Incyte, a global biopharmaceutical company specializing in drug discovery in the fields of oncology, dermatology and other applications has more than 2,000 employees worldwide. And the company’s Wilmington, Delaware campus has close to 1000 employees. Recently, Incyte dedicated an expansion on the campus with a building for chemistry, technical and development operations staff. The pandemic did not get in the way of the project staying on track; Paula Swain, Executive Vice President at Incyte, attributes this to ease of access to the decision makers in Delaware. “Because of Delaware’s size, it’s easier to get things done, and state officials work with you long after the operation is set up,” explained Swain.
But access is just one of the elements that make Delaware such an attractive location for both businesses and talent. Others include the state’s tax favorability, its history and support of innovation – which began more than 200 years ago with the founding of the DuPont company in Delaware. A concentrated focus on economic growth, access and development of talent, and an excellent quality of life complete Delaware’s value proposition.
Delaware Ranks #1 in the U.S. for Most Favorable Tax Climate in the Manufacturing Sector
In the 2021 Location Matters report, which KPMG completes in concert with The Tax Foundation, Delaware ranks among the top three states nationwide for business tax favorability. The report assesses the corporate tax burden in two categories of cities – major and mid-sized – across the United States. The survey includes the wide range of taxes that impact businesses including property tax, income tax, sales tax and others. The comprehensive study compared the full tax burden faced by businesses in all 50 states, and Delaware ranks #3 for most favorable corporate tax climate in the U.S.
Additional key findings from the nationwide survey include:
- Delaware ranks #2 for overall corporate tax favorability for new firms.
- Delaware ranks #3 for overall corporate tax favorability for mature firms.
- Delaware ranks #1 nationwide for tax favorability in the manufacturing sector.
A Booming Life Sciences Sector
Recently, Delaware Prosperity Partnership – the statewide economic development resource – has seen a significant increase in interest from life science enterprises eyeing Delaware. In Delaware, the sector has seen a 65 percent increase in the number of new biotechnology R&D companies formed over the last 10 years. Delaware also ranks 7th nationally for life sciences venture capital funding per capita. Last year, WuXi STA chose Delaware for its first East Coast manufacturing campus. Situated on 190 acres in Middletown, Delaware, the project is one of the largest Delaware has seen and will add high-quality jobs as the campus is being constructed.
A comprehensive report on the Delaware life sciences vividly demonstrates the sector’s strength and recent growth, with 11,000 jobs in the field and an annual economic impact of $2 billion in GDP. Released by Delaware Prosperity Partnership and the Delaware Bioscience Association in September 2021, “Life Sciences in Delaware: Momentum and Opportunity” is the first comprehensive assessment of the breadth, depth and potential of the Delaware life sciences landscape.
The report analyzed five industry subsectors: pharmaceuticals and therapeutics; research and development, testing and medical laboratories; agricultural and industrial biosciences; medical devices and equipment; and supply and distribution. These subsectors capture the full spectrum of bioscience activity in the state across private sector companies, higher education and nonprofit research institutions.
Statewide Investment in Lab-Based Businesses
To ensure that early-stage life science companies not only start in Delaware but stay and grow in the state, the Delaware Legislature created a new Graduated (Advanced) Lab Grant Program and fueled it with $10 million in capital for 2022.
The fund has already supported six, early-stage life science companies and is getting even more attention in 2022. The Lab Grant Program is especially focused on companies poised to commercialize their products.
“Access to capital can present a barrier to growth as most companies in this phase of growth are focused on using their resources to get their product to market versus investing in facilities,” says Delaware Prosperity Partnership Business Development Vice President Becky Harrington.
Delaware offers grants that cover up to 33 percent of fit-out costs for lab space, with the understanding that the property owner agrees to make good-faith efforts to fill the space with lab tenants if the original user outgrows it or has another reason for moving. In the event those efforts aren’t successful, the state will provide the building owner with a portion of the lost rent as a stop-gap measure. To date, six companies have chosen to grow in Delaware with Lab Grant support.
Statewide Investment in Site Development
Another new funding source Delaware has launched is designed to ensure the state is nimble in its response to businesses considering Delaware. The Site Readiness Fund was created to support development or redevelopment of commercial and industrial sites across the state to, in turn, spur economic growth and new business investment.
“The Site Readiness Fund,” says Governor John Carney, “ensures that properties can be quickly converted to meet the needs of employers who will create quality jobs for Delawareans.”
The fund provides grants, loans or other economic assistance to qualified businesses or local governments that invest in constructing, renovating, or improving commercial, industrial sites that are readily available to new businesses, established businesses that are considering moving to the state, or existing businesses within the state that need additional sites to remain or expand in Delaware. To date $6.2 million has been awarded to eight projects.
Chief among the project awards so far is the $1 million received by Chestnut Run Innovation and Science Park. The former DuPont site has been transformed into campus that combines research, advanced manufacturing operations and business incubation while cultivating relationships with local universities. The Site Readiness Fund support Chestnut Run received will be used for improvement of site lighting, utilities, paving, concrete and selective building demolition.
A Diverse and Robust Talent Pipeline
Delaware draws on a world-class talent pool in the statewide and regional labor market across industries. In the sciences, for example, nearly 30 percent of all biochemists and biophysicists in the United States and one in six U.S. pharmaceutical employees works in Delaware’s region.
7Growth in federal funding has accelerated research and development activity – and created a growing R&D workforce. Since 2000, Delaware’s R&D funding from the National Institutes of Health has more than doubled, and the state is among the top three recipients per capita of funding from the NIH Institutional Development Award (IDeA) program. The National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL), headquartered at the University of Delaware, recently opened a $156 million center for R&D and biopharmaceutical workforce training and, in July, received another $153 million in federal grants.
Delaware also is home to an increasing, wide range of degree and training programs. The number of degrees in the life sciences disciplines awarded by Delaware institutions has grown by 64 percent since 2010. And its Department of Education-sponsored training programs are growing in both participation and success.
Quality of Life Tips the Scales
Tax benefits aren’t just for businesses in Delaware – and they only tell part of the story. With no sales tax, the 6th lowest property taxes in the country, and a highly competitive cost-of-living – more and more professionals are choosing Delaware. The 2020 Census Data shows the state has outpaced other Northeast corridor regions with the fastest growing population in in the Northeast and Mid-Atlantic regions in ten years.
What’s more, Delaware features an unusual blend of residential choices, from city living to small-town America to beach life along some of the best sands on the Northeast corridor: Bethany Beach and Rehoboth Beach rank among the top 21 East Coast beaches to visit, according to U.S. News and World Report. Delaware is also known for its award-winning schools, nationally-ranked healthcare systems, diverse range of recreation options and a welcoming “state of neighbors.”