THE DEVELOPMENT OF BOSTON’S INNOVATION

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THEINTERSECT RPROJECTTHE DEVELOPMENT OFBOSTON’S INNOVATION DISTRICT:A Case Study of Cross-Sector Collaborationand Public EntrepreneurshipForeword by Ariella Cohen

The Intersector ProjectWhat is the Intersector?Perhaps more than ever before, addressing common, knotty problems in our modern liferequires navigating across the government, business, and non-profit sectors.Yet sectorshave differing languages, cultures, and practices that make it challenging to work together.There is a need for a new sector, the intersector, a space where collaboration amonggovernment, business, and non-profit sectors enables leaders to share expertise,resources, and authority to address problems that cannot be solved by one sector alone.About The Intersector ProjectThe Intersector Project is a non-profit organization that seeks to empower practitionersin the government, business, and non-profit sectors to collaborate to solve problemsthat cannot be solved by one sector alone. We present real examples of collaborationsin many places, across many issues and illuminate the tools that make them successful.We do this through our library of forty case studies, which profile successfulintersector initiatives; our Toolkit, which draws from an extensive body of researchto provide practical knowledge to practitioners; and our ongoing research aimed atproviding meaningful analysis and practical insight into the growing space of intersectorcollaboration.Learn more at intersector.com.THEINTERSECT RPROJECTThe Development of Boston’s Innovation District2

Table of ContentsForeword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7A Mayor’s Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Mass Challenge: A Key Turning Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Community Engagement and Communications Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11The District Gains Momentum: Key Developments and Entrants . . . . . . . . . . . . . . . . . . . . 13District Hall: Boston’s First Public Innovation Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Current State of the District: Successes and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17The Role of the Public Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Key Issues and Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Conclusion: Future Visions of the District and of Innovation in Boston . . . . . . . . . . . . . . 23Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Authors and Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28The Development of Boston’s Innovation District3

ForewordBy Ariella CohenEditor-in-Chief, Next CityMy first post-college office was a converted loft inthe DUMBO section of Brooklyn. The year was 2004;the Internet was only then beginning to transform theway we live and work, yet big changes were afoot, andmy boss’s landlord, David Walentas, knew it.Twenty-five years earlier the real estate developerhad gambled 12 million on 2 million square feetof industrial property underneath the ManhattanBridge. It was a lot of money for a noisy warrenof half-empty warehouses and fetid cobblestonedalleys, but Walentas hunkered down for the long haulon the intuition that the neighborhood’s residentindustries were soon to change. By the time Iarrived on the scene with a job at an independentBrooklyn newspaper and a scrappy commuter bike,the warehouses were teeming with young computerprogrammers and MacBook-toting graphic designers.I encountered my first software entrepreneur on thecreaky freight elevator I rode up to my office everyday and drank my first locally brewed kombucha inthe overpriced grocery store on the building’s firstfloor. Eventually, both the software guy and the localkombucha made their way into my newspaper stories.To innovate is to disrupt the established orderand introduce something new. . The ideal endresult is the increased creative productionassociated with the kind of spontaneous crosssector interaction I experienced in DUMBO,not to mention new tax revenue and jobs.The Development of Boston’s Innovation DistrictWalentas didn’t call DUMBO an innovation district.He didn’t have to. The creative energy was palpablein the neighborhood’s narrow streets – and Walentashad subsidized the rents of enough startups, artists,and media types that no one was going anywhere elseanytime soon, anyhow.Eleven years later, Walentas has been made amillionaire many times over, and DUMBO is oneof the city’s wealthiest (and most Instagram-ready)neighborhoods, a mix of glassy multi-million-dollarcondo towers, hip offices, and posh commercecatering to residents with a median household incomeof 181,684. (By comparison, the median income forthe city as a whole is 50,711.)I still have a few artist and journalist friends who workin the neighborhood thanks to the discounted officespace that Walentas continues to provide in hope ofmaintaining the neighborhood’s buzz.Yet more andmore, the neighborhood feels like a study in luxuryurbanism. It’s lovely to visit but not a replicable oreven desirable model for most cities.To innovate is to disrupt the established order andintroduce something new. Brookings Institutionresearchers Bruce Katz and Julia Wagner describeinnovation districts as “physically compact, transitaccessible” mixed-use areas where “leading-edgeanchor institutions and companies cluster andconnect with startups, business incubators, andaccelerators.”1 The ideal end result is the increasedcreative production associated with the kind ofspontaneous cross-sector interaction I experienced in4

ForewordDUMBO, not to mention new tax revenue and jobs.These districts represent a mash-up of thedevelopment strategy that made a grittyneighborhood under a loud bridge desirable toentrepreneurs and wealthy condo-buyers, and anemerging model predicated on collaboration andgovernment involvement. Instead of Walentas’ oneman, market-driven show, they are the product oflong-term planning and shared investment on the partof taxpayers, anchor institutions, and private-sectorpartners.As with any public-private partnership, thesecollaborations carry risk but also the potential fornew public benefit. Where in the past a developer likeWalentas may have been held accountable for hiringlocally or building a minimal number of affordableunits mixed in with the luxury apartments – 58of them in the case of DUMBO – this new modelpresents an opportunity to plan strategically withpublic needs in mind and, ultimately, create a placethat reflects the interests of a diverse urban populace.In cities such as Pittsburgh, Detroit, Buffalo, St. Louis,and Boston, the model is being adapted to meetlocal needs with programs intended to foster amore inclusive ecosystem that will create economicopportunities not only for those already connected tothe tech sector but also those who need a way in. Inother words, these cities are seeking to do somethingtruly innovative: disrupt a pattern of inequality.the city’s reputation as a hotbed for tech-drivenentrepreneurship.Yet as the District continuesto grow, it faces new challenges of accessibility,affordability, and identity – challenges that can onlybe addressed through more collaboration and yes,innovation. Indeed, we are not in DUMBO anymore.Ariella Cohen is an award-winning journalistwith 11 years of experience reporting on urbanchange, politics, and policy. Prior to joining NextCity – a non-profit organization with a missionto inspire social, economic, and environmentalchange in cities through journalism and eventsaround the world – she co-founded New Orleans’first online investigative news outlet, The Lens,and worked as a staff reporter for the BrooklynPaper in New York. She has reported on disasterrecovery, urban development, and city politicsin Port-au-Prince, Jerusalem, and in cities acrossthe United States. Follow her @ariellacohen onTwitter.With this report, The Intersector Project offers aninsightful exploration of collaborations across thebusiness, government, and non-profit sectors in thecontext of the Boston Innovation District, one ofthe earlier examples of this emerging model for21st century economic development. Since 2010,more than 200 startups have set up shop in the area,creating hundreds of new jobs and contributing toThe Development of Boston’s Innovation District5

IntroductionThis study explores the relevance of intersector collaborations– collaborations across the business, government, and nonprofit sectors – in the context of the Boston InnovationDistrict.Emerging in urban centers across the country, citylevel innovation districts are geographically distinctareas intended to attract cutting-edge companies,research institutions, startups, accelerators, andother related entities, creating a dense community ofinnovators and entrepreneurs.2 Innovation districtsalso tend to attract businesses that offer supportservices to tenants (e.g. law, accounting, and publicrelations firms), as well as entities that offer amenities,such as restaurants and bars.Understanding how city-level innovation districts canharness the strengths of each sector is particularlyimportant in an era of urbanization, limited publicresources, and increased public expectations ofpublic sector innovation. The development of theBoston Innovation District provides an outstandingexample of a government-led economic developmentapproach involving collaboration across sectors. Italso demonstrates what Mitch Weiss, former Chiefof Staff to Boston Mayor Thomas Menino and now alecturer at Harvard Business School, has described as“public entrepreneurship.”3 Public entrepreneurshipis an approach to public sector management thatdraws upon a set of “lean” startup principles, includinghypothesis-based experimentation and testing,iterative learning, and speed, agility, and willingness topivot.The Development of Boston’s Innovation DistrictUnderstanding how city-level innovationdistricts can harness the strengths of eachsector is particularly important in an era ofurbanization, limited public resources, andincreased public expectations of public sectorinnovation.Following this approach, Boston’s public sector ledthe development of the District, an ecosystem ofinnovation and entrepreneurship.4 This economicdevelopment strategy aimed to revitalize anunderutilized parcel of land by attracting bothestablished companies and emerging entrepreneurs,and developing infrastructure and amenities toholistically support work-life opportunities – alllargely without the use of major tax incentives orcostly capital investments. Within this framework, theOffice of Mayor Menino (and subsequently the Officeof Mayor Martin J. Walsh) and supporting agenciescatalyzed investments and stakeholder engagementthat brought the District to life, breeding additionalcross-sector activity and partnerships along the way.6

BackgroundBoston’s distinctive concentration of higher educationinstitutions, research and manufacturing capabilities,and venture capital firms makes it uniquely positionedto attract extraordinary talent and innovativeventures. According to Entrepreneur magazine, as ofJanuary 2015, Boston was the top destination forventure capital investments in the United States, afterthe San Francisco Bay Area.5 These contextual factorscontribute to the city’s ability to promote dynamiceconomic growth.6The Boston Innovation District spans approximately1,000 acres and includes five sub-districts: Fort Point,Seaport, Port, Convention Center, and 100-Acres.It is most commonly known as the South BostonWaterfront or Seaport District and has a richhistory that dates back to the 19th century. It wasa wetland peninsula that was annexed to Boston in1804, when it became a hub of fast-growing industrialdevelopment.7 The area served as home to railyards and manufacturing companies for Boston’sworking port until about 1955. The developmentof transportation infrastructure, including elevatedhighways, isolated the District, making it hardlyaccessible by foot.Beginning in 1995, the extension of the MassachusettsTurnpike to Logan Airport and the opening of theTed Williams Tunnel made the area more accessibleand created opportunities for development. In 2004,the Seaport District was further integrated intodowntown Boston as the result of the project knownas the Big Dig that dismantled the elevated CentralArtery highway and rerouted Interstate 93 throughunderground tunnels.8 Shortly after, the expansion ofthe Massachusetts Bay Transit Authority’s Silver Linebrought public transportation to the area for the firsttime.9 2004 also marked the opening of the BostonConvention and Exhibition Center east of Fort Point,The Development of Boston’s Innovation DistrictDOWNTOWNBACK RICTSOUTH BOSTONNORTHDORCHESTERCourtesy of the Boston Redevelopment Authoritywhich transformed the area and drew in thousandsof new visitors. In 2005, Joe Fallon, founder of