Innovation Growth Spreads Across More Global Cities as Premium Workspace Supply Lags

JLL's Innovation Geographies 2026 report maps a widening multi-tier network of innovation hubs and identifies a shortage of institutional-grade workspace as a constraint on growth in several markets.

News Summary

• Innovation activity continues to disperse geographically, producing a multi-tier landscape of mature, growing and nascent hubs rather than a single dominant centre, according to JLL's Innovation Geographies 2026 report published on 31 March 2026.
• The San Francisco Bay Area remains the leading global centre, joined by eight anchor markets — Beijing, Boston, London, New York, Paris, Seoul, Singapore and Tokyo — which together generated $12.8 trillion in output in 2025 and attracted nearly $770 billion in venture capital funding and $78 billion in foreign direct investment over the preceding three years.
• Only about 11% of global office space has been built since 2020, a share that falls to roughly 9% across the Bay Area and anchor cities, a supply gap the report links to rising prime rents in several markets.
• The report identifies place-based, mixed-use development — combining research institutions, transport connectivity and housing — as a central factor in how new innovation clusters form and which cities attract mobile talent and corporate occupiers.

Lead

Innovation is spreading across a broader set of cities worldwide while the supply of high-quality workspace remains well below demand, according to a report published on 31 March 2026 by JLL, the commercial real estate services and investment management firm.

The study, Innovation Geographies 2026, describes a global innovation landscape that has moved from a model centred on the technology industry to a multi-tier network of established hubs, reinforcing mid-sized cities and emerging centres, each competing for skilled workers, corporate occupiers, capital and infrastructure investment.

Background

Innovation was widely associated with the technology sector through the 2000s and 2010s. The report states that the concept now spans the talent, companies and institutions driving constant reinvention across finance, insurance, healthcare, media, entertainment, manufacturing and education.

That broadening has changed both where growth clusters emerge and how they interact with property markets and urban development. Rather than generating large-scale corporate expansions in a small number of high-demand markets, the report says innovation is now closely tied to urban refinement and to evolving patterns of living and working.

The pandemic-era migration towards affordable, lifestyle-oriented cities has cooled slightly but remains in place, blurring the distinction between established and emerging innovation markets. The report cautions that outcomes are not uniform: the scale of urbanisation, the presence of institutional anchors, the provision of infrastructure and the ability to attract and retain mobile talent will continue to determine the amount and form of change between and within cities.

Main Reporting

A widening geography of innovation

The report groups cities into a tiered structure. At the top sits the San Francisco Bay Area, which the authors describe as unmatched in capital and talent depth. It is complemented by eight anchor markets of comparable importance to the global economy, each with distinct specialisms: Beijing, Boston, London, New York, Paris, Seoul, Singapore and Tokyo.

Below these, the report identifies 18 reinforcing cities with nearly 91 million residents combined. The group ranges from large metropolitan areas such as Los Angeles and Shanghai to technology centres including Austin, Berlin, Seattle and Tel Aviv, advanced manufacturing hubs such as Munich and San Diego, lifestyle destinations including Amsterdam, Copenhagen, Helsinki, Stockholm and Zurich, university cities such as Cambridge and Raleigh, and business centres including Sydney, Toronto and Washington, DC. The report states that these markets recorded population inflows 3.8 times higher than the Bay Area and anchor cities.

A further category, described as welcomers, combines talent concentration with net migration of 5.2% over the past three years. Examples include Adelaide, Brisbane, Bordeaux, Calgary, Bristol, Nashville, Valencia, Orlando and Tampa. The report notes that innovation credentials in these cities are less established, while citing data analytics in Bristol as an emerging cluster.

Two production-oriented groups are also identified. So-called engineers are defined by sustained investment in advanced hardware (Taipei, Phoenix, Shenzhen), software (Bengaluru), industrial engineering (Stuttgart, Detroit, Hangzhou) and energy (Houston). A related group, described as motors, is growing at a smaller scale, with examples including autonomous vehicle activity in Birmingham in the United Kingdom and global capability centres in Hyderabad, Delhi and Chennai.

Bridging output and talent are connector markets such as Chicago, Dallas, Frankfurt, Hong Kong and Madrid, which combine skilled labour, multinational headquarters and international connectivity. The report places a set of nascent geographies — including Ahmedabad, Indianapolis, Las Vegas, Mexico City, Porto and Sao Paulo — in a vanguard category expected to benefit most from spillover effects and affordability pressures.

Place-led development takes shape

With innovation activity distributed across more cities at scale, the report argues that place-based offerings have become decisive in attracting talent and corporate occupiers. It states that companies of varying sizes and sectors are approaching site selection at a more granular level, evaluating not only the city or workplace but the built environment, with micro-locations that combine a sense of place, amenities and accessibility performing best.

Several projects are cited as illustrations. In Midtown Atlanta, Tech Square functions as an educational and research anchor focused on computing technology within a densifying urban core. In Asia, the Jurong Lake District in Singapore and San Tin in Hong Kong are described as urban extensions oriented towards advanced manufacturing and research and development, with greater emphasis on sustainability, mixed-use programming, open space and design than earlier generations of development.

In Berlin, Siemensstadt Square is converting a 76-hectare former factory site in the west of the urban core into a mixed-use neighbourhood centred on artificial intelligence, digital mobility and thousands of new homes. In South Korea, the Seoul-area suburb of Yongin is being developed into a community focused on semiconductor manufacturing across 4.2 square kilometres, with investment exceeding $8.4 billion, according to the report.

Supply shortfall and pricing pressure

The report states that only 11% of global office space was built since 2020, with the figure falling to around 9% in the Bay Area and anchor cities. It cites new-build central business district vacancy rates of 0.9% in Paris and 1.2% in London, and notes that academic, connector and welcomer markets also show single-digit shares of space completed over the same period.

The principal exception is foreign direct investment-driven hubs in India and China, and to a lesser extent selected Eastern European and Australian cities. In Hyderabad, Bengaluru, Guangzhou, Pune and Shanghai, more than 30% of core supply was built since 2020. The report states that demand-driven construction has helped Indian markets maintain lower vacancy, with Bengaluru office vacancy easing to 10.5% after peaking at 13.9% in 2024.

The supply-demand mismatch is affecting occupational performance unevenly. The report records net occupancy increases of 13.2% in motor markets and 4.0% in engineer markets relative to pre-pandemic levels, while anchor and reinforcing markets remain 1.0% to 2.0% below previous highs in aggregate. Prime rents average more than $1,280 per square metre in anchor cities and up to $837 per square metre in reinforcing markets, compared with an average top-end rent of $324 per square metre in vanguard cities. The published summary does not specify the rental period to which these figures refer.

International Context

The findings sit within a wider set of cross-border developments. Innovation clusters are increasingly tied to international capital flows, with venture capital and foreign direct investment acting as leading indicators of where corporate occupiers, research institutions and skilled workers concentrate.

The geography of semiconductor and hardware production — spanning Taipei, Phoenix, Shenzhen, Stuttgart and now Yongin — links urban development directly to global supply chain policy, export controls and industrial subsidies adopted by governments in the United States, the European Union, Japan, South Korea and China.

Artificial intelligence investment is also reshaping corporate real estate demand, as large technology firms, cloud providers, data centre operators and financial institutions seek space near research universities, power infrastructure and fibre connectivity. The report states that co-location of AI and other emerging technologies with relevant institutions and deep capital pools will be essential to the next phase of cluster formation.

Infrastructure and connectivity remain determining variables. Ports, airports, rail links and digital networks influence whether second-tier cities can convert migration inflows into durable innovation capacity, a question relevant to regional development programmes in Asia, Europe, North America and Latin America.

The office supply shortfall intersects with public policy priorities including housing affordability, urban regeneration, land-use planning and climate adaptation, as cities attempt to accommodate growth without displacing existing residents or locking in high-carbon patterns of development.

Verified Analysis

The tier structure, output figures, capital flows and vacancy and rent data cited above are drawn from JLL's published insight. They represent the firm's own classification and market analysis, and the summary does not disclose full methodology, city inclusion criteria or the underlying data sources for each metric.

Several observations follow from the material presented. First, the dispersion of innovation activity is consistent with broader evidence of capital and talent moving towards lower-cost, higher-amenity locations, a trend supported by migration and investment data published by national statistical agencies and venture capital trackers. Second, the workspace shortage described is largely a product of construction cycles and financing conditions following 2020, rather than of a single policy decision, and its effect on rents is concentrated at the upper end of the market.

Third, the report should be read with awareness of its commercial context. JLL is a listed real estate services and investment management firm with interests in transaction, leasing and advisory activity across the markets it analyses. That does not invalidate the findings, but it places them alongside independent research from university urban economics departments, national statistical offices, patent and trademark registries, and multilateral bodies such as the OECD and the World Bank.

Potential risks identified in the underlying material include persistent undersupply of institutional-grade space pushing occupiers towards secondary locations, concentration risk in AI-related capital spending, and the possibility that rapid district-level development in India and China outpaces absorption. Conversely, cities that combine research anchors, transport connectivity and housing supply may capture a disproportionate share of future investment.

Future Developments

Over the next two to five years, several developments appear likely to shape the landscape described in the report.

• Policy implementation. Industrial policy, semiconductor subsidies and urban regeneration frameworks adopted in the United States, the European Union, India, Japan, South Korea and China will continue to influence where manufacturing, research and data infrastructure are located.
• Business response. Corporate occupiers are expected to maintain granular, amenity-driven site selection, with lease decisions increasingly informed by talent availability, sustainability performance and connectivity rather than by cost alone.
• Technology adoption. Artificial intelligence, automation, robotics and digital infrastructure investment will continue to generate demand for specialised facilities, including data centres, laboratories and advanced manufacturing space.
• Market developments. Prime rents in constrained markets may remain elevated while secondary and vanguard cities compete on cost and quality of life; delivery volumes in India and parts of China will test whether supply keeps pace with demand.
• Regulatory evolution. Data governance, competition policy, zoning reform and climate-related building standards are likely to become more significant determinants of development feasibility.
• International cooperation. Cross-border research partnerships, talent mobility arrangements and infrastructure financing will shape whether emerging hubs can reach the scale of established anchors.

Key Takeaways

• Innovation activity is dispersing across a widening multi-tier network of cities, with the Bay Area and eight anchor markets remaining the largest concentration of output and capital.
• Reinforcing, welcoming, engineering, motor, connector and vanguard cities are competing for talent, corporate occupiers and investment on the basis of place quality, cost and connectivity.
• Only about 11% of global office space has been built since 2020, leaving prime markets tight and rents elevated at the top end.
• FDI-driven markets in India and China are the main exception, with more than 30% of core supply built since 2020 in several cities.
• Place-based, mixed-use development combining research anchors, transport, amenity and housing is identified as a decisive factor in cluster formation.
• The report is proprietary commercial research and its methodology is not fully disclosed in the published summary; findings should be weighed alongside independent data.

Conclusion

The Innovation Geographies 2026 report adds to a growing body of evidence that innovation-driven economic development is becoming more geographically distributed, even as capital, talent and institutional capacity remain concentrated in a relatively small number of leading cities. The immediate consequence is intensifying competition among cities for skilled workers and corporate investment, alongside persistent supply constraints in the highest-demand office markets.

For policymakers, investors and corporate decision-makers, the practical implication is that location strategy now depends on a broader set of variables — research institutions, infrastructure, housing, regulation and climate resilience — than in previous cycles. Whether the emerging hubs identified in the report can convert migration and investment inflows into durable innovation capacity will depend on the execution of urban development plans, the pace of infrastructure delivery and the stability of international capital flows over the coming decade.

Sources

• JLL, Innovation Geographies 2026: https://www.jll.com/en-us/insights/innovation-geographies

GlobeNewsAgency.com is an international news organisation. This report is based on a publicly available third-party research insight and does not constitute investment advice.