Where to grow bio?

Unprecedented life-sciences discoveries have spurred a wave of biotechnology-based innovation and the creation of thousands of new companies. These emerging businesses are poised to be a significant growth engine of the next new economy.

Looking to capitalize on this activity, regions across the country have stepped-up their economic development efforts with hopes of luring an emerging crop of budding biotech businesses.

The requirements of this industry are somewhat unique and the real estate site selection process must include specific criteria. Biotech companies looking for a location to build and grow their businesses should carefully examine a region's attributes--considering not only what the region is promising, but what it is currently delivering.

Regions that provide the best opportunities for biotech companies to prosper offer the following important attributes:

Presence of Major Pharmaceutical Companies

A large concentration of established pharmaceutical companies is an essential element in a region's ability to offer a world-class biotech development environment.

Emerging businesses rely on these major companies for expertise, partnerships and talent, among other resources and benefits. Start-ups also rely on them as a valuable source of capital. In the United States, there are only a handful of regions that can be considered well-established pharmaceutical hubs.

For example, fourth-fifths of the world's largest pharmaceutical companies--including firms like SmithKline Beecham, Merck and Rhone-Poulenc Rorer--have a presence in the Greater Philadelphia region in the form of administrative offices, research and development and/or manufacturing.

Over the years, the presence of these major institutions has been a catalyst for tremendous growth and expansion for emerging biotech businesses in the Philadelphia area.

Consider these local success stories.

Cephalon, a biotech company with about 700 employees, was founded in 1987 by a research biologist who previously had worked at DuPont.

And Centocor, a biotech firm that created an anti-blood clotting drug, was acquired by Johnson & Johnson in 1998.

Rich Talent Pool

All successful business centers must have the ability to consistently produce highly educated, well-skilled workers to support a variety of different industries. But biotech companies typically require an even higher degree of talent. Regions must offer a rich pool of experienced executives and senior professionals with medical training and advanced degrees in subjects such as medical engineering, chemistry and computer sciences.

The area must also offer a large and diverse specialist workforce to fill positions for researchers, clinicians, administrators, sales personnel, regulatory experts as well as entry-level employees with undergraduate science degrees.

In addition, there must be professionals with graduate degrees in biomedical engineering, chemistry, computer sciences and the health professions as well as those with training that combines courses in biological and molecular sciences with business and federal regulatory requirements.

Generally, this type of deep and diverse talent pool is only available in regions with world-class higher-educational infrastructures. An abundance of colleges and universities in a region, including premier medical schools and academic health centers, helps to ensure a dynamic environment that produces graduates who are skilled in all of these areas.

Research Infrastructure

Research infrastructure is another factor emerging biotech companies should look at when choosing a location. The area should have a combination of research expertise and industrial experience that can create ideal conditions for new firms.

The presence of renowned institutions is a key factor in a region's ability to attract government research funds.

It also creates the opportunity to take advantage of synergies and form valuable partnerships in areas of research and development and/or manufacturing.

Similarly, an area with rich industrial experience is fertile ground for growth and innovation.

Strong Investment Community

Access to capital is also essential. Large pharmaceutical companies, of course, can provide one source of funding for emerging biotech companies. But because of the long development process needed for most new biotech innovations, that alone, is not usually enough.

Regions must have a strong, established, venture capital community that understands the nuances related to investing in life-sciences businesses. The local venture capital industry must also be diverse enough to accommodate investments at all stages of a biotech company's lifespan--from seed stage to later stage.

Supportive Entrepreneurial Infrastructure

Effective entrepreneurial support is another key attribute biotech companies should require of a region, Beyond capital, a region must have a network of established organizations designed to provide resources that help businesses grow.

Such organizations can be extremely valuable in helping to forge partnerships with related companies and institutions, developing relationships with professional service providers and providing assistance with other business and management needs.

Available, Suitable Real Estate

The availability of suitable, cost-effective real estate is another key factor in the location decision process. The requirements of biotech facility requirements are often complex and regions must be able to accommodate a range of needs. Incubator sites can provide good options for very early-stage companies, enabling them to keep their costs low by sharing space with other, often similar, businesses.

But as the company grows--from initial research to manufacturing stages--real estate requirements will change.

Not only will successful companies likely require more space, they will also often require space that is specially configured to accommodate such things as specialized water and air supplies and space that conforms to government regulations.

With the level of excitement surrounding the rapid scientific advances emerging from the biotech industry, it's no surprise that many regions are eager to witness this growth first-hand.

However, biotech companies looking to build and grow their businesses would be wise to look behind the advertising campaigns and evaluate regions on their ability to best serve the company's current and long-term needs.

GREG BYRNES 

DIRECTOR OF ECONOMIC AND BUSINESS DEVELOPMENT

PECO ENERGY