A report issued in December 2001 by the Council on Competitiveness and the National Governors Association has found several factors crucial to the development of what it calls "Clusters of Innovation": physical and information infrastructure, strong K-12 education, universities and specialized research centers, and specialized talent and training rather than abundant low-wage labor.

Life Sciences Market Thriving in Spokane

It may produce most of the nation's fresh produce, but California does not have a monopoly on West Coast bio-economics. In Spokane, Washington, around 50 life sciences firms have established a foothold, led by Hollister-Stier Laboratories, which is completing a $1.5 million plant expansion, and recently announced a $4 million extension to accommodate a new commercial-scale freeze-drying process. The company hopes to seize further opportunities in the device business, pending FDA approvals.     "We've diversified our operations to capture new opportunities, but the key to this outstanding year has rested with an exceptional staff," says Tony Bonanzino, president of Hollister-Stier. "The work skills and solid work ethic in Spokane are among the finest I've seen anywhere."     The new 224-acre (91-ha.), $200 million Pacific Northwest Technology Park near Spokane International Airport will be anchored by Biomedex, which will build an 80,000-sq.-ft. (7,400-sq.-m.) production facility there this spring. Expansions are under way at the city's four hospitals, too, as well as at the health sciences complex in Washington State University's downtown campus.     Development officials credit the educational resources of the Northwest Inland Technology Education Center and the Spokane Intercollegiate Research and Technology Park for drawing biotech tenants to the city, as well as Washington's new tax increment financing law, which allows developers to tap future increases in property taxes to pay for infrastructure development costs.

      The report singled out San Diego in the biotech field. Harvard Business School Professor Michael Porter noted area strengths like the University of California-San Diego's research capabilities and the opportunities to develop further economic ties with both the longtime military presence there and with the growing vitality of nearby Mexico. He also noted that the main challenge in such an idyllic community as San Diego is bringing the average wage more in line with the "California cost of living," which he appraised at 23 percent above the national average.
      Some would use that same figure to characterize the area's quality of life. Doing their part to enhance that quality in San Diego and beyond are companies like IDEC, maker of cancer-fighting drugs Rituxan and Sevalin, for instance. IDEC first invested $18.9 million in a 60-acre (24-ha.) plot of land in Oceanside, then began construction of a 1.37 million-sq.-ft. (127,300-sq.-m.) facility that will attract a total investment of $1.3 billion and total employment of 2,400 over the next four years. Another $30 million will go toward development of a 43,000-sq.-ft. (4,000-sq.-m.) building across the street.
      Besides heavy biotech investment in San Francisco, where it has 1.3 million sq. ft. (120,800 sq. m.) of lab space under development, Slough Estates is building a 1 million-sq.-ft. (93,000-sq.-m.) research park in San Diego, close to UCSD, that will offer 600,000 sq. ft. (55,700 sq. m.) of workspace to the likes of Pfizer, Merck, Novartis, DuPont and Johnson & Johnson -- a power lineup if ever there were one.
      Advanced Tissue Sciences recently signed a 10-year, $10 million lease for 29,141 sq. ft. (2,700 sq. m.) of wet lab space in a new, nine-acre (3.6-ha.) development called Wateridge Summit, in Sorrento Mesa, developed by Multi-Tech Properties. The company may provide the ultimate model for cluster development and redevelopment; it grows and manufactures human-based tissues and organs for repair and transplantation.
      Up the coast, both Slough and Catellus are drawing similar linkages with a new, 43-acre (17.4-ha.) UC-San Francisco campus, and with another campus of sorts, a thriving south-side cluster in the city. Catellus is constructing 5.95 million sq. ft. (552,750 sq. m.) of lab and office space called Mission Bay near the UCSF spread for companies in both life sciences and other sectors. UCSF is known for its ties to around 60 successful biotech companies.
      That's just a small chunk of the 700 life sciences companies in the Bay Area, which, like their counterparts down south, draw significant knowledge and talent from perhaps the most supported state university system in the nation, if not the world. New facilities at UCSF include a 385,000-sq.-ft. (35,760-sq.-m.) research facility and a 165,000-sq.-ft. (15,330-sq.-m.) human genetics, developmental biology and developmental neuroscience center, scheduled to open in 2003.
      Stanford is contributing as well, in building the $146 million, 504,000-sq.-ft. (46,800-sq.-m.) Clark Center for Biomedical Engineering and Science, also opening in 2003. Around 50 faculty -- a third of them newly hired -- will fill the space. The facility will be named for James Clark, co-founder of Netscape Communications Corp. and founder of Silicon Graphics, Healtheon Corp. and myCFO Inc., who has donated $90 million for the project.