Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Proximity matters for knowledge spillovers

I am at my most creative when I’m in the same room with other people and we are bouncing ideas around. There’s a compounding effect that takes place. One person says something and that then triggers a new idea. I find the whole experience very rewarding and, for me, it’s a reminder that creativity can be a process. It is also a reminder that proximity is important for those of us who have jobs that deal in creativity.

We have spoken a lot about this on the blog, but here is an interesting and recent study that looked at knowledge transfers across different tech startups within one of the largest co-working spaces in the US. For context, the co-working space itself consisted of five floors, about 100,000 square feet, and housed 251 different startups. To measure knowledge transfer, the researchers looked at instances of a startup adopting a component of a peer’s technology stack.

What they found was the following:

  • Knowledge exchange is greater amongst startups that are dissimilar
  • Close physical proximity greatly influences the chance of knowledge spillovers; however, this effect quickly falls off
  • After 20 meters or so, there’s almost no difference between being down the hall or being on a separate floor within the building
  • One of the ways you can counteract this last finding is to create shared spaces; startups with overlapping common areas, such as a kitchen, saw greater distances of influence

In short: proximity matters.

If you’d like to download a full copy of the study, click here.

One response to “Proximity matters for knowledge spillovers”

  1. doug pollard Avatar
    doug pollard

    The compounding effect is why the IDP (Integrated Design Process) has proven to create the most innovative (and cost effective) design solutions. I used to conduct community design charrettes all across Canada also for that reason and with the same result … much more creative solutions in much less time (a few days) plus with less objection since every one got a chance to participate. We also found that groups any larger than 8 or perhaps ten at a stretch were not effective the group tended to divide itself in two. Multiple groups of 8 in the same room and overlapping/sharing what they were up to on a regular basis however works really really well..one group sparks another

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