The Greater Philadelphia region is gunning hard for the life sciences industry - and for good reason. After the region hosted BIO 2005, the world's largest biotechnology conference, a study from the Milken Institute identified this area as one of the best regions in the country for life science companies stating that "The Greater Philadelphia life sciences cluster ranks among the elite centers in the country."1
That news fueled an even bigger push to focus on the life sciences industry, and today the Greater Philadelphia region, which includes parts of New Jersey, Pennsylvania, and Delaware, is sending a clear message to this industry: It offers unique benefits that make doing business here a win-win situation for everybody.
So what are these benefits? Location is perhaps the most obvious advantage. "This region lies within an easy reach of the financial capital of New York City and the regulatory and political capital of Washington, DC. Europe is also easily accessed from this area, allowing companies to do business on two continents in the same day," says James F. Shannon, chief marketing officer of Select Greater Philadelphia (SGP), a non-profit organization that markets this 11-county region of Greater Philadelphia nationally and abroad. Those counties include New Castle in Delaware; Burlington, Camden, Gloucester, Mercer, and Salem in New Jersey; and Bucks, Chester, Delaware, Montgomery, and Philadelphia in Pennsylvania. Of course Philadelphia is considered the "capital" of the region, largely because of how many life sciences companies and academic institutions reside there.
And even though the Greater Philadelphia region lies within a short drive to these major cities, that proximity hasn't driven up the cost of living. "I often hear business owners say they can't believe the value they get here," says J. Michael Bowman, chairman and president of Delaware Technology Park, a research park in Newark, Del. "It's much more affordable to live and do business here than in major cities like New York City."
Quality of living also tops the list of benefits as well. "We're a diverse place that supports numerous cultural, educational, and retail opportunities," says John Grady, senior vice president of the Philadelphia Industrial Development Corporation, a not-for-profit corporation that promotes economic development throughout Philadelphia. "We're similar to New York or Chicago, but traffic is less congested and the cost of living is a lot less than other regions." Geography also factors into quality of life, for this three-state region has the distinct advantage of close proximity to beaches as well as mountains.
There are also 88 colleges and universities in the region, which not only increase quality of life but enhance opportunities for businesses to draw from a highly-educated work force. Based on a recent report released by SGP, roughly one-third of the region's awards during the 2005/2006 academic year were advanced certificates and degrees, considerably higher than the US average of 25%.2 "At the same time that we're providing opportunities for our graduates by bringing in more life science companies, we're also giving these companies access to a highly educated work force," Shannon says.
According to the Milken report, in 2003 the Greater Philadelphia area had almost 53,500 employees directly in the core life sciences industry, second only to Greater New York, which boasted more than 74,500 employees. When looking at combined direct and indirect effects, Greater Philadelphia's core life science industry was actually responsible for 276,000 jobs, or 11.4% of total employment in the region. (Using the same definitions as the Milken report, an SGP survey of 2004 data now shows 54,500 employees in the core life sciences and a jump to 327,000 jobs in related sectors.)
That raises yet another advantage for life science companies doing business in this area: The strong presence of their peers in supporting industries. "This is a great place to commercialize a drug or introduce a new medical device because of the connections and supportive network available to life science companies," Shannon says.
The large presence of life science companies in this region is one major reason why 40% of all meetings that come to Philadelphia - largely considered a pharmaceutical powerhouse - are healthcare or life science-related," says Kathleen Otto, former executive director of the Greater Philadelphia Life Sciences Congress, a division of the Philadelphia Convention and Visitors Bureau (CVB), and currently director of business development for Bio NJ.
"The support we received from the region's life science companies to host BIO 2005 demonstrates they are serious about life sciences," says Danielle Cohn, vice president of marketing and communications for the Philadelphia CVB. BIO 2005 was such an achievement that the city hopes to attract another BIO conference and is currently bidding on BIO 2013. In fact the city will soon be expanding the Pennsylvania Convention Center, located in the heart of Philadelphia, largely to satisfy the growing needs of BIO. When the revamped convention center opens in the summer or fall of 2010, it will be 60% larger, offer the largest ballroom on the east coast, and feature the largest contiguous exhibit space in the Northeast. "We want to make this area a world-class destination for the life sciences industry," Otto says.
The expansion of the convention center, though, is just one example of how the region is allocating additional space for the life sciences industry. Take, for instance, Philadelphia's Navy Yard, a 1,200-acre site that currently boasts about 5.5 million sq. ft. in which about 74 companies, including a cluster of life science companies, are housed. The project is only one-third of the way developed, Grady says, and by the time it's done, it could offer up to 12 million sq. ft. of capacity.
Or consider Delaware Technology Park, awarded Research Park of the Year in 2005 by the Association of University Research Parks. The park sits on 40 acres and features 250,000 sq. ft. of space with the potential to add another 100,000-sq.-ft. building. As Bowman explains, the park functions more as a transition site for smaller companies to build into larger growth. "Many of our tenants get their ideas going here and then build from that early success," he says, adding that the park has assisted in the creation of 20 new life science companies. Currently about 54 tenants have set up operations in the park.
Another way this region is upping the ante to make the area more desirable to the life science industries? Financial incentives. New Jersey is perhaps a leading example of how financial incentives are working to promote the life sciences industry.
For starters the state offers a tax certificate program, which more than 400 biotechnology and technology companies have taken advantage of since its creation in 1999. The funding enables these businesses to sell tax losses or research and development tax credits to raise cash so they can finance their growth and operations. Allocations in 2007 of $60 million bring total funding under this program to $445 million since 1999, say Caren Franzini, chief executive officer of the New Jersey Economic Development Authority (EDA).
In addition New Jersey developed the Edison Innovation Fund, which cultivates an entrepreneurial environment for life sciences and technology companies. Through the fund the EDA, which helps manage the fund's resources, is working to build the state's research universities to benefit these companies. In December of 2006 the EDA approved the first $45 million to be allocated to "targeted areas of investment" that support the life sciences industry. For instance, Provid Pharmaceuticals, Inc., a chemistry-based drug discovery company in North Brunswick, NJ, received $750,000, in part to advance research and development efforts. Meanwhile Signum Biosciences in South Brunswick, NJ, which develops skin care products, nutritional supplements and pharmaceuticals, was awarded $1 million to finance testing procedures and research and development and to hire new employees.