Can Neighborhood Innovation Districts Spur Sustainable Economic Growth in Boston?

Written by Amanda Maher

The clustering of like-minded entrepreneurs or complimentary businesses is not a new phenomenon. The rise of the suburban office park – often focused on research or technology – is one example of a clustering trend. Another is the natural clustering of businesses in a certain location, such as the numerous life science businesses concentrated in Kendall Square in Cambridge, Massachusetts.

Over the last decade, cities have started to develop different types of clustering strategies, including dedicating certain areas as “Innovation Districts”. Innovation Districts are geographically defined areas where active stakeholders, anchor institutions, companies and organizations connect with and grow start-ups, business incubators and accelerators. Barcelona is considered to have the first Innovation District, with 22@, and Boston shortly followed suit with its Seaport Innovation District, the first in the U.S. It is estimated that there are now at least 80 of these Innovation Districts across the globe.

Still paving the “innovation” way, Boston has recently announced an effort to extend innovation to each corner of the City through “Neighborhood Innovation Districts”. Neighborhood Innovation Districts are distinct from Innovation Districts in that they are embedded within an existing neighborhood and specifically target the residents of that neighborhood from both a human capital perspective (encouraging local residents to start businesses and/or encouraging innovative businesses to hire local residents) as well as a product perspective (developing products/services/new systems that are desirable and affordable to the neighborhood’s population).

The purpose of Neighborhood Innovation Districts is to spur sustainable economic development that focuses on growing jobs in production, innovation and traded sectors of the economy while concurrently equipping residents with the skills they need to compete for and succeed in these jobs.

Unlike Main Street organizations, which are specifically designed to support commercial business districts, Neighborhood Innovation Districts will be designed to support innovation and entrepreneurship.

“As we seek to foster and support economic development in Boston, it is essential for us to establish an environment that supports entrepreneurship and job creation throughout all corners of our city,” said Boston Mayor Marty Walsh in a statement announcing the initiative. “Innovation knows no boundaries, and our policies, infrastructure and programs should reflect that.”

To that end, Mayor Walsh appointed a 27-person committee to study the Neighborhood Innovation District concept and identify appropriate neighborhoods as pilots. In its first months, the committee whittled down the number of pilot locations to four:  East Boston, Bowdoin-Geneva and Fields Corner, both Dorchester neighborhoods, and Dudley Square-Uphams Corner in Roxbury. Each of these neighborhoods has traditionally suffered from disproportionately high poverty and unemployment, but recent development in these neighborhoods makes them promising candidates for further growth.

In Dudley Square, for example, the City has redeveloped the vacant Ferdinand furniture building, an iconic site that will soon house the new headquarters for the Boston Public School (BPS) and approximately 3,300 sq. ft. of incubator space for local startups (recently dubbed the “Roxbury Innovation Center”). Meanwhile, Smarter in the City opened its doors this past summer at 100 Warren Street in Dudley Square. This small technology incubator houses five startups, all of which originally hail from the inner city neighborhoods of Roxbury, Dorchester and Mattapan. Some have speculated that the combination of the new BPS headquarters and a clustering of technology companies could make Dudley Square a new hotbed for Ed-Tech innovation.

In many ways, Boston’s development of Neighborhood Innovation Districts is a result of the tremendous success of the Seaport Innovation District and its unintended consequence of driving Seaport real estate prices sky high. Many innovative entrepreneurs and startup companies can no longer afford the Seaport Innovation District, having been priced out by large corporate entities like Vertex Pharmaceuticals, Goodwin Procter and PricewaterhouseCoopers. The Neighborhood Innovation Districts can help solve this problem.

Not everyone is sold on creating Neighborhood Innovation Districts: Some argue that you can’t “engineer creativity,” that innovation springs up naturally and companies must come together organically. Others suggest that dispersing innovative companies from one district to several will lessen the impact of the original Seaport Innovation District.

It is too early to tell whether the Neighborhood Innovation Districts will achieve the desired goals. Entrepreneurs often want to be located among the best and brightest entrepreneurs and companies, even if it means compromising on space and paying higher rent. As such, the private sector has been slow to support innovation efforts in Boston’s inner city neighborhoods. For now, the bulk of innovative companies remain in areas like Kendall Square and the Seaport District, surrounded by venture capitalists and service firms like accountants and lawyers.

Yet, as the Neighborhood Innovation District concept suggests, there are multiple ways to connect inner city residents to the growth of Boston’s innovation economy. Regardless of where the companies anchor themselves, with proper infrastructure in place – from public transportation to workforce training – there is no reason for residents within the urban core to be shut out from innovation’s economic impact. Similarly, a combination of education and advocacy can encourage innovative companies to develop products and services that meet the needs of inner city residents. In any scenario, boosting the innovation economy can be a win-win for inner city residents and the city as a whole.