Pop quiz: If you want the best Seattle neighborhood for stimulating creativity and innovation, would you pick South Lake Union or Pioneer Square?  When it comes to work districts and new ways of working, one of these places is more of the future and one of them more about the past.  Which is which?

You would be tempted to pick South Lake Union, the place with all the construction cranes and where Paul Allen, Bill Gates, and Jeff Bezos have placed their bets.  Besides their money, the City of Seattle itself has put tens of millions of dollars into the street car, rebuilding Mercer Street, and making a new waterfront park. 

Then there is Pioneer Square, the place with empty storefronts, homeless folks, and the traffic of game days.  How could this be the future?

My answer to the pop quiz would be Pioneer Square. One key is looking not the quantity but at the quality of development. Pioneer Square has open buildings, walkable streets, and vibrant coffee houses, and these factors are increasingly important in business, especially to the legions of people who are going out on their own or joining small companies, people who need to be in contact with one another.

There is a curious phenomenon going on in business and commercial real estate: Even as wireless technology frees us to work when, where, and how we want, face-to-face meetings are becoming ever more crucial for making important decisions about new products and ventures. Pioneer Square wins out in this critical category.

A key factor is the scale of the two places. South Lake Union is about six times as big as Pioneer Square.  In South Lake Union the walk from the Whole Foods store at Denny and Westlake to the new lakefront park at the top of Westlake takes 15-20 minutes, while it is close to a mile between Whole Foods and the Gates Foundation campus just east of Seattle Center. There is no one identifiable center in South Lake Union, no one place you can count on walking out and seeing someone you know. In Pioneer Square almost everyone is within a five-minute walk of Occidental Park and Occidental Mall.

Next is the big difference in the scale in the buildings and the size of the blocks. Most of the new buildings in South Lake Union are big structures where 150 people or more may work on a given floor.  A single tenant may take up most of one block in a building accessible only by pass key.  In Pioneer Square some of the buildings are so narrow they may be five to a block, and those historic blocks are about 300 feet long, compared to more than 500 feet in South Lake Union. 

To be sure, South Lake Union will be a major jobs center over the next 20 years, possibly adding as many as 25,000 new jobs just in the next five years. The question is whether the place itself fosters the kind of face-to-face contact and multi-disciplinary work necessary to innovation. Jane Jacobs wrote “New ideas often need old buildings.”  Sometimes the scrappy start-up firms simply cannot afford the rents that go with new construction, but just as importantly, these old buildings come in old neighborhoods where people run into one another. 

It was this original need for face-to-face contact that first drove the renaissance of old work districts.  One of the first on the West Coast was South Park in San Francisco, several blocks south of Market Street. Laid out in 1852, it had undergone many changes when architects and designers began moving there in 1970.  The same thing began happening in the Pearl District of Portland in 1982, and in Vancouver’s Yaletown in the mid 1980s.  Aldus was one of the first tech companies to start in Pioneer Square; it released PageMaker, one of the industry’s first desktop publishing programs, back in 1985. 

One of the big changes in business today is that more and more highly skilled people are going independent or joining young small firms. These workers, largely in the New Economy, need to be in sonstant and serendipitous contact with one another.  This happened in the movie industry over the last 20 years and is now happening in software, marketing, and even high finance.  Call it the “project economy”:  people working together on consulting assignments and brand new products, on high-powered, multi-disciplinary teams.  They need walkable work districts and gathering places where they can collaborate with each other and maintain their network of contacts.  This networking keeps them in touch not just on current but upcoming work, work that will pay the bills in the coming year. 

In Pioneer Square there are two primary gathering spots for these independent and small-company workers:  Zeitgeist Coffee, at Second and Jackson, and Caffé Umbria, at Occidental and Jackson.  These two places are alive with people talking and meeting.  Caffé Umbria is slightly more sedate, with a European ambiance, while Zeitgeist is noisier and more retro, with an old Bakelite globe on a stand near the front door.  The iPad count is high in both places.  People buy coffee and stay. 

Nearby office buildings have attracted people with similar interests and values.  The constant stream of visiting speakers at Elliott Bay Books downstairs in the Globe Building (First and Main) drew designers and nonprofits to that building; examples are the Alliance for Pioneer Square, Seattle Arts & Lectures, and the Seattle Parks Foundation.  Today the Globe Building includes The Hub, a co-working space with plans to triple in size by co-locating with Social Venture Partners and the Bainbridge Graduate Institute, a sustainable MBA program.

Tenants in the Globe Building now include two gaming companies and an online data storage company.  CB Richard Ellis broker Dan Stutz says that tech tenants now occupy about half the space in Pioneer Square, and that although many are small, they can be very profitable with as few as 25 or 50 employees.  Some of these companies want to stay small, by getting just the right combination of people.  Undead Labs, a game company in the Globe Building, advertises “We’re not building an army; we’re building the Navy SEALs.” 

In other parts of the country big companies have begun to locate their new-products divisions in places like this to catch that independent way of thinking.  In Grand Rapids, Michigan, Amway, Steelcase, and Wolvervine (a large shoe company) have put their new-products divisions in “Grid70,” a downtown building where 30 percent of the floor area is lounge areas and meeting rooms shared with small companies.  A Steelcase manager speaks of the “happy accidents” that happen there when people from different companies and backgrounds run into one another. 

This kind of informal idea exchange has long gone on at rapidly growing industries.  In the 1970s and 1980s chip manufacturers in Silicon Valley like Intel and National Semiconductor competed fiercely with one another by day, while after hours top engineers gathered at Walker’s Wagon Wheel to exchange tips on design, manufacturing, and marketing. 

Some companies are consciously trading secrecy for even more openness, to keep themselves exposed to new perspectives.  In downtown Palo Alto, IDEO, one of the world’s leading industrial design firms, gives an average of three tours of its offices each day.  The company occupies a warren of old warehouse buildings with a common patio next to an alley.  IDEO executives says it takes time for employees to respond to visitor questions, but they get as much as they give in terms of contact with people of different backgrounds and ways of thinking.