Can a ‘place’, or even a sense of place, have a commercial value? We live in a different world today than that of the last generation and current younger generations will live in a different one again. The speed of change is phenomenal and we’re now seeing ‘Innovation Districts’ that will have significant influence on retail and shopping centres in general. Cramer examines the trend.
The notion that a place can have a quantifiable value as a consequence of its identity has formed the basis of a number of my Shopping Centre News articles. But place cannot have a value, economic or otherwise, without being inherently attractive to talent, businesses and people, either by innovation or distinctiveness, or both. In previous articles, I have challenged that new economic models will need to emerge to value and add value to new-style bricks-and-mortar retail environments. In this article, I investigate the latest trend in knowledge-based economies, to create what have been coined ‘innovation districts’, and investigate what role retail can play in the creation and support of these places. The wonderful thing about trends is that they have not yet been entirely formulated or simply defined. The huge opportunity is for retail to play a leading role in the formation of these places.
We are formally in the age of innovation. Fuelled by the speed of technology, we are entering into an era where the average Generation-Z person will have 17 jobs, across five careers, and live in 15 homes over the course of their lifetime. Of the five careers, it is likely that the majority of the jobs do not yet even exist; the school children of today are expected to thrive in a future work environment driven by a culture of enterprise and collaborative innovation. It is anticipated that Generation Z will encounter a choice of beyond 162 as-yet undefined career opportunities, according to futurist Thomas Frey, in addition to the ones we can already define. They range from 3D technologists (3D printed houses are already in development, so that’s not too hard to imagine) to ‘Time Brokers – Time Bank Traders: Where do you go when you run out of time? Naturally, to the time-bank, and take out a time-loan.’ This is an era of rapid and profound change, and our cities and places, including those locations focused in and around retail, need to alter and respond to these new conditions.
A significant trend in the evolution of our cities is the rise of what have been called ‘innovation districts’. These districts, as defined by the Brookings Institution, are geographic areas where leading-edge anchor institutions and companies cluster and connect with start-ups, business incubators, and accelerators.
Physically, they are typically relatively compact, transit orientated, technologically connected, and offer a mixed-use environment. They are attractive to talent and business alike, and, in turn, they become a self-perpetuating hub of like-minded folk who are, in many cases, now drawn to the urbanisation of previously non-urbanised or suburbanised areas of our cities.
This last point is key to the success of innovation districts. It relates to identity and character of place. It is no longer enough just to have the best technology, the right talent and mentors, a history of success, a pool-room of awards… or even a major retail offer.
If the place is sterile, unattractive and disconnected, they will not attract. Innovation districts, by their nature, embrace the essence of urbanism: they are diverse, complex, dense, culturally responsive and environmentally considerate. Though they may be underpinned by an anchor – say, a university, technology park, hospital or retail centre – they bring within their sphere some typical mixed-use outcomes of residential, retail and commercial uses, as well as some less typical and future ones that we do not yet know how to define. But, for this publication, and in the evolving retail context, the question is: what role can retail play in contributing to these innovative places?
According to the Brookings Institution, innovation occurs when new or improved ideas, products, services, technologies, or processes create new market demand or cutting-edge solutions to economic, social and environmental challenges. Retail itself has been going through its own innovative renaissance. Necessity is the mother of invention, and digital disruption has seen retail’s need to respond to the new digital paradigm arguably faster than any other property sector. The suggestion, only a couple of years ago, that bricks and mortar may cease to exist, has given way to an even stronger belief that physical presence, coupled with an online identity, is the likely future for the industry. As metropolitan trends emerge, such as those described in innovation districts, the opportunity exists to continue that evolution, morphing and changing retail to respond to new and emerging urban typologies.
The thing about trends, as retail knows so well, is that they are often difficult to define. While the Brookings Institution confidently described emerging innovation clusters in Boston, Brooklyn and Chicago, in areas ripe for urban regeneration, associated with established cities and located near or adjacent anchor institutions and facilities, a quick Google search tells us pre-emerging may be a better description. A young barrister, working at the heart of the Boston Innovation District, was asked to describe where the area was by a Bloomberg journalist but didn’t understand the question… and yet was standing at the centre of it.
Why are they hard to define? Because they don’t have true boundaries or definitions. Meanwhile, these precincts are radically shifting our understanding of late 20th-century spatial geography, altering traditional land evaluations and land-use mapping, causing disruption to the established economic spreadsheet, and driving mixed-use as the true nature of things. They add to the mix a new asset class, that being the network asset. This puts value on the ability to connect locally, globally, physically, virtually. For the latter, it means new infrastructure, Wi-Fi, NBN and digital technologies we are yet to know about, but bringing people together physically is equally as relevant. The other layer of these places is the expectation of their attracted talent, that they are “bike-sharing and bankable investments – all connected by transit, powered by clean energy, wired for digital technology, and fuelled by caffeine.”
There is a familiarity to this description that those working within the retail sector will instantly recognise. These are some of the attributes that the new urban retail model also seeks, in order to increase dwell time, enable people to linger and meet, and embed retail into the fabric of the city, place and community. There is, then, an obvious opportunity to co-join the now accepted new retail practices and link them to other emergent urban typologies. Retail is not yet discussed, apart from as a service, in the musings and writings about innovation districts from mayors through city planners to economic journalists. Australia has a huge opportunity to lead the way.
Innovation districts, by this name or another, are coming to Australia – or are already here. Any locations across our metropolitan centres that attract entrepreneurs, business or research and development specialists, are connected and wired for collaboration and are witnessed in the ‘urbanisation’ of abandoned waterfronts, post-industrial areas or suburbia itself. I recently discovered a quiet achiever in Warringah, New South Wales.
Quite literally out the back of Warringah Mall is a shared, flexible office space of 12,400m2, which offers a range of flexible strata spaces that can be tailored to a variety of business types.
Called the Lifestyle Working Brookvale project, the single-lot development has single-handedly changed a typical suburban street into an urban oasis.
The Brookvale project is based on a simple idea: to improve the life of your staff is to improve your bottom line. Lifestyle working represents a balance between work and health, family and leisure. The lifestyle aspects built into the project include basement surfboard and bike storage, with a dedicated space to wash the sand off your feet before heading to a desk, a health club and 25m lap pool, and a series of open spaces that are Wi-Fi connected for indoor and outdoor working. One of the most important features of the project is the food offer, which includes a café, restaurant and bar that focuses on healthy food alternatives, fresh corporate catering and outdoor barbecues. For now, the retail offer is limited to food, but it is no accident that the major retail asset of Warringah Mall is located on the doorstep of the project. Retail being nearby provides another layer of amenity and entertainment that shores up the lifestyle aspect of the project.
International benchmarks for joining retail with creative industries and innovation-based places do exist.
One example is The Custard Factory in the United Kingdom. It is a collective of equal parts creative and digital businesses, independent retailers and event venues. Located within a five-minute walk to Birmingham’s Bullring, it hosts 500 businesses, of which enough are retailers for locals and tourists to think of the destination as a retail precinct first, and a business hub second. This is further supported by a regular calendar of fairs, festivals and music gigs, as well as seasonal and short-term events. The Custard Factory harnesses adaptive reuse of the historic buildings to secure the identity of place that attracts both innovative start- ups, including retailers, to household brands like ASOS.
The opportunity for retail and innovation districts is twofold. On the one hand, there is no reason why innovation districts themselves, particularly as they are defined by Brookings as “fuelled by caffeine” cannot contain appropriate retail within them. This can only positively contribute to the activation of the places as vibrant destinations, and continue to support the transition away from sterile, mono-use locations in search of the entrepreneurial spirit. On the other hand, and using the Custard Factory as an example, there is no reason why innovation projects, precincts, buildings and spaces cannot be incorporated within existing and evolving retail assets, or founded as retail ventures. There is a synergy between the uses that can be mutually supportive and assist to transition the 20th-century retail model to the 21st-century mixed-use urban retail experience. SCN