Innovation districts must be socially sustainable Social infrastructure, often overlooked, is becoming investable, but still needs support from governments. Greater fiscal autonomy can help cities invest directly in innovation. In Japan, for example, local governments have a good degree of fiscal autonomy, including more control over local tax revenues, compared to other more centralized systems such as the United Kingdom.53 Involving local stakeholder organizations in the master-planning of innovation districts, including communities, businesses and academic institutions, is key to their success. Embed these principles through context-specific planning As demonstrated through the case studies, while the core components of innovation districts are broadly applicable, their implementation must be sensitive to local context and scale. For example, the City of Agadir’s approach to urban innovation exemplifies a distributed model – developing specialized clusters across the city and leveraging its coastal location to focus on the ocean economy and agritech. At the same time, innovation is integrated city-wide, to address pressing challenges such as water scarcity and urban heat effects. (see Innovation District Spotlight 7). Allied to this context-specific approach is the need for a clear, long-term vision – essential to avoid ad hoc development and to ensure a balanced alignment between public and private interests. Equally important is thinking beyond the physical boundaries of the district itself – echoing earlier points on governance – to consider wider urban systems and broader impacts on communities. Although innovation is a key driver of successful districts, it cannot operate in isolation. It must be supported by integrated planning, policy and governance frameworks that provide stewardship and active management of the spaces created. Innovation Ecosystems: A Toolkit of Principles and Best Practice 31

Innovation Ecosystems 2025