The life sciences sector has accounted for more than $230bn of worldwide greenfield foreign direct investment (FDI) projects since 2010.It has a high correlation between substantial capital investment and large job creation, delivers above average salaries and benefits to its workforce, drives health science cluster formation and can spur innovation. Consequently, countries and communities aggressively compete to earn new life science industry investments. 

As with many industries, the sources and destinations of life science investments are unevenly distributed. In the Americas, 90% of inbound life science FDI originates from 16 countries, but only five countries capture 90% of those new investments. The US has earned 64.7% of inbound greenfield projects over the past 18 years, followed by Canada (7.7%), Brazil and Mexico (6.5% each) and Costa Rica (4.7%). 

Understandably, a great deal of public focus on the sector is on Covid-19, vaccines, and related investments. This represents only a small fraction of the sector, though, which today is comprised of more than 50 interrelated sub-segments. These include diagnostics, therapeutics, cell therapies, genomics, pharmaceuticals, cold-chain distribution, digital healthcare, biotechnologies, medical devices with artificial intelligence and much more. 

The global ageing population is a leading factor for a rise in age-related diseases and, as a result, increased FDI in the life sciences sector. Longer lives bring social and economic opportunities, but also higher degrees of age-associated health risks and economic costs, including an estimated $1.2tn attributed to cancer annually. Consequently, a rapidly emerging sub-sector is dedicated to early-stage disease detection. 

Take, for example, our client, the California-based Grail, which recently announced a 400-job, $100m commercial scale facility in North Carolina. My colleagues, including co-author for this column, Alan Reeves, worked with Grail on their location strategy. The company combines traditional clinical techniques with new, advanced bioinformatics and machine learning to identify invasive cancer signals with high accuracy. Their story — innovative diagnostics, just five years old, with more than $2bn in funding and a need to rapidly scale — is being repeated as life science specialisations increasingly integrate with the world of tech and data science. 

The science, funding and business models for life sciences companies are evolving. Traditional investment destinations — the key countries and metro clusters — in this sector will continue to see investment. Recent trends, however, show that sector diversification is creating more opportunities for communities beyond the core markets. Still, policy-makers across the Americas must respond to the needs of this rapidly changing industry. 

Gregg Wassmansdorf is a senior managing director, consulting, at Newmark, a global commercial real estate services firm, and also a member of the Site Selectors Guild.

This article first appeared in the February/March print edition of fDi Intelligence.