Local governments and policymakers , in efforts to rebrand places as ‘ innovation hubs ’, favour corporate interests . Tax incentives and relaxed zoning laws facilitate large-scale developments that clash with the existing built environment , inadvertently marginalising current residents . This scenario is unfolding in central Sydney .
Historically , planning for innovation zones has not provided for affordable housing or investments in cultural landmark preservation , allowing change to the social and cultural landscape ( Brenner , Marcuse , & Mayer , 2009 ; Fainstein , 2014 ).
Speculative investments also contribute . Announcing an innovation district can trigger speculative buying , with investors anticipating property value increases , further driving up prices ( Fields , 2015 ).
SOCIAL INEQUALITY AND EXCLUSION In addition to the consequences of gentrification , innovation districts can perpetuate further social inequality by being sites of significant economic restructuring .
By definition , striving to create new industries and jobs of the future and to transform local economies is disruptive . New skills and capabilities are essential to adapt and take advantage of opportunities . This attracts the “ creative class ” seeking high-paying jobs and cosmopolitan lifestyles , at odds with the existing population and social amenities ( Florida , 2002 ).
Inevitably , a two-tier labour market emerges , where high-income professionals and low-income service workers co-exist but with disparate economic and social prospects .
This situation is reinforced by the focus of innovation districts being on advanced technologies , and high-value , high-growth industries . Innovation becomes equated with selected high-end or new to the world breakthroughs , excluding recognition of non-technological innovation and the ingenuity of mainstream businesses and their workforces .
Inequalities are exacerbated by the disproportionate influence on the shape and operation of innovation districts by ‘ power elites ’ - property developers , policymakers , venture capitalists , academic leaders , the media and the like . With access to resources and networks heavily tilted to favour those already well-connected or privileged , other interests and voices are excluded ( Brown & Greenbaum , 2017 ).
Typically , success for innovation districts is defined by economic and commercial returns . This is another indicator of a culture of exclusivity , limiting interaction across social sectors and neglecting social innovation that could benefit a broader population ( Bourdieu , 1986 ; Granovetter , 1973 ).
EROSION OF COMMUNITY IDENTITY AND THE SOCIAL FABRIC While innovation districts drive technological advances and civic renewal projects in hard-pressed neighbourhoods , cities and towns , it is rare that they are initiated and controlled by local people .
Rather , innovation districts rely on attracting specialised talent and businesses , often new inhabitants with different socioeconomic profiles ( Fainstein , 2001 , Harvey , 2008 ). This creates an external ecosystem alien to the local community ( Florida , 2002 ).
Innovation districts also draw on global businesses and a mobile , cosmopolitan population , which can also lead to the loss of local identity ( Zukin , 1995 ). Global retail chains and brands replace local traditions , landmarks and businesses , diluting local and indigenous cultures and distinctiveness ( Shaw & Hagemans , 2015 ).
The locality gains economic value but loses its distinct identity , becoming another extension of a gentrified city ( Zukin , 2010 ).
There is a loss of a sense of belonging . As social bonds weaken , the neighbourhood loses its social capital , which is crucial for residents ’ mental wellbeing and resilience ( Putnam , 2000 ).
Invisible assets like community relationships , values , and local vernacular are diminished . The collective cultural memory and sense of place fade , replaced by a narrative of tech-driven progress and competitiveness ( Harvey , 2008 ). Existing residents , lacking the financial or educational capital to adapt , become cultural ‘ outsiders ’ in their neighbourhoods ( Butler , 2007 ; Slater , 2006 ).
SAVING INNOVATION DISTRICTS Innovation does not have to be antithetical to social inclusion . Innovation districts can still drive economic growth and prosperity but should not do so at the expense of social equity and community cohesion .
The much-lauded attributes of innovation districts as epicentres of collaboration , creativity and technology leadership are weakened by blindspots about their contributions to gentrification , displacement and other social inequities ; damage to the social fabric and identity of local communities ; and unfair constraints on who benefits from innovation ’ s higher living standards and opportunities .
Rather than abandoning innovation districts , they require a re-think . Building on their foundation aims of boosting placebased economic development , innovation districts should expand their remit to advance community and social wellbeing also .
Practical programs suggested in the literature to counter deficiencies in hightech innovation districts include :
• Introducing performance measures that go beyond GDP and other economic outputs like patents , spin-off companies , and jobs created . These should cover affordable housing , income distribution , gender diversity , carbon footprint , and community engagement , among other parameters of equity and sustainability . ( Benneworth & Dassen , 2011 ).
• As proposed by Prahalad ( 2004 ), innovation programs that serve the most disadvantaged should receive priority . Such programs would focus on using innovation to provide affordable , accessible services and products to people experiencing poverty and create job opportunities beyond highly specialised tech roles .
• Other approaches include cooperative governance models , which involve local communities and give them a say in the businesses and services operating in innovation districts ( Chatterton , 2016 ).
• Community participation in planning and development processes is crucial . Such engagement ensures community needs are addressed , fostering inclusion and value ( Fainstein , 2014 ).
ECONOMIC DEVELOPMENT JOURNAL VOL 17 NO 2 2024 09