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Areas with an existing biotech
industry cluster, research parks and
university towns all are vying for their
share of a new crop of new facilities.

by RICHARD WESTLUND

W hen Amgen selected Cambridge, Mass., for its new Kendall Square research center, the global biotechnology company made it clear that access to a high-level, professional work force was a major contributing factor.

"We believe it is important for Amgen to have a research presence in the Boston area, which is home to so many of the world's best biotechnology research and leading research scientists," says Gordon Binder, chairman and CEO of the Thousand Oaks, Calif.-based company, at the November 1999 groundbreaking ceremony. The 285,000-sq.-ft. (26,500-sq.-m.) building will eventually support several hundred researchers in biology, chemistry and other scientific disciplines.

More than a thousand miles to the west, Bayer has announced plans to build a US$200 million pharmaceutical manufacturing facility in Kansas City, Mo., where the German company already has a research park and animal health facility. Bayer plans to begin construction in 2002 and complete the work in 2004 as part of a five-year, $1 billion capital investment and R&D program. "The new facility would add 140 jobs at the site," says Emil Lansu, executive vice president in charge of Bayer's Kansas City area sites. "Those positions primarily would require individuals with degrees in science or engineering and technicians with special expertise." To entice Bayer into growing its local presence, the State of Missouri and the Economic Development Corporation of Kansas City agreed to sponsor a package of economic incentives.

For Amgen and Bayer -- like hundreds of other pharmaceutical and biotech companies -- access to a skilled and available work force is clearly the key factor in making investment decisions, with financial and economic incentive packages in second place.

"One of the biggest contributors to a move is work force -- not only skilled, but available workers," says Ellen Davis, executive director, National Association of Manufacturers Site Selection Network in Washington, D.C. "That's a big problem today, because our national unemployment rate is so low. Pharmaceutical companies tend to look at the talent, but it is definitely an employee's market out there."

A second major factor, according to Davis, is presence of other pharmaceutical companies. "An industry cluster tends to attract new facilities," she says. "If a location is right for one company, it probably offers the same advantages to others." Recruiting new employees with R&D or manufacturing skills, for instance, is easier if there is already a large base of pharmaceutical or biotech workers right in the neighborhood. Other factors important to pharmaceutical companies include:

• The cost of doing business
• Local regulations, especially if a community is "manufacturing friendly"
• Transportation and distribution facilities that make it easy to get pharmaceutical products to market
• Economic, financial and training incentives offered by local municipalities and state governments.