National Biotechnology Conference Highlights: The "Florida Model" For Economic Development
I don't know if Richard Florida was at the 2006 annual BIO conference in Chicago in April, but he was all over the exhibit hall. In the world's largest trade show for the Biotechnology Industrial Organization (BIO), dozens of economic development agencies spent hundreds of thousands of dollars trying to lure biotech and pharmaceutical firms to their communities. Almost all the American-based agencies heeded Florida's advice in The Rise of the Creative Class. They promoted their labor pool, technological capabilities, and quality-of-life amenities -- culture, diversity, and recreation -- more than they did tax breaks and fast permitting.
The agencies at the conference demonstrated what we planners always suspected -- good quality-of-life planning is good economic development. The conference also provided a lesson for new and frustrated economic development (ED) professionals -- you might be better off practicing listening skills than econometrics.
It's not surprising that more than a dozen governors and foreign officials visited BIO. The conference, which attracted more than 19,000 attendees and 1,700 sponsoring exhibitors, is the best shot for ED professionals to make their pitch to the life sciences industry. Biotechnology is a dream industry for economic development and urban planning. Average wages center around $60,000. The industry targets the kind of consumers, retailers, and services businesses love to chase -- those with lots of per-capita discretionary income. Since higher-income and educated households tend to have fewer children, they also put less pressure on government services.
But the conference is also expensive. An agency could spend $30,000 to $40,000 to rent, staff and maintain a 100-square-foot booth for three days. (Some states had "pavilions" that were probably the size of your first apartment -- some with more than one story.) If you've got one shot, you better have a good game plan. For most ED professionals, Richard Florida seemed to be their coach.
The Florida Model
In his groundbreaking analysis, Florida identified three key approaches successfully employed by regions to attract "knowledge economy" industries -- talent, technology, and tolerance. Talent -- having a good supply of college-educated residents (and preferably institutions of higher education). Technology -- having the right kind of infrastructure (fast Internet access can be as important as quick highway access). Tolerance -- having a community that is welcoming to diverse populations (while the ED agencies did not promote tolerance directly, they did emphasize "culture" and "urban" living -- which are normally associated with diversity).
When I first went to the BIO conference in 2003, I saw a lot of exhibitors use the Richard Florida playbook. But Rise of the Creative Class had been published in 2002, and I thought it was just another economic development fad. Three years later, even more exhibitors were using the Florida model.
Take Oklahoma. What do you think of that state? Cowboys in wide-open prairies? Fanatical football fans? Ranches and empty roads? Oklahoma City would like you to think of an urban, and urbane, center. Skyscrapers and scientists, not cows and prairie dogs, adorned the cover of its marketing package at BIO. Other regions touted golf courses or other lifestyle amenities not necessarily good for business, but undoubtedly great for living.
Challenges To Economic Development Through Biotech
Communities that want to attract biotechnology businesses should know that there are some physical, zoning, economic, and cultural challenges. Land use issues generate one Catch-22 situation, for example. Research and development companies want the flexibility, space, and rents associated with light industrial facilities. Like all businesses, they also want easy access to labor and resources -- which is often provided by colleges and universities. In turn, as higher education institutions around the country become more welcoming to their neighbors, they attract more residents. This means that more land gets zoned and developed for residential and commercial properties that are too small or restrictive to meet the needs of biotech industries. Communities thus face the challenges of land banking (that is, delaying development while waiting for better market conditions, which makes a neighborhood less attractive) or using eminent domain to assemble properties. Plus, colleges and universities tend to be nonprofit or governmental institutions, meaning that communities are losing out on uses that might pay higher taxes.
Embracing diversity also isn't easy. There's a lot that economic development professionals can do, but it has to be more than organizing ethnic festivals and showing glossy pictures of people of color. The best way for planners and economic development professionals to encourage tolerance is to work with those institutions that directly influence social norms and customs -- schools, religious institutions, and community-based organizations. While planning can help stakeholders be more open to new ways of thinking, most planning professionals don't have the kind of relationships with stakeholders that are needed to change prejudices about "others" and "diversity".
The nuances of the city-biotech company relationship also play a major role in the success of economic development efforts. Of course, the old economic development standbys were promoted -- like tax incentives, expedited permitting, and infrastructure. But the economic development professionals also lured industries with local quality-of-life benefits and the presence of research centers. To build a successful relationship, cities and companies can't just tell each other what they want; they have to listen to each other, and show that they care about each other's interests. At first, I had been surprised to see so many comfortable chairs and couches in the economic development exhibits. But the furniture and conference room settings were there to help the ED professionals build relationships with the industry heads they were trying to lure. I don't know what was being said in these meetings, but I'm pretty confident the professionals weren't just explaining business characteristics and demographics. In nonprofit management, the general rule is that you have to "friendraise before you fundraise", because people give to people before they give to causes.
A planner for a California city that has been adding more biotech told me about what might be called a "zipper" strategy of relationship-building. City officials and staffers at virtually every level build relationships with their industry counterparts. So the mayor talks to the chief executive officer, the city planner talks with the company's corporate planner, and so on. In a neighboring community, the planner said, the mayor may build a good working relationship with a top corporate officer, but staff members might be seen as difficult to work with. So the company gets mixed messages, which in economic terms means increased risk.
Only a limited number of regions can reasonably hope to attract a significant investment from the biotechnology industry. But the benefit of the Florida quality of life model over the traditional tax break strategy is that even if a community doesn't lure biotech, the community retains the kind of amenities that will benefit its residents for generations and make it more attractive to other types of "creative" professionals and economic development.
Leonardo Vazquez, AICP/PP, is an Instructor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University of New Jersey. He is the Director of Bloustein Online Continuing Education for Planners and The Leading Institute.
The 14th Annual International Convention of the Biotechnology Industry Organization took place from April 9 to April 12 in Chicago.