From office hub to innovation engine: Rethinking the central city
Across the world, central business districts are still grappling with the legacy of the pandemic. Office vacancy remains high. Commuter patterns have changed. And the traditional model of the city centre - a dense cluster of office towers and daily inflows of workers - is no longer fit for purpose.
But what comes next?
A new report from BCG, Reviving the City Center: From Office Buildings to Knowledge Campus, puts forward a compelling proposition. Drawing on Tokyo’s example, the report suggests that the way forward is not about restoring the past, but rethinking the role of the city centre entirely.
Rather than a generic commercial zone, the city centre can become a network of knowledge campuses: sector-focused districts that combine business, amenity, housing and cultural infrastructure. Places with a clear identity. Places where people want to be - not just for work, but to connect, learn, collaborate and live.
A more purposeful city centre
The BCG report highlights Tokyo’s unique approach to city centre revitalisation. Rather than relying on a single monolithic centre, Tokyo has cultivated a series of distinct urban precincts, each with its own economic focus. Marunouchi and Nihonbashi specialise in finance and professional services. Shibuya has become a hub for digital and creative industries. Shinagawa is anchored by IT and retail. Roppongi positions itself as a cultural and global business centre.
Shibuya in Tokyo, which stands out for its strong presence of digital creative industries
What these districts share is not just economic specialisation, but mixed-use intensity. Many of them have significant residential populations, high levels of walkability, access to transit and quality public spaces. This blend of functions supports 24-hour activity and makes the precincts more resilient to shocks like COVID.
Rather than trying to coax workers back into underused office towers, Tokyo has focused on making its city centres more valuable and vibrant. And the strategy appears to be working.
Lessons for other cities
This approach holds valuable lessons for other cities facing similar challenges.
In many cases, the policy response to the post-COVID city centre has been reactive and piecemeal: incentives for office workers to return, campaigns to increase foot traffic, or proposals to convert commercial buildings into residential use. These responses have their place, but they don’t address the core question:
What is the city centre for in a post-COVID economy?
The Tokyo model offers a provocative answer. The city centre can become a place for knowledge production and exchange - a concentrated, high-value part of the urban economy where collaboration, specialisation and innovation thrive.
Importantly, this transformation doesn’t require building from scratch. Many city centres already have the ingredients: universities, hospitals, cultural institutions, public infrastructure, and large numbers of firms. What’s often missing is integration and intent.
From edge-of-city innovation districts to CBD-based innovation ecosystems
In a previous Econovation article - Revisiting Innovation Districts - I argued that we sometimes place too much emphasis on building standalone innovation precincts on the edge of town. These districts often struggle to reach critical mass, or replicate the density and diversity of activity already present in city centres.
The Tokyo example reinforces this idea. Rather than developing innovation precincts in isolation, what if the city centre itself became the innovation precinct?
After all, city centres already concentrate much of a city’s infrastructure, talent, knowledge institutions and amenity. They are, in many cases, the most walkable, best-connected and culturally rich parts of the city. Instead of creating new innovation zones on the fringe, the smarter move may be to apply innovation district principles within the city centre - with a sector focus, partnership models, public realm investment and activation strategies.
A challenge, and an opportunity
Of course, this kind of transformation isn’t easy. It requires coordinated strategy across land use planning, transport, economic development and investment attraction. It requires a willingness to let go of the old CBD model and build something new in its place. And it demands long-term commitment. This kind of change doesn’t happen quickly.
But for cities willing to take up the challenge, the opportunity is enormous. A city centre that is specialised, vibrant, mixed-use and knowledge-rich is not just a more economically productive place, it’s a better place to live, work and visit.