Big Idea 2014: Goodbye Silicon Valley, Hello Silicon Cities

This opinion piece from Bruce Katz is part of a series in which LinkedIn Influencers pick one big idea that will shape 2014. See the original article here.

As the United States slowly emerges from the Great Recession, led by our cities and metropolitan areas, a remarkable shift is occurring in the spatial geography of innovation.

For the past fifty years, the landscape of innovation has been epitomized by regions like Silicon Valley — suburban corridors of spatially isolated corporate campuses, accessible only by car, with little emphasis on the quality of life or on integrating work, housing and recreation.

That model now appears outdated.

Innovative companies and talented workers are revaluing the physical assets and attributes of cities. A new spatial geography of innovation is emerging and, in 2014, it will reach a critical mass worthy of recognition and replication.

This new model — the Innovation District — clusters leading-edge anchor institutions and cutting-edge innovative firms, connecting them with supporting and spin-off companies, business incubators, mixed-use housing, office, retail and 21st century urban amenities.

Innovation Districts are already found in the downtowns and midtowns of Atlanta, Cambridge, Detroit, Philadelphia, San Francisco and St. Louis, where existing clusters of advanced research universities, medical complexes, and tech and creative firms are sparking business expansion as well as residential and commercial growth.

Others are taking root in cities such as Boston and Seattle where underutilized areas — particularly older industrial lands — are being re-imagined and remade by leveraging their enviable location near waterfronts and downtowns and along transit lines.

Still others are developing in traditional exurban science parks like Research Triangle Park outside Raleigh-Durham, which is scrambling to urbanize in line with the preferences of their workers for walkable communities and the preferences of their firms to be near other firms and collaborative opportunities.

Why is this happening? Profound demographic, economic and cultural shifts are radically altering the preferences of both firms and people, re-forging the link between economy-shaping and place-making.

The prototypical family of the suburban era — a married couple with school-age children —

now represents only 20 percent of households, down from over 40 percent in 1970. “Quality of life” is increasingly understood as proximity to restaurants, retail, cultural and educational institutions, and other urban amenities. Young professionals are starting families later and, in the meantime, demanding a vibrant street life, historic neighborhoods, and public transit.

At the same time, our open, innovative economy craves proximity and extols integration, where knowledge can be transferred seamlessly between, within and across clusters, firms, workers and supporting institutions. With the rise of open innovation and networked idea generation, the imperative to collaborate has expanded to a broad group of knowledge-intensive sectors, including science- and technology-heavy fields such as chemicals, biotechnology, telecommunications, and semiconductors. No single company can master all the knowledge it needs; rather, innovation relies on a network of connected firms. In short, companies need to collaborate to compete.

Together, these trends are fundamentally altering how firms and people interact, how ideas flow and how places — offices, research labs, business incubators — are physically designed. Innovation Districts embrace the redesign of buildings and office spaces in support of collaboration and open innovation and they provide the physical and social platform for entrepreneurial growth — incubator space, collaborative venues, social networking, product competitions, technical support and mentoring.

In turn, the line between private and public spaces is blurring. When Zappos, the online retail giant that grew to scale in Henderson, Nevada, part of suburban Las Vegas, was looking for a new headquarters in 2010, CEO Tony Hsieh sought a denser workplace to increase interaction and collaboration of workers. For Hsieh, that meant not only open floor plans and amenities within the office, but also moving the new headquarters (and 2,000 Zappos workers) downtown to Vegas’ Fremont East neighborhood, in the old City Hall. Hsieh paired the move with a new private investment fund (separate from Zappos) called the Downtown Project to build a dense, multi-use and walkable environment, including luring new startups close to the headquarters and creating more housing and co-working spaces in the district. “The idea,” Hsieh said, “went from ‘let’s build a campus’ to ‘let’s build a city.”

Cities and firms that ignore these trends risk alienating both their workers and their communities. Take Google, whose corporate campus in suburban Mountain View is forced to bus in workers living in downtown San Francisco, leaving many to question the wisdom of their location and the long-term sustainability of the arrangement for Google and for the city. (Also leaving some to speculate that the Internet giant is, in fact, planning a move into the city.)

Innovation districts represent a profound, structural shift in the physical landscape of work and living. They are both competitive places and “cool” spaces, embodying the very raison d’être of cities: to aggregate talented, driven people who exchange ideas and knowledge in what the urban historian Sir Peter Hall calls “a dynamic process of innovation, imitation and improvement.”

Over the past few years, the Innovation District idea has taken root in several cities at the vanguard of innovation in the United States; in 2014, I expect it, like all metropolitan inventions, to be embraced, replicated, and improved upon by cities across the country.