innovation hub case study

Building innovation ecosystems: Accelerating tech hub growth

Across the United States, from urban to rural areas, public- and private-sector leaders are coming together to build innovation hubs. Relative upstarts such as the Indianapolis 16 Tech Innovation District and Tulsa Innovation Labs are positioning themselves as new centers of innovation, drawing inspiration from established ones such as Silicon Valley and Boston. Currently, the opportunity to launch new hubs is especially ripe given there is nearly $2 trillion in new federal funding  designed to boost US innovation, competitiveness, and national security over the next decade.

Ecosystems, hubs, and districts: A short primer

When discussing how to build communities for innovation, it is useful to establish what we mean by these terms.

Innovation districts, the oldest of the three, were highlighted as a growing trend for much of the 2000s. The Brookings Institution, in 2014, defined them as “geographic areas where leading-edge anchor institutions and companies cluster and connect with start-ups, business incubators and accelerators. They are also physically compact, transit-accessible, and technically wired [with] mixed-use housing, office, and retail.” 1 Bruce Katz and Julie Wagner, “The rise of innovation districts: A new geography of innovation in America,” Brookings. The Global Institute on Innovation Districts, which leads the analysis of innovation districts globally, was founded in 2018. It defines them as “new geographies of innovation emerging primarily in cities and urbanizing areas” and estimates that there are more than 100 of them around the world. 2 “The ambition,” Global Institute on Innovation Districts, 2022.

Innovation hubs are somewhere between districts and ecosystems. Nature magazine, in its “Global Innovation Hubs Index” (2020), opened with this definition: “cities or metropolitan areas that can lead the flow of global innovation elements and influence the efficiency of resource allocation, drawing on their unique advantages in science and technology innovation.” 3 “Global innovation hubs index,” Nature , 2020.

Innovation ecosystems are the newest of the three tech hub archetypes. The MIT Sloan Management Review defined innovation ecosystems in 2022 as “places that engage five stakeholder types—research institutions, entrepreneurs, corporations, investors, and governments—linked by a strong social fabric of mutual interest, complementary needs and resources, and trust.” 4 Philip Budden and Fiona Murray, “Strategically engaging with innovation ecosystems,” MIT Sloan Management Review , July 20, 2022.

Innovation hubs are geographic areas that bring together R&D institutions (such as tech-enabled corporations, universities, and medical facilities), as well as venture capital, incubators, and start-ups. They fall into three categories: smaller districts, midsize tech hubs, and larger cross-regional ecosystems, with the latter being by far the most complex but potentially impactful (see sidebar “Ecosystems, hubs, and districts: A short primer”).

Think tanks and businesses have published papers defining the value proposition of innovation hubs and offering ways for companies to participate in the hubs that already exist. While these papers generally address the what and the why , this article builds on those perspectives to explore how public- and private-sector leaders could launch and scale an innovation ecosystem anchored in existing regional assets or accelerate efforts that are already underway.

Below, we outline the potential benefits of innovation hubs and offer six essential steps that leaders can consider for building and nurturing an ecosystem that promotes vibrancy, attracts top talent, and creates new and significant opportunities for economic and social development. The playbook we’ve created is based on our experience designing and developing best-in-class ecosystems and on our data analysis of more than 100 innovation districts and tech hubs. It addresses key elements of building an innovation hub including prioritizing sectors, attracting talent and investment capital, mapping strengths and opportunities, and identifying ways to support the effort.

Creating an innovation ecosystem is a significant undertaking, and success often pivots on how well those who lead it build relationships with new and established companies and institutions, fill gaps in the business landscape through investment, and address the specific needs of workers and residents.

Why innovation hubs matter

Spanning high-value, research-oriented sectors from aerospace to life sciences to software, innovation hubs generate attention and investment for a reason. Annual productivity growth for US innovation industries has averaged 2.7 percent since 1980—nearly double the rate of all other sectors. These industries also claim 60 percent of US exports, boast 80 percent of US engineers and patents, and attract workers with above-average earnings—generating even more jobs for the communities where they are located. 1 David M. Hart, Siddharth Kulkarni, and Mark Muro, “America’s advanced industries: New trends,” Brookings, August 4, 2016. Innovation hubs have higher commercial-rent growth rates than adjacent business districts: 5.3 percent from 2010 to 2020, compared with 4.8 percent, respectively. 2 McKinsey analysis. They outperform other regions and business districts economically, financially, and socially. In the most successful examples, the unifying, mission-driven spaces they create open new avenues for healthier, more diverse, and more connected communities.

Innovation hubs open new avenues for healthier, more diverse, and more connected communities.

There are compelling reasons to focus on innovation hubs now. In 2021 and 2022, the federal government passed a suite of legislation that aims to bolster the resilience of the US supply chain, promote the development of high-tech innovation clusters, and extend services and infrastructure to rural communities. Leaders can help finance and jump-start the development of an innovation ecosystem by taking advantage of competitive grants to regional innovation ecosystems and of legislation such as the CHIPS & Science Act , which creates incentives for domestic semiconductor manufacturing and authorizes funding for programs such as the National Science Foundation’s Regional Innovation Engines.

Six essentials: The innovation ecosystem playbook

Categorizing innovation districts, tech hubs, and ecosystems.

Innovation districts occupy a specific neighborhood or business districts within urban areas. Hubs are often similar in size but sometimes extend to multiple neighborhoods or the larger part of a city. Ecosystems are far more flexible but tend to be larger, enveloping whole cities or even crossing county and state lines. Given their size and conducive environment, ecosystems often give rise to (and ultimately house) hubs or districts with more defined mandates.

There’s similar split in collaboration for scaling. To grow, districts and hubs must generally garner excitement and buy-in from employees, faculty, or neighborhood residents. Ecosystems usually also need governments to play a strong role—for example, through tax incentives or capital investment. Often, they require cross-institutional collaboration to support new technologies across the innovation funnel and to share facilities that catalyze innovation.

The leadership structure also differs. A single actor (for example, a real-estate developer, a university, or a large philanthropic foundation built for purpose) can often lead districts and hubs successfully because they tend to focus on just one or two industries or functions. An ecosystem’s complexity calls for more diverse stakeholders (developers, education institutions, private companies, and governments) that take the reins together to generate ideas, solve problems, and enable something special.

Innovation hubs typically fall into one of three categories—districts, tech hubs, and ecosystems—that vary according to scale, levels of collaboration, and reach. Ecosystems are the newest of these, and definitions are evolving (see sidebar “Categorizing innovation districts, tech hubs, and ecosystems”). Broadly speaking, in addition to prioritizing technology-centered R&D, investment, and growth, these ecosystems usually feature assets such as robust mobility options (including public transit), as well as a strong technological infrastructure and accessible spaces to play, connect, and live. All this promotes inclusive and equitable economic growth, innovation, and productivity (see sidebar “Research Triangle Park”).

Research Triangle Park

The ecosystem that quickly became the largest research park in the United States, Research Triangle Park (RTP), in North Carolina, started to develop in the 20th century. RTP harnessed its three academic anchor institutions—Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University—to build a thriving innovation ecosystem in collaboration with local and state governments, business interests, and venture capital.

Although RTP began with a focus on biotechnology, life sciences, and microelectronics, it now has 300 companies across all sectors and more than 50,000 employees, who have collectively contributed to more than 3,000 patents. RTP also boasts apartment buildings that prioritize holistic living, efficient transit options, and even entire self-contained sports leagues. The ecosystem is supported by close collaboration among private-, social-, and public-sector leaders. RTP companies and universities collectively spend $6 billion a year on research expenditures within the ecosystem. North Carolina’s state government and the counties in the ecosystem support companies with competitive tax rates and incentive programs.

Public- and private-sector leaders could consider following a six-step approach to create and expand a thriving innovation ecosystem (Exhibit 1). A community-building program in a district will look quite different from one at an ecosystem, for example—but the playbook’s essentials remain the same across the spectrum of innovation hubs.

1. Set the aspiration and a bold vision

Innovation ecosystems that struggle to succeed often underdeliver on the first playbook element: a strong identity rooted in a clear aspiration and forward-looking goals that build broad stakeholder excitement and buy-in. Defining a unique, differentiated identity and brand crystallizes an ecosystem’s intangibles, such as livability or regulatory stability. It establishes a value proposition for people and businesses alike. It also sets the stage for defining short- and long-term success metrics, helping to maintain the focus on why the ecosystem exists. It is the vision—backed by core competencies, specific strengths, and culturally consistent themes—that distinguishes one ecosystem from the others.

Aspirations can vary. Cortex, in St. Louis, aspires to be an “inclusive economic engine” for the region, linking success to outcomes beyond just financial returns, 3 “Accelerating inclusive economic growth in St. Louis,” Cortex Innovation Community, July 13, 2022. while Virginia’s Commonwealth Cyber Initiative is anchored in growing a specific sector. But when leaders establish an aspirational identity that resonates with employees and organizations, people become excited about pioneering new models for working, collaborating, and living.

Boston is a prime example of an ecosystem based on an ambitious goal: to define its “place, people, and purpose as the capital of scientific revolution.” 4 “The capital of scientific revolution,” Massachusetts Life Sciences Center. Taking advantage of its wealth of universities (including Harvard and the Massachusetts Institute of Technology), as well as leading institutions such as Mass General and Brigham and Women’s Hospital, the city government set out to work closely with entrepreneurs, developers, and leaders across sectors to define its ambitions. In turn, the city as an ecosystem has been able to support smaller, more defined innovation districts within its sphere, including Seaport, South Station, Kendall Square, and Back Bay/South End (Exhibit 2).

2. Focus on specific sectors, partners, and anchor tenants

We’ve found that innovation ecosystems are more likely to thrive when local leaders and developers play to a region’s existing skill base and institutional strengths. Ecosystems can focus on specific sectors and subsectors—for example, electric vehicles, advanced air mobility, or medical devices. Or they can focus on functions, such as artificial intelligence or the Internet of Things (IoT), across multiple sectors. Or they can live at the intersection of sectors and functions, as life science R&D and agricultural technology do.

Innovation ecosystems are more likely to thrive when local leaders and developers play to a region’s existing skill base and institutional strengths.

Two questions can help leaders identify a region’s value proposition and ideal anchor institutions: What unique areas of competitive advantage can the region pursue? And which universities, research institutions, incubators and investors, and businesses could be anchor institutions?

Some regions may be primed for a “right to win” approach, which builds off existing sector-based assets to anchor an ecosystem in an area of advantage. These existing assets could include areas of specialization, talent pipelines fed by higher-education and research institutions, emerging venture capital (VC) capabilities, or infrastructure (such as proximity to farmland, specific transit options, or urban density).

Alternatively, leaders could pursue a “want to win” approach, which creates an area of advantage by leveraging current conditions and trends to drive investment. These conditions and trends can be identified by analyzing projected growth for a particular sector, function, or intersection; major disrupters; and other factors that could influence growth trajectories (such as technology trends , supply chain disruptions, or federal funding). It can be tempting to zero in on hot industries, regardless of an area’s assets and strengths, but leaders could benefit from thinking like creators of coherent economic clusters—interconnected and intentional groups of employees, tenants, firms, and institutions. 5 Smaller-scale initiatives, such as neighborhood innovation districts, often require greater refinement—for example, an on-campus research center rather than a broader life sciences regional ecosystem.

The approach used to identify a unique value proposition can also be applied to anchor institutions. One of them may already exist in the region. But such an institution could also be attracted to it—for example, a large company that’s looking to tap into local start-ups for new capabilities and paid pilots, or a university that wants to expand its teaching and research facilities. The range of options may seem overwhelming, but large-scale developers can home in on an ideal candidate by considering factors such as revenues, growth, the total number of employees, and private versus nonprofit status. The process can be both iterative and opportunistic—testing multiple value propositions in the market to see where interest sparks and then refining the results.

Such intentionality in cluster and subsector design is evident in some of the largest innovation ecosystems currently being developed. National Landing, for example, is a 17-million-square-foot development spanning multiple Arlington County neighborhoods (including Pentagon City, Crystal City, and Potomac Yard) just outside Washington, DC. The ecosystem has secured the location for Amazon’s HQ2 campus. National Landing clearly focuses on technology and the region’s related expertise—including IoT, cybersecurity, and cloud computing. By building on two newly attracted anchor tenants (Amazon and Virginia Tech), National Landing has expanded its technology-focused footprint considerably. It has created enough space to accommodate 25,000 new employees and the follow-on economic growth. 6 “National Landing bid releases study, new data defining the region as one of the nation’s leading innovation districts,” National Landing, April 11, 2022.

3. Catalyze a critical mass of VC capital and start-ups through a strong innovation backbone

Start-ups and early-stage companies often develop cutting-edge ideas with the potential for real financial and economic returns. Innovation ecosystems can boost their chances of success if they catalyze a critical mass of start-ups and VC funding by developing a “backbone” across the four key areas of the integrated innovation funnel—the generation of ideas and R&D, commercialization, start-up and early-stage development, and growth (Exhibit 3).

Scaling up R&D, both academic and private, can help ensure that innovation remains robust. Those ideas can then be translated into start-ups by attracting entrepreneurs, fostering tech transfers, and building out IP assets. Seed, angel, and broader venture capital funding nurtures start-ups so that they survive and scale up past infancy. Early-stage companies—part of the integrated innovation funnel and value that the ecosystem promises—also need access to capital and structured support.

Assessing strengths and opportunities across the innovation funnel and making tailored plans to bolster strengths and fill gaps are key ingredients of a successful ecosystem. Understanding the root cause of gaps can help target effective solutions for bridging them. If a location has low VC funding, for example, either a lack of investment vehicles or of funding opportunities in the region could be responsible. These distinct challenges would require distinct solutions.

A robust mix of companies is also essential for building a healthy innovation funnel because it allows start-ups to improve their ideas—from applied research through the commercialization of a finalized product or service—by working together with large R&D anchor institutions and established talent. Boosting private investment in some higher-risk early-stage companies can help achieve better balance between start-ups, more mature companies, and established but slower-growing anchor institutions.

Cortex (St. Louis)

In 2002, St. Louis approved a master plan to develop a 200-acre area of industrial legacy land adjacent to anchor institutions, including Washington University’s medical campus, St. Louis University, and Barnes–Jewish Hospital, in an area that became known as Cortex. Leaders made sure that supporting start-ups in all stages of growth was part of the mission. The steps they took to promote that goal included building spaces for coworking, incubators, accelerators, and labs, as well as providing specialized prototyping, pilot, and scale-up equipment.

By considering needs beyond traditional corporate office spaces and by establishing the right balance to create a vibrant space ripe for early-stage investment, Cortex fostered innovation and investment side by side. To attract venture capital, it developed infrastructure, including a new MetroLink station to provide connectivity to the region. Tax abatements and incremental financing were regulatory mechanisms to attract venture investment. Altogether, Cortex has been credited with generating $500 million of investment across nearly 400 companies—85 percent of them small businesses—that have together created 3,800 technology jobs and made the broader St. Louis community a successful innovation ecosystem. 1 McKinsey analysis.

Ecosystems can support activities across the integrated innovation funnel in several ways. University anchors can empower tech transfer offices to scout and support developing technologies more proactively. Incubators and accelerators can help entrepreneurs on their journeys. Ecosystem leaders can coordinate start-up showcases by building out physical hubs that allow VC firms to interact with the ecosystem organically. The right mix of activities will probably depend on the scale of the hub and its strengths and challenges across the pipeline: the ASU Scottsdale Innovation Center, 7 Arizona State University. for instance, has fostered $1.3 billion a year in economic activity by incubating and funding student start-ups. 8 Darren Higgs, “SkySong expected to generate $58.2 billion In economic impact over next 30 years,” ASU Scottsdale Innovation Center, January 19, 2021. The St. Louis Cortex, meanwhile, has prioritized regulatory and infrastructural policies to generate $2.1 billion 9 “The regional impact of the Cortex Innovation Community,” Cortex Innovation Community. in single-year economic impacts (see sidebar “Cortex (St. Louis)”).

4. Develop an ecosystem talent and workforce strategy

Another critical component of successful ecosystems is a coordinated talent strategy. A scarcity of talent can severely constrain an ecosystem’s growth. For knowledge-based industries, location decisions often hinge on the available talent pool and the ability to develop and attract qualified candidates.

Economic development organizations and local leaders have historically relied on businesses and schools to attract talent. But large-scale ecosystems can have their own strategies to convince employers that they are environments where people want to work, play, and live—and would willingly relocate to.

To that end, the talent pipeline can be expansive and can focus on development across a spectrum of occupations and skill levels aligned to priority sectors. Public- and private-sector leaders can create partnerships and collaborations with a range of institutions, including four- and two-year universities, training providers, and community-based organizations that support greater access. Standing up an ecosystem can be an opportunity for leaders to work together to tear down the “paper ceiling” by incentivizing and helping employers to rethink degree requirements and consider candidates with two-year degrees or other certifications of skills—an approach that emphasizes reskilling existing talent pools, uplifting the entire community.

Helping ecosystems tailor specific programs to the needs of a sector or even an individual company can also create direct pathways into family sustaining jobs. Leaders can look at K–12 education to maintain a high-quality talent pipeline over the longer term. Such novel strategies helped the economic development organization JobsOhio attract companies and capital investment to the state, creating tens of thousands of new jobs.

Attracting talented workers to an ecosystem and then retaining and developing them often hinge on creating a relatable aspiration and appealing anchor institutions. To ensure that the ecosystem’s universities, research institutions, and companies have a robust talent pipeline, leaders could consider developing a coordinated and cross-sector regional workforce strategy that translates the ecosystem’s brand, goal, and aspiration into a tangible pitch. They can also work with all participating organizations to ensure that employers have access to qualified applicants and that employees have access to exciting and competitive opportunities. Other ways to increase the retention rates of local graduates include launching new or expanded degree programs, loan forgiveness for graduates staying within the region, coding bootcamps, university satellite campuses, and working with ecosystem companies to offer internships and apprenticeships.

5. Design high-quality real estate, infrastructure, and livability

Say that sufficient talent has been attracted to an area and that large anchor tenants are coexisting with accelerators, incubators, start-ups, and academic entities. But to be sustainable, an ecosystem needs to remain attractive to businesses, institutions, and workers. That enduring appeal is anchored in two types of infrastructure: first, the physical and virtual infrastructure aligned to the specific needs of the prioritized sectors (for example, wet-lab space for life sciences), and second, the “placemaking” infrastructure that informs quality of life. Leaders typically focus on the physical and virtual, which are crucial, but placemaking is also key for facilitating an inclusive community, vibrant and successful start-ups, collaboration, ideas, and growth, as well as making people who live and work in the ecosystem happier and more productive (see sidebar “Boston and Kendall Square”).

Boston and Kendall Square

Boston is a prime example of an ecosystem based on the ambitious goal to define its “place, people, and purpose as the capital of scientific revolution.” 1 “The capital of scientific revolution,” Massachusetts Life Sciences Center. Over the years, the city as an ecosystem has been able to support smaller, more defined innovation districts within its sphere, including the Seaport, South Station, and Kendall Square. Kendall Square, called “the most innovative square mile on the planet,” provides an example of how to use innovative infrastructure to improve the experience of anchors and tenants. It has long prioritized the infrastructure needed to help its residents lead connected, efficient lives—for example, by taking the latest R&D thinking from its anchor tenant, MIT. 2 Lita Nelsen, “Help America’s universities keep transforming the world,” Boston Herald , August 17, 2022.

The area also takes advantage of innovations from the broader Boston community—for example, in public transit and open-access technology. Most recently, MIT unveiled its plans for the new Volpe redevelopment of a central parcel of land in the district. The plans prioritize research community space, transit improvements, inclusivity, and cutting-edge energy efficiency, all designed to take advantage of new technology to attract both tenants and residents. 3 “Volpe project prepares for design phase,” MIT News on Campus and Around the World, October 7, 2021.

Real-estate investments and spatial decisions involve more than glossy new buildings or flavor-of-the-month technologies. Economic development organizations should prioritize investments in physical and digital infrastructure aligned with an ecosystem’s sector needs, from research facilities and prototyping equipment to co-working spaces and incubators. Even in a postpandemic world, physical spaces such as offices  and storefronts  are important. Retail, residential, and commercial real estate that complements new ways of working  can provide the right alchemy for attracting and retaining the best talent and businesses. Quality-of-life investments—such as highway interchanges, light rail stations, and public parks and open spaces—can create an appealing atmosphere for ecosystem residents, commuters, and businesses alike. Finally, a sufficient supply of housing is critical to ensure community affordability and vibrancy.

Each of these components—infrastructure to live, work, and play—can be designed to avoid the negative externalities that come from growth. Transportation and transit systems can use demand forecasting and load planning to get people from place to place without adding to congestion; land use and housing plans can account for pricing and affordability to avoid pricing people out of existing homes.

6. Cultivate a vibrant, diverse community and a sense of place

Innovation industries have long been notable for their lack of diversity and inclusion. Less than 20 percent of the people employed in engineering jobs are women, for example, even though they earn a majority of undergraduate and advanced STEM degrees. 10 Richard Fry, Cary Funk, and Brian Kennedy, “STEM jobs see uneven progress in increasing gender, racial and ethnic diversity,” Pew Research Center, April 1, 2021. Black workers make up 11 percent of total US employment across all sectors but only 9 percent of STEM workers, and the gap is even more pronounced for Hispanic workers. 11 Richard Fry, Cary Funk, and Brian Kennedy, “STEM jobs see uneven progress in increasing gender, racial and ethnic diversity,” Pew Research Center, April 1, 2021. Closing that divide will depend largely on the enrollment of members of historically marginalized communities in STEM education, and progress is currently poised to move slowly. Our research found that at current rates of change, racial and ethnic parity in higher education is still 70 years away. 12 Diana Ellsworth, Erin Harding, Jonathan Law, and Duwain Pinder, “ Racial and ethnic equity in US higher education ,” McKinsey, July 18, 2022.

University City Science Center

University City Science Center (UCSC), an urban research park in Philadelphia’s University City innovation ecosystem, provides tech commercialization curricula and convenes innovation programs for the broader area. In 2020, it held more than 400 programs and events for 15,000 participants, 44 percent of them non-White. Moreover, the initiative supported 94 start-ups, and nearly half of its overall funding went to company founders from underrepresented groups. UCSC’s development and risk capital helps underserved members of the wider innovation community, too. Additional UCSC-led real-estate developments, started in 2020 in the innovation ecosystem, have created a new commercial lab, a public park, and a STEM-focused middle school on a campus currently being leased to Philadelphia public schools.

To redress the imbalance, successful ecosystems can catalyze diverse, inclusive community building and shared prosperity— “inclusive growth.” Leaders can begin with a firm understanding of their starting point to promote equity goals and then develop initiatives, together with community anchors and education institutions, to ensure that the voices of residents are included in the ecosystem’s development and that opportunities benefit everyone, not just transplants to the area. Partnerships with community-based organizations are also critical to ensure that existing residents are not displaced as rents rise and new public spaces are created. Ecosystem leaders can even steer investment to create opportunities for disadvantaged communities and company founders from underrepresented groups (see sidebar “University City Science Center”).

This last component of the playbook begins in the planning phase, when leaders are well-positioned to promote inclusion as they consider urban-design, health equity, or other initiatives that bring together a diversity of stakeholders. They can commit themselves publicly to the goal of inclusive growth by setting SMART 13 Specific, measurable, achievable, relevant, and time-bound. goals for diversity, equity, and inclusion and by announcing them transparently. They can also create performance incentives linked to these goals and share updates through annual progress reports on diversity, equity, and inclusion.

To capitalize on the promise of innovation ecosystems, government and private-sector leaders can consider a few critical shifts in their community-building approach. Instead of doing business as usual, these leaders can not only cultivate a community of anchor institutions but also support tenants that enhance one another’s businesses within specialized segments. Instead of just helping to shape infrastructure with public authorities and creating common residential amenities, economic development leaders in the public, private, and social sectors can work together to assist anchor tenants and cluster businesses. And instead of looking at financial returns in isolation, leaders across sectors can capture the value for all shareholders and stakeholders. The potential returns—for communities, organization leaders, and residents alike—are worth the effort.

Cameron Davis is a consultant in McKinsey’s New York office. Ben Safran is a partner in the Washington, DC, office, where Lauren Yayboke is an associate partner. Rachel Schaff is a client capabilities manager in the Waltham, Massachusetts, office.

The authors wish to thank Kyoka Allen, Jennifer Bright, JP Julien, Mike Kerlin, Jonathan Law, John Means, Rob Palter, Steven Smith, and Lauren Voluck for their contributions to this article.

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GUEST POST from Chateau G Pato

Innovation has become a critical factor for success in today’s fast-paced and competitive business world. To foster and nurture innovation, many companies and organizations are establishing innovation hubs. These hubs serve as central locations for collaboration, idea generation, and experimentation. However, creating an effective innovation hub requires careful planning and execution. In this article, we will explore the key elements of a successful innovation hub by examining two case study examples.

Case Study 1: Google X

Google X, the experimental research division of Google, has gained a reputation for its groundbreaking projects and inventions. The company’s innovation hub, known as the “moonshot factory,” is a prime example of an effective innovation ecosystem. Here are three key aspects that contribute to its success:

1. Diverse and interdisciplinary teams: Google X brings together experts from various fields such as engineering, design, robotics, and artificial intelligence. This diversity of skills and perspectives enables cross-pollination of ideas, fostering innovation through shared knowledge and collaboration.

2. Encouraging experimentation and risk-taking: Google X promotes a culture that embraces failure as a necessary step towards success. Teams are encouraged to explore ambitious ideas and take calculated risks, even if they may not yield immediate results. This mindset allows for disruptive innovation and encourages team members to think beyond their usual limits.

3. Strong leadership and support: The innovation hub is backed by strong leadership that is committed to nurturing a culture of innovation. Leaders provide support and resources to teams, ensuring they have the necessary tools to think creatively and bring their ideas to fruition. This support is vital in overcoming obstacles and maintaining momentum.

Case Study 2: The Epicenter Innovation Hub

Located in Stockholm, Sweden, Epicenter is a co-working space that serves as an innovation hub for more than 350 companies. It has quickly become a hotbed for technology and creativity. Here are two essential elements that contribute to Epicenter’s effectiveness as an innovation hub:

1. Community and networking opportunities: Epicenter places a significant emphasis on fostering a strong community of professionals from various industries. It actively encourages interaction, collaboration, and networking among its members. By bringing together diverse skill sets and backgrounds, Epicenter creates an environment where ideas can flow and evolve.

2. Access to cutting-edge technology and resources: Epicenter provides its members with access to state-of-the-art technology, prototyping labs, and collaborative spaces. This infrastructure enables companies and individuals to test and develop their innovative ideas without facing barriers related to expensive equipment or limited resources. Accessibility to such resources is crucial in facilitating innovation and turning ideas into reality.

Creating an effective innovation hub requires careful attention to key elements such as diverse and interdisciplinary teams, encouraging experimentation and risk-taking, strong leadership and support, building a strong community, and providing access to cutting-edge technology and resources. By studying successful case examples like Google X and Epicenter, organizations can learn valuable insights and apply them to their own innovation hubs, driving their businesses forward in an era of rapid change and disruption.

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The Berkeley-Haas Case Series is a collection of business case studies written by Haas faculty. Our culture and vision at the Haas School of Business naturally offer distinctive qualities to the Series, filling a gap in existing case offerings by drawing upon lessons from UC Berkeley's rich history and prime location in the San Francisco Bay Area. We seek to publish cases that challenge conventional assumptions about business, science, culture, and politics.

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Building an Innovation Hub

Universities have assumed an expanded role in science and technology-based economic development that has become of interest to catch-up regions as well as to leading innovation locales.

This paper examines how the role of the university has evolved from performing conventional research and education functions to serving as an innovation-promoting knowledge hub through the case of Georgia Institute of Technology (Georgia Tech). This case is discussed in the context of state efforts to shift the region from an agricultural to an industrial to an innovation-driven economy. Central to the transformation of Georgia Tech as a knowledge hub is the emergence of new institutional leadership, programs, organizational forms and boundary-spanning roles that meditate among academic, educational, entrepreneurial, venture capital, industrial, and public spheres.

Comparisons between Georgia Tech’s experiences and those of university roles in selected other catch-up regions in the southern United States highlight the importance to the case of networked approaches, capacity building, technology-based entrepreneurial development, and local innovation system leadership. Insights on the transformation of universities and the challenges of fostering a similar transformation in regional economies are offered.

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Building an innovation hub: A case study of the transformation of university roles in regional technological and economic development

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Isenberg School Of Management Business Innovation Hub / BIG

• Curated by Paula Pintos
• Architects: Bjarke Ingels Group
• Area Area of this architecture project Area:  6500 m²
• Year Completion year of this architecture project Year:  2019
• Photographs Photographs: Max Touhey , Laurian Ghinitoiu
• Manufacturers Brands with products used in this architecture project Manufacturers:   Alucoil , National Enclosure Company , Viracon
• Architect of Record: Goody Clancy Architects
• Project Leaders:  Yu Inamoto, Pauline Lavie-Luong, Hung Kai Liao
• Project Team:  Ibrahim Salman, Lucas Hong, Maria Eugenia Dominguez, Douglass Alligood, Cheyenne Vandevoorde, Denys Kozak, Linda Halim, Yixin Li BIG Ideas: Tore Banke, Terrence Chew, Simon Lee, Seoyoung Shin, Pei Pei Yang, Ku Hun Chung, Jan Leenknegt, Derek Wong, Peter Lee, Mustafa Khan, Kristoffer Negendahl, Davide Maggio, Manon Otto, Yehezkiel Wiliardy, Justyna Mydlak, Elena Bresciani, Nicolas Gustin, Daniel Kidd, Deborah Campbell, Domenic Schmid, Francesca Portesine, Kai-Uwe Bergmann, Fabian Lorenz, Emily Mohr, Barbara Stallone, Amina Blacksher, Alice Cladet, Tianqi Zhang
• Collaborators:  Richmond So Engineers, BIG IDEAS, Arup, Nitsch, VAV, Towers | Golde, Haley & Aldrich, Acentech, HLB, SGH, PEER, Wil-Spec, VGA, Lerch Bates, LN Consulting, Mohar Designs
• Client:  University of Massachusetts Building Authority
• Partners In Charge:  Thomas Christoffersen, Daniel Sundlin, Beat Schenk, Bjarke Ingels
• City:  Amherst
• Country:  United States
• Did you collaborate on this project?

Text description provided by the architects. Designed by BIG-Bjarke Ingels Group and Architect of Record Goody Clancy, the copper clad Business Innovation Hub at the heart of the University of Massachusetts Amherst adds 70,000SF of hyper-collaborative study and social space to one of the top-30 public business schools in the United States.

The new expansion and partial renovation of the Isenberg School of Management nearly doubles the school’s current space to accommodate Isenberg’s growth in the last decade, while introducing new facilities for more than 150 staff and 5,000 students in undergraduate, master’s and Ph.D. programs. BIG and Goody Clancy were commissioned in 2015 to design a flexible space that inspires and facilitates collaboration for every Isenberg student.

Prominently situated on Haigis Mall near the entrance to the campus, a dramatic triangular glass entrance created by a domino-effect greets students. The building exterior is wrapped in straight, vertical pillars that gradually slope downward, creating a distinct appearance without any curved elements. The Business Innovation Hub directly extends the school’s existing 1964 building from the north and east sides in a wide circular loop, linking back on the upper floors to maintain connectivity. The loop consolidates Isenberg’s faculty and staff under one roof, creating a singular place of arrival and a strong visual identity for the entire Isenberg School of Management.

The Business Innovation Hub’s exterior is clad in copper , so long-term exposure to the elements will naturally weather the metal from a dark ochre to an enduring patina. With longevity and sustainability in mind, the building also targets LEED Silver certification. Upon entering, students and faculty arrive at the 5,000SF Learning Commons.

Daylight peers between the accordion-like pillars to illuminate the multi-story atrium, where the heart of the business school hums with students learning, networking and dining. The bright and spacious Learning Commons doubles as an event venue for guest speakers, award ceremonies, banquets, and career fairs. In any room or hallway, natural light reaches inside from both the campus and the inner courtyard.

Throughout the Business Innovation Hub, spaces are designed with student interactions, teamwork and chance encounter in mind: soft chairs adorn the corridors, benches are affixed to the grand stairway and classroom chairs can easily maneuver for theater-style lectures or small-group work. On the second and third floors, students and staff occupy the innovation labs, advising spaces and faculty offices.

To support the career development of every Isenberg student, classrooms are equipped with integrated technology for distance learning. In addition, the Chase Career Center gains 15 new interview rooms, and various conference rooms and breakout areas are distributed throughout the loop. The inner spaces of the extension face a circular courtyard, where an open-air garden and stone benches create an oasis for collaboration and contemplation.

The courtyard connects back to the campus via two pathways between the original Isenberg building and the Business Innovation Hub. The buildings are fused by two bridges above the paths: the large bridge cloaked in copper becomes the gateway to the courtyard while the small bridge glazed with glass forms a visual continuity around the interior courtyard.

 In the evening, the Business Innovation Hub glows from the life within—appearing as an inviting beacon on the campus and creating a lasting impression for campus visitors, staff and students.

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Building an innovation hub: A case study of the transformation of university roles in regional technological and economic development

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Greg Giuffrida , Jennifer Clark

Discussions of university-based economic development practice have evolved from discrete discussions about constituent elements (ex. technology transfer, firm start-ups, etc…) to more integrated discussions about the role of the entrepreneurial university in shaping innovation districts. Policy analysts have identified “innovation ecosystems” connected to anchor institutions in Baltimore, Buffalo, Cambridge, Cleveland, Detroit, Houston, Philadelphia, Pittsburgh, St. Louis, San Diego, and “Tech Square” in Atlanta. These innovation districts share characteristics in common with the “Triple Helix” thesis combining university, industry, and government partners to build innovation neighborhoods connected to anchor institutions. Although the success of these innovation districts has been widely noted, the elements underlying that success have not been systematically identified. This study contributes to this evolving scholarship by examining the development and evolution of Technology Square in Atlanta, Georgia, USA. The “triple-helix” thesis articulated by Etzkowitz and Leydesdorff argues successful innovation cultures are fostered by continuous and iterative interaction among universities, governments, and industry. The Brookings Institution’s innovation districts model further considers the physical space and relationship culture in which these triple helix interactions manifest: 1) Economic assets (the triple-helix actors); 2) Physical assets (public and private space, infrastructure, and connectivity); and 3) Networking assets (the relationships among the various actors that help advance new ideas). This paper analyzes the “Tech Square” project. It was built from 2001 to 2003 and simultaneously expanded the size and scope of the Georgia Institute of Technology, a major public research university with an urban campus. The project was initially driven by the need for more programming and academic space, but multiple factors shaped it into the foundation of a growing innovation hub. This case study uses a review of the literature on university knowledge and technology transfer; archival records; interviews; contemporary accounts; and mapping to build an ex post evaluation of Tech Square based on evolving theories of innovation district design. This study makes key contributions through a close examination of the physical form of Tech Square and how it was shaped by its particular Triple Helix environment. In addition, the Tech Square case highlights how the U.S. political context of limited government funding for university expansion necessitates a more creative economic development role for universities as anchor institutions. The findings of this study will be of interest to practitioners and scholars of economic development, public policy, urban planning and design, public-private partnerships, and higher education seeking to better understand the evolving role of research-intensive urban universities in building and shaping innovation districts.

Gerhard Fuchs , Philip Shapira

Lars Føleide

The world is changing at an ever increasingly rate. Corporations are in a constant race to optimize cost structures, and reinvest just enough of their profits to maximize shareholder value. The field of entrepreneurship is also rapidly becoming more agile and sophisticated, in areas of web and mobile – with Silicon Valley taking the lead in this development. Universities play a crucial role as an innovation promoting knowledge hub, and have been improving its function in this role through boundary-expanding initiatives, as they started to take an active role in improving the underlying dynamics of entrepreneurship to achieve stronger economic development. Private incubators programs like Y Combinator and 500 Startups have with their success in fostering entrepreneurship spurred interest for replicating their value at the university level. Doing a successful startup might seem like daunting task to accomplish, especially considering that once disrupting technologies like the Internet have now reached a mature level – and the expected quality level before launch are continuously reaching new heights. This report will explain the importance of incubators, and how they facilitate the process of allowing knowledge to be commercialized through entrepreneurship - which creates higher economic growth, as much of this knowledge might never have been commercialized without a surrounding ecosystem. Keywords Innovation, Cluster, Knowledge Hub, Knowledge Governance, Incubators, Venture Capital, Entrepreneurship, Social Entrepreneurship, Business Development, Capitalism, Economic Growth

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Jennifer Clark , Connie Huang

"In this article, we engage the question of regional resilience theoretically and empirically. Our theoretical approach merges discussions of regional development in evolutionary economic geography (primarily UK based) with regional resilience in urban planning (primarily US based) using Markusen’s industrial districts as a framework for analysis (1996). We use data on ‘triadic’ patents (USA, Japan and Europe) to measure regional innovation, both per capita by region and categorized by firm size for regions in the USA. We then use this data to create a ‘typology of innovation districts’. Our analysis suggests that policies encouraging small-firm innovation have broad benefits for regional economies. Keywords: regions, resilience, industrial districts, innovation systems, small firms JEL Classifications: O32, R11, R58"

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The recent rise in university-industry partnerships has stimulated an important public policy debate degrading the theoretical rationale for government support for knowledge transfer/exchanges from higher education sector. This paper draws on a particular case study conducted at Lund University, which is the largest comprehensive research university in Sweden. We ask the role of fundamental research at the university and organizational responses to growing expectations with respect to its subsequent use ...

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Leading in the era of AI: How Microsoft’s platform differentiation and Copilot empowerment are driving AI Transformation

Apr 24, 2024 | Judson Althoff - Executive Vice President and Chief Commercial Officer

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A Copilot on every desk, every device and across every role is core to Microsoft’s mission to empower every person and every organization on the planet to achieve more. By bolstering the services customers know and love with our Copilot capabilities across the Microsoft Cloud, we are enabling zero-shot innovation — the ability to effectively gain value out of the box — for their businesses to increase productivity, creativity and inclusive collaboration. ISVs, digital natives, startups and the rest of our partner ecosystem are leveraging our Copilot stack to build AI solutions that are reshaping business processes across industries. We continue co-innovating directly with customers on our open cloud platform to bend the curve on innovation by identifying AI design patterns; then integrating and applying data to solve their most pressing challenges faster and more efficiently than ever before. Underpinning it all is the need for a strong cybersecurity foundation, and the work we are doing to ensure this critical imperative is met. No one is immune from bad actors, and we remain committed to transparency and trust in our approach to protecting customer and partner data. By empowering organizations with industry-leading cloud and responsible AI solutions, paired with our focus on security, we are helping them unlock opportunities that deliver pragmatic business outcomes. I am proud of the work we have done this past quarter that exemplifies our approach to enabling AI Transformation, and the success of our customers and partners across industries who have embraced it.

Just this week we announced our strategic partnership with The Coca-Cola Company to accelerate AI Transformation enterprise-wide as well as across its global network of independent bottlers, and shared news of our partnership with Cognizant to drive enterprise AI adoption for millions of users. We are expanding our work with G42 to accelerate responsible AI innovation in the United Arab Emirates and beyond while accelerating digital transformation securely across the Middle East, Central Asia and Africa with expanded access to services and technologies. We are also building on our relationship with Cloud Software Group to bring joint cloud solutions and generative AI capabilities to more than 100 million people.

We continue to shape the future of industry alongside our customers to help them differentiate their businesses. At CES, we showcased how our customers and partners are innovating across the automotive and mobility industry with generative AI to solve deep business problems and create new opportunities, and revealed the Copilot key for Windows 11 PCs . At NRF, we shared new copilot templates to help retailers incorporate generative AI across the shopper journey while enhancing the experience for store associates and making AI implementation more accessible. Just recently at HIMSS, we announced Microsoft’s role as the technology enabling partner for the Trustworthy & Responsible AI Network , a consortium of healthcare leaders aimed at operationalizing responsible AI principles to improve the quality, safety and trustworthiness of AI in healthcare.

Enabling pragmatic AI innovation with Copilot capabilities to deliver immediate value

Companies like  Amadeus , AAMI , TotalEnergies and Cushman & Wakefield are leveraging Copilot for Microsoft 365 to enrich customer interactions and advance high-priority projects. Visa employees are transforming how they work to better serve the needs of their clients and Banca Transilvania is boosting efficiency and innovation while delivering the highest quality of customer service. Emirates NBD engineers are solving their most complex problems while remaining within their development environments, and 96% of early adopters at CommBank have shared that Copilot is making them more productive. Colombia-based Cenit is experiencing rapid adoption of Copilot to empower employees to be more creative, productive and collaborative. U.K.-based law firm Clifford Chance is helping employees automate daily tasks like meeting notes, email drafts and inbox management with AI and natural language processing, while Air India built a plugin to gain real-time access to flight and operations data to empower better decision-making.

With Copilot in Dynamics 365 Customer Insights, Northrop & Johnson achieved a 250% increase in charter bookings while helping team members save time, boost productivity and enrich the quality of engagement with their customers. Using Power Platform and Microsoft Copilot Studio, Cineplex is saving employees over 30,000 hours annually in manual processing times and reducing ticket refund handling time from 15 minutes to under a minute. Northern Trust is using Microsoft Copilot for Service to modernize its client relations organization, streamline employee processes and elevate the client experience. Teams at EPAM Systems are leveraging Microsoft Copilot for Sales to improve sales processes and better support its business strategies, while freeing up time to spend with customers.

Building AI design patterns that bend the curve on innovation and intelligently reason over data to solve business challenges

Icertis is leveraging Azure OpenAI Service and its proprietary AI models in conjunction with its extensive data lake to uncover cost savings, enhance compliance and reduce risk across millions of legal contracts. Insurance company FWD Group is using the service to enhance customer experiences and operations across its lines of business, and Singapore-based CapitaLand Investment has saved 1 million Singapore dollars and 10,000 work hours per year with data-driven AI models. With Azure OpenAI Service as the secure foundation for its supply chain platform, Blue Yonder is harnessing AI and machine learning to provide real-time decision making for businesses across 78 countries. Homes & Villas by Marriott Bonvoy and Publicis Sapient are making it easier for travelers to find the right vacation homes through natural language search powered by large language models within Azure OpenAI Service, and Miral is curating some of the most sought-after leisure, entertainment and tourism activities with a 24/7 AI-powered concierge. Using several AI models, Australian retailer Coles developed an edge computing platform that makes 1.6 billion informed predictions each day so customers can find exactly what they are looking for across its 850 stores.

With Microsoft Fabric, Melbourne Airport is synchronizing flight bookings and ground transportation data to project demand while maintaining efficiency, reliability and safety of its operations. Rail freight operator Aurizon is deriving better data insights from 400 sensor-equipped locomotives to enhance cost efficiency, scalability and predictive maintenance. Seair Exim Solutions is increasing export-import trade data ingestion speeds by 90% to empower its global shipping industry customers with improved insights more quickly with help from Mandelbulb Technologies , while Dener Motorsport is using Fabric and real-time analytics to help automotive engineers detect and resolve car issues within minutes — down from nearly half an hour. By hosting its data within Azure Kubernetes, Windstream is improving its custom GPT platform to help employees find the information they need faster across 100,000 indexed documents. To promote financial inclusion, Trusting Social focused on a strong data foundation paired with AI services to enable the development and deployment of solutions that assist more than 130 financial institutions across Asia. Sasfin Bank worked with Legal Interact to implement a unified document management system to analyze contract clauses and streamline legal operations and workflows using Azure Cognitive Services and Azure SQL. TomTom has deployed GitHub Copilot to its developers, resulting in 85% of the company’s engineers feeling more productive and 70% saying it enables them to focus on more satisfying work. Meesho — a leading online marketplace in India — is using a generative AI chat agent to increase inquiry resolution by 40% and customer satisfaction by 25%, while leveraging GitHub Copilot to streamline code delivery and testing for its 200+ developers.

Strengthening cybersecurity foundations with industry-leading cloud and responsible AI solutions

Microsoft’s Secure Future Initiative (SFI)  reflects our commitment to continually advancing the built-in security of our products and services.   We recently announced the general availability of Microsoft Copilot for Security — the industry’s first generative AI solution designed to help security and IT professionals do their work with greater speed and accuracy. In our latest Copilot for Security economic study , security analysts using the Copilot were 22% faster and 7% more accurate across all tasks, with 97% saying they want to use it again. Our ability to offer this solution to customers is bolstered by more than 100 partners such as Capgemini, Cisco and Darktrace who are committed to working with us to deliver trusted, responsible AI solutions. In collaboration with TC1 Labs , Pacifico Seguros has become the first company in Latin America to implement Copilot for Security with a Zero Trust approach, strengthening its security defenses and confidently preparing the company for future security challenges. Security professionals at Enverus are saving hours per day on low-value tasks with Copilot, allowing them to focus on strategic work and help elevate the impact of their security team. Wipro is using the solution to help employees save time and act quickly to improve outcomes across its business.

Using the Microsoft Defender security stack, Del Monte Foods increased security visibility and coverage across its IT environment, reducing security risks by 50% and improving its security response and remediation capabilities. To streamline its security operations, Jones Lang LaSalle implemented Microsoft Defender for Endpoint with help from Tanium , reducing cybersecurity spending by 20% and enhancing protection for nearly 90,000 endpoints. Türkiye-based Demirören has adopted a Zero Trust security model by unifying its security solutions to protect essential business data and enhance threat detection and response capabilities. Paytronix , a provider of customized digital experiences for restaurant and convenience store guests, improved its security profile by seamlessly migrating data for 250 million user accounts to Azure without interruption. The Audi Group’s IT department is simplifying endpoint management and safeguarding its hybrid workforce across 12 countries with enhanced security using Microsoft Intune. To ensure robust data protection and seamless access for authorized personnel, SLT-MOBITEL is using Microsoft’s AI-powered security products to fortify end-user devices and services while simplifying information security and compliance. Oregon State University and Grupo Bimbo are utilizing Microsoft data security solutions to safeguard their environments and confidently prepare for their continued adoption and deployment of AI.

Embracing AI Transformation has become a priority for organizations around the world seeking to unlock AI opportunities. Whether helping our customers adopt and scale AI with our Copilot capabilities or building unique AI strategies leveraging our open platform and partner ecosystem, we are humbled to work with you to drive pragmatic business outcomes and differentiated industry leadership. Our commitment to your success is unwavering. We will continue building upon our trusted relationships and our focus on responsibility and security so you can move forward with confidence in your AI journey. I remain inspired by what we have done — and what we will do — to help our customers and partners achieve more.

Tags: AI , Azure OpenAI Service , Copilot for Dynamics 365 , Copilot for Microsoft 365 , Microsoft Cloud , Microsoft Copilot for Sales , Microsoft Copilot for Security , Microsoft Copilot for Service , Microsoft Copilot Studio , Microsoft Defender , Microsoft Fabric , Microsoft Partners

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