ST. LOUIS — The life sciences account for a smaller share of jobs at the nation’s university-created technology research parks than two information technology specialties, but that is expected to change over the next few years as the nation’s cities develop new biomedical campuses or expand existing ones, according to a recent survey of tech park owners.
Walter Plosila, vice president in the Technology Partnership Practice of the Battelle Memorial Institute, which conducted the survey, told BioRegion News that life science employment at research parks should rise because a greater number of new parks are focusing on nurturing startup biotechnology, pharmaceutical, and medical-device businesses. That is part of a broader trend among tech parks to specialize in one or a few related technologies, he said.
All that activity, however, doesn’t necessarily mean that the new parks will succeed economically, scientifically, or both, cautioned Plosila.
According to the survey, released last week, 13.5 percent, or 35,734 jobs at North American research parks were in software, while 11 percent, or 28,969 jobs, were in “computers and related hardware.” By comparison, 10.6 percent, or 28,007 jobs, were in the “drugs/pharmaceuticals/diagnostics” category, the survey said.
“I think that’s going to change,” Plosila said. “We’re seeing a phenomenal increase in biomedical parks, but they’re slowly coming online. Whether it’s Salt Lake [City’s University of] Utah [Research Park] or [the University of California San Francisco’s] Mission Bay or USC [the University of South Carolina’s Innovista campus], we’re seeing lots of these in the development stage around the country. They’re in development. As that happens, you’re going to see much more of the composition being in the biosciences broadly defined to include [agricultural biotech], medical devices, drugs and pharmaceuticals, and research and testing.”
Plosila spoke with BioRegion News after addressing the closing session of a three-day conference held here by the Association of University Research Parks. AURP and Battelle, a nonprofit research organization in Columbus, Ohio, teamed up to survey 134 owners and managers of the 174 research parks in the US and Canada.
In all, North America’s 174 research parks generated a combined 264,413 full-time jobs, and 6,953 support jobs, according to results of the survey. That figure increases to 300,616 full-time and support jobs when including posts from research parks that did not respond to the survey.
That figure increases to 679,151 jobs when including peripheral biotech posts, including biotech patent lawyers. That number swells to a projected 752,355 when including job projections from non-respondent parks.
The report created its employment totals by multiplying the number of research park jobs in each sector by a number developed through the US Bureau of Economic Analysis’ Regional Input-Output Modeling System, or RIMS II, to project the total employment generated by the research park. The multipliers, a standard economic-forecasting tool, vary from sector to sector — and in the case of the life sciences, vary within the sector.
For the ”drugs/pharmaceuticals/diagnostics” sector, the multiplier is 5.64 – but that only applies to 2,897 positions that do not involve research and development. The multiplier for the remaining 25,110 R&D jobs in the sector, as well as all R&D jobs studied, is 2.43.
Of the 134 North American research parks surveyed, 122 occupy a total of 123.9 million square feet of space, with 86 percent now occupied by tenants. The remaining 12 respondents recorded no space because they are in planning stages.
The total occupied space is less than half of the total 275 million square feet available if all the potential space at every research park were developed. Such a “full buildout” scenario calls for development of 35,354 square feet; to date only about 22,000 of those have been developed.
‘More Important’ Multi-Tenant
Plosila said one need that research parks should address is creating more multi-tenant space for growing companies. While newer companies in incubators are smaller than their counterparts a decade ago, the percentage of multi-tenant buildings has shrunk from 53 percent in the 1980s to 39 percent of today’s 1,833 research park buildings, the survey found.
“Multi-tenant space is more and more important, especially that surge space that you can move people in and out of,” Plosila told the conference audience. “Clearly, there’s real interest because that’s where the corporate community is going. They want multi-tenant space that they can expand or contract as their business changes.”
About 59 percent of tech park space in North America is in suburban areas, compared with 73 percent recorded as late as 2003. Since then, 53 percent of all new research parks have risen in urban rather than suburban areas.
“Whether in fact this urban focus will continue the rest of this decade, time will tell,” Plosila told BRN. “I think it’s too early to know how much of that will happen. If [research parks] pick their niches, what they’re good at, that could succeed. If everybody tries to do the same thing, if everybody picks the same areas then you have some challenges.”
And if research parks stay healthy, according to the AURP-Battelle survey, then 39 percent of their tenant graduates will remain in the same region as the parks that spawned them, rather than outside of the region.
Over the past five years, the survey found, 759 companies expanded enough to outgrow their incubators, though 299 of them stayed within the community. Of the remainder, 156, or almost 21 percent, relocated to multi-tenant space within their research park; 115, or 15 percent, were acquired or merged with other companies; 73 (9.6 percent) left the region; 19 (2.5 percent) moved to their own buildings within their research parks; and 97 (nearly 13 percent) went out of business.
Other Key Findings
- The average research park has 114 acres with six buildings totaling 314,400 square feet of space, 30,000 square feet of it set aside for incubator companies. That space is 95 percent occupied, with 72 percent of tenants being for-profit businesses, followed by university programs (14 percent) and government agencies (5 percent). The average park employs 750 people and operates on an annual budget of less than $1 million. Three of every four parks retain less than 10 percent of their revenue as profit.
- The top five challenges listed for research parks over the next decade were eliminating obstacles to commercializing technologies; breaking down barriers between academics and entrepreneurs; integrating more closely with universities; identifying sources of support for operations and buildings; and fostering more competition among research parks both within and outside the US.
- The top three reasons tenants locate within research parks, according to operators surveyed, were access to a skilled workforce, including students; followed by the quality of buildings; and the prestige of being within a park. Access to university faculty and facilities placed fourth.
- While 75 percent of respondents said amenities were more important to tenants now compared with “5 to 10” years ago, only 35 park operators (28 percent) had a conference center; 21 percent (17 percent) each included a hotel and retail shops; and 20 (16 percent) had on-site housing.
- The more support from university and business leaders, the likelier research parks are to grow. Plosila singled out the St. Louis BioBelt as a cluster that has successfully drawn such support.
‘Coincidental’ With Bill
Michael Bowman, president of AURP’s board of directors, said the survey was coincidental with, and did not result from, a group seeking support for a bill introduced in the Senate last May.
The “Building a Stronger America Act” would give the federal government a greater role in subsidizing the planning and building of research parks. The legislation, S. 1373, would allow Washington to guarantee up to $50 million in loans toward the construction of new research parks and improvements to the infrastructure of existing parks.
University research park developers could receive up to $10 million in guarantees, and up to 80 percent of the amount for loans exceeding $10 million up to a maximum of $50 million. The measure would also enable non-profit university research parks to receive up to $750,000 toward feasibility studies
On Oct. 18, Bowman — who is also the chairman and president of Delaware Technology Park — was among speakers who testified in support of the legislation during a hearing of the Senate Committee on Commerce, Science and Transportation.
“As a means of creating sustainable prosperity for our country, science parks play a key role in maintaining America's competitiveness,” said Bowman, according to a copy of his written testimony
posted on AURP’s website. “Science parks, however, face challenges. In today’s uncertain financial climate, they must identify sources of support for both the development of new parks and the upgrading of existing parks if they are to help the US remain competitive.”
“We’re seeing a phenomenal increase in biomedical parks, but they’re slowly coming online. As that happens, you’re going to see much more of the composition being in the biosciences broadly defined to include [agricultural biotech], medical devices, drugs and pharmaceuticals, and research and testing.”
The measure might also counteract the decline of US research and innovation as measured by drops in the number of college-aged students pursuing science and engineering degrees, Bowman said. Other than the Oct. 18 hearing, the Senate has taken no action on the measure, though the House of Representatives is expected to start debating it soon. Bowman said Rep. Heather Wilson, Republican of Albuquerque, NM, is days away from introducing a companion bill in that chamber.
Wilson is one of two co-sponsors AURP is trying to line up in the House. The other will be a member of the Democratic majority that took control of the chamber last January, Bowman said. “I don’t think a partner is going to be a problem. It’s just a matter of which one agrees. We’re not sure who that will be yet.”
Another issue AURP is wrestling with is whether it will hire a lobbyist to plead its case for Building a Stronger America. Hiring a lobbyist will be costly to the organization — and expenses are no small issue for AURP, which is on track to finish this year with a $20,000 surplus after losing more than $100,000 the previous year.
“How we manage this without one, or can we get a silver bullet kind of person to help us, we don’t know the answer to that one yet,” Bowman said. “Right now we’re on the mass appeal: Everybody go locally and push it.”
He said the survey results have been shown to members of Congress being lobbied for support, and have already proven helpful to Building a Stronger America supporters — especially the specifics on job creation and economic impact.
“They like data, and there are two things about it at least that they really like. One was the quantification of jobs. Everybody does their own math of what that means in terms of dollars of economic development. But it’s big — I mean we’re billions of dollars,” Bowman said.
Second, everybody’s got [a research park] or needs one, and that’s a good thing when you’re talking to the Congress. It’s not just for San Francisco or Boston. Everybody can play into this in some credible way.”