With technological advancement occurring at an increasingly breakneck pace, it’s natural the number of life science and technology innovation clusters is growing as well. These clusters result from the increasing recognition that innovators do not perform at their best in widely dispersed buildings. Instead, they gain most from highly-specialized facilities and collaborative ecosystems that foster cross-fertilization of ideas.
Almost 20 years ago, Cambridge, Mass.-based Alexandria Real Estate Equities, an $18.4 billion REIT that is among the largest developers, owners and operators of collaborative life sciences and technology campuses in AAA locations, began examining the impact of capital, talent, institutional knowledge and a metropolitan environment on idea generation and cultivation. As a result of the company’s findings, Alexandria moved away from a single-asset acquisition strategy. In its place, it adopted and encouraged a strategy seeking to develop entire urban innovation ecosystems. Think Cambridge/Kendall Square, Mass., San Francisco/Mission Hills, Calif., Seattle, Wash. and New York City, N.Y.
Alexandria currently has a footprint of more than 33.1 million square feet, with demand driven overwhelmingly be life sciences, technology and talent. Company officials rigorously adhere to the theory that proximity to and collaboration with academia, institutions and related businesses – as well as the ability to access capital, a strong start-up ecosystem and talent – are crucial to advancing life science and nurturing technological advancement. If a promising urban market has multiple elements but is lacking one critical piece of the puzzle, Alexandria introduces that missing element.
Alexandria Founder and Executive Chairman Joel Marcus recently sat down for a Q-and-A regarding the history and future of life science and tech cluster development.
Question: What are the distinctive advantages of clustering life science and tech companies in proximity to one another?
Marcus: With 10,000 diseases known to humankind, and only 500 currently addressable with medical therapies, the ability of the science and medical fields to respond to human need is in its infancy. Tech will only help it grow, [because] much of the future of drug development depends on data analytics and machine learning, especially when it comes to reducing the time between discovering and developing drugs.
Whether on the computing or design side, the advanced engineering taking place at tech companies can make the biological discovery of life science companies happen smarter and faster. Clustering companies together affords more opportunities for this collaboration and will help advance innovation that can improve human health and quality of life.
Question: Please discuss the most successful innovation clusters, and what differentiates them from other markets.
Marcus: When we think about the innovation continuum, there’s research, there’s development and there’s commercialization. How these factors are concentrated and complemented by one another in a market really defines its potential. So if we were to rank the innovation clusters, I’d say that Cambridge is number one and San Francisco is number two. It takes a generation to grow a cluster and these are now in their second 25-year gestation period, with both having started back in the late 1970s and early 1980s.
Question: What is lacking in clusters that haven’t yet reached this stage?
Marcus: When you look at emerging clusters that are not as established, you may find an imbalance of these factors. Some cities may have a talent pool with strong research backgrounds, but are lacking commercial expertise. Others may have a burgeoning startup ecosystem, but capital is almost non-existent.
Our formula, which helped us not only start the company but has also informed all of our efforts, is all about evaluating each component and identifying a world-class location that brings together great science, great talent and the ability to attract investment capital.