W |
hen Concept Inc. went looking in 1988 for a site to manufacture arthroscopic medical devices, the company found what it needed in Largo, Fla., a town in the Tampa Bay Area on the Gulf of Mexico.
Today, the US$256 million-a-year company known as Linvatec employs 1,100 workers and occupies 235,000 sq. ft. (21,855 sq. m.) of high-tech manufacturing space at its Pinellas County location and is planning a large facility expansion in the Largo Lakes Corporate Center.
Tucked between two cities known nationally for their Gulf beaches – Clearwater and St. Petersburg – Largo may seem like an unlikely place for a firm that makes the surgical devices doctors use to repair torn ACL’s and MCL’s. But it’s no accident that Linvatec picked Largo as the location for its corporate headquarters.
The community is centrally located in a Tampa Bay metropolitan market that ranks in the top 60 cybercities in America, according to the American Electronics Association and NASDAQ.
When NCR, based in Dayton, Ohio, needed to open a new research and development center earlier this year, it did so in Dundee, Scotland.
The capital investment of US$28 million on the eastern shores of Scotland will generate 500 jobs and provide engineering development for the next generation of automated teller machines.
Wendy Alexander, minister for enterprise, transport and lifelong learning for the United Kingdom, said, “The fact that NCR decided to invest $28 million in the Dundee facility is a testament to the confidence it has in its work force to continue to develop and produce innovative products.”
Why are high-growth companies like Linvatec and NCR investing millions of dollars into new, high-tech facilities in places like Largo, Fla., and Dundee, Scotland? The answer can be found in the new rationale for high-tech location strategy, say several corporate decision-makers and academic experts.
The bottom line: Companies no longer are forced to cluster in compact communities for the sake of doing business with one another. Nor do such firms have to pick only the major metro areas that produce the most talent.
The “new trend,” notes futurist and author Joel Kotkin of Stanford, “augurs something far more profound – the shifting of top-end tech jobs to peripheral areas.”
Areas like Largo, Fla., and Dundee, Scotland. Here’s why: They are part of geographical regions that offer outstanding colleges and universities, a relatively low cost of living and low cost of doing business compared to major metro areas and a high quality of life.
Tampa’s Lure: The Labor Pool
Mark Snyder, a Linvatec executive who manages the company’s Largo location, says the firm can find exactly the caliber of work force it needs in Pinellas County – a community that has seen its average age drop from 54 to 38 in less than 20 years. And if Pinellas can’t fill all 1,100 job slots, Linvatec can draw from neighboring counties.
“One of the biggest draws is the labor pool here,” says Snyder. “We could never have shut down the other locations we have elsewhere and consolidated here in Largo without the skills we can find in the work force in Pinellas County. A lot of our staff comes from Honeywell, General Electric and Lockheed Martin,” all former longtime defense contractors in the area.
That formula – hiring precision engineers who used to build bombs and other weapons systems for the U.S. Armed Forces – is one that has worked well for Linvatec. It also bodes well for other companies throughout the Tampa Bay market of seven counties: Hillsborough, Pinellas, Polk, Pasco, Hernando, Manatee and Sarasota.
Consider the infrastructure of labor, networking and research that underpin the Tampa Bay market:
- Anchored by Tampa, the Florida High-Tech Corridor (which includes Orlando) now has 6,800 high-tech companies employing 158,000 workers.
- Enough people work in the Florida High-Tech Corridor to give the area six internationally competitive “clusters” – aviation and aerospace; information technology; medical technologies; microelectronics; modeling, simulation and training; and optics and photonics.
- New alliances have formed to provide support to key industries throughout the High-Tech Corridor. These include the Medical Manufacturers Consortium and the Gulf Coast Life Sciences Initiative in Tampa Bay and the Florida Photonics Cluster and Digital Media Alliance in Orlando.
- The Florida High-Tech Corridor Council has provided $25.2 million to 290 research projects involving 145 corporate and institutional partners through the University of South Florida in Tampa and the University of Central Florida in Orlando. This investment has attracted $55 million in matching funds for a total of more than $80 million invested into Central Florida research projects.
More importantly, this investment convinced a number of corporate real estate site selectors recently to choose Tampa Bay as home for some of America’s fastest-growing companies.
J.P. Morgan Treasury Technologies moved 1,500 people in 2000 and 2001 into 450,000 sq. ft. (41,850 sq. m.) of new class A space in the Duke-developed Highland Oaks office park in Tampa – a facility that processes $1.6 trillion a day in financial transactions on various securities markets around the world.
Merck Medco established a 125,000-sq.-ft. (11,625-sq.-m.) customer service center and 147,000-sq.-ft. (13,671-sq.-m.) prescription processing center in Tampa last year, creating 2,000 jobs and qualifying the expansion as one of Site Selection’s 20 largest facility deals of 2001.
RefTec International Inc., a company that manufactures refrigerant equipment for the air-conditioning industry, moved into an 18,000-sq.-ft. (1,674-sq.-m.) facility in the Northgate Industrial Park in Sarasota – a community recently rated as the “Third Best Place in the Nation to Live and Work,” according to Employment Review and BestJobs.USA.
Comdial Corp., a company that develops fully integrated communications solutions and applications for small-to-medium-sized businesses, relocated its corporate headquarters and 100 jobs from Charlottesville, Va., to Sarasota.
Lakewood Ranch – a master-planned development of some 29,000 acres (11,745 hectares) in Manatee and Sarasota counties – continues to lure high-tech firms to the South Tampa Bay market. Two new companies establishing a presence there are Backsoft Corp. and SPEEDCOM Wireless.
The Pinellas Star Center – a 750,000-sq.-ft. (69,750-sq.-m.) former U.S. Dept. of Energy nuclear weapons manufacturing plant in Pinellas County – houses 24 varied technology firms including Raytheon, Constellation Technology, Concurrent Technologies, Pace Technology and National Technical Systems.
Robin Ronne, senior vice president of economic development for the Greater Tampa Chamber of Commerce Committee of One Hundred, says that projects such as those listed above only confirm what he and others throughout the Bay Area have known for some time.
“With effective long-range planning and strategic development initiatives, Tampa has had all the essential fundamentals of cost effectiveness for businesses and individuals in place for the past 10 years,” says Ronne. “Taken collectively, all these factors have directly affected the high-ranking state and national economic performance of Tampa in 2001 and previous years, and should bode well for 2002 and beyond.”
The Making of Silicon Glen
Across the Atlantic Ocean, another seaside community is following a similar path to prosperity. The Edinburgh-Glasgow-Dundee triangle in Scotland is rapidly becoming a world leader in biotechnology, microelectronics, optoelectronics and nanotechnology.
Scotland’s microelectronics industry employs 41,000 people, including 30,000 in supply infrastructure and 8,000 in semiconductor design. About half of the United Kingdom’s semiconductor design work takes place in Scotland. That’s why such global giants as Sun Microsystems, NEC, National Semiconductor, Motorola and Raytheon all maintain significant operations there.
|
A major player in Scotland’s microelectronics industry is the Alba Centre in Livingston, right in the middle of “Silicon Glen” – the region between Edinburgh and Glasgow. Drawing upon expertise from four universities in the region, the Alba Centre was formed in 1998 to promote research and development in the microelectronics sector and began enrolling its first students in 1999 to study full-time for a master’s degree.
The 100,000-sq.-ft. (9,300-sq.-m.) campus will grow to more than 1.1 million sq. ft. (102,300 sq. m.) upon buildout, according to John Reekie, director of marketing for the Alba Centre. “The campus is partially functioning as an incubator,” said Reekie. “We will increase the number of startup companies throughout Scotland, and most will remain in the Silicon Glen corridor. More than 3.4 million pounds [sterling] have been invested into research to date. Within the next four to five years, that will double.”
The success of Alba has led Tality, a subsidiary of Cadence Design Systems, to open a design center in Scotland. Tality develops and deploys a broad portfolio of intellectual property to accelerate the development of leading electronics products. The company opted to locate its design center in Scotland, largely because of the strength of the design engineering community at Alba and the surrounding corridor.
“Another good example is Motorola,” says Reekie. “The company’s global embedded software group is doing work here on next-generation mobile devices. The Alba Centre’s program for master’s and doctorate students has helped Motorola in bringing people to work for them. Ultimately, companies will spend research dollars where technology is leading edge.”
Speaking of leading edge, it is also no accident that the country that cloned Dolly the sheep is becoming a global leader in biotechnology. Peter Lennox, director of biotechnology for the Scottish Enterprise, noted that two of the three largest venture capital investments in biotech in Europe this year were in Scotland. These included a $50 million investment into Cyclacel and a $75 million investment into a bio-pharmaceutical company.
“Why does Scotland attract and grow these kinds of companies? A lot of it has to do with the skills of the people who live and work here,” says Lennox. “Scotland produces more than 31 percent of all UK post-graduates in genetics research. It’s all about enabling the companies of tomorrow to work with the key researchers in Scotland. And remember – this phenomenon is not new. John Hunter, the father of modern surgery, came from Scotland.”
So did Alexander Fleming, who in 1929 discovered Penicillin in Scotland. The MRI scanning technology was developed in Scotland in the 1980s as was the drug Zantec.
“Right now, we are growing by more than 30 percent a year in core biotech in Scotland,” adds Lennox. “Today, 90 core biotech companies do business in Scotland. If we were in the United States, we would rank as the sixth most productive state in that sector. We have 20,000 people working in biotech in Scotland.”
But whether it’s biotech or microelectronics, industry leaders say that Scotland’s appeal to corporate site seekers is based upon three primary factors: excellent higher education, competitive costs and high quality of life. Without those three criteria, say the experts, the companies would not come to Scotland.
Today, Scotland’s roster of companies reads like a Who’s Who of Biotech: Axis-Shield, PPL Therapeutics, Organon, Serologicals, Biovation, Cyclacel, PanTherix, Remedios and Strakan – just to name a few.
But Scotland isn’t content to stop there. Lennox says the Scottish government is investing money into developing a bio-manufacturing campus in Edinburgh and is looking at sites in Glasgow.
“The goods news is that for every R&D job we create in biotech, it creates three jobs in manufacturing,” notes Lennox. “That’s not a bad ratio.”
