By Mark R. Smith, Contributing Writer
Depending on a certain type of business park’s address around the globe, they’re known by various monikers. For instance, in Europe, they’re technopoles; and in Asia, they’re science parks.
In the U.S., they’re often called research parks, but are also known as science and tech parks. Whatever the nomenclature, they create synergies and foster the innovation that’s vital to the United States, as well as world, economies. They’ve come a long way since they were established in the 1950s, most famously in Palo Alto, California, across the street from the main campus of Stanford University.
While that location was somewhat inconspicuous at the time − “Back then, people didn’t want you to see what they were doing,” said Rick Weddle, president and CEO of the Site Selector’s Guild, in Little Rock, Arkansas. Science and tech parks have evolved to the point that they’ve become gathering places where people not only want you to see them, but need tenants to share and build on ideas, and maybe even come over for a sandwich and a drink in an environment that offers amenities the pioneers at Stanford never imagined.
And that approach, no doubt, has led to great things, with more to come.
“The biggest move in the sector today,” said Weddle, “is the move toward innovation.” And innovation is just what is needed as the world, the economy, and science and tech park owners and tenants move forward in the face of COVID-19.
While it’s tough to fathom such a landscape now, “There were fruit orchards around Stanford University when Stanford Research Park (SRP) was founded in the 1950’s,” said Sean Randolph, senior director of the Bay Area Council Economic Institute in San Francisco.
While the SRP was created by the university, “That was unusual at the time because colleges focused on the academics, not the business world. Still, Stanford’s administration felt that the university should not be an ivory tower,” said Randolph. “Thus, SRP was established to support students and professors who had business ambitions. That approach continues to this day.”
SRP proved to be a catalyst in budding Silicon Valley during the days of the Cold War and the space race. “Federal research money was important at that point and is directly linked to the Silicon Valley we know today, directing the growth of the region based on tech startups,” he said. “There were also successful local businesspeople who became venture capitalists, so funding and mentoring were available for new companies.”
Of course, the scale of the technology licensing successes have changed in a big way, as more programs are available on campus to support student and faculty entrepreneurs, as well as the commercial application of research developed on campus. What the worlds of business and academia see today has expanded far, far beyond SRP.
“Silicon Valley did not rise around a traditional tech park or a cluster of such a park; the entire region is a gigantic tech park,” said Randolph. “There are also science and tech parks at NASA Ames Research Center; and at Mission Bay at the University of California at San Francisco (UCSF), which is in a former railroad yard turned into a massive biotech center that focuses on life sciences. A number of pharmaceutical companies are located there and it hosts many accelerators connected to the university.”
And that’s hardly all. There are two federal labs clustered in the East Bay, Sandia National Laboratories and Lawrence Livermore, in the Livermore Valley Open Campus; between the two labs, they employ nearly 2,000 scientists who generate considerable innovation.
Randolph said all of the park models are there. “SRP is more traditional; UCSF is an innovation zone with large pharma and life science companies, plus many startups; NASA Ames encompasses tech licensing programs and has an accelerator; the two federal tech labs in the Livermore Valley are in another targeted innovation zone; and another federal tech lab, the Lawrence Berkeley National Laboratory, on the campus of UC Berkeley, is in yet another innovation zone formed by the lab, the university and surrounding companies.
“All that,” he said, “makes the entire region a tech park.”
But what people need to see, said Randolph, “is how universities frequently anchor science and tech parks. If that’s not the case, it’s hard for them to be successful.”
Also Early On
“While Stanford is often cited as the granddaddy of science and tech parks, another place on the map mentioned in the same breath is the Research Triangle Park (RTP) in North Carolina,” said Weddle.
For all of its reputation and panache, “SRP is a small piece of the Silicon Valley innovation area,” he said. “While RTP’s proximity to Duke University, N.C. State University (NCSU) and the University of North Carolina at Chapel Hill led to the placement of science and tech parks that were more out of the way” from various amenities.
In the case of RTP, it’s almost equi-distant between those three universities, and has grown on the strength of each school, with a technology and business interface. “RTP’s 7,000 acres served as a land bank where its reputation developed over time,” said Weddle. “As today’s science and tech parks became areas of innovation where the attractiveness is in the overall environment, as opposed to a specific piece of real estate.”
For instance, RTP was established as, and is, a physical place, “and we often think of company activity in a certain spot,” he said. “On the other hand, there’s the Barcelona Science Park (Parc Científic de Barcelona to the locals) that isn’t so much a certain piece of real estate, but just part of the downtown area that has the right support services; it’s a play space, but not a specific play space.”
Now on 1,300 Acres
Just to show how unused land in a smaller, but growing city can grow into a cosmopolitan international address, Leah Burton, director of the Centennial Campus at NCSU, offered a thumbnail retrospective.
The campus was founded in the mid-’80s, “with the only idea that NCSU needed to expand,” said Barton. “At the time, the university had few options − aside from 1,000 adjacent acres at a former mental hospital. The buildings were still there, but it was mostly farmland.”
So Bruce Poulton, then the NCSU chancellor, asked then Governor Jim Hunt for a small portion of the land, but Hunt gave him 700 acres, as long as NCSU directed toward expansion of economic development efforts. Later, NCSU acquired and expanded on the remaining land.
At that point, government agencies were collocated with various business entities. “We couldn’t have built Centennial Campus without RTP being there,” she said, noting that today Centennial encompasses more than five million square feet and hosts 75 corporate and government partners which employ 5,500 people, in addition to the students and faculty on campus. It also features student apartments, plus townhouses and condominiums, with a Marriott Stateview Hotel and Conference Center, as well as an installation of the National Security Agency, the Laboratory for Analytic Sciences.
“So, we have a mixed-use campus and that’s still not built out,” Burton said, “and we can double that space whenever we do. That will eventually mean a daily population of 35,000 people, just on our campus.”
She said the model started at NCSU “is only going to increase in importance throughout the United States, because we’re seeing a decrease in R&D from inside companies. As they look externally, it’s important for universities to position themselves as easy places to set up and do business − and universities are keen to deliver the best exponential learning experience for students, which includes allowing them to work on industry issues while in school.”
What visitors find at RTP today is a focus on increased density. “That’s the best way to drive population, so you can attract amenities for the workers and residents,” said Burton. “Not everyone wants to be downtown and what we’re doing at Centennial has been successful, but [we] can accomplish even more by increasing density.”
And that density leads to collaboration. You need unintentional collision in such spaces where people can meet, discuss and solve issues. That’s why co-working spaces with food halls and other amenities are so popular. They ultimately drive and increase in innovation.
On that front, Weddle also pointed to Ann Arbor SPARK, which is part of the University of Michigan, and how taking advantage of existing density of the state’s southeast region moved innovation district to greater heights.
Paul Krutko, CEO of Ann Arbor SPARK and board chair of the International Association of Science Parks & Areas of Innovation (IASPAI), talked about SRP and the earlier days of the movement, “when it was simply a case of science in a park.”
“The notion was to create a physical office park environment in a non-urban setting within a university location. That model worked for the first few decades during boomer era,” said Krutko. “Back then, people moved to where the job was.”
But when it was founded in 2005, Ann Arbor SPARK “was not a science park, per se,” he said. “It was a public-private partnership that was based on similar projects at Stanford and at the Massachusetts Institute of Technology,” though the University of Michigan was not seeing people moving in to work.
What was happening at the university was a continual exodus of some of the brightest minds on campus. “They were leaving because there was nothing around Ann Arbor to facilitate and help them,” said Krutko, also citing the importance of density and amenities. “But today, we have a 30,000-square-foot facility to help them get started, and 240 companies that employ 3,000 employees in our portfolio. And hopefully, when they move, it will be to a local commercial real estate.”
Parallel to that point, the IASPAI took heed of a study conducted by Bruce Katz, a Centennial Scholar at The Brookings Institute, which delved into how parts of communities were resurrected with multi-use environments. Krutko pointed out that “began to happen independent of science parks. It revealed that companies wanted young talent, they had to cater to that talent when they wanted a dynamic, urban environment with ample amenities,” for example, in one market, an outdated space became a haven to food trucks.
It’s a different day and age, with a different workforce, that fueled that movement. “Today, understand that Gen Xers, Millennials and post-Millennials are not attracted by the environment. About two-thirds of the workers in these categories are more focused on picking where they want to work,” he said. “They believe in their talents and go to a place they like to find a job.”
The most important trend with the science parks globally, Krutko stated, “is their need to evolve to (and reflect the needs of) companies as they attract talent to work in their firms. That type of approach has led to a vacancy rate in Ann Arbor of less than two percent.”
That’s the kind of low number stakeholders want to see, since they don’t want to assist these companies as they gain traction, only to see them bolt. “That means the role of economic development is to develop ‘sticky know-how,’” said Weddle, “which is creating interdependencies based on a tacit knowledge that isn’t physical, but institutional. That makes an area harder for companies to leave.”
That success is also critical because stakeholders in science parks “work hard to get greater visibility,” said Bob Hess, vice chairman of Newmark Knight Frank Global Corporate Services, New York. “They can get left off the radar because the site selectors are marketed by economic development organizations that work within a larger radius.”
“Also,” said Hess, “[science and tech] parks are owned by different stakeholders, like universities and consortiums, which have a certain vision and don’t always react as quickly to site selectors who are apt to be looking for a faster deal.”
Overshadowing what’s happening in the science and tech park market is, of course, what’s overshadowing the world − COVID-19 − “and no one knows what’s going to happen,” said Brian Darmody, CEO of the Association of University Research Parks (AURP), from the organization’s East Coast office at WeWork’s College Park, Maryland located in the University of Maryland Discovery District.
With AURP’s 35th anniversary approaching, the current state of the world had Darmody in a reflective mood.
“All told, 35 years is a short amount of time,” he said. “When science parks first launched in the 1950s, they were sterile, low-rise buildings, with parking lots. There was nothing inviting about them; today, they almost all have various amenities, thus have become integrated into universities, with features like housing and child care centers. And know that not all of the workers in research parks are Ph.D.s, so there is a need for workforce housing on site and in the surrounding area.”
Like all of us, he is hoping that COVID-19 eventually ends up representing more of a blip on the timeline of history and does not cause fundamental changes to how the industry operates, especially when, at its heart, it is about collaboration.
“People need to engage,” Darmody said, “but will so many people like working at home that we don’t need as much office space?” Hess added, “Granting people personal space has turned out to be at a premium. How might the banks feel about lower demand for office space when it comes time for financing? And know that AURP has members in 13 countries; we need to continue those relationships more than ever. Science is inherently international.”
While those concerns are real, there are new tangents to contemplate, too.
“Today, even hospitals are getting into the game,” he said, pointing to Washington’s Children’s National Hospital, which will open an innovation district in the former campus of Walter Reed Army Medical Center, located in D.C.’s Northwest quadrant, with the unveiling of JLABS, a pediatric innovation center with Johnson & Johnson.
“The point is science and tech operations are more often built into already integrated areas and bolstering the economic punch,” Darmody said. “And know that there are many biotech companies looking to solve that very problem of integration while the tenants in the park work on great things like new vaccines.”
That kind of boost is more important than ever. COVID-19 will affect our members in various ways, regarding financing, expansion, etc., worldwide. There are research parks in every country, many aligned with universities, some not; there are more private sector parks here in the U.S., though many coordinate with federal concerns.
One new example is Percontee Global Life Science Development Corportion, which is building a seven-million-square-foot commercial development with 5,000 residential units also in the Silver Spring area, adjacent to the Food & Drug Administration (FDA) headquarters, and a new Adventist Healthcare Washington Adventist Hospital, VIVA White Oak.
“Since all news drugs and devices have to go through FDA approval,” said Darmody, “imagine the interest of biotech and pharmaceutical companies to be able to do vaccine work next to FDA headquarters.”
Odenton, Maryland-based Mark R. Smith joined Expansion Solutions after having written about site selection among the vast number of topics he has covered in the business universe. That part of his career began in 1993 when he joined The Daily Record, a Baltimore business and legal publication, where he delved into the worlds of economic development and commercial real estate, among numerous other industries; in 2003, he was named editor-in-chief of The Business Monthly, another Maryland publication that covers the scene in the Baltimore-Washington Corridor counties.
Concurrently, he’s written at length about the film and video industry for a variety of publications, and about his other loves, including music, sports and leisure.