"Targeting innovative cities has now become an explicit part of investment strategies," says Carol Hodgson, Director, Global Research at JLL. "Our research also shows that innovation-centric cities appear to be more resilient to economic shocks. During the last downturn, these cities saw average real estate capital values fall less and bounce back more quickly. These include cities such as Seoul, Berlin and Chicago."
Attracting corporate occupiers
Like real estate investors, corporate occupiers also search for locations that have advanced innovation ecosystems. These cities sustain highly skilled workforces and are best placed to succeed in the future. The mature markets of Europe, the U.S. and Australia are the world leaders when it comes to talent. Cities like London, San Francisco, Washington, DC, San Jose and Seattle are home to cutting-edge universities along with well-qualified, growing populations.
For cost-conscious businesses, the most affordable hubs relative to their innovation and talent offerings are smaller cities like Austin, Helsinki and Melbourne. Second-tier Australian cities such as Brisbane and Perth also perform well, offering a significant discount with more attractive yields and rents up to 67 percent lower than in Sydney.
East versus west – the increasingly global nature of innovation
Although San Francisco is still the world's most tech-savvy metro area, U.S. cities no longer dominate in innovation. Three of the top five most innovative markets – Tokyo, Singapore and Beijing – are now in Asia Pacific.
Asian cities have made rapid progress toward developing sophisticated future-looking business ecosystems, while China's government is committed to bringing the country's higher education up to par with the U.S. and Europe. Shanghai, Shenzhen, Seoul and Bangalore continue to expand their capabilities and global reputations as leading tech hubs.
For more information, download the Innovation Geographies report here: https://www.jll.co.uk/en/trends-and-insights/research/innovation-geographies-2019
JLL's Innovation Geographies study covers over 100 cities globally and tracks a broad range of factors to assess a city's innovation capacity and the relative strength of its talent pool. Innovation is defined by the level of foreign direct investment in high-tech industries; research and development expenditure; the number of patents awarded and venture capital activity. The strength of a city's talent pool is determined by its demographics, the quality of its higher education institutions, the proportion of people with a bachelor's degree and employment in high-tech industries.