What Yorkshire can learn from success of Silicon Valley innovation district - Colin Harvey

Cities like Leeds can help the North make a major contribution to increasing UK productivity, through innovation districts, our columnist says.
Cities like Leeds can help the North make a major contribution to increasing UK productivity, through innovation districts, our columnist says.

For the 21st century city, knowledge is power. Just as planners 70 years ago understood the need to cluster manufacturers together to deliver economies of scale, today’s urbanists cite agglomeration as the key to economic success.

Businesses continue to value locations close to suppliers, workers and competitors. Evidence on how ideas develop and spread suggests proximity remains crucial to productivity, despite rapid improvements in communication technology over the last two decades. That’s why innovation districts are becoming increasingly important for cities across the world. By bringing together businesses, researchers and investors, cities can benefit from the uniquely vibrant and entrepreneurial environment these clusters create. With sufficient investment in infrastructure, innovation districts can provide a significant boost to urban economies. The concept is particularly relevant for the North of England.

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The Northern Powerhouse agenda is built on the idea that, individually, Northern cities are strong, but collectively they are greater than the sum of their parts. By harnessing the creativity of innovation districts within major urban areas like Leeds, Sheffield and Manchester, the North can make a major contribution to increasing UK productivity.

There are a number of successful innovation districts across the world, but perhaps the most famous examples are located in Silicon Valley which is home to the world’s biggest tech companies such as Apple and Google. California’s celebrity entrepreneurs such as Facebook’s Mark Zuckerberg have clearly played a major role in developing Silicon Valley into what it is today. Equally important, however, is the role played by local, state and national government in promoting an environment conducive to risk-taking, innovation and, ultimately, growth.

Research from the influential Brookings Institute finds innovation districts are most successful when supported by a network of public, private and civic stakeholders united behind a clear strategy.

Districts prosper when local leaders identify and develop sectors in which their city has a particular advantage.

Silicon Valley is home to Stanford and Berkeley, two of the top research universities in the world, and the area grew initially due to development of the mass-produced electrical semiconductor in the 1950s.

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Over the last few decades, state and city authorities have remained laser-focused on promoting the area as a tech hub. Businesses have focused strongly on quality of life for employees, by improving public transport infrastructure and supplying the super high-speed broadband.

Innovation districts emerged in the US, but businesses and political leaders in the UK are catching on. The UK Innovation Districts Group was established in 2017 to represent six areas across the UK, including Leeds, Liverpool and Manchester. Plans for the Leeds Innovation District were announced earlier this year, with a £450m redevelopment of Leeds General Infirmary proposed. The new district will release land for commercial and research development, bringing some of the UK’s most innovative health researchers together at the heart of the city.

The benefits of innovation districts are clear, and there is evidently ambition to create more in the UK. There is huge potential to utilise publicly owned land, as outlined by the Local Government Association’s One Public Estate programme. This initiative is set to create 44,000 jobs, release land for 25,000 homes and raise £615m for local authorities. There is scope to expand this and similar programmes to utilise currently under-used sites - many of which are well located in town and city centres - for more productive purposes. Northern cities are particularly fortunate in this respect, with many underused publicly owned sites in and around city centres that could be regenerated with innovation in mind.

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Cities should utilise public funds, for example those delivered through devolution, to invest in infrastructure in and around innovation districts and assist education providers in delivering the skills that these industries need. UK government, meanwhile, should ensure money is available to local leaders with the right vision and ambition. Leeds has already demonstrated the kind of entrepreneurial spirit that helps innovation to thrive, and Government should support this kind of activity across the Northern Powerhouse.

Colin Harvey is Director for the North at consultancy and construction company Mace.