Innovation-oriented industries and talent concentration to drive urban and real estate recovery

Urban life and the importance of cities are experiencing a revival after the pandemic. According to the new “Innovation Geographies” study by Jones Lang LaSalle (JLL), innovation- and talent-rich cities will be best positioned for economic growth post-pandemic.

February 22, 2022

Measures against the spread of the COVID-19 virus badly affected living (together) in cities. Now, the global economy, urban life and the importance of cities are experiencing a revival. Innovation-oriented industries and the availability of talent play a key role in this. The «Innovation Geographies» study by JLL demonstrates a strong link between innovation, talent ecosystems and real estate performance. Zurich does particularly well in terms of the availability of highly qualified workers.

The JLL study compared 109 cities in 28 countries and examined 16 key factors. The evaluation combines factors that favor innovation and talent, such as the presence of top-ranked universities, R&D expenditure or patent applications.

While Zurich ranks in the middle of the pack for innovation, it ranks 12th in the world for availability of highly skilled labor, behind Berlin (10th) and Stockholm (11th) and ahead of Copenhagen (13th) and Dublin (16th).

The qualities and high attractiveness of Swiss cities are not only evident in the JLL study, but also in other surveys. Vienna heads the “Quality of living city ranking” by Mercer (2019), immediately followed by Zurich in second place. Geneva (9th) and Basel (10th) are also in the top ten, with Bern following in 14th position. In the “IMD World Competitiveness Ranking”, Switzerland ranked first in 2021, ahead of Sweden, Denmark, Holland and Singapore. The USA follows in 10th place, with Germany and China in 15th and 16th place.

“Not only studies and rankings, but also numerous company settlements and expansions of companies from the IT, tech or life science sector as well as a lively startup scene underpin Zurich's attractiveness. However, this does not stop at the city borders, but also includes significant parts of Eastern, Central and Northwestern Switzerland. For the economic strength, it is elementary to promote the spirit of innovation and the education system in order to remain attractive as a location for companies in the future.”

Daniel Stocker, Head of Research at JLL Switzerland

Looking for more insights? Never miss an update.

The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.

1 San Jose 11 Schanghai
2 Tokio 12 Singapur
3 San Francisco 13 Shenzhen
4 Boston 14 Los Angeles
5 New York 15 San Diego
6 Seoul 16 Tel Aviv
7 Paris 17 Toronto
8 Peking 18 Berlin
9 London 19 Asutin
10 Seattle 20 Stockholm
Talent Concentration
1 San Jose 11 Stockholm
2 Boston 12 Zurich
3 San Francisco 13 Kopenhagen
4 London 14 Brussel
5 Tokio 15 Paris
6 Peking 16 Dublin
7 Washington DC 17 Sydney
8 Asutin 18 Toronto
9 Seattle 19 New York
10 Berlin 20 Raleigh-Durham
Key takeaways of JLL’s study “Innovation Geographies”:

1. Global gateways maintain the lead: A critical mass of people, a broad mix of industries, sought-after amenities and anchor universities will continue to attract talent and companies to such established gateways like San Francisco, Tokyo or London.

2. Innovation spreads across the globe: While the U.S. dominate the innovation rankings, other countries and cities are catching up. Europe fares particularly well in terms of talent, displaying potential for greater innovation across a wide range of cities.

3. The rise of smaller, talent-rich cities: Smaller, more affordable cities with a high quality of life already attracted people and companies before the pandemic. This trend has accelerated. People look for appealing urban areas in which to live, work and play. Cities that combine these factors with a robust and diversified innovation ecosystem – such as Denver, Stockholm, Melbourne or Zurich – are also outperforming from a real estate perspective, pulling in new companies and capital. 

4. Poised for renewed growth: There will be a post-pandemic revival and resurgence of city centers as people continue to be drawn to the opportunities, amenities and lifestyles offered in these locations. Cities with the strongest innovation and talent credentials are best placed to support a solid recovery – and thus for future growth.

5. Innovative cities will be key to combatting climate change: With the built environment contributing 40% of global emissions, and typically over 60% in cities, metropolitan areas are taking on a central role on the path to a climate-neutral lifestyle. Using real-time data on energy efficiency, waste management, health, mobility and space usage, technologically advanced cities will develop urban digital ecosystems. The real estate industry and technology sectors working together hold the key to creating scalable smart-city solutions to drive city-wide energy and resource efficiency.

Implications for real estate markets:

Understanding the innovation and talent development of cities will be crucial to identifying future growth markets. Indicators of innovation power and talent availability will therefore become increasingly important for investment decisions.

Innovation clusters and access to a skilled workforce have long been key factors for companies' location strategies and decisions. The acute shortage of skilled workers is raising awareness of the “war for talents even more, and with it the advantages of the “global leaders“ as company locations due to their almost inexhaustible labor pools. However, the cost of office space and talent is often higher in cities that have a high level of innovation and a promising labor market.

The full study “Innovation Geographies” of JLL can be found here:

Looking for more insights? Never miss an update.

The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.