Cleveland announced an ‘innovation district’ during a pandemic. What challenges are there? - cleveland.com

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CLEVELAND, Ohio -- The Cleveland Innovation District, announced Monday, is another step in the “rise of the innovation district,” a trend in the academic and business world that boosts start-up and business development in cities worldwide by outlining a physical area for investment and collaboration.

Innovation districts are a combination of existing buildings and potential future investments in offices, venture labs, storefronts and other physical spaces. For Cleveland, that means pulling in talent from Cleveland State University and Case Western Reserve University, as well as the three major hospitals. The district’s formation comes amid the coronavirus pandemic, which challenged the core idea of innovation districts -- that proximity sparks collaboration. Office workers have been working from home, and most meetings and organizing happen virtually.

So, how can an innovation district announced in the midst of a pandemic survive?

Hundreds of these types of projects exist around the world, with some organized through the Global Institute for Innovation Districts. There were upsides and downsides for these districts during the pandemic, president and Brookings Institution senior fellow Julie Wagner said in an interview on Monday. On one hand, the pandemic created opportunities for pre-existing networks of hospitals, universities and businesses to collaborate on solutions or manufacturing.

“I think it’s challenging to jumpstart a district right now if you haven’t had some level of history and face-to-face engagement. It would be challenging to start something like this in the midst of a pandemic,” Wagner said. “I don’t see that at all being the story of Cleveland. Cleveland has decades of investment, decades of relationships, and networks. It makes complete sense to me as to why they would be unrolling this effort now.”

Innovation districts, though, are based in physical space, and a large part of investment comes from real estate development. For example, when a similar project was announced in Cincinnati in March 2020, right before the pandemic took root, state economic development agency JobsOhio invested up to $100 million, which in part went to graduating STEM (science, technology, engineering and math) majors, but also $2 billion for research and real estate development.

In Cincinnati, the innovation district includes the University of Cincinnati and Cincinnati State’s campus, as well as UC Health, contained in a slice between I-71 and I-75 near downtown. Both the Cincinnati and the Cleveland project are being built through collaboration of existing institutions.

Before JobsOhio announced the district, Cincinnati already housed the 1819 Innovation Hub. The hub offers access to technology and a makerspace, but also houses space for start-ups. The Uptown Innovation Corridor, also a pre-existing effort, is a smaller area within the district that focuses on bringing investments and companies to Uptown Cincinnati, developing an identity for that area and making it more walkable. Lt. Gov. Jon Husted said in the announcement on Monday that the 1819 Innovation Hub is now full. UC is now building a 180,000 square-foot Digital Futures building in the Uptown Innovation Corridor.

Both projects aim to boost the number of STEM graduates and attract and retain talent to Ohio. The Cincinnati Innovation District was the first of this type of project in the state. In January 2020, the district started with a multi-university partnership between Wright State, Xavier, Cincinnati State, UC and the University of Dayton to increase startups.

The Cincinnati and Cleveland projects are slightly different in approach, with state officials Monday asserting a clear focus for the Cleveland district in health care and medical research, including the Cleveland Clinic’s new Global Center for Pathogen Research & Human Health, which will take up a significant amount of the $565 million in funding coming through JobsOhio, the Cleveland Clinic and the Ohio Development Services Agency.

The Cincinnati Innovation District is focused in a specific area -- though it does include partners outside of this area, like Wright State University -- but the Cleveland project has not released a geographic outline of where this district will sit. Though the district was formally announced in 2020, work on shaping the project began in 2017. Since then, there has been a 185% increase in issued patents, and a surge in start-up activity.

One of the goals of the district is to connect talent with corporate partners, a process that moved online since the pandemic started. David Adams, UC’s Chief Innovation Officer, said that moving forward, the district will operate in physical spaces and digital spaces. The district serves as a convener for its partners, like P&G and Kroger, to develop talent. The digital space has allowed for connections with students outside of the Cincinnati area, and presented an opportunity to work on recruiting out-of-state talent to Cincinnati.

“Everything we do is based on the needs of the organizations that we’re trying to work with,” he said. “So instead of being solutions to a specific problem, I think one of the things that we take a lot of pride in, we’re a needs-based approach, in terms of really listening to the customer and trying to understand what problems they are trying to solve.”

Adams believes that there is still a need for the proximity and physical spaces offered by an innovation district, because it makes it so much easier to collaborate. UC’s board of trustees recently acquired more space to house companies because of expressed interest.

“I mean, if you look at the work happening in Atlanta with the example of Tech Square, you’re looking at a system that’s happened in decades. For the Pittsburgh innovation district, you’re looking at something that probably started back in the 1980s. If we go to Silicon Valley, you’re looking at something that started in the 1940s, connected to Stanford University,” Adams said. “We’re seeing an ecosystem that’s been developed over 70 years. So we’re working very aggressively to accelerate this effort and we think there’s a lot of learnings that we have here that we very openly want to share with other cities and communities that are working to do this.”

Husted said since the fiscal investment in the Cleveland project is larger than the Cincinnati project, there’s “potential to be even bigger.”

Outside of Ohio, there are more than 100 innovation districts worldwide. Often a “district” was formed in an area that already housed research, medicine and education. For example, in Pittsburgh, that district was based on collaboration between the University of Pittsburgh, Carnegie Mellon University and the University of Pittsburgh Medical Center. Wagner said the strength of the long-standing partnerships within innovation districts was showcased by the challenge of the pandemic.

Winston-Salem, North Carolina began forming its Innovation Quarter in 1998, with the Piedmont Triad Research Park. As the park grew it was renamed the Innovation Quarter in 2013.

When the pandemic began, frontline workers and researchers in the area began working on solutions for masks and mask-wearing. Eventually, research groups working on mask prototypes partnered with a local apparel sock manufacturer that was in the Innovation Quarter at the time to manufacture and distribute the masks.

“Before you knew it, we had a push across the whole city to get everyone wearing a mask, and that unfolded over the course of just a few weeks,” Marketing and Communications Director James Patterson said. “And so that idea of collaboration and what it really means to collaborate, and why during a pandemic, that’s absolutely necessary, has only been strengthened in the midst of the pandemic.”

Once the pandemic progressed, researchers and students were able to return to the quarter’s buildings, but numbers are certainly smaller, Patterson said. The area also has lost in-person events in the green space within the quarter and some businesses, including restaurants, have struggled because of the pandemic’s closures. Rallying of the community around those businesses has helped, Patterson says, but it’s been challenging.

Considering how to best serve the community and how to help fix some of the inequities highlighted by the pandemic is part of what’s next for innovation districts, Wagner said.

“Innovation districts, just like downtown and other economic hubs, are going to have to be very specific about their unique value proposition, now and for the next two years,” she said. “Part of that is the ability to demonstrate to investors, including the government, why limited fiscal dollars and investments should be placed there.”

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