This policy briefing looks at how location affects innovation, and how innovation strategy should reflect regional differences.

Key findings:

• Some places are more innovative than others, however much innovation policy is ‘spatially blind’.
• Cities offer three qualities essential to innovation: proximity, density and variety. Rural areas however tend to be overlooked by policymakers. 
• But innovation doesn’t stop at administrative boundaries. Instead, an innovation system follows a ‘functional region’ that normally reaches beyond a city or locality but is smaller than a nation.
• Innovation strategy should recognise the importance of regional innovation systems.

Place matters to innovation. From Silicon Valley to Shoreditch, innovative places attract the brightest and most creative people to produce a ferment of new ideas and ways of working.

The distinctive qualities of innovative places make them poles of attraction in the economy. But too often innovation policy has been set at a national level, without taking account of the widely differing needs of regions and localities.

Recent reforms to regional and local government offer an opportunity to create regional innovation strategies that properly reflect regions’ distinctiveness.

Local authorities should use multi-area agreements to implement cross-boundary innovation policy, and regions should take the opportunity presented by the new Regional Strategies to develop their own ‘regional innovation journeys’, building on their particular strengths.

Author:
Nesta