Harlem, a neighbourhood located in New York's Upper Manhattan, visibly prides itself upon the hospitality of its residents, the vibrancy of its arts scene and the variation and quality of its restaurants. But beyond the soul food eateries and gospel churches that the area is renowned for, the neighbourhood also plays home to Harlem Biospace (Hb), New York's newest biotech incubator.

Co-funded by the New York City Economic Development Corporation and operational since the end of November 2013, Hb gives budding entrepreneurs access to costly wet lab equipment within the confines of a fashionable loft-style building. Importantly, it also gives a boost to Harlem's image and its efforts to overhaul its economy; no small matter given that some parts of Upper Manhattan struggle with an unemployment rate that stands as high as 18%, despite being a part of a city with a GDP that is more than twice that of Switzerland.


Competition heats up

Harlem is not the only area attempting to cure local economic woes by targeting the biotech industry. “Almost everyone wants to be in [biotech], almost everyone thinks they have assets,” says Angelos Angelou, founder of Angelou Economics, a Texas-based consultancy that has, in the past 19 years, prepared more than 600 economic development strategies with clients often requesting life sciences feasibility studies.

“Having a hospital does not make a place a biotech hub. It takes a lot of time, commitment and investment,” he adds.

There is a number of locations that have, after years of chasing the Holy Grail of biotech, experienced considerable success. According to data from greenfield investment monitor fDi Markets, between 2008 and 2013, the leading destination country for biotech – the US – attracted 173 projects, but more than half of these were outside of the country's traditional biotech clusters of Massachusetts, California and North Carolina.

According to Mr Angelou, rising biotech hubs such as Maryland and Texas (which between 2008 and 2013 were third and fourth most popular destinations for biotech FDI, respectively) offer not just a growing number of medical research institutions, but they have also proved their ability to secure research dollars. “John Hopkins University [in Baltimore, Maryland] is the national leader in receiving federal research grants and Texas has its own $3bn programme for cancer-related research and product commercialisation,” says Mr Angelou.

Better, together

Similar factors played an important role in the growth of biotech in Orlando, Florida, a city famous for being the home of Disney World, but which also hosts more than 4300 life sciences-related companies that employ some 86,000 people. But, according to Rick Weddle, president and CEO of Metro Orlando Economic Development Commission (MOEDC), Orlando's collaborative spirit also plays a key role in its success. 

“Great research universities do not always work well with the surrounding economy. But here you will find a triple helix of academia, business and government willing to get things done,” he says.

According to Mr Weddle, his economic developers spend a great deal of time chasing not just the industry's biggest players, but smaller companies as well, such as Mazor Robotics, a surgical guidance technology provider from Israel. At the end of 2012, Mr Weddle's organisation managed to convince Mazor Robotics to open its US headquarters in Florida.

“It might not employ hundreds of people, but it has great capabilities,” says Mr Weddle. Indeed, shortly after it moved to Florida, Mazor Robotics's technology was used at a local medical centre to perform the world's first deep-brain stimulation procedure.

Size isn't everything

According to Roger Humphrey, head of the life sciences practice at global real estate services firm Jones Lang LaSalle (JLL), focusing on small to medium-sized biotech companies can be a great fit for emerging clusters. “When I worked in big pharma, we would focus mainly on big established clusters. Now I am discovering many middle-market opportunities. I find this trend very encouraging,” says Mr Humphrey, who worked for pharmaceutical giant Merck before joining JLL in 2013.

The latest edition of JLL's 'Life Sciences Clusters' report highlights 11 emerging hubs, among them Colorado, home to 1200 mostly small and medium-sized biotech companies, and Ohio, which is home to 1300 companies divided between Cleveland, Columbus and Cincinnati.

Smaller companies matter also because they help clusters build a supply chain, which, according to Mr Angelou, is one of the anchors of any successful biotech hub. “Biotech is not only about the discovery of drugs, but also medical equipment and health-related software. It is about congruency of factors and assets,” he says.

Foreign interest

Rivalry between US bio-medical hubs might be fierce, but increasingly they are finding themselves also competing against foreign rivals. As fDi Markets data shows, between 2008 and 2013, Singapore and Shanghai attracted more investments than San Diego and Boston. The list of major biotech investment destinations also features São Paulo, Beijing, Bangalore, Jiangsu Province (China) and Dubai. In the past five years, China has been the third most popular location for life science-related investments in the world, while India and Singapore were fifth and sixth, respectively.

While just a couple of years ago the attractiveness of emerging markets was mostly associated with the lower production costs of outsourced generics, JLL's cluster report says that, increasingly, “the governments of emerging global economies are focused on growing their high-tech capabilities”.

According to Mr Humphrey, the major obstacle in emerging markets is the underdeveloped intellectual property (IP) protection in these countries. “A lot of research [companies] still prefer better protected areas such as the US and Europe,” he says. “But as these [developing] markets mature, they might improve their IP protection. And there is wealth of high-quality workers there."

The examples of successful emerging hubs in Texas, Maryland, Florida and further afield show the potential of betting big on biotech, and are bound to lead even more locations, from every corner of the globe, to consider entering the fray.