The Next Destination for Millennials: Small Cities with Innovation Districts

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<em>Chattanooga Mayor Andy Berke talks about the city’s Innovation District at the National League of Cities Big Ideas for Cities event on April 15, 2016.</em>
Chattanooga Mayor Andy Berke talks about the city’s Innovation District at the National League of Cities Big Ideas for Cities event on April 15, 2016.

The closed innovation environment of yesterday, where businesses cloistered amongst themselves in office parks, is gone.

In its place are innovation districts: environments in city-centers where ideas move freely. Innovation districts allow talent, startups, established firms, non-profits, cultural assets, and more to come together in one place to innovate and create new ideas, policies and technologies.

Innovation districts have been shown to usher in new eras of prosperity in some of the world’s largest cities—from Boston to Barcelona—but do they have the same effect in smaller metropolises? This question was confronted head-on when Chattanooga announced its plans to become the first mid-sized American city to establish an innovation district.

The creation of Chattanooga’s innovation district was a natural outgrowth of a long line of planning and good decision-making. Chattanooga built on what was unique to the city – the GIG and the recent growth of an entrepreneurial ecosystem. Well-timed quality-of-life investments in downtown Chattanooga’s public realm made by local leaders, along with the city’s good mix of economic, physical and networking assets helped enable their innovation district to succeed.

Everywhere can’t be Boston or the Bay Area—and other cities shouldn’t try to be. Innovation districts need to harness what makes each city tick, be it the culture, the technology, or the policies. Chattanooga’s success shows cities five key lessons for growing their own innovation footprint:

Leverage Past Instances of Collaboration

Chattanooga faced certain challenges that confront many mid-sized cities. One way in which the city met those challenges was by building upon its history of collaboration. Working across the private and public sectors, as the city did in its earlier waterfront redevelopment process, has helped Chattanooga overcome challenges for decades. Citizens, the business community, and local philanthropies came together to create the innovation district.

Dream Big but Execute Realistically

Any city may dream about becoming a magnet for innovation, but it is incumbent upon city leaders and stakeholders to be realistic. Chattanooga knew it had to stem the brain drain of talented young people to other cities. To do that, the city identified and highlighted its critical assets: the university, the municipally owned utility, Electric Power Board (EPB), and existing companies that wanted to expand locally. The innovation district, in a sense, created a focused effort to leverage those assets and create opportunities, from work to retail to cultural touch points that would serve to retain many of the city’s highly-educated millennial graduates.

Use Critical Anchors as Catalysts

Innovation districts need anchors—universities, existing industries, cultural attractions—and Chattanooga’s district, like many others, has a number of traditional anchors. What makes this district stand out, though, is one of its nontraditional anchors, EPB, along with the GIG, which created a broadband backbone for the city. This affordable infrastructure, which Chattanooga introduced years ahead of any other city, brought in businesses and convinced others to stay and grow their companies. Not only has this brought attention and investment to the city, but it has helped Chattanooga more strongly establish itself as a regional technology hub, punching above much larger cities in the southeast.

Getting the People Equation Right

Quality-of-life issues are incredibly important to consider as cities build their innovation districts. Early on, Chattanooga had a strong focus on making sure that cultural assets, such as coffee shops, bars, restaurants, and other critical meeting spots were accessible – and change the perception that downtown was for people in suits, not t-shirts. There was a concerted effort to create a livelier environment where the day extended beyond 9-5. Strong partnerships between city leaders, the private sector, nonprofits, the university, and foundations provided crucial support in moving the effort forward.

Properly Define the Innovation District

Finally, it is critical to get the real estate and land use decisions right. Cities must develop sound reasoning for where the innovation district will be located. In Chattanooga’s case, there was an emphasis on the centrality of the district downtown. City leaders very much wanted walkability to be a primary component, and as any good urbanist knows, a circle with a one-quarter-mile radius provides the ultimate focus for that. Keeping the district dense and well-defined sends clear market-based signals for growth and success. Additionally, if zoning changes are needed—particularly to support mixed-use development—cities should keep these in mind and plan accordingly.

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