District, which for many years has leveraged the technological capabilities of Carnegie Mellon, the University of Pittsburgh, and strong research-oriented medical institutions.

Innovation districts, manufacturing hubs with R&D capabilities, and innovation corridors are then adding up to a set of connected geographies we define as innovation constellations.  Analysis by the Global Institute of Innovation Districts shows that the relationships between the districts, hubs and corridors within these constellations are elevating a collective set of capabilities as the distinctions between these places are complimentary rather than competitive.

In the Phoenix metropolis, for example, a constellation of manufacturing, research and workforce facilities has been intentionally built across several jurisdictions. Ecosystems have begun to concentrate between the locations of the major manufacturing companies, TSMC in Phoenix, Intel in Chandler and LG Energy Solution in Queen Creek, representing hundreds of billions of dollars in private capital investment.

Arizona State University has a major research campus in Tempe, strategically located between the major manufacturers; the campus is home to a NSTC R&D Prototyping and Advanced Packaging Center[1] and a DOD-backed Microelectronics Commons Hub.  And the community college has a workforce accelerator for semiconductor technicians in Central Phoenix, almost equidistant between the TSMC and Intel facilities. Phoenix’s core innovation district, the Phoenix Bioscience Core, has been driving collaborative innovation in a range of health and health tech areas that will benefit with linkages to the region’s emerging manufacturing base.

St. Louis, Pittsburgh and Phoenix reflect the cutting edge of innovation geography at the district, corridor and constellation level.  In these communities, federal agencies, state governments, metropolitan business alliances, universities, community colleges and the energy/transportation stakeholders are sorting through functional spatial arrangements that meet the needs of industrial innovation today and on into the future.

But these examples are still the exception rather than the rule. In many parts of the United States, defense-related manufacturing is supersized, as is the presence of critical defense installations. But the involvement of local universities is anemic, diminishing the potential for greater innovation, efficiency and productivity, particularly as defense manufacturing grows in scale and sophistication.  Correcting this imbalance is an urgent challenge for national security, which requires strategic action by government, industry and universities.

A Path Forward

If the US and other countries are going to meet this innovation moment, several strategies will be critical.

As a start, national and state agencies, large manufacturing companies, major universities and community colleges and cities and metropolitan areas alike need a new spatial map of the critical institutions and facilities that make up the new industrial economy.  Where are these assets located?  Are they close to each other or far removed?  Does location enable or impede the ability to function as a tight ecosystem?  What relationships have been forged that enable constant and continuous engagement between different actors and stakeholders?

In some communities, the spatial mapping and evaluation of R&D capabilities will reveal deep connections that are already being forged across companies, universities, skills providers, utilities and others. In these cases, the explicit recognition and even branding of the innovation geography, as in St. Louis, Pittsburgh and Phoenix, can inform the next wave of location decisions. For example, new or expanded technology-related centers of excellence, whether privately or publicly financed, can be smartly situated in emerging hubs and corridors of advanced production, research and innovation.

In other communities, however, this research and analytical exercise will not only reveal a paucity of networks but an absence of key institutions that are able to drive technological change and respond to occupational needs.

In these cases, more dramatic action may be needed. Advanced units of public or even private universities, for example, may need to be moved from one part of a state to another, to be situated closer to sites of production.  Anchor institutions, in other words, may need to be unanchored.  There is already a precedent for this. Cornell now has a presence in NYC, with the establishment of Cornell Tech on Roosevelt Island.  And Virginia Tech has a presence in Northern Virginia, far from its home campus in Blacksburg.

But these location decisions are often mired in parochial politics. That needs to change, fast, if the surge in production is going to be met by a concomitant surge in aligned innovation.  Here, the first mover examples from St. Louis, Pittsburgh and Phoenix can be studied for appropriate lessons and interventions.

The smart spatial alignment of all the factors of production is a must have in a global economy marked by trade volatility and technological acceleration. Advanced economies do not occur in the abstract but in real places that join up assets and activities in purposeful and functional ways.

It appears that after decades of planning for the postindustrial city, the industrial metropolis has emerged as a central part of national economic restructuring. Economic geography, barely taught and long ignored, must now become an integral part of economic development across layers of government and sectors of society.