BEYOND SILICON VALLEY : RE-THINKING HIGH-TECH INNOVATION DISTRICTS
Dr John H Howard , Narelle Kennedy
Everywhere wants to be the next Silicon Valley , a rich concentration of advanced technology enterprises , entrepreneurs , world-class universities , and researchers , attracting global talent and investment , quality jobs , and high-growth industries .
Promotion of high-tech innovation districts , precincts and hubs is a favoured strategy of economic development professionals and organisations . They are vital innovation ecosystems , fostering creative and entrepreneurial endeavours , enhancing economic prosperity , and achieving urban and civic renewal .
However , while innovation districts represent economic vitality and progress , they also have significant and often unrecognised shortcomings that undermine social wellbeing and cohesion .
This paper marshals the research to look more closely at the downsides of high-tech innovation districts and similar clusters , and ways of redressing these deficiencies .
It outlines an alternative approach for rethinking place-based innovation policies , the key feature of which is connecting
economic development with community development .
QUALIFIED ECONOMIC IMPACT Innovation places and spaces are painted as modern economic engines , leveraging human and financial capital to drive research , development and entrepreneurship , thus fostering job creation and supporting industries like law , accounting , logistics , and local retail ( Feldman & Zoller , 2012 ; Turok , 2012 ).
The rhetoric praises their positive impact on regional economies , citing ‘ ripple ’, ‘ spillover ’, and ‘ trickle-down ’ effects as evidence of broader economic advantages ( Moretti , 2012 ; Audretsch & Feldman , 1996 ).
Policymakers and industry leaders amplify these proclaimed economic benefits ( Feldman , 1994 ; Florida , 2002 ). Silicon Valley , for instance , is cited as having produced tech giants like Apple , Google , and Facebook , contributing significantly to the US economy ( Kenney & Zysman , 2016 ). However , closer examination reveals significant inequities : wealth concentration among a small elite , high housing costs , and wage stagnation for non-tech workers .
The ‘ trickle-down effect ’ has limitations , with marginalised populations rarely seeing tangible improvements in living standards . The negative environmental impact of innovation districts , including intensive construction , energy consumption , and waste generation , is frequently downplayed ( Bulkeley et al ., 2011 ).
In other words , the economic benefits are not universally shared , and employment opportunities are skewed towards those with high educational attainments , widening the gap between skilled and unskilled workers ( Florida , 2017 ; Glaeser , 2011 ; Markusen , 1996 ; Autor , 2015 ; Moretti , 2012 ).
GENTRIFICATION EFFECTS The rise of innovation districts triggers gentrification . Infrastructure investments and an influx of high-paying tech jobs and high-income knowledge workers elevate housing costs and property values ( Lees , Slater , & Wyly , 2018 ). Long-standing residents , often lower-income families , are displaced as rents and essential service costs increase . Severe housing affordability issues are evident in places like Silicon Valley and Boston ’ s Kendall Square ( Smith , 1996 ).
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