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Does Innovation Always Lead to Gentrification?

A new study makes the development of innovation districts sound like a win-win for all parties involved. But a look at some existing districts, like Boston’s Cambridge or Brooklyn’s Dumbo, makes it clear that there are downsides too.
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(Photo: Lynda Cosgrave/Shutterstock)

(Photo: Lynda Cosgrave/Shutterstock)

Technology start-ups, business incubators, reinvigorated neighborhoods full of renovated warehouses, platoons of dynamic young residents with disposable income and coding skills. The signifiers of urban success listed in a recent Brookings study called “The Rise of Innovation Districts: A New Geography of Innovation in America” all sound fairly positive. After all, isn’t this the central dream of our times, to take an underutilized chunk of capital and transform it into useful profitability, whether that’s a former train station or a really great URL?

The way the study presents its ideas, it’s hard to imagine what city wouldn’t want an “innovation district.” The buzzword is defined by a geographic area where “leading-edge anchor institutions and companies cluster and connect with start-ups, business incubators and accelerators.” In other words, it’s an ecosystem of businesses in various stages of growth interacting with new-business developers that feed into the pre-existing hierarchy like an oceanic food chain: In mergers and acquisitions, the larger fish periodically eat the smaller ones. The innovation districts are also “physically compact, transit-accessible, and technically-wired and offer mixed-use housing, office, and retail,” which is to say, they are in cities with diverse zoning where office life can be adequately balanced out by the presence of easily accessible apartments and cafes.

If the ultimate goal of innovation is to bring technology to more people, why aim development solely at pleasing the demographic of technology workers?

The Brookings report offers itself as a guide to creating pop-up iterations of Silicon Valley where tech jobs attract youth, who in turn create more tech jobs and drive “innovation,” which becomes a synonym for economic growth. This self-perpetuating process is positioned as a de-facto formula to attract the best businesses and people: “Our most creative institutions, firms and workers crave proximity so that ideas and knowledge can be transferred more quickly and seamlessly.” Technology-obsessed youth apparently demand not only efficient transfer of data over their Wi-Fi networks but a kind of universal networked ideology in which the movement of people, commodities, and take-out food is, as the report notes, seamless. Yet all is not right in this innovation ideology.

Examples of the innovation district have arisen in Brooklyn, Berlin, London, and Seoul, among other cities listed by the report. The neighborhoods “provide a strong foundation for the creation and expansion of firms and jobs,” even in our continuing recessionary trough. But turning older urban corridors into heavily polished centers for young workers with particular needs—it all sounds a bit like another catalyst of change we’re more familiar with: gentrification.

FOR THE FIRST TIME since the 1920s, cities are now growing faster than suburbs, and as populations boom and desirable real estate—like that in the innovation districts—is created and marketed, the demographics are changing. Older generations of residents are pushed out of innovation-district areas like Brooklyn’s Dumbo or Boston’s Cambridge as young, highly educated, and less-than-diverse workers move in. And while innovation districts do eventually spread capital to their surrounding cities as companies “co-invent and co-produce new discoveries for the market,” as the report describes, the question is, which markets is the growth actually serving?

San Francisco, which seems to present an ideal of Brookings’ concept of innovation, is awash in services like delivery laundry, luxury car services, and designer super-foods created by and for young, wealthy, single people. Less-served are the city’s population of homeless, unemployed, and elderly, who are leaving long-term rental homes as prices are driven up by tech-industry knowledge workers. As Mat Honan illustrates in a poignant essay on his city, a consumerist utopia co-exists with the decaying remains of the old city that are rapidly getting whitewashed into oblivion.


(Graph: Brookings)

While innovation districts may catalyze growth, it remains to be seen how sustainable that growth will be. In the world of entrepreneurial technology, ephemerality and competition are king: The losers are quickly weeded out and the winners go on to be absorbed into larger winners. The process only benefits a thin spectrum of the population that already has access to the kinds of capital—education, real estate, connections—that the innovation economy thrives on. The rest, it leaves behind.

In fact, San Francisco places just fourth on the list of the United States’ most quickly gentrifying cities. In front of it are three other centers of technology entrepreneurship: New York, Seattle, and Boston (in ascending order). In Boston’s technological center, Cambridge, John Summers exhaustively tracked innovation’s discontents for theBaffler, which he edits from the city. “The innovator’s dogma means making all your city’s peoples and institutions attractive to corporate professionals-in-training,” he writes. “The market has been driving the poor and the working class out of these cities ... and the Innovation Economy is finishing them off.”

"The market has been driving the poor and the working class out of these cities ... and the Innovation Economy is finishing them off."

For Summers, innovation is a shibboleth to the economy’s higher classes rather than a magic charm for universal growth. While the Brookings report trumpets innovation districts, Summers realizes instead that “innovation means the price of existing goes up.” Innovators don’t create affordable housing. They have little incentive to build a more equitable community. Where innovators thrive is in reproducing their own, which is the most fundamental trend that the report picks up on, though not in so many words.

Intentionally creating innovation districts is a powerful idea, and the report outlines clear steps to develop one. “Promote inclusive growth” is even included as one of the steps, recommending “using the innovation district as a platform to regenerate adjoining distressed neighborhoods” as well as create “educational, employment and other opportunities for low-income residents.” Unfortunately, these suggestions don’t go nearly far enough.

Any city looking at developing an innovation district as a way to seek economic growth must ensure that it is sustainable, organic, and woven into the pre-existing fabric rather than simply plopped onto an empty-looking post-industrial neighborhood. Zoning should guarantee a strong mix of business with residential and retail in these areas, rather than leaving them lifeless warrens of office buildings. Rather than slick cafes and high-end shopping, educational institutions should be given guaranteed space in innovation districts at fixed, low rents, and their tuition fees should be subsidized, particularly for local residents.

If the ultimate goal of innovation is to bring technology to more people, why aim development solely at pleasing the demographic of technology workers? Enlivening a city’s brand is tempting, but energizing its entire population is even better.