Project to create innovation districts in São Paulo state makes progress

Researchers have completed the first stage of a technical study on the creation of environments designed to foster the development of innovative solutions and creativity in the cities of São Paulo and Campinas.

By Elton Alisson  |  Agência FAPESP – Researchers at FIPE, an economics think tank, have completed the first stage of a technical study in preparation for the creation of two innovation districts in São Paulo state – planned areas near universities and research institutions containing high-tech companies, startup incubators and accelerators, and designed to foster innovation.

Forthcoming stages of the study, commissioned in 2018 by FAPESP, were discussed at an online seminar held by the two institutions in early June.

“Organizing these innovation districts is a complex process that requires participation by a great many actors in the public and private sectors. The legal and governance framework must be very sound. We don’t have a lot of experience with designing such frameworks in Brazil,” said Marco Antônio Zago, President of FAPESP, in his opening remarks to the webinar.

The authors of the study began by analyzing the area currently home to the CEAGESP wholesale market in Vila Leopoldina, a neighborhood of the city of São Paulo, and are now looking at other areas along the Pinheiros River and near the University of São Paulo (USP), Butantan Institute, the Technological Research Institute (IPT) and the Nuclear and Energy Research Institute (IPEN).

In the same region, the São Paulo State Government intends to implement the fourth stage of its International Center for Technology and Innovation (CITI). Undertaken by the State Department of Economic Development in partnership with the prefecture of São Paulo, the project will foster the creation and application of high-tech and hard-tech solutions. 

The first stage of the project was completed in late 2020 with the launch of IPT Open Experience, a program designed to attract midsize and large firms’ research and development (R&D) centers to IPT’s campus, as well as startups and science and technology institutions, and to connect them to IPT’s technological infrastructure.

“CITI’s implementation has given greater breadth and depth to the plan to develop an innovation district on the land now occupied by CEAGESP,” said Carlos Américo Pacheco, CEO of FAPESP.

The second innovation district will be located on Fazenda Argentina, a former farm occupying 1.4 million square meters near the University of Campinas (UNICAMP). The site was purchased by UNICAMP in 2014.

The two areas belong to metropolitan São Paulo and contain Brazil’s most important universities, research institutions and science and technology centers, as well as large corporations in several sectors, accounting for about 25% of the nation’s gross domestic product (GDP), according to Andrea Calabi, coordinator of the technical team responsible for the study.

“These two public areas in São Paulo state have special conditions for the construction of innovation districts, which are physical spaces designed to act as catalysts of transformational initiatives requiring connections with entrepreneurs, researchers and investors, to stimulate the production and market insertion of innovative technologies, and to create a solid foundation for the creation of new companies and jobs,” Calabi said.

To prepare the legal, institutional, financial and urbanistic frameworks for the innovation districts to be created in the two areas, the researchers who are taking part in the project have spent the last two years analyzing the challenges posed by their design, implementation and management.

The results show that the proposed innovation districts have the potential to foster a new regional dynamic in the production of knowledge and its application in manufacturing and services. They could also become drivers of a process of reorganization and densification of São Paulo’s innovation ecosystem, as well as socially inclusive development of the local and regional economy, with evident benefits in terms of sustainable urban renewal.

“The construction of these innovation districts represents fundamental opportunities for São Paulo from the standpoint of increased competitiveness, job creation, and entrepreneurship,” Pacheco said.

The study also highlights the need for all three tiers of government – municipal, state and federal – to be involved in different stages of the projects, deploying strategies that align public policy goals with the potential to generate income and assure their financial sustainability.

Another finding is that the success of the two innovation districts will depend on the capacity of project leaders to motivate and attract private investors, given the fiscal problems faced by Brazil and the constraints on public spending. 

“In view of the fiscal crisis, one of the challenges will be transforming public assets into investment flows for the development of projects that benefit society, focusing on increased productivity and economic competitiveness,” Calabi said.

Evolution of innovation environments

Innovation districts are a global trend and an evolution of innovation environments such as technology parks, incubators and accelerators, or innovation-promoting regions such as Silicon Valley in the United States.

One of the reasons for their large-scale creation is their strategic role in accelerating innovation and renovating urban spaces so that they are more attractive to talented people and tech startups, according to the experts who took part in the seminar.

“Innovation districts correspond to a novel urbanistic model relating to the technological revolution we’re currently experiencing. This revolution requires a new kind of city that’s more sustainable, has a new mobility model, and mixes the use of spaces so that people can interact and innovations can be generated out of these relationships,” said Miquel Barceló, who ran the 22@Barcelona innovation district in Spain between 2004 and 2007.

One of the world’s first innovation districts, alongside Boston’s, 22@Barcelona began operating in 2000 and transformed the Poblenou industrial area into a hub of innovation and creativity. Formerly known as the “Catalonian Manchester”, the area began decaying in the early 1960s. It was rehabilitated as part of the large-scale reconfiguration of Barcelona in preparation for the 1992 Summer Olympics. One idea was new housing, but a group of intellectuals, economists and urbanists advocated conservation of its economic and productive character. The city’s mayor backed the proposal, and Poblenou’s obsolete manufacturing base was converted into a hub of the knowledge economy.

“Innovation districts provide responses to new demands to leverage knowledge, innovation and creativity as drivers of the region’s economic and social development,” Barceló said.

According to a report produced by the Global Institute on Innovation Districts (GIID), there are more than 100 innovation districts around the world. Besides 22@ Barcelona, they include Ruta N in Medellín (Colombia), the Buenos Aires Technology District (Argentina), the Digital Port in Recife (Brazil), and the MaRS Discovery District in Toronto (Canada).

“Each of these districts reflects the local context and conditions. The reason for their success is that they have a good governance, leadership and funding model,” said Julie Wagner, President of GIID.

Creating successful innovation districts is not easy, however. Around 70% of the attempts to create them in countries like Canada, South Korea, Saudi Arabia and the United States have failed, said Ramon Gras, a researcher in urban innovation at Harvard University in the US.

“What happened to the projects to create innovation districts in those countries is that wrong decisions were made in terms of urbanistic and architectural design, and in terms of the choice of economic sectors for the participating companies. We can avoid this by doing a good diagnosis,” he said.

To help plan these initiatives, Gras and colleagues at the Massachusetts Institute of Technology (MIT) have developed an online system that models the economic complexity of cities in any country, identifying sectors that have competitive advantages and should be included in any plan to develop an innovation district.

“The model identifies the city’s specific economic sectors with interesting prospects. We’ve used it to evaluate several sites in the US, Mexico and Europe,” Gras said.

According to Tim Moonen, a researcher at the University of Bristol in the UK, the key factors determining the success of an innovation district include the existence in the host city of a regulatory environment and other mechanisms to foster entrepreneurship and attract capital, as well as economic sectors with favorable growth prospects.

“Innovation districts are innovation ecosystem hubs,” Gras said. “It’s important to support cities in different ways by helping them have successful innovation districts.”

In São Paulo state, besides the capital and Campinas, other cities with the potential to develop innovation districts include São Carlos, Ribeirão Preto and São José dos Campos, according to participants in the seminar.

“São José dos Campos is a natural candidate to have an innovation district because of its history of attracting and participating in the global supply chain for high-tech industries, especially aerospace,” said César Augusto Vieira de Mello, one of the organizers of the city’s Technology Park.