There's no disagreement among the experts that access to venture capital is one of the top concerns on any biotech company's agenda. How close the VCs need to be to a specific region is debatable in a world where funding can come from anywhere, says Lewis.
      "Historically, it's been nice to be within a few hours drive of your capital, but what's more critical is being known to the VC community," he says. "We see companies selecting a location based on the cost of living being lowest, not on the presence of a VC community. And we see VCs located in the Silicon Valley urging companies to stay in Ohio (because of the cost of living)."
      Awan argues that while access to capital is extremely critical for companies, that doesn't mean a company must reside in a region with a high concentration of VC firms. "We've had folks from the West Coast invest in western Massachusetts companies and folks from here go to Texas. You can always host VCs and showcase your products."
      Grace believes biotech firms want to see "foreign" investment in a region, which is usually attracted

Mahmud Awan, RTC

to a domestic pool of capital.
      "That's where the government comes in. Site selectors need to look for national and provincial governments that recognize the need for seed capital to leverage larger VC firms," he says.
      Bankofier agrees, pointing out that the Arizona legislature in May passed a bill that allows "angels" to receive a 35-percent tax credit for life science investments for each dollar up to $250,000 that they invest in early-stage biotechnology.

      There's no away around it: The cost of doing business can pretty much trump many of the benefits a region has to offer, these experts agree.
      Whether it's energy costs, real estate or the cost of industry R&D, Grace argues that lower is better because it means a higher profit margin for the company and more bang for the buck for employees. Regions with lower housing costs, for example, can lower their employee salary level while still providing a high quality of life.
      Although he calls the cost of living "the most critical thing," Awan warns site selectors to be careful when assessing a region's cost of living. "They need to balance the growth aspects of a location, as in how it lends itself to grow the business and improve profitability, with issues like weather that affect energy costs. Then those issues need to be balanced against factors that relate to creativity. A place that's more costly at first glance may have other benefits. The Northeast, for example, may have higher operating costs, but also have other benefits — like proximity to funding sources and a high number of research institutions — that balance the picture."
      He adds that site selectors need to "look for a winning combination. A huge, pre-existing cluster of biotech firms will usually mean a very high cost of living. You have to pay employees twice as much in Cambridge, Mass., or Palo Alto, Calif. But move 75 miles away to a place like western Massachusetts and the costs go down and employees salaries drop."
      All advise site selectors to seek regions where state governments are providing a supportive tax structure that can level the playing field. For example, Massachusetts -- once known as "laxachusetts" — now has a state government that is "tremendously responsive and aware of business challenges," says Awan.
      In Arizona, Bankofier says his tech council is currently pushing legislation that will give companies an added 10 percent tax credit for collaborative research with the four main universities. This is coming on the heels of $440 million for universities to build and improve existing R&D facilities.

From the Company Perspective Speaking for themselves, the following biotech-related companies provide their own reasons for choosing a location based on their workforce requirements:       Kinetic Muscles Inc., Tempe, Ariz.: Skilled assembly and test technicians, along with quality-control personnel, is very important to this medical device startup. Its core is now R&D, but the owners say they expect to grow as a manufacturing base and require every type of employee from sales to front office. But the common theme would be a working knowledge of the U.S. Food and Drug Administration's Good Manufacturing Practices.       Biomedical Research Models Inc., Springfield, Mass.: Doctorate-level professionals are preferred at this contract research services company that genetically engineers lab animals for use in drug testing, with a particular emphasis on rapid access interventional drug therapy for type 1 diabetes. A key reason for choosing New England was the proximity to name colleges and universities and a wide base of smart, motivated support staff, according to a company spokesman.       Diagnostics Products Corp., Los Angeles, Calif.: Because of the proximity to a number of high-caliber universities, this diagnostics company finds it easy to recruit highly educated local labor. "We don't have to relocate the graduates. These are pluses for us," says a spokesman quoted in a 2004 report entitled "California's Biomedical Industry."       Marox Corp., Holyoke, Mass.: A producer of metal precision body parts for medical implants, Marox needs skilled machine operators, particularly those who are trained to operate computer numerically controlled machines. A ready pool of workers in the region has helped keep the company in western Massachusetts, according to a company spokesman.