Medellin’s Innovation District, A Living Laboratory for the World 

Background Information

•Regarding innovation:

a)The Technology, Science and Innovation Plan, focuses mainly on three markets: energy, health and information and communication technologies (ICT).

b) Progressive Tax exemption on ICA Tax (Industry & Commerce) and Property Tax in any location within city for the development of innovative activities within the six clusters.

c) When located inside the innovation district, the 75 percent–100 percent exemptions apply for 10 years (according to the settling location inside the district).

d) Research and Development incentives in Colombia - Colciencias - article 158-1 tax statute.

e) Free Trade Zones (FTZ) - Act 2685 de 1999.

•In process:

a) Highly Innovative Companies (HIC) - Conpes 3834 de 2015.

b) Fast Track Highly Innovative Companies located at a Science, Technology and Innovation Park - Conpes 3834 de 2015.

•Regarding the Urban Transformation:

Municipal Agreement 048 of 2014, by which the revision and long-term adjustments of the Medellin’s Territorial Organization Plan are adopted.

Public Policy establishing the 2030 city model, in which the Medellin’s Innovation District is defined as the territorial platform for competitiveness, supported with knowledge and technology activities generating value.

Municipal Decree 2053 of 2015, whereby the Innovation District is adopted under the Macro-project Riocentro.

Definition: Complementary urban norm, enabling project development.

Municipal Decrees 1483 and 1739 of 2015, through which the Innovation District Project is announced.

Definition: Legal instrument softening the real estate speculation in order for the state to intervene in the territory. 

Goals of the Initiative

This initiative addresses the strategy under a social inclusion, economic and urban orientation:

The social inclusion strategy defines two strategies with the objective of linking actors to the territory:

• First, social participation in the development. For this, 2,070 participants were linked in the co-creation process of the urban future of the territory.

• Second, the economic inclusion strategy aiming to promote local economy and articulate the science, technology and innovation ecosystem, seeks to impact with the intervention model (which fosters opportunities for experimentation, promoting social enterprises and strengthening economic communities) 2,000 businesses of the four neighborhoods involved in the Innovation District. This consolidates a model of inclusive development for developing cities.

The economic strategy seeks to attract innovative actors to the district, who contribute to the introduction of the knowledge economy, generating quality jobs, greater sustainability and welfare for all. Our Soft Landing program is our mean of implementing this strategy. As of August 2016, we have helped 141 innovative companies from 23 different countries to successfully land in our Innovation District. These companies have generated 2,115 quality jobs in the Innovation District. Our value proposal is to help these companies grow in the city, working specifically in the following aspects: infrastructure, capital, talent and networks to access the market. Our goal is to attract about 700 companies to Medellin and create 18,000 new quality jobs by 2021.

From the urban point of view, we seek to create spaces that are at the service of innovation. There will be more than 150 real estate projects that develop about 1.5 million square meters. These projects will be mainly funded by private investors and will involve the landowners. The space will be distributed as follows: 30 percent for housing and 70 percent for innovation associated economic activities and other complementary services. These projects will contribute to the construction of 6.2 hectare of public spaces for innovation and four social facilities for innovation and experimentation. The planned urban infrastructure is designed to be sustainable, efficient and innovative, enabling the city to have a green and digital environment.

Parties and Partners to the Initiative

The Medellin's Innovation District has developed a number of strategies for working with actors, the community, public and private partners.

•Between the public sector and the community:

a)Alliance with landowners using memorandums of understanding. We have designed models of inclusive real estate businesses, which are based on partnerships with the owners. These partnerships offer the owners different alternatives to join the business as compensations for contributing. According to this model, we have organized three real estate projects and developed nine possible partnerships.

•Among the public sector:

a)Institutional alliance as a tool for implementation. Through the concurrence of the public sector, it facilitates urban and real estate development of more than 150 real estate projects, about 1.5 million square meters for innovation (to live, work and recreate), 62,000 square meters of new public spaces and four new social facilities. These are part of the Medellin's Town Hall, the Urban Development Corporation and Ruta N.

b)Alliance to promote and attract businesses to the Innovation District as a business destination in Latin America. It includes ProColombia, ACI and Ruta N. As a result, we have established more than 140 companies from 23 countries (including Colombia) in the district, which have generated more than 2,110 quality jobs. Our goal is to attract about 700 companies to Medellin and create 18,000 new quality jobs by 2021.

•Among the public, private sector and the community:

a) Development of transforming business models: we created a project database from vocations of the sector, in which 2,007 businesses were mapped. We developed new business models where the local business community would participate. Additionally, we will use experimentation laboratory spaces and will attract investment.

b) Platform for interaction between the community, the state and the businesses. It will allow interactions to test, co-create and evaluate products among the actors. It will help companies to reduce the risk of opening the market in LA, the community to increase their income and be first exposed to innovation, and the state to have a laboratory in a real environment to test public policies, among others. Currently, we are developing the first pilot.

•Among the public and the private sector:

a) Private investment mechanisms will be established to develop projects. A trust mechanism will be enabled.

Resources Used for Implementation

The municipality financed the formulation of the Innovation District. Part of the resources utilized will be reimbursed once the real estate projects are developed. The formulation included detailed technical studies on social issues, a population census and socioeconomic characterizations. The formulation allowed to generate spaces for citizens to participate and co-create (about 80 percent of the community proposals were included in the project). For the urban part, several studies were made covering from environmental to mobility, legal, land tenure, financial, innovative public services infrastructure, among others. This formulation allowed us to create and implement the attractive strategy that focused on attracting businesses and actors in the innovation ecosystem to the Innovation District. This strategy includes the cooperation with county and city promotion agendas.

For the implementation, a funding system allowing the financing of the territory's urban and social transformation was included within the public policies. These resources will become effective to the extent that the private investment and development is reached. To complement, other funding instruments are being created and implemented as a pilot in Colombia. These instruments, such as selling additional building rights (additional buyable square meters) and TIF (Tax Increment Financing) allowing to leverage taxes such as the future property tax to develop catalyzer, social and physical projects to strengthen the innovation ecosystem, boost the arrival of investment and promote projects. All these resources will be managed by the institutional vehicle created for this purpose, whose studies were funded cooperatively by multilateral banking.

From the social point of view, a sustainability model was developed based on the benchmarking of creation and innovation spaces in the world. It includes the community in the development of products and services, in convergence with companies and universities. This model seeks to turn this area of the city onto an innovation platform allowing us to promote ideas, products and services to market or to similar contexts in the world. This would be the first living laboratory in the country.

Innovation for the Initiative

The project should be seen as revolutionary. It should be tried in other completely different contexts. It will be the first bet to create an economic development project based on innovation, involving the urban renewal of the territory and connecting communities and existing players. This, through a living laboratory, will serve the state, the community and the private and business sectors to meet and generate a real impact on the environment.

A disruptive model has been developed. It seeks to strengthen existing economic communities, develop new social impact businesses and generate physical spaces for experimentation of products and services, in partnership with the academia and the local companies.

The complete development of the Innovation District can be replicated in vulnerable urban contexts, especially in developing cities or countries. This is a potential model to reduce inequity gaps in physical spaces for innovation.

Innovation has been applied in

The Medellin's Innovation District is a model that embodies the city's public policy of Science Technology and Innovation in a physical territory. For this, new strategies were implemented for urban planning and their legal instruments are in the service of innovation, economic and social transformation. This environment is designed with new urban infrastructure standards and technologies that will be at the service of the innovation ecosystem.

Moreover, new transforming business models were under design. These models link public, private and community actors. The strategical plan started by seeking jobs in the territory with the objective to inject innovation for the generation of a new state in the development of the territory. As promotional strategy, we are able to link various local and national actors in order to attract additional actors to the Medellin's innovation ecosystem, which generate jobs and living spaces designed for innovation.

At the government level, we were able to innovate in the sense of achieving articulation between several entities for them to assume a role in the implementation of the project. We used a new governance model to allow the articulation of own urban renewal initiatives, with the economic and social transformation, business development and the innovation ecosystem. As a result of this, innovative businesses, the community, the private real estate development sector and the institutions will have an articulated government commitment that will allow them to interact and generate added value, impacting the quality of life in the city.

Obstacles and Solutions for Innovation

The renewal of the urban territory initially involves a resistance of the population against possible scenarios of displacement or gentrification of the area. In this respect, and because of the lack of confidence in the urban renewal processes developed in the city, it was necessary to develop a social strategy which will reach all people. This strategy seeks to motivate participation and real impacts on development. By 2015, this strategy was able to bring together more than 2,000 people and more than 48 institutions in the District. On a more personalized work strategy, we have worked with more than 700 landowners, with the aim of integrating the processes of urban and real estate development. 

Outcomes and Assessments

• Key Performance Indicator/Top Impact: Improve the quality of life of Medellin’s inhabitants through the creation of sophisticated jobs and increasing the income per capita. By 2025 the goal is to create 28,000 jobs, attracting 700 companies by 2021.

• Enhance competitiveness and the city’s attractiveness using strategies that create capacities and business.

• Increase the participation of businesses associated to knowledge in Medellin’s economy (GDP).

• Lead Medellin’s execution and permanent updating of public policies and Science, Technology and Innovation (STI) programs.

• Transform Medellin into a World Innovation Hub.

• Assure our own resources and leverage third party resources.

• Enable innovation spaces. 

Today we have created more than 2,115 sophisticated jobs in Medellin’s innovation district, attracting more than 141 companies from 23 countries (including Colombia).

Methods Applied

Our valued proposal to attract companies: “We help you grow”

• Ruta N makes sure you find the capital

a) Flexible financing for innovation

Specialized support

Shared risk

Technology-based projects

Sectors: Aerospace, Agrotech, construction, energy, health and life sciences, textiles, clothing and fashion design, ICT and tourism

b) Access to the Smart Capital Network

16 funds matched

20 investment mechanisms

72 companies funded

34 percent waiting to be invested 

• Ruta N makes sure you land easily and grow at no capex

a)141 companies from 23 countries (including Colombia)

• Ruta N makes sure you find the talent pool needed.

a) Tailored made training

b) We help you attract, select and recruit the best talent at no charge, without limits in salaries. 

• Ruta N makes sure you connect your solution with the market:

a) Matchmaking Business Management Professional dedicated to companies located at the District.

b) Four networking events per year

c) Our networks: Brainbook (social network connecting ecosystem entities), IASP, Clusters, MiMedellín (co-creation network to solve city challenges), SUNN (connects startups , research groups , companies and investors) and EBN

From the urban perspective:

• Geographical information system that integrates social management and urban data.

• Marketplace platform to integrate innovation spaces supply and demand, so we can make sure the easy landing process of innovative startups.