This article is based on Narelle Kennedy’s presentation to the Economic Development Australia national conference hosted virtually by the City of Liverpool in November 2020.

If 2020 is good for anything, it has shaken up old certainties and encouraged us to be bolder in finding new angles and solutions to big challenges.

Lockdowns, isolation, physical distancing have dramatically affected the mainstays of both home and working life.

They have made us more digitally adept. We rely more on services and facilities in our local neighbourhoods. Businesses are of necessity sourcing locally. More regard for essential work and workers. A greater focus on the relationships and activities that are in walking distance. Closer and continual connections to home and family can bring both delights and challenges.

In short, 2020 has re-set the importance of ‘place’ and heralded the comeback of community.

Can this change be made to work in the interests of the many people and places where jobs and livelihoods have been disrupted, perhaps permanently?

Is there a new way to make local communities more innovative and prosperous? Can we re-think what makes places both smart and liveable?

Here are three insights to help answer these questions.

Innovation is more than high tech breakthroughs and entrepreneurial start-ups, but neither is it just any improvement, bright idea or piece of creativity or agility.

Innovation requires creating value by doing something new. This means putting a novel idea into action, so that it meets an unmet or even, an unarticulated, need in a better way than the alternatives. And, crucially, in doing so, it gains a return, whether in business revenue and profit or in measures of community wellbeing and prosperity.

Innovation is not just the province of high tech, high growth ‘gazelle’ firms. Ordinary mainstream businesses can innovate too. They can innovate through learning by doing, and through learning by interacting with others, by knowledge-sharing and collaboration.

Innovation can take many forms – unique business offerings from bundling products and services together, superior ways of managing your people and supply chains, high-quality customer service and experiences, to name a few.

So, don’t unnecessarily straight jacket the types of innovation open to your community.

Knowledge workers are not necessarily the main source nor the key beneficiaries of innovation. The benefits of innovation can be applied and spread more widely.

Innovation must be managed to benefit the wider population, including those who are most likely to become the casualties of economic transformations.

To do this, pay attention to the essential work and workers of the everyday economy, providing the goods and services that sustain our daily lives.

The everyday economy impacts on innovation because it affects everybody, it is interdependent with knowledge work and workers, and a significant element of the everyday economy is learning, caring and social support work. This work reinforces the social ties and human interactions crucial for social cohesion, resilience and a sense of belonging and community identity.

Strengthening the performance of the everyday economy is an innovation strategy—because it unlocks the untapped potential of communities. This has been referred to as ‘the economics of belonging’.

What makes a place smart is not the location of universities surrounded by tech hubs and industries of the future, or the operation and analysis of smart digital infrastructure. Rather, smart places are the crossroads where different knowledge worlds meet, explore and create something new and valuable to the local community.

To create an innovation precinct or smart place, don’t just seek to mirror Silicon Valley-like enclaves or dense urban knowledge hubs.

Smart places measure themselves on combined economic, social and sustainability outcomes.

They work on building proximity, diversity and interactions across different sectors, disciplines, and areas of knowledge and expertise. They allow for creative collisions of ideas and serve as safe spaces for enterprises to experiment with possible innovations.

They can be a testing ground for alternative imaginative solutions to complex societal problems and the best ways of implementing them.

In short, the message is take advantage of the comeback of community.

Probe beyond the obvious, beyond the usual suspects, into the active ingredients of both innovation and place-making. Delve deeper to understand how these innovation opportunities and capabilities suit your particular local circumstances and conditions.

Here, you can create the pathways that allow ordinary businesses and people to prosper, even in local communities with seemingly poor prospects.


Martin Sandbu, The Economics of Belonging, Princeton University Press, June 2020.

John Bessant, Managing Innovation. Creating value from ideas, June 2019.

Diane Coyle, The Key to the Productivity Puzzle, Project Syndicate, 13th October 2020.