TECHNOLOGY parks, once a widely adopted policy tool to bridge academia and industry for innovation and commercialisation, are becoming increasingly outdated.
Empirical evidence suggests that spatial clustering plays a crucial role in accelerating innovation, driving global interest in innovation districts – dynamic, urban-like ecosystems where start-ups, research institutions and industry leaders densely co-locate, collaborate and thrive.
For Malaysia to build a competitive and sustainable tech ecosystem, its technology parks must evolve into innovation districts. However, this transformation must go beyond surface-level changes to embrace the deeper structural shifts that drive real innovation.
Since the 1980s, a growing divide has separated university research from corporate product development. Universities focus on discovery, companies on commercialisation – leaving a gap that technology parks were meant to bridge but largely have not. Co-location alone hasn't overcome cultural and organisational barriers.
As a result, many technology parks struggle to turn research breakthroughs into marketable products, constrained by isolation and rigid structures. Knowledge flow remains reliant on formal channels, like university tech transfers, rather than the organic, multidirectional spill-overs seen in dynamic innovation hubs worldwide.
Traditional technology parks are single-use enclaves – car-dependent and detached from city life. Innovation districts, by contrast, capitalize on urban density and mixed-use design.
Instead of isolating innovators, they merge universities, start-ups, established companies, housing and amenities in a walkable neighbourhood.
This proximity is both geographic and programmatic: labs and offices mix with apartments, cafés and cultural venues, generating daily encounters and cross-pollination that spark new ideas.
Simply put, innovation districts blur the line between work and home, making innovation a social process.
Research shows they're not merely rebranded tech parks; they intentionally combine urban vibrancy with innovation infrastructure in ways older models never did (Drucker & Kayanan, 2023). They foster an open, networked environment: entrepreneurs and researchers share workspaces, connect at events and learn from each other in real time. Knowledge flows freely through informal interactions and trust-based networks, rather than getting stuck in silos.
Empirical evidence shows that firms in innovation clusters out-innovate their isolated peers. Studies of industrial districts – the precursors to today's innovation districts – reveal that companies in these clusters have higher innovation rates (Muscio, 2007). Proximity alone doesn't explain it: local networks foster knowledge spillovers and help firms adopt new techniques faster. Researchers note that businesses identifying with a district are more likely to innovate, tapping into neighbours' tacit know-how and observing each other's experiments.
In other words, the intangible social dynamics of a cluster – casual information sharing, a shared mission – drive creativity. Proximity breeds familiarity and trust, easing collaboration. A start-up might get early feedback from a nearby university lab, or firms might partner after engineers chat at a café. These spontaneous exchanges can't be scripted top-down, but innovation districts make them more likely. The result: dense networks, faster knowledge diffusion and a cycle of innovation fuelling more innovation.
One needs only look at 22@Barcelona to see the innovation district model in action. Launched in 2000, the 22@ project transformed a dilapidated industrial area of Barcelona into a vibrant innovation hub for technology, media and design and magnet for talent and investment.
The initiative repurposed 200 hectares of former factory land into a mixed-use district intentionally designed for innovation. Derelict factories became university campuses, start-up incubators and co-working lofts while striking new buildings serve as icons of the area's rebirth.
By 2010, 22@ had drawn about 7,000 companies and shops – half of them newly founded – while adding 114,000sq m of parks and green space. The once-desolate neighbourhood saw a profound boost in residents and according to recent figures, roughly 90,000 to 95,000 people now work there (22@Network Barcelona, 2022); notably, the district is home to 12,150 companies whose turnover represents 14.4% of the city's total.
Notably, Barcelona took a holistic approach, blending business clusters (ICT, biotech, energy) with housing and amenities to create a lively urban district, not just a tech hub. A public incubator (Barcelona Activa), co-working spaces and innovation campuses nurtured start-ups, while regular networking events like "22@ Breakfast" connected entrepreneurs, researchers and residents. What began as government-led redevelopment soon attracted private investors, global companies and top talent, forming a self-sustaining ecosystem.
The main appeal of innovation districts lies precisely in their self-sustaining ecosystems, concentrating everything businesses need – not just infrastructure but community. A well-designed district combines physical assets (labs, broadband, co-working hubs) with social assets (networks, mentors, talent pipelines).
Over time, this concentration hits a tipping point, generating its own momentum (Morisson, 2020). A successful district eventually attracts firms and talent organically, thriving even after public support recedes.
This means that unlike traditional parks that depend on government grants or anchor tenants, a mature innovation district sustains itself. Spatial clustering creates strong network effects: start-ups find customers or partners next door, large companies spin off ideas into local ventures and universities see nearby firms commercialise their research. Housing, cafes and cultural venues keep the district lively beyond 9-to-5, helping attract and retain top talent. A critical mass of innovators draws even more innovators – a pattern seen from Silicon Valley to 22@. In Malaysia, this magnetic effect is crucial to reversing brain drain, making skilled locals and diaspora experts see opportunity at home in a vibrant cluster "where the action is" ("Malaysian Brain Drain: Voices Echoing Through Research").
In short, innovation districts create an environment where innovation is not a program or policy, but a culture – a daily way of life that perpetuates itself.
- Transforming a technology park into an innovation district requires strategic changes in physical design, policy and community development. Drawing from global best practices, a blueprint for this transformation may include:
- Transition from a single-use office park to a mixed-use hub with residential, commercial and recreational spaces. A "work-live-play" environment with housing, cafes and green spaces fosters collaboration beyond business hours (Schnoke et al., 2024). Connectivity is key – integrating public transit, walkable streets and cycling routes transforms an isolated campus into a vibrant, urban-integrated district creative folks gather, unwind and exchange ideas even long after work ends.
- A stakeholder-driven governance model – one that incorporates triple to quadruple to quintuple helix partnerships (universities, private firms, local authorities, civil society representatives and natural environment) – ensures broader participation and a more dynamic innovation ecosystem. This multi-stakeholder approach fosters transparent decision-making and resource allocation, breaks down traditional silos and cultivates a shared vision that can adapt to the evolving needs of the district.
- An innovation district thrives on people, not just buildings. Co-working hubs, incubators and maker spaces should be open to tenants and outsiders, fostering organic idea exchange. Regular interactions – monthly "tech meet-ups," demo days, hackathons, or informal breakfast talks where researchers and entrepreneurs swap insights – build trust and collaboration, essential for a successful cluster. Shared digital platforms can connect firms, universities and start-ups, facilitating knowledge flow. Extending engagement to local communities through internships, public science events and open-door days strengthens the district's role as an inclusive innovation hub.
However, while the physical and policy changes are critical, the true X-factor in an innovation district is culture.
Unlike traditional science parks, where firms operate in silos, innovation districts thrive on knowledge-sharing – even among competitors. Effective management plays a crucial role as a connector, fostering partnerships, resolving conflicts and driving cross-sector collaboration.
Shifting from a siloed approach to an ecosystem mindset takes time, but empirical evidence is unanimous: trust and daily interactions are just as vital as infrastructure.
A shared mission – whether advancing biotech, agritech or smart-city solutions – can naturally fuel collaboration, leading to expertise exchange and joint ventures while our numerous national challenges, in turn, can provide a constant source of inspiration for these collective goals.
Crucially, the transformation from a conventional technology park to an innovation district must be underpinned by a rigorous Input–Output–Outcome–Impact (IOOI) framework.
In this early stage – when government involvement is still strong – scarce resources must be allocated based on data and scientific analysis, ensuring they are deployed where needed most and yield maximum impact. Policymakers must justify how investing specific resources in targeted activities will achieve desired outcomes and lasting impacts. Establishing the trust-based networks that fuel thriving innovation districts is nearly impossible without IOOI.
Moreover, witnessing IOOI in action serves as a powerful catalyst, inspiring our diaspora to reconnect with and invest in Malaysia's dynamic innovation ecosystem.
Ultimately, transforming our relict technology parks into innovation districts isn't about a trendy label or a prettier campus – it's about building a vibrant community of inventors, entrepreneurs, students and creatives pushing boundaries together. In this ecosystem, "collisions" – those serendipitous encounters that spark creativity – are fostered not only by thoughtful design but also by deep, systemic interaction. Imagine a biotech researcher at UM advising a MedTech start-up at an incubator, or a multinational engineer mentoring local entrepreneurs at a shared makerspace. These synergies drive the modern innovation economy. They cannot be mandated, but they can be cultivated through deliberate design of space, community and proper governance structures.
Dr Rais Hussin is the Founder of EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.
