• Sam Zegas

Phases of innovation: what city leaders need to know

This analysis is explored in depth in Aretian's new Atlas of Innovation Districts and accompanying report. You can access the interactive Atlas and download the full report at www.aretian.com/atlas.


Innovation takes place at many levels. There are metropolitan dynamics, district dynamics, as well as human dynamics specific to the teams of people who generate innovative knowledge and products. Our methodology accounts for these differences in scale and uses a different analytical framework for evaluating innovation at each level.

By analyzing the innovation dynamics at each distinct scale (metropolitan, district, and human), it become possible to identify new variables, correlations, and causations between the inputs to innovation and the performance of the entire ecosystem. This interlinked visibility makes it possible to align the KPIs of a single organization to the KPIs of a city to coordinate intelligent decision making across disparate groups. Let's take a deeper look.


Metropolitan Scale: 3 Phases of Innovation

At the metropolitan level, the Atlas of Innovation Districts evaluates innovation ecosystems according to their activity in 3 phases:

  1. Research and Academia

  2. Technology Transfer

  3. High Value Added Production

In the Research and Academia phase, organizations engage in theoretical innovation, primarily through academic institutions. In the Technology Transfer phase, design, engineering, and technology firms originate or evolve ideas from research and academia, and crystalize them into useful designs, products, and services. In the Mass Production phase, companies that specialize in manufacturing and distribution begin to mass produce new products based on the designs developed during the technology transfer process.


Assessing a region’s ratio and performance through its activities in these three phases gives a high-level understanding of the innovation landscape. Cities in the process of developing a new innovation ecosystem will need to develop through these phases sequentially, as the outputs from the Research and Academia phase become inputs for the Technology Transfer phase and outputs from Technology Transfer phase become inputs for the Production phase. A mature innovation ecosystem at the metropolitan level will have diverse, high-functioning players operating at each of these phases, successfully transitioning novel ideas into marketable products and services.


District Scale: 5 Phases of Innovation

At the district level, the Atlas of Innovation Districts evaluates innovation according to 5 Phases. These phases describe how organizational structures, decision making structures, and human dynamics have an impact on greater society. The 5 Phases are:

  1. Inputs for Decision-making, Investment and Design: strategic decision-making processes

  2. Innovation Intensity: societal effort to support innovation

  3. Innovation Dynamics: tactical and operational decision-making processes

  4. Innovation Performance: tangible results from knowledge-intensive activities, value creation

  5. Outputs for Societal Impact and Benefits: value created flows to broader society

Assessing a district’s innovation through the framework of these 5 phases provides insights that help leaders of private and public organizations understand how their actions influence the surrounding environment. At both the first step - Inputs, Decision-Making and Design - as well as the third - Innovation Dynamics - organizations can make specific decisions to influence the innovation ecosystem around them. In the first phase, decision makers can change inputs like investment levels, policies, and design principles. These changes to inputs will reshape the innovation ecosystem in the second phase. The third phase gives leaders the opportunity to change the dynamics of team interactions as they work toward new solutions. The fourth phase encompasses output of the innovation ecosystem, including new patents, products, and services. In the fifth phase, the effects of the new products outputs result in the societal impacts, such as high quality employment, economic contribution, and sustainability.

These 5 Phases are the most relevant framework for assessing the state of innovation at the scale of an Innovation District. Designers and policymakers seeking to develop their Innovation District may also benefit from assessing whether the district has all components of the Burke-Gras Hierarchy of Innovation Needs. This framework provides a broad set of evaluative criteria from location to the quality of amenities and the innovation performance, all of which are needed to create a thriving urban innovation ecosystem.



Human Scale: 7 Phases of Team Innovation

At the human level, the Atlas of Innovation Districts evaluates innovation according to 7 Phases. These phases of team innovation describe the process by which new ideas flow from inception to mass production. Each of the seven phases represents a step that a team must take in order to develop a successful product, process, or service. The 7 Phases are:

  1. Idea Generation

  2. Data Gathering

  3. Hypothesis Testing

  4. Prototype Creation

  5. Validation & Calibration

  6. Minimum Viable Product

  7. Mass Production & Diffusion

The 7 Phases also provide a framework for organizations to create innovation support systems, helping their employees remove obstacles and achieve their goals. Highly innovative organizations will create systems to reduce common obstacles and provide support and feedback at each phase. Interventions that support innovative team environments might take the form of conveniently-located maker spaces, mentoring programs, and legal consulting services for guidance on incorporation and IP protection.

The Atlas of Innovation Districts presents analysis of innovation at the metropolitan, district, and human levels. Many of the problems that block innovation ecosystems from reaching their full potential operate across multiple scales. For this reason, to develop a nuanced understanding of the dynamics at play in an innovation ecosystem, it is important to include perspectives from all three scales.


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