Toward a deeper understanding of Anchor Institutions and their role in innovation
Updated: Jul 2
Aretian is working to create a new science of cities, using data science and complexity theory to build digital twin models of urban spaces. To begin this work, Aretian's team of researchers has conducted a deep analysis of innovation ecosystems and produced a first-of-its-kind Atlas of Innovation Districts. The Atlas project explores the secret recipe for what makes an Innovation District succeed or fail.
The problem with theories of urban systems to date is that they have relied too heavily on qualitative methods to produce insights. Without rigorous quantitative analytical methods, theoretical models of how urban and economic systems work are necessarily limited. They cannot come close to producing realistic models of urban spaces in all their complexity.
For example, researchers studying innovation ecosystems have long been aware of so-called "anchor institutions," which serve as the nucleus for innovation ecosystems. These institutions, which usually are large industry or academic organizations, create economic stimulus and attract other related businesses to an area. This generates a dense network of collaborators and competitors that build the specialization and expertise required for successful innovation. The academic work on anchor institutions to date has generally stopped at the conclusion that anchor institutions play a central role in fueling innovation. This insight is a useful first step, but it is too high-level and not quantitatively rigorous enough to add real value to the conversation about harnessing innovation to promote economic growth.
Harvard researchers and Aretian co-founders Ramon Gras Alomà and Jeremy Burke have pushed this science further both qualitatively and quantitatively through Aretian's Atlas of Innovation Districts.
Qualitatively, they have classified anchor institutions into 5 types, each of which shapes the surrounding district’s qualities and influences the human experience in the surrounding neighborhood. Quantitatively, they employed semi-supervised clustering methods, a machine learning technique, to sort the districts in the Atlas into the appropriate category using a quantitatively rigorous approach.
The 5 anchor district types that Aretian's analysis identified are as follows:
City Government: This district type develops where municipal or metropolitan government agencies are the key drivers of innovation. This type of district is characterized by overall better living environments with diverse levels of housing, shops, and amenities, but tend to have lower innovation intensity overall. Seattle South Lake Union is an example of this type.
Research and Academic Center: This district type grows around world class universities, colleges, technical schools, and research centers. Research and Academic districts are characterized by strong output of scientific articles and patents, some of which transfers into locally-based technology ventures. They tend to be strongly meritocratic environments that produce more radical innovations. Kendall Square/MIT is an example of this type.
Entrepreneurial / Bottom Up: This district type develops organically where entrepreneurs and startups come together in a dense environment. Entrepreneurial / Bottom Up districts tend to develop in highly meritocratic urban environments and is characterized by a common culture and values, economic incentive schemes, and fluid circulation of talent. The Austin Innovation District is an example of this type.
Industry Cluster: This district type grows around dominant corporations. It is characterized by strong specialization and concentration of related industries in close proximity to strategic suppliers. The Boeing campuses in Los Angeles are an example of this type.
Strategic Government Agency: This district type develops around high-performance national research and development centers. These districts are often placed in remote locations and are intensely focused on basic science and defense applications. They generate massive technology transfer spillovers in multiple industries that use the new technologies to build out applications for the general public. The Oak Ridge National Laboratories are an example of this type.
Because the 5 kinds of anchor institutions create different dynamics in their surrounding districts, it is important to understand which type of anchor institutions your city hosts. Each type of anchor institution comes with distinct strategic implications for development. The goal is to cultivate a custom-fit innovation ecosystem around the institutions that are best able to promote virtuous cycles of economic activity. That customized fit depends on understanding how anchor institutions differ from one another and what it takes to make them succeed.
Anchor institutions are not the only component to consider when cultivating high-performance innovation ecosystems. There are also considerations related to urban design and geospatial effects that combine to form a well-functioning whole. These topics will be explored in our coming blog posts and are explained in depth in the Atlas of Innovation Districts report. Stay tuned for more!