LONDON/CHICAGO – A new report from JLL, published on 31 March 2026, maps the shifting geography of global innovation and its impact on commercial real estate. The study, titled "Innovation Geographies 2026," argues that innovation has become a pervasive force across every sector of the economy, moving well beyond the technology industry. As a result, the geography of innovation is expanding, with a multi-tier structure of established and emerging hubs that are redefining where companies locate and how cities develop.

The report identifies a hierarchy of innovation geographies, from the San Francisco Bay Area and eight "anchor" cities – Beijing, Boston, London, New York, Paris, Seoul, Singapore and Tokyo – through "reinforcer," "welcomer," "engineer," "motor," "connector" and "vanguard" markets. Together, the Bay Area and anchor cities account for $12.8 trillion in output (as of 2025) and have attracted nearly $770 billion in venture capital funding and $78 billion in foreign direct investment over the past three years, according to JLL.

The Expanding Geography of Innovation

The report emphasizes that innovation no longer clusters exclusively in a handful of global cities. While the San Francisco Bay Area retains its dominance, a set of 18 reinforcer cities – including Los Angeles, Shanghai, Austin, Berlin, Seattle, Tel Aviv, Munich, San Diego, Amsterdam, Copenhagen, Helsinki, Stockholm, Zurich, Cambridge, Raleigh, Sydney, Toronto and Washington, D.C. – now play a critical role in the global ecosystem. These cities have seen population inflows 3.8 times higher than the Bay Area and anchor markets.

A further group, termed "welcomers," are attracting migration due to lower housing costs and lifestyle appeal, with a net migration rate of 5.2% over the past three years. Examples include Adelaide, Brisbane, Bordeaux, Calgary, Bristol, Nashville, Valencia, Orlando and Tampa. Production-centric "engineers" and "motors" include advanced hardware hubs such as Taipei, Phoenix, Shenzhen, and Bengaluru, as well as smaller centres like Birmingham (UK) and Hyderabad, Delhi and Chennai.

In addition, "connector" cities such as Chicago, Dallas, Frankfurt, Hong Kong and Madrid bridge business and innovation, while a set of "vanguard" cities – including Ahmedabad, Indianapolis, Las Vegas, Mexico City, Porto and São Paulo – represent nascent innovation geographies that could benefit from spillover effects and affordability pressures.

Place Led Innovation

The report argues that place is now a key determinant of innovation cluster growth. Successful urban regeneration projects are blending innovation with mixed-use development, sustainability, and improved connectivity. Examples include Tech Square in Midtown Atlanta, Jurong Lake District in Singapore, San Tin in Hong Kong, and Berlin's Siemensstadt Square, a 76-hectare former industrial site being transformed into a neighborhood focused on artificial intelligence and digital mobility. South Korea's Yongin semiconductor cluster, with more than $8.4 billion in investment, is another example of output-focused placemaking.

These projects reflect a broader shift toward micro-location decisions, where occupiers prioritize sense of place, amenity and accessibility. In slower-growth markets with higher vacancy, the quality of place becomes even more critical.

Premium Workspace Shortage Drives Rents

A central finding of the report is the severe undersupply of premium workspace. According to JLL, only 11% of global office space has been built since 2020; in the Bay Area and anchor cities, that figure falls to about 9%. In Paris and London, new-build vacancy in central business districts stands at just 0.9% and 1.2%, respectively. This shortage is pushing prime rents upward. Anchor cities have seen average prime rents exceed $1,280 per square meter, while reinforcers reach up to $837 per square meter. In contrast, vanguard cities offer average top-end rents of only $324 per square meter.

Exceptions are found mainly in FDI-driven hubs in India and China. In Hyderabad, Bengaluru, Guangzhou, Pune and Shanghai, more than 30% of core office supply was built since 2020. Bengaluru's office vacancy has declined to 10.5% after peaking at 13.9% in 2024, attributed to demand-driven construction.

The report also notes divergent occupancy trends. "Engineers" and "motors" have seen net occupancy gains of 4.0% and 13.2% relative to pre-pandemic levels, while "anchors" and "reinforcers" remain 1.0–2.0% below previous highs. This consolidation is contributing to rent growth in the top tier and a bifurcated market.

International Context

The findings come amid broader global shifts in investment, technology and policy. The expansion of innovation geographies reflects rising competition for talent, the growth of artificial intelligence and advanced manufacturing, and increased emphasis on economic resilience and regional development. For policymakers, the report highlights the importance of infrastructure, institutional anchors and land use planning in building innovation ecosystems. For investors and occupiers, it suggests that geographic diversification and asymmetric risk in property markets are likely to persist.

Future Outlook

Looking ahead, JLL expects innovation geographies to continue evolving, with placemaking and differentiation becoming more important than net expansion. The co-location of AI and other emerging technologies with deep capital pools and research institutions will be essential. Markets that can deliver modern, high-quality workspace and attractive urban environments will likely command a premium, while others may face structural vacancy and slower growth.

Key Takeaways

• Innovation is dispersing across a wider range of cities, creating a multi-tier global hierarchy.
• Placemaking and quality of life are now critical for attracting talent and corporate occupiers.
• The supply of premium office space is severely constrained in many major hubs, driving rent growth.
• Demand-driven construction in FDI hubs, particularly in India and China, is outperforming other markets.
• Future success depends on integrating innovation with urban development, infrastructure and sustainability.

Sources

• JLL Insights: "Innovation drives place, and place drives innovation" – Innovation Geographies 2026, published March 31, 2026. https://www.jll.com/en-us/insights/innovation-geographies