Scripps Research Institute in Palm Beach, FL

By Stefanie Ramsperger and Jack Rogers
From the March/April 2013 issue

The recovery in the biotech sector appears to be solidifying. According to the most recent biotechnology report published by Ernst & Young, the sales in established biotech markets grew more than 10 percent in 2012. This threshold hasn’t been crossed since the outbreak of the worldwide financial crisis. Expenditures for research and development significantly increased by 9 percent.

About $33.4 billion in venture capital was raised in the sector. However, mostly big enterprises profited from this inflow whereas small- and medium-sized companies still have to suffer from a depletion of seed money since the Recession. In contrast to the U.S., financing in Europe has not regained the levels seen prior to the financial crisis. A retreat in the public markets in 2011 resulted in overall financing levels that are back to those seen in 2008, reflecting the continuing struggles of the Eurozone countries over the sovereign debt of some member countries.

While the biotechnology sectors of Eurozone countries are relatively small, the uncertainty has driven investors across the continent to seek lower risk. One bright spot is that, similar to the U.S., Europe has seen venture capital hold relatively steady. Across Europe, there were 56 venture rounds of greater than $5 million (down from 65 in 2010). The most significant venture capital transactions included $39 million raised by Symphogen (Denmark), $99 million raised by Biocartis (Switzerland) and $96 million raised by Circassia (United Kingdom). Biotech accounts for approximately 15 percent of total venture capital investment across Europe, a slightly higher percentage than in the U.S. in 2011.

In Europe the list of commercial leaders—Actelion, Elan Corp., Eurofins Scientific, Ipsen, Meda, Novozymes, Qiagen and Shire—has not changed since 2007. In 2011, the revenues of these commercial leaders increased by 19 percent, while those of the other companies decreased by an identical percentage. The same pattern was repeated across all the major indicators, with the health of a few large companies increasing as the rest of the industry saw its performance worsen.

In this year’s Global Biotech Report, we zero in on several locations in Europe that are well-positioned for future success, including three biotech hubs in Germany and key biotech/ pharma centers in Austria, Belgium and Luxembourg that have strengthened their competitive position in the global market in recent years. As always, we also take a fresh look at the leading biotech and pharmaceutical hubs in the U.S.

Hessen Keeps Getting Bigger In Biotech/Pharma

Biotech is among the most important sectors of the Hessen region and this sector is growing every year. With Frankfurt recognized as the financial capital of Germany, the area is well known for its excellence in the service sector. However, the region also excels in manufacturing industries, and it is Germany’s logistics gateway to the world.

More than 19,500 people are employed in the biotech/pharma sector in Hessen. The area has 225 biotech companies (of which 59 are core biotech concerns), and 14 percent of these employ at least 500 people. In the last decade, Hessian biotech companies have more than doubled their revenues to over 5.2 billion Euros.

The strength of Hessen’s biotech sector are a multitude of R&D programs, its number of industry patents and its domination in the medical sector of biotechnology—known as “red” biotech, accounting for 81 percent of all Hessian biotech revenues (according to the latest Location Study Hessen-Biotech, which was commissioned by Hessen’s location marketing organization, Hessen Trade and Invest GmbH). However, industrial biotechnology (“white” biotechnology) is on the rise. About 56 percent of all biotech companies in Hessen have their own R&D programs.

White biotechnology is located at the interfaces of chemistry, biology and the engineering sciences. “It uses microorganisms and enzymes to create new substances and processes for the purpose of producing innovation for many different user sectors, for example amino acids, vitamins and aromas for the food industries,” explains Dr. Thomas Niemann, Director Technology and Future at Hessen Trade and Invest GmbH.

The biotech/pharma activities in Hessen center around two clusters: one is located in Central Hessen, the other is in the southern part of the State. Hessen is a stronghold in biotech production. Out of a total capacity of more than 830,000 liters of fermentation production in the manufacture of “red” biotech in Germany, more than 250,000 liters are attributed to Hessen. Production takes place in Frankfurt (sanofi-aventis), Marburg (Novartis- Behring), and Hanau (Heraeus).

Höchst Industrial Park in Frankfurt is one of Europe’s largest chemical and pharmaceutical parks and looks back to almost 150 years of chemistry tradition. Just in 2012, tenants invested 310 Million Euros, bringing the total to about 5.5 Billion Euros since 2000. Höchst hosts 90 on-site companies, among them sanofi-aventis, Bayer CropScience, Clariant and Celanese. Researchers, manufacturers, customers and service providers come together at the site and cooperate in terms of raw materials and infrastructure. They also join forces with regard to future-oriented technologies, because the Industrial Park embodies a wealth of research and production know-how. Site operator Infraserv Höchst offers services with regards to secondary processes; for example, they provide the companies with raw materials on-site, do the facility management and run site security. New companies can also rely on their patent lawyers, engineering consultants and other personnel services, which decreases their starting cost.

Hessen has five universities and five Schools of Applied Sciences that cooperate with biotech companies. Hessen is particularly strong in the field of Medical Technology. It comprises a total of 900 medical tech companies, which employ more than 20,000 people. Many of them are located at Höchst Industrial Park. According to Dr. Niemann, “one-third of the German production capacity of biotechnological medicine is centered in Hessen.”

Recently, the importance of “white” (industrial) has increased in the area. The Cluster Initiative Integrated Biotechnology (CIB) in Frankfurt supports networking in this field. The cluster was one of the winners of the “BioIndustry 2021” contest held by the Federal Ministry of Research. The Hessian state government also has set up a state initiative for the Development of Scientific and Economic Excellence (LOEWE) with the aim of providing long-term support for the research landscape. “This especially includes new ideas in Industrial Biotechnology,” says Niemann. “In Hessen, funds of more than 32 million Euros are made available for Industrial Biotechnology.”

Another promising biotech field is “personalized medicine.” CI3 is a network in Hessen to advance individualized immune intervention. It has been selected as one of Germany’s leading edge clusters in 2012 and has thus been awarded 40 million Euros by the German government. “Research in this field is very promising,” confirms Niemann. “The cluster, that is supported by the states of Hessen, Rhineland-Palatinate and Baden-Wurttemberg and has 120 member-institutions, is on its way to the very top.”

The cluster CI3 works on innovative medicine that is exactly adjusted to the individual patient, who suffers, for example, from tumors or autoimmune diseases. The center of the cluster is based in Mainz. The idea of the cluster is that companies and research facilities will work in partnerships on 78 different projects. The project partners estimate a total volume of approximately 130 million Euros.

“Universities, other research facilities, small and medium-sized companies as well as international players in the field—we have the whole value chain in Hessen,” says Thomas Niemann. Among the project partners are, for example, the technical university Darmstadt, Goethe University Frankfurt, the Paul-Ehrlich-Institution, Georg-Speyer-Haus, Abbott, Biotest, sanofi-aventis and Merck.

Berlin: Biotech Mega-Hub

The Berlin-Brandenburg region concentrates on clinical research. In the capital of Germany, biotechnology is a strong force driving innovation and growth, interfacing with the pharmaceutical, diagnostics and medical technology sectors. Berlin-Brandenburg has a versatile research and clinical landscape. HealthCapital, the cluster management of the region’s healthcare industries, was implemented in 2010. Its goal is to coordinate companies, research and education institutes to foster collaboration and innovation.

Among the focus areas of Berlin-Brandenburg are biomedicine and diagnostics, therapeutics and regenerative medicine and industrial biotechnology. Berlin-Brandenburg is home to more than 200 biotech companies. The sector employs more than 4,000 people. In addition, pharmaceutical and medtech companies in the area have another 10,000 employees each.

Like Munich, Berlin is a top location for start-ups. In 2012, Berlin was ranked the top start-up region in Germany by Foreign Direct Investment magazine. The region offers foreign companies reimbursement grants of up to 50 percent. Berlin is not only home of various start ups, but existing bioscience companies are expanding in the area. In 2012, Takeda made Berlin its distribution headquarters. The Japanese pharmaceutical company is Berlin’s most recent arrival, having relocated its distribution unit from Aachen and Konstanz to Berlin.

Also, sanofi-aventis and B. Braun Melsungen made large investments to expand their existing locations in Berlin. B. Braun Melsungen had their roofing ceremony in January 2013. The 38.2 million Euro expansion project increases the size of the production site by 65 percent. Injectable solutions in plastic containers will be manufactured there. The building will probably be completed by October 2013. Production lines will be installed in 2014. B. Braun Melsungen expects to create 25 new jobs by 2015.

In the past five years, B. Braun Melsungen already had invested 40 Million Euros in Berlin for expansion projects. 670 employees already work for the company in Berlin. In total, the business has three sites in Germany’s capital.

Among other major global corporations that are located in the capital region are Bayer Pharma AG, Berlin-Chemie AG, Pfizer Deutschland and sanofi-aventis. In the past years, sales revenues of more than 5 billion Euros were generated by pharmaceutical products of 24 Berlin-based pharma companies. Together, they employ 10,000 people in the area.

Among a variety of research institutes in Berlin that focus on Life Sciences are four Max Planck institutes, two Fraunhofer institutes, Leibniz institutes and Helmholtz centers, five universities and four universities of the Applied Sciences.

The Berlin Institute of Health (BIH) was founded in November 2012. On this occasion, Professor Walter Rosenthal, chairman of the board and scientific director of the Max Delbück Center for Molecular Medicine Berlin Buch, said: “The founding of the Berlin Institute of Health is a unique opportunity for the German science landscape to restructure the collaboration between a non-university research institution and a university medical center in the field of basic and clinical research.” The BIH will be established in 2015 by the state of Berlin as a public corporation and it will combine the research of the Charité and the MDC, one of 18 research institutions of the Helmholtz Association. The MDC employs more than 1,600 people from 57 countries and works with a budget of more than 70 million Euros per year. The goal is that the cooperative venture with the Charité will harness the strengths and expertise of both partners and significantly advance health research not only in Germany but also on an international level. It will focus on an interdisciplinary approach. For research of the BIH in the coming years, extensive technology platforms are being setup.

“Based on its excellence in interdisciplinary and transnational cooperation, the cluster HealthCapital Berlin- Brandenburg is generating innovations which are to benefit patients as soon as possible,” says director BioTOP Berlin-Brandenburg and cluster manager HealthCapital, Dr. Kai Bindseil. “The application spectrum for biotechnology is constantly increasing. While biotech has concentrated on developing new medicine and diagnostics in recent years, we are now moving on to new markets due to intelligent interconnections with branches like information and communication technology.”

To enforce cooperation at the interface of biotech and IT, Berlin brings together IT and biotech science and industry to develop interdisciplinary projects for innovative IT-supported healthcare. One example is the project “IT-Future of Medicine (ITFoM). The Max Planck Institute for Molecular Genetics is leading in the project. 60 institutions and companies have joined forces to develop computer models by which personalized “virtual patients” will be derived from the molecular, physiological, anatomic and environmental data of every individual patient. The goal is to develop optimal concepts with minimal side effects.

Public support remains an important factor for financing new products because only few companies have access to venture capital funding. A study by Fleischhauer, Hoyer & Partner has shown that venture capital has increased compared to the crises. With 70 million Euros most of the money was invested in biotech. Investments in medtech were also high with 66 million Euros. The study shows that the Berlin-Brandenburg area ranks third (Bavaria and North Rhine-Westphalia rank first and second) in regional distribution of all investment. According to the latest BioTOP Report, public funds worth up to 42 million Euros are provided by the federal states for fixed-asset investments and new product developments. The leverage effect generated a further 45 million in private investment. The federal government and the European Union provide additional double-figure million Euro funding.

For start-ups, the High-Tech Gründerfonds (HTGF), leading investor in innovative start-ups, has created a new fund worth more than 300 million Euros. Among the investors are Altana, BASF and Robert Bosch.

From Invention To Innovation In Bavaria

“Success through synergies” is the motto of the Bavarian cluster initiatives. To assist entrepreneurs in the starting up and expanding of biotech, Bavaria has set up three agencies under the cluster Biotechnology Bavaria: BioM is responsible for greater Munich, BioMed Würzburg is located in the north of Bavaria and BioPark Regensburg GmbH is responsible for biotech in the core of the state. Bavaria is home to over 320 biotech and pharmaceutical companies.

The cluster in the greater Munich area is home to around 200 companies. 19,000 employees work in the Munich Biotech region. With two universities, two universities of Applied Sciences, the Max Planck Institute of Biochemistry, Neurobiology and Psychiatry and the Helmholtz Research Center for Environmental Health, the region offers an excellent environment for innovation. These institutes include, for example, the Center for Nanosciences, which is one of the world’s leaders in the development and application of nanobiologies. The Life Sciences Campus in Martinsried forms the core of Munich’s Biotech region. The agency “Invest in Bavaria” states: “The campus is home to nearly half of the region’s Biotechs.”

IZB – Biotech Incubator Martinsried Bavaria

The focus of this area is on “red biotechnology,” particularly on diagnostics and therapeutics. The region is dominated by small and medium-sized companies, but eight corporations are listed on the stock exchange, among them MorphoSys.

Freising, located just a few minutes north of Munich, is home of the Weihenstephan campus. It is one of Europe’s major centers of green biotechnologies and has its own incubation center.

In 2012, BioM announced that the Bavarian Ministry of Economics granted four groups of young academics in the field of biosystems research. The subsidies by the state mount up to 1.5 million Euros for each team of young academics. The duration for the grant is five years. This lays the cornerstone for a new research network in the field of molecular biosystems (BioSysNet) that is being established within the framework of a new strategy called “Aufbruch Bayern.” The four young academics that lead the research groups have previously worked in Italy, the Netherlands, Switzerland and in the U.S. The goal of BioSysNet is to further strengthen Bavaria’s competitive situation in molecular biosystems.

BioSysNet is part of a Bavarian research center for molecular biosystems and thus profits from the subsidies by the Ministry of Science, Research and Arts and is being supported by “Aufbruch Bayern.” The total subsidies amount to 18.1 million Euros.

Bavaria’s north attracts entrepreneurs in the field of biotechnology and medical technology with its Innovation and Start-up Center for Biotechnology and Biomedicine. The Würzburg region is the largest entrepreneurship center in the district of Lower Franconia. The project “Life Sciences in Würzburg” has been established to provide consultancy services and to promote start-ups.

A third hub for biotechnology in Bavaria is in the middle of the state, in Regensburg. Back in 1998 the BioPark Regensburg GmbH was founded. The industrial park was supported by the State of Bavaria and built directly on the university campus at a total cost of 42 million Euros. The park has been expanded in 2001, 2006 and 2011 and now offers 18,000 square meters of laboratory, office and storage space for companies and institutes. Currently, 36 leaseholders and 550 employees have chosen the BioPark. The Regensburg region is home of 47 companies with more than 3,145 employees, 900 of them working in the core area of biotechnology. This makes the Regensburg area the second top biotech region in Bavaria.

The specialties of the university of Applied Sciences in Regensburg are fluorescent bioanalytics, molecular diagnostics, biofunctional surfaces, sensors and applied biomedicine.

In January, BioPark Regensburg GmbH announced that a new center for biomedical engineering will be established in the area. The “Regensburg Center of Biomedical Engineering” (RCBE) will move into interdisciplinary lab facilities in Regensburg’s BioPark. The aim of the new center is to bundle biomedical, medical, IT and engineering competencies and make use of the interfaces.

It comes as no surprise that Regensburg bundles its competencies in interdisciplinary research. For four years the University of Applied Sciences in Regensburg has offered classes in “Medical Information Technology.” Since 2011, “Biomedical Engineering” is a course of studies. Graduates are qualified to work at the interface of medicine and IT, or engineering, respectively. The RCBE will now support and bundle research competencies in these fields. Its focus will be on biomechanics, e-health and equipment technology for medical engineering.

Collectively, companies in Bavaria have performed well in the past years. Employment figures rose slightly by two percent. Bavaria’s 166 small and medium-sized core biotech companies employed a record-setting 4,000-plus  people in the state. Since 2006, employment in these companies has grown by 30 percent. 126 of the 166 small and medium-sized companies are located in the greater Munich area. Core biotech companies account for 10,300 in Bavaria, a plus of 300 employees at Roche, Penzberg, which is remarkable. Adding pharma to this count brings employment in the sector to well over 20,000 people.

There were four newly established companies and among the most recent openings of international subsidiaries are three US-biotech companies and one Japanese pharmaceutical company. LabPMM, San Diego California, opened its German diagnostics Laboratory and Myriad Genetics, Salt Lake City, Utah, set up its central European laboratory in a new building in Martinsried.

Bavaria was countrywide the only state in the past year to attract foreign companies for greenfield development. Bavaria was able to chalk up about 70 million Euros of external biotech funding for Germany in 2011. Numbers for 2012 are not available yet, but it can be estimated that external funding will be higher after a rather meager year. At the same time, revenues of Bavarian biotech companies went up to a new record of more than 510 million Euros.

In 2010, the Munich Biotech Region along with Bavaria’s Medical Valley Nuremberg were winners of the Leading Edge Cluster competition by the German Federal Ministry of Education and Research. Until March 2015, the main research and development strategy for several projects in the Munich area will push personalized medicine. Like the cluster CI3 in Hessen which got the same award only two years later in 2012, the Federal Ministry of Education and Research contributes 40 million Euros for the cluster. The Munich Biotech region received another 60 million Euros by the Bavarian ministry and industry partners.

Next to this, a number of Bavarian biotech companies receive grants by the European Union for their research and development projects. One example is the EUROCALIN Consortium, which includes ten companies, for example Pieris AG in Freising. Over the last 15 years, Roche has invested more than 2 billion Euros for their location in Penzberg to develop and produce therapeutic proteins. In the last two years alone, they invested more than 350 million Euros in new plants for production of therapeutics and diagnostics in Penzberg.

Belgium: Beehive Of Biotech

In Belgium, Flanders has specialized in plant biotechnology, whereas Wallonia has focused on health biotechnologies and medical technologies. Most biotech companies in Belgium are located in the northern part of the country, Flanders. Approximately 17 percent of the companies are in the Capital region, and Wallonia is home to around 34 percent of the companies.

More than 15 percent of the European biopharmaceutical exports come from Belgium. The country is said to be the largest exporter in pharmaceutical goods. A quarter of the world’s vaccines are produced in Belgium. As the world’s second largest vaccine producer, the company GlaxoSmithKline (GSK Biologicals) in Rixensart, southeast of Brussels, contributes to a great deal to this. Approximately 30,000 people work in the biotech sector.

Biotech in the three parts of Belgium is organized in special associations. Flander’s association is called “FlandersBio,” the association in the Capital Region is called “Brussels Life Tech” and Wallonia’s association is “BioWin.” Flanders in the North looks back to a strong tradition of biotechnology that is centered around the university towns of Gent, Mechelen and Leuven. Flanders is home to more than 120 biotech companies, most of which belong to the health and green biotechnologies sectors.

Brussels is home to mostly young biotech companies. Although the region covers not even one percent of the country’s territory, it represents more than 15 percent of the biotech activity in Belgium. Most companies in the capital work in medical biotech.

The same holds true for companies in Wallonia. Since 2005, the regional government of Wallonia supports biotechnologies with the so-called “Marshall Plan.” Setting out from this action plan, the Walloon government has updated and optimized its priorities via a “Marshall Plan 2.Green.” It has been endowed with a budget of 2.75 billion Euros for the period 2009 to 2014. 1.15 billion Euros are alternative funding.

One of the most important regional clusters is the “BioWin” life science network. 27 research and development projects are being funded within the cluster. “BioWin is establishing Wallonia as a world leader in various areas of cutting-edge technology, such as biopharmacy, cell therapy, radiopharmacy, diagnostics, biotechnological products for research and industry, bioinformatics and the processing of complex data,” says Frédérick Druck, communication and international relations director at BioWin.

The cluster has 510 members with 116 businesses and around 80 percent of its members are small and medium-sized companies. 400 research units employ about 11,000 researchers from five academic centers of excellence. With 14,300 employees and a turnover of 4.4 billion Euros, the health sector is key to the economy of Wallonia.

Of the 27 projects that have been funded as a result of the Marshall Plan, five have been completed. Druck says: “In the coming years, we will create 1,200 new jobs.” He adds: “With the help of the cluster we have made a big step in excellence in technologies.” One outcome of this is that 51 patents connected to the projects have been submitted and seven new products have been launched on the market. “We see that five new businesses have been set up,” Druck adds. “Now that there is a network there is a real dynamic.”

Internationalization is key to BioWin in order to strengthen its global competitiveness. Therefore, WAL-Dx/BioWin, the Walloon in vitro diagnostic network and its partner, EuroMediag, the diagnostic cluster of EuroBioMed, the health cluster for the PACA and Languedoc-Roussillon regions (France) joined forces to create EDCA, the European Diagnostic Cluster Alliance. The network already includes nine clusters and represents 400 companies and 40 universities across Europe.

“It was also important for us to create new technological platforms,” Druck says. MaSTherCell, Wallonia’s first technological platform dedicated to the clinical and commercial production of cell therapy products for third parties is a case in point. Realized in 2011, it helped create 20 new jobs. By 2014, 35 jobs will be created and 50 new jobs are predicted by 2017.

“In Wallonia, the universities in Brussels, Charleroi and Liège are hotspots for research,” says Druck. In total, 14 universities and several other research facilities add to Belgium’s great research experience. Flanders and Wallonia have five universities each and four schools are located in the Brussels area. On a regular basis, Belgium’s universities rank among the top 25, according to the Academic Ranking of World Universities. Leuven University, for example, has specialized on medicine, cell biology and gene therapy. Gent University, by contrast, focuses on biomedicine and plant genetics. Hasselt University is known for its expertise in autoimmune diseases.

The financial situation for biotech companies in Belgium is favorable. “For the last eight months we note that very small companies have found 60 million Euros private capital at venture capital funds,” says Frédérick Druck. The website reports that Belgium is Europe’s leader with regard to venture capital.

One recent investment was made by the biopharmaceutical company Union Chimique Belge (UCB). The company inaugurated a new biotechnology pilot facility at the Braine-l’Alleud site of UCB in September 2012. The site operates a research and production facility employing 1,500 people. The biopharmaceutical facility was constructed with an investment of 65 million Euros. Approximately 100 new jobs will be created. With the opening of the pilot biotech center, UCB is gearing up to reinforce its biotech activity through industry and academia collaboration. It is among the first plants in Belgium to produce cell-culture-based therapeutic proteins. The plant is a milestone in the development of new biological medicines and molecular development.

Luxembourg: Europe’s Solid Rock

“[Luxembourg has] a solid foundation to generate future economic diversification and growth,” says Dr. Thomas Dentzer, Head of Life Sciences Sector Development and Luxembourg BioHealth cluster manager. As the competitiveness of a country is more and more dependent on effective innovation networks involving private and public sectors, Luxembourg has implemented various initiatives in order to strengthen the research and development and innovation potential of companies and to reinforce links with public research organizations and academia.

Luxembourg’s House of BioHealth

“The Luxembourg Cluster Initiative, launched by the Luxembourg government, actively encourages networking between the private and the public sectors,” explains Dentzer. Healthcare and biotechnology are among the key technologies that have been identified as being important for the future sustainable development of the Luxembourg economy. Luxembourg’s research and development and innovation policy brings together biotech with other networks, such as eco-innovation-technologies or IT.

The Luxembourg BioHealth Cluster brings together public and private stakeholders whose activities are related to health science and technologies in Luxembourg. “It aims to foster partnerships and collaborations that favor innovative projects, thereby reinforcing and capitalizing on the national strategy developed to achieve scientific excellence in molecular medicine,” says Dentzer.

Luxembourg is strong in biomedical research. “The trends in Luxembourg, also due to the focus on personalized medicine, are going in the direction of computational biology and bioinformatics, using the latest IT-solutions to investigate complex processes,” adds Dentzer. The medical field is taking advantage of Luxembourg’s IT infrastructure and its expertise in data security.

Among the most important research facilities in the Grand Duchy of Luxembourg are the Integrated BioBank of Luxembourg (IBBL), the Luxembourg Centre for Systems Biomedicine (LCSB) and, most recently, the House of Biohealth, a new life science incubator.

The mission of IBBL is to work with the people of Luxembourg to provide high quality specimens and data, catalyze partnerships and support research. To accomplish its aims IBBL will, for example, support the four priority research programs in the personalized medicine initiative (cancer, type 2 diabetes, Parkinson’s disease and normal population cohort). The LCSB, by contrast, is accelerating biomedical research by closing the link between systems biology and medical research. Neurodegenerative diseases like Parkinson’s disease, metabolomics and disease network analysis are in the focus of LCSB’s research.

Luxembourg’s most recent research facility is the House of Biohealth. The construction of the new life sciences incubator was officially launched in  November 2012 by the Secretary of Economy and Foreign Trade, Etienne Schneider. It aims to facilitate the transformation of research results into marketable products and services, and it is expected to receive its first tenants in the beginning of 2014. It will be built in the vicinity of the future city of sciences in Esch-Belval. Dentzer says: “This unique facility will offer office space as well as laboratories providing the necessary infrastructure for the creation and development of start-ups as well as already established companies in the fields of biotech, cleantech and ICT.” Within 10,000 square meters of laboratory space, the building is expected to host 500 to 700 researchers.

The building is a joint project of the Luxembourg Ministry of Economy and Foreign Trade, the ZARE Park for economic activities in Esch-sur-Alzette and private investors.

The Luxembourg government has developed financial aids for companies involved in research and development. The Ministry of Economy and Foreign Trade, for example, targets small enterprises or small private research organizations established in Luxembourg which were created less than six years before the aid is granted and which either will, in the foreseeable future, develop new products, processes or services, which involve a significant risk of technical or industrial failure or which have used at least 15 percent of their operating expenses for research and development over the least one of the three years preceding the granting of the aid, or over the current year. All of the enterprise’s expenses are eligible. This aid can only be awarded once and it cannot exceed one million Euros. Financial aids for new innovative businesses are, for example start-up loans or equipment loans offered by the Société Nationale de Crédit et d’Investissement. To support intellectual property rights, Luxembourg offers an 80 percent tax exemption to income from patents, trademarks, design, models and software copyrights or domain names. Capital gains generated on intellectual property will be exempt up to 80 percent. Plus, in 2009, net wealth tax was abolished on qualifying intellectual property.

Biotech company WaferGen Biosystems, Inc. set up its European headquarters in Luxembourg in 2010. The Luxembourg government provided the company with significant support towards increasing its research and development activities and raising its profile in Europe. WaferGen is working in partnership with the Integrated Biobank of Luxembourg and maintains offices in the business incubator Luxembourg Technoport. WaferGen is an emerging leader in the development, manufacture, and sale of state-of-the-art systems for genome analysis for the life science and pharmaceutical industries.

Another company that installed its European Headquarter in Luxembourg is Neo Medical Systems. The company collaborates with Luxinnovation and the BioHealth cluster. Founder Francois Scalais submitted a business plan to the 1,2,3,GO programme, which selected the company as a laureate in the 2012 round. With a prototype of a system that provides 3D laparoscopic images in operating rooms, Neo Medical Systems is currently preparing to participate in the Seed4Start initiative to bring in additional financing. Scalais explains: “Luxembourg is great for us.”

 Austria: Connecting East And West

The total revenue in biotech in Austria accounts for approximately 3 billion Euros. The vast majority is generated by only 36 large companies like Boehringer Ingelheim, Sandoz or Sanochemia that have 5,800 employees. In 2010, the research strength of these companies was as high as 107 percent. Innovation hubs are in Tirol, Upper Austria and Styria. The most important innovation hub for biotech, however, is Austria’s capital region, Vienna. Every second biotech company in Austria is based in Vienna.

The cluster LISAvienna connects more than 400 companies, 99 of which are core biotech companies, and 22 research facilities. 9,000 life scientists work in Vienna.

Austria is known for its research funding. In 2011, Austria raised the research rate/premium from eight to 10 percent for expenses in research and development. Companies that invest in innovation get the premium in cash.

“Two national funding agencies, AWS and FFG, fund pre-seed formations of companies with 200,000 Euros”, says Susanne Locker. She is a project manager in the LISAvienna cluster management. “AWS and FFG fund young high-tech-start-ups with one million Euro seed-financing.” The research funding company FFG supports innovative projects financially.

One central funding initiative is the Competence Center for Excellent Technologies (COMET). It aims to strengthen cooperation between industry and academia. During its run duration from 2006 to 2019, 1.5 billion Euros will be invested in industry-oriented research; a great part of this will go to life sciences.

One of Austria’s focus areas is cancer research. The competence center Oncotyrol in Innsbruck has a research volume of 37.5 million Euros until 2015. In 2012, the EU-project OPTATO was started to develop new strategies against an incurable bone marrow tumor. It has a research volume of four million Euros.

Also, the institute of molecular pathology (IMP) that is based at the Campus Vienna Biocenter, enjoys an excellent reputation. More than 200 researchers from all over the world work here. Boehringer Ingelheim invests more than 160 million Euros per year for cancer research in Vienna.

Among the most important research facilities next to IMP and Oncotyrol are the Austrian Institute of Technology (AIT), the Institute of Science and Technology Austria (IST Austria), the Austrian Center for Industrial Biotechnology (acib) and the Research Center Pharmaceutical Engineering (RCPE) in Graz.

The RCPE was founded in 2008 in the context of the funding program COMET. RCPE’s CEO Johannes Khinast says: “With our special research focus, corporations like Pfizer, GlaxoSmithKline, Roche, Novartis, sanofi-aventis, Bayer, AstraZeneca, Abbott or Merck like to partner with us. We work together with 10 renowned research facilities. There are only two comparable non-university research institutes in the world.”

In 2012, pharma-giant Baxter announced it will build a 30 million Euros production facility in Vienna. The company is planning to launch the operating site at the end of 2014. In 2011, Baxter invested approximately 47 million Euros in production sites in Austria. In 2012, the pharmaceutical corporation invested 100 million Euros. In total, the company employs 4,100 people in Austria. Baxter employs 900 people in Vienna and Orth in the field of research and development. Three out of four scientists who work for Baxter around the globe are thus based in Austria. The country is Baxter’s largest site in the world.

In 2012, Austria’s investment agency ABA was able to attract 201 foreign companies across all sectors to start their business or relocate to Austria. They invested 282.4 million Euros. 2,385 new jobs were created, which is an increase of 31 percent, compared to 2011.

One of 11 life science companies that invested in Austria in 2012 is biolitec AG. The German company develops medical laser systems and fiber optics. Biolitec CEO Dr. Wolfgang Neuberger says: “The infrastructure, funding options and flexible group taxation were crucial for our decision to relocate our headquarters to Vienna.”

Texas Biotech Out Of The Labs, Into The Market

In the U.S., the race is on to move promising biotech initiatives out of labs and into commercial production.

In the Lone Star State, a University of Texas spinoff company has pulled in $2 million to test a new technique for culturing non-embryonic stem cells. According to a regulatory filing, StemBioSys raised at least $2 million of a $3.5 million equity offering. CEO Dr. Steven Davis told the San Antonio Business Journal late last year (when the company began raising the round) that it would fund research projects to validate the quality of the stem cells generated by the company’s technology.

StemBioSys is developing XC-marrow ECM, a propriety three-dimensional culture for growing mesenchymal stem cells from bone marrow, adipose tissue and umbilical cord blood. These immature cells have multiple potential uses in research and therapeutics because they can self-renew and mature into a variety of cell types. Stem cell therapies are being studied as a repair mechanism for tissues all over the body, from the heart to the brain to the knees.

The company says its three-dimensional extracellular matrix can grow cells quicker than conventional media while retaining stem cell properties and may help overcome key obstacles in creating stem cell therapies. The technology was developed by Dr. Xiao-Dong Chen, an associate professor of medicine at the University of Texas Health Science Center and the company’s chief scientific officer, and licensed from UT.

Although it’s only available for research purposes now, this kind of technology could have therapeutic applications down the line. “If this research transfers successfully to clinical application in humans, we could establish personal stem cell banks,” Chen said. “We would collect a small number of older stem cells from patients, put those into our young microenvironment to rescue them–increasing their number and quality–then deliver them back into the patient.”

The company has struck a deal with GenCure, an affiliate of the nonprofit South Texas Blood & Tissue Center, to receive mononuclear cells from clinical grade umbilical-cord blood that it uses for R&D purposes. It was founded in 2010 in San Antonio, Texas and has received previous funding from the Texas Technology Development Center’s McDermott Pre-Seed Fund.

Currently, there are more than 160 Austin-area companies with over 8,200 employees operating in the areas of Biotech, Diagnostics, Medical Device, CRO/IRB, Pharma, Biosecurity and Agribio, among others. Texas is one of the leading biotech states in the country, with 3,400 companies and an estimated economic impact of $75 billion.

As relatively young industries in Austin, life science and biotechnology companies enjoy unique successes, with strong growth projected in the areas of biologics/biotech and medical device/diagnostics. Here’s a breakdown of the leading sectors:

• Medical device/diagnostics (40 percent)
• Biologics/biotech (20 percent)
• Contract Research Organizations (20 percent)
• Pharmaceuticals (10 percent)
• Other (11 percent)

Molecular Biotech Center Opens In Salt Lake City

The University of Utah has developed a well-deserved reputation for its research and business innovation, a reputation now enhanced by a new high-tech facility that could promises a financial return as well.

Leaders from the Utah Science Technology and Research Initiative in 2012 dedicated the James L. Sorenson Molecular Biotechnology Building—a $130-million, 208,000-square-foot research facility where scientists, physicians and engineers will collaborate to create new advances in the biotech field.

“The technology that is developed here is going to be a multidisciplinary …cross-pollination of ideas,” said Dinesh Patel, chairman of the USTAR Governing Authority, as reported by KSL.com. Located midway between the engineering and medical areas of campus, the new research building will facilitate increased interaction among faculty and student researchers,

Up to three additional buildings are planned to expand the university’s biotech center.

Financial support for the facility came from $100 million in state bonding and the balance from private donations, including $15 million from the Sorenson Legacy Foundation and $1.25 million from Micron Technology. Construction of the project began in April 2009 and was completed in December 2011. Tenants started moving in last month.

According to the KSL.com report, researchers at the new facility will have the ability to perform “dry” nano (fabrication) for silicon chips, etc., as well as “wet” nano—for use in biomedical devices. The facility also boasts precision equipment, including a $3 million confocal microscope for florescent imaging of cellular processes. Nanofabrication is the design and manufacture of devices with dimensions measured in nanometers. One nanometer is a millionth of a millimeter—less than the diameter of a human hair. The process is of interest to computer engineers because it could open the door to super-high-density microprocessors and memory chips that could one day store a data bit in a single atom.

Since its inception in 2007, USTAR has helped produce more than 300 invention disclosures and patent filings, along with 44 start-up companies or industry partnerships, according to a program statement.

USTAR collaborates with the University of Utah and Utah State University to create world-class research teams in strategic innovation development areas. Highly regarded faculty members, supported by teams of top researchers, lead the teams.

The infrastructure and multidisciplinary nature of the new Sorenson Molecular Biotechnology Building and at the related facility at Utah State University will likely help draw bigger research grants to Utah.

“To successfully win big federal and industry grants takes more complex, collaborative teams of researchers,” Patel told KSL.com. “The physical and intellectual infrastructure this building represents has already helped the U. of U. win a $20 million advanced materials grant.”

The new facility houses the Brain Institute, Nano Institute of Utah and Department of Bioengineering, according to USTAR spokesman Michael O’Malley.

Thus far, the USTAR program has recruited 32 principle researchers to Utah from such prestigious institutions as Harvard, MIT and UCLA. As of Dec. 2011, the researchers have generated nearly $80 million in grants since 2007, with more than $81 million in research proposals pending.

NBAF Bio-Defense Lab Moves Forward In Manhattan, KS

In Kansas, state leaders are celebrating recent progress in the region’s largest biotech project: the National Bio- and Agro-Defense Facility (NBAF), in Manhattan, KS.

The federal Department of Homeland Security signed a formal land transfer agreement with the state to move ahead with NBAF.

“While there is much more work to be done, signing of the land transfer agreement is a good step forward in securing the future health, wealth and security of our nation,” Gov. Sam Brownback said in a news release. “It demonstrates DHS’ continued commitment to completing the NBAF in Manhattan. Kansas stands ready to partner with DHS to move this important national security priority forward.”

Rendering of the National Bio- and Agro- Defense Facility in Kansas

DHS will acquire about 46 acres of land near the north end of Kansas State University for the lab. The transfer clears the way for construction to begin, and a groundbreaking later this year.

NBAF scientists will research animal and human diseases and develop cures and vaccines to counter them. According to the news release, DHS already has invested more than $125 million in the lab, which is expected to cost $650 million. The state has committed $105 million dollars of matching funds for the facility and $35 million dollars of research funding. The project is expected to have a $3.5 billion economic boon to the state in its first 20 years, including 757 construction jobs and 326 permanent positions.

NBAF researchers would study animal-related diseases—including foot-and-mouth disease, classical swine fever, African swine fever, Nipah virus, Japanese Encephalitis, Rift Valley fever and contagious bovine pleuropneuomonia—and develop vaccines and treatments. The facility would be run jointly by Homeland Security and the U.S. Department of Agriculture.

“This was the next step we have all been waiting for and moves us further down the construction timeline,” said U.S. Sen. Pat Roberts. “We will continue to monitor each step in the process to ensure NBAF remains a top national security priority.”

VC Funds Flowing Into Florida Bio Initiatives

The bioscience industry in Florida is on the rise in terms of new companies and venture capital flowing into businesses, according to BioFlorida, an industry trade organization.

Venture funding for the industry in 2012, for example, rose 19 percent over 2011, to $103.5 million, according to a BioFlorida release. That was the best year for venture capital in the industry since 2007. Plus, the amount of deals rose from 15 in 2011 to 19 in 2012.

The amount of biotech start-up companies in the sector is growing, too. BioFlorida reports that tally is up 13.5 percent since the first quarter of 2012.

The statewide data comes from a University of Florida Sid Martin Biotechnology Incubator report. “The new data is evidence of a strong, innovative and sustainable bioscience business climate here in Florida,” says David Day, assistant vice president of the University of Florida Office of Technology Licensing and the Sid Martin Biotechnology Incubator.

“Not only is Florida experiencing growth in the number of biotechnology businesses, we are also seeing a continued increase in venture capital investments—demonstration of investor confidence in our biotechnology start-ups and breakthrough research,” Day added.

Naples-based biotechnology firm Kirax is planning a new high-rise headquarters. “My goal is to continue to expand Kirax in Naples,” said Edmundo Muniz, president and CEO of Kirax, which develops pharmaceuticals, in an interview with the Naples Daily News. “You will see a big tall building in Naples with the word ‘Kirax’ across the top.”

Southwest Florida is playing catch-up with other regions of the state in developing a biotech cluster. Of the 219 biotechnology companies based in Florida, seven of them are located in Southwest Florida, according to Florida BioDatabase. That puts the region sixth out of the state’s eight regions in terms of numbers of biotech companies, tied with Northeast Florida and behind the Panhandle and Central Florida, according to the database.

Florida experienced a biotech boom from 2006 through 2011, with the number of companies growing by 42 percent compared to just 5 percent nationwide, the university’s Florida BioPulse report shows. More than 10 percent of the nation’s biotech companies call Florida home.

The report gives much of the credit to then-Gov. Jeb Bush, who pushed a controversial $310 million incentive package through the state Legislature to lure the Scripps Research Institute to Palm Beach County, which threw in another $187 million for the first phase of construction.

The institute specializes in biomedical research. It opened in 2009. Scripps “opened up the dam” for biotech in Florida, said Patti Breedlove, associate director of UF’s Sid Martin Biotechnology Incubator.

“That was a pivotal moment,” she said. “People stopped laughing about the possibilities of biotech in Florida.”

Getting Southwest Florida a larger share of the biotechnology pie isn’t “on our radar now,” said Michael Wynn, co-chairman of The Partnership for Collier’s Future Economy, an arm of the Greater Naples Chamber of Commerce.

He said he sees a “huge potential” for attracting biotechnology firms when the county is ready to redirect its focus there, citing the region’s quality of life and the plethora of CEOs that live here and whose connections with the biotech world could be tapped.

In Estero, Florida Gulf Coast University’s fledgling biotechnology program has graduated 40 students, and is setting its sights on creating a master’s and doctorate degree program, said Takashi Ueda, an associate professor of biology and the biotechnology program leader. A 241-acre research park, dubbed Innovation Hub, is planned to break ground at FGCU in early 2013 with a focus on renewable energy sources, including biotech.

Roche Breaks Ground On Indy Learning Center

Late last year, Indianapolis Mayor Greg Ballard joined Roche Diagnostics President and CEO Jack Phillips as well as other Roche executives and community leaders to break ground on the company’s new Learning and Development Center. The center is the first element of a $300 million site transformation investment that was announced in June 2012. The city of Indianapolis and the Indiana Economic Development Corporation offered Roche tax abatements, tax credits and training grants.

“Roche has been an important part of our life sciences heritage for nearly 50 years now, and this expansion signals an important commitment to the region,” said Ballard.

“Central Indiana has been our home since 1964 and we are here to stay,” said Jack Phillips, president and CEO of Roche Diagnostics, adding that the company’s history and growth in the region is due in part to the community’s outstanding workforce and partnerships with the state and city that have enhanced job creation.

The capital investments at Roche’s North American headquarters on the northeast side of Indianapolis will support the company’s growing diagnostics and diabetes care businesses.  The new Learning and Development Center will host the training of more than 1,500 customers from across the nation each year.

“As a key piece of our North American Headquarters, the new Learning and Development Center will serve as a hub and gateway for worldwide operations,” said Phillips. “We felt that it was important for the building to reflect our global influence, right here in Indianapolis.”

Mississippi Medical Center Unveils New Research Hub

Construction of a new research building, which will include space for start-up biotechnology companies, is commencing this year at University of Mississippi Medical Center in Fondren. UMC leaders plan to spend $35 million initially on the eight-story shell of the Cancer and Biomedical Science Research Center and plan to finish the ground, first and second-floor interiors of the 220,000 square-foot building. That work should take about 18 months. Contractors would complete additional floors as funds become available. “We have very limited amounts of research space right now,” said Dr. John Hall, UMMC associate vice chancellor for research. “This building will help us recruit scientists, expand our research centers and institutes, and develop the Biotechnology Research Park at UMMC.”

Biotech company incubator space will occupy about 25,000 square feet on one floor. That will mark the first phase of a long-term plan to construct the Mississippi Biotechnology Research Park. The building also will house laboratory animal facilities and UMMC Cancer Institute labs. Hall said administrators will survey space needs of departments and research centers. UMMC leaders put plans on hold last year for a Mississippi Biotechnology Research Park project at the old farmers market when Congress swore off federally targeted funds, known as earmarks. The project already had received nearly $20 million in federal earmarks, and UMMC had taken ownership of the farmer’s market property, located at West Street and Woodrow Wilson Avenue. With little likelihood of further federal support, administrators opted to include biotech incubator space in the Cancer and Biomedical Science Research Center, which allowed use of the $20 million for the on-campus building.

Frederick County, MD: U.S. Biotech Research Hub

Frederick County, Maryland, is the prime location for bioscience companies to establish and continue their dynamic success in a global marketplace. Already home to more than 70 cutting edge bioscience companies, Frederick County has the second largest cluster of bioscience companies in Maryland.

In fact, Maryland is home to the highest concentration of federal biotech research facilities, anchored by the National Institutes of Health (NIH). Taken together, Maryland’s bioscience research complex is conservatively estimated to represent nearly $8 billion in research and development expenditures annually, third in total size only to California and New Jersey. The state also has a leadership position in academic R&D per capita, led by Johns Hopkins University, the top recipient of NIH funding in the U.S.

MedImmune is completing work on its $600-million Frederick Manufacturing Center, which will employ 250; when it ramps up to full production the center is expected to be the largest bulk biotech manufacturing facility in the United States.

Frederick County’s burgeoning biotech cluster continues to expand exponentially. A good example is MedImmune, now part of AstraZeneca, which recently completed its $250-million, 337,000- square-foot Frederick Manufacturing Center, creating 200 new jobs and bringing total employment to 450. The Frederick facility will be one of the biggest bulk biotech manufacturing facilities in the country. The workforce at the $600-million facility is expected to double when the plant ramps up to full production. MedImmune also has expanded its headquarters complex in Gaithersburg, investing $200 million and increasing the lab staff to 600.

Qiagen, a Netherlands-based supplier of sample and assay technologies in the life sciences sector, expanded its North American headquarters and manufacturing center in Germantown. The $2-million, four-phase expansion is adding about 90 new jobs. Qiagen employs more than 3,500 globally, including nearly 700 across its three locations in Maryland at Germantown, Gaithersburg and Frederick.

Lonza Bioscience invested $26 million in an expansion of its cell production and office space in Walkersville, adding 80 employees bringing total employment to 480. Additionally, Life Technologies undertook a $5 million expansion of their life sciences manufacturing distribution center.

Many new and expanding bioscience companies choose Frederick County as their preferred business location for the following reasons:

• Business Friendly Environment
• No business personal property tax
• Competitive tax structure
• Fast Track permitting assistance
• Start-up companies benefit from a high-tech incubator at Frederick Innovative Technology Center

Recent bioscience expansions also include the Fort Detrick National Interagency Biodefense Campus; new laboratories and office for Interagency Biodefense R&D and new facilities at the SAIC-Frederick, Inc./National Cancer Institute.

Maryland Gov. Martin O’Malley is seeking to spur biotech development with his $100-million InvestMaryland program, which would provide tax credits to insurance companies so they could invest in technology companies, including biotech research facilities. The state also is well under way with its Bio 2020 plan to invest at least $1.3 billion in biotech across the decade. The 15-year-old Maryland Venture Fund, which makes direct investments in technology and life sciences early-stage companies, has invested $25 million and returned more than double that investment.

Under the Bio 2020 plan, the Maryland Biotechnology Center was established within the Maryland Department of Business and Economic Development to coordinate a host of state, university and private sector initiatives to support biotechnology innovation and entrepreneurship in Maryland. The Center works closely with university technology transfer offices and commercialization programs such as the Maryland Technology Development Corporation (TEDCO) and the University of Maryland’s Maryland Industrial Partnerships (MIPS) program to foster and fund collaborative initiatives between bioscience enterprises, universities, and federal labs. In certain qualifying cases, the Center can supplement funding of industry-university and industry-federal labs research partnerships.

The Center has created a BioEntreprenuer Resources Program which assists entrepreneurs in leveraging available public and private capital. The Center also works closely with the University of Maryland School of Law’s Intellectual Property Legal Resource Center (MIPLRC). The MIPLRC provides free legal services on the subjects of business and intellectual property to start-up bioscience enterprises.

Higher-Ed Partnering For Progress In Minnesota

A biotechnology partnership has been initiated between Minneapolis Community and Technical College (MCTC) and the University of Minnesota. In addition to the transferability of the Biotechnology program in its entirety, the partnership ensures graduates of MCTC’s Biotechnology program with grade point averages of 3.5 or higher will be enrolled at the College of Biological Sciences at the University of Minnesota, one of the University’s most prestigious schools.

“Minnesota has earned its place in the medical device industry by nurturing scientists,” said LifeScience Alley President and CEO Dale Wahlstrom. “This partnership moves students between two strong academic programs to graduate studies or careers in Minnesota’s famed bioscience sector.”

The first cohort within the new biotechnology partnership includes seven MCTC students. MCTC’s Biotechnology faculty leader Rekha Ganaganur noted all seven of the students have undergraduate research or internship experiences and some have obtained jobs in the bioscience industry. She applauded the vision of Robert Elde, the dean of the University of Minnesota’s College of Biological Sciences. “Dean Elde knows Minnesotans want colleges to collaborate to enhance the biotechnology workforce of the future.” Ganaganur is grateful for the LifeScience Alley membership for serving on the MCTC advisory group which made the partnership possible.

Elde and Ganaganur pledged their programs to support students who start their academic careers at community colleges. MCTC program participants can consider themselves University students as they grow their academic careers. “The partnership is a positive example of a collaborative effort that will help ensure a pathway for students to the top scientific careers in our state,” said MCTC President Phil Davis. “I am extremely impressed with the caliber of students enrolled in our programs, and MCTC welcomes this as a way to encourage academic success.”

New Jersey New Incentives For On-The-Job Training

NJ Gov. Chris Christie Administration recently announced that financial hiring incentives are now available to employers through the state Department of Labor and Workforce Development (LWD) if they hire and train former pharmaceutical industry employees. Employers willing to hire displaced pharmaceutical workers may reduce the cost to train new employees under this new on-the-job training program, which will reimburse each employer up to 50 to 90 percent of a new hire’s salary for up to six months and a maximum of $14,000.

“As a former business owner, I fully understand the expense associated with training new employees.  This is an opportunity for employers to bring on new staff and offset their training costs. This program benefits employers and employees and will help stimulate job growth here in New Jersey,” said Dept. of LWD Commissioner Harold J. Wirths.

New Jersey employers from all industries are eligible to participate in this program, which is commonly known as an On-the-Job-Training program, as long as the prospective new hires are among the former pharmaceutical industry workers covered under a National Emergency Grant first issued to the LWD by the U.S. Department of Labor in 2010.

The program is managed in collaboration with the state’s Life Sciences Talent Network at BioNJ. It is designed to help workers who were displaced from the pharmaceutical industry due to the economic downturn by providing job training and assistance in finding new employment. New Jersey applied for the grant to keep the state’s pharmaceutical talent in the state and maintain New Jersey’s economic competitiveness. The workers covered under the grant include those who were displaced from approved locations of Bristol-Myers Squibb, Hoffman-La Roche, Johnson & Johnson, Merck & Co., and Pfizer companies.

Under the new On-the-Job Training component, employers will not incur any fees and LWD or the Life Sciences Talent Network staff will pre-screen applicants for eligibility or will assist in qualifying candidates prior to the actual hire. New Jersey also is paving the way for increased cooperation between the state’s bio-pharma industry and academia.

Lt. Governor Kim Guadagno recently announced the formation of a new Council on Innovation to advise the NJ Partnership for Action on how industry and academia can better work together to improve New Jersey’s economy and attract more federal funding. Creation of the Council is among 15 recommendations in a report released by New Jersey Policy Research Organization (NJPRO) and Innovation NJ. In addition, Lt. Governor Guadagno announced Secretary of Higher Education Rochelle Hendricks as the newest member of the NJ Partnership for Action. The report recommends policy changes that would create an “innovation ecosystem,” making it easier for industry and academia to collaborate on new ideas and inventions.

Other recommendations include cutting red tape by creating standard agreements governing intellectual property rights and collaboration between entities. Identifying areas of expertise within New Jersey’s colleges and universities that can form the basis for Centers of Excellence. Designation of a single center of excellence for a topic would provide guidance to interested parties searching for a research partner; having a chief administrator at each college and university who will serve as a one-stop shop coordinator for businesses to connect with university information and resources.

Secretary Hendricks emphasized the importance of aligning businesses and academic institutions to grow New Jersey’s economy, attract more federal funds and bring innovative products and ideas to market.

“We need to be efficient and effective to win the competition to market commercial ideas and products,” she said. “Many of our academic institutions are already doing ground-breaking research. With improved collaboration among state agencies, colleges and businesses, that research can be directly connected with the economy, helping our institutions continue to compete on a national and global scale.”

Kentucky Spreads Seed Capital To Bio Start-Ups

Kentucky is offering a host of programs geared to jumpstart biotech start-ups. Commonwealth Seed Capital, LLC (CSC) is an independent fund that makes debt or equity investments in early-stage Kentucky business entities to facilitate the commercialization of innovative ideas and technologies. Investments are typically made in these specified innovation areas: health and human development; information technology and communications; bioscience; environmental and energy technologies; and materials science and advanced manufacturing.  CSC invests in companies that have a significant Kentucky presence, the prospect for substantial growth and the potential to generate an appropriate rate of return.

The Kentucky Cabinet for Economic Development also offers a matching funds program to facilitate biotech start-ups. The Cabinet will match, on a competitive basis, Phase 1 and Phase 2 federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards received by Kentucky high-tech small businesses and those willing to become Kentucky-based businesses.

This includes matching Phase 1 federal awards up to $150,000 to support the exploration of the technical merit or feasibility of an idea or technology. The program also provides up to $500,000 of federal Phase 2 awards, which support full-scale research and development.

The post COVER STORY: Global Biotech Report appeared first on Business Facilities.

Already home to world-class research labs at Georgia Tech and the Centers for Disease Control, Metro Atlanta lures another high-tech gem in Baxter’s $1.3-billion bio-pharma investment.

By Business Facilities Editorial Staff
From the January/February 2013 issue

Gold

Project Title: Baxter International Bio-Pharmaceutical Manufacturing Plant
Entered By: Georgia Department of Economic Development

The nominees for Business Facilities’ 2012 Economic Development Deal of the Year Awards competition reflected a diverse cross-section of growth strategies, most of which are built on a foundation of new manufacturing capacity.

Entries from 17 states that jousted for our top awards included a biotech mega-complex in Georgia, a world- class commercial aircraft assembly facility in Alabama, a yogurt plant in Idaho and even a refinery in Philadelphia. All of the contenders held the promise of hundreds of new jobs; the biggest projects offered the potential to transform the economies of entire regions.

As always, our award recipients were selected by a blue-ribbon panel of industry experts who carefully reviewed project details provided by the finalists. The task of separating the wheat from the chaff was especially challenging for our 2012 awards, as all of the nominees were worthy contenders.

Projects nominated for Business Facilities’ annual Economic Development Deal of the Year competition are asked to submit an Economic Impact Analysis for the project (using standard analysis methods including RIMS II, REMI or IMPLAN) and a narrative detailing how the project came together.

Our judging panel, including leading site selection consultants, evaluates the overall impact of the project and assesses the effectiveness and innovation of the location’s approach to landing the deal. Key factors in this evaluation include creative use of incentives, regional cooperation, partnerships with higher education resources, potential for growth and execution of overall economic development strategy.

The judges have spoken and Baxter International’s decision to make a $1.3-billion investment in Georgia is our 2012 Economic Development Deal of the Year Gold Award winner.

The Baxter bio-pharmaceutical facility, an integrated campus which will include three main manufacturing components as well as warehousing, utilities and lab support facilities, is expected to directly create 1,800 jobs with an economic impact of $6.2 billion.

Over a 10-year period, the bioscience complex will generate an overall regional economic impact estimated at nearly $13 billion, creating more than 8,700 direct, indirect and induced jobs. The campus will be located in Covington, GA in Stanton Springs, a 1,620-acre master-designed industrial park west of Interstate 20 at the intersection of Newton, Walton, Jasper and Morgan counties.

Artist’s rendering of Baxter International bio-pharmaceutical campus in Georgia.

Baxter’s new biologics manufacturing facility will include an advanced plasma fractionation facility, giving the bio/pharma giant additional capacity for testing and purification of its medications. Products to be made at the Georgia site will include immunoglobulin treatments for patients with immune deficiencies and albumin products used as plasma-volume replacement therapies in critical care, trauma and burn patients.

“Baxter’s decision to come to Georgia marks a new era in the growth of our biosciences industry and will have a far-reaching impact on our economy,” Gov. Nathan Deal said when the project was announced. “We are honored to welcome this flagship company to Georgia and proud that our state’s vast resources for the biomedical field will assist the company with the groundbreaking medical advances it is renowned for.”

Deerfield, IL-based Baxter makes medical devices, pharmaceuticals and biotechnology products with a focus on hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other chronic and acute medical conditions. The company’s 2011 revenue was $13.9 billion; it employs about 19,000 U.S. workers and has 14 plants, including three in Puerto Rico.

According to the Georgia Department of Economic Development, Baxter will get about $80 million in state incentives, including $65.6 million based on the number of jobs it will create, and a $13.7 million project development grant.

“This mega-project will anchor Georgia’s thriving bioscience sector for years to come, moving the Peach State into the front ranks of national biotech players,” Business Facilities Editor in Chief Jack Rogers said.

Rogers said BF’s judging panel was particularly impressed by the regional cooperation that brought this project to fruition, and the flexibility shown by state and county agencies in tailoring solutions to meet Baxter’s needs. Baxter narrowed the location search to four candidates internationally in 2009.

The entities involved in landing the project included the Georgia Department of Economic Development, the Joint Development Authority of Walton, Newton, Morgan and Jasper Counties and the Technology Park of Atlanta.

The quick turn-around time between the site selection decision announcement last April and construction of primary facilities in the Baxter project is unprecedented, Rogers noted.

“Baxter announced its decision in April and by August 1 ground was already broken on a 1-million- plus-square-foot facility,” he said. “Georgia’s willingness to cut red tape will be followed by a ribbon-cutting on a world-class bioscience complex.”

Construction of the first manufacturing buildings at the new Baxter campus is expected to be completed in 2015, with full commercial production commencing in 2018.

The Metro Atlanta plant will be Baxter’s third in the Southeast; it also has plants in North Cove, NC, and Cleveland, MS. According to a Triangle Business Journal report, Baxter International executives toured sites in Granville County, Wake County and Lee County in North Carolina before selecting the Covington, GA location.

Metro Atlanta already is home to several major research institutions, including Emory University, Georgia Tech and the federal Centers for Disease Control and Prevention.

Baxter’s plant puts Georgia on the map as a player in the life sciences industry, said Mike Cassidy, president of the Georgia Research Alliance. “It’s validation of a long-term strategy to make the state attractive to the life sciences industry,” Cassidy said.

South African energy giant Sasol makes the largest private-sector investment for a single industrial project in U.S. history with its Lake Charles, LA petrochemical complex. In this photo, Louisiana Gov. Bobby Jindal (left) and officials hail Sasol’s mammoth petrochemical project.

Silver

Project Title: Sasol North America Inc.
Entered By: LED, Southwest Louisiana Economic Development Alliance, Port of Lake Charles

One of the largest private-sector investments for a single industrial project in U.S. history is our 2012 Economic Development Deal of the Year Silver Award winner.

Sasol Ltd., a global energy company based in South Africa, decided that Louisiana’s highly developed pipeline infrastructure is perfectly suited to its plans to develop a $10-billion gas-to-liquids processing plant that will enable it to tap into the natural gas bonanza in the U.S. emanating from abundant shale gas reserves.

In addition to the processing plant, which will yield 96,000 barrels/day of premium fuels, Sasol North America also plans to build a $4.5-billion cracker unit at its Lake Charles Chemical Complex in Westlake, LA. The cracker will produce up to 1.4 million tons annually of ethylene used to make plastics.

The new facilities in Calcasieu Parish will result in the creation of more than 5,000 permanent jobs in the Southwest Louisiana region, in addition to the 5,500 construction jobs that will be engaged in building the project through 2020. The expanded Lake Charles complex will have a direct economic impact in the region estimated at more than $29 billion over the next 20 years.

BF’s judging panel was particularly impressed with Louisiana’s willingness to go the extra mile in securing land options for the project, the customized incentives package offered to Sasol and the state’s creative use of LED’s GIS mapping in presenting its proposal to the energy giant.

Using a multi-layered GIS map displayed on an iPad, LED officials were able to show site details, utilities, nearest rail access, proximity to the river and the Port of Lake Charles during the first site visits by the Sasol team. According to LED, the introduction of the new GIS mapping enabled Southwest Louisiana to pull ahead of a Canadian province that was competing for the project.

In announcing the mega-deal, Gov. Bobby Jindal said the $14.5-billion petrochemical complex “will bolster Louisiana’s position as the No. 1 exporter of energy in America.” Gov. Jindal also noted the Lake Charles complex will represent a huge new source of demand for natural gas in the state, including gas extracted from deposits in the Haynesville Shale formation.

The Sasol project was a joint effort involving Louisiana Economic Development, Southwest Louisiana Economic Development Alliance and the Port of Lake Charles.

To secure the project, Louisiana offered Sasol a custom incentive package that includes a performance-based grant of $115 million for land acquisition and infrastructure costs associated with the facility. Sasol also will receive the services of LED FastStart™, the nation’s No. 1 state workforce training program.

In addition, the company will qualify for Louisiana’s new Competitive Projects Payroll Incentive (up to 15 percent payroll rebate for each GTL job) and Quality Jobs Program (up to 6 percent payroll rebate for each ethane cracker job).

One of the largest grants in the history of the Texas Enterprise Fund and local property tax abatements bring Apple’s primary operations nexus to the Texas state capital.

Bronze

Project Title: Apple Inc. Americas Operations Center
Entered By: Austin (TX) Chamber of Commerce

Apple’s selection of Austin, TX as the site for its new $304-million Operations Center is the Bronze Award winner in Business Facilities’ 2012 Economic Development Deal of the Year competition.

The new facility, which will increase Apple’s workforce in Austin to more than 6,700, will serve as the primary operations nexus for the company in the Americas outside of Apple’s global headquarters in Cupertino, CA, centralizing accounting, human resources, sales, marketing and finance.

State, county and local agencies came together to put together a package for Apple that sealed the deal in an intense site-selection battle for the operations center. The Austin Chamber of Commerce, Travis County and the Governor’s Office of Economic Development and Tourism were key players in bringing the project to fruition.

“Texas put down a marker with an aggressive incentives package which made it clear that the Lone Star State did not intend to be outgunned for this project, which turbocharges a strategic growth sector for the Austin region,” said Business Facilities Editor in Chief Jack Rogers.

The state of Texas awarded one of the largest grants from the Texas Enterprise Fund in the history of the program—$21 million—which together with a property tax abatement from the City of Austin and Travis County provided for a total incentive package of $35 million for the operations center. Apple gave candidate locations a three- month window in which to make their proposals.

The new 1-million-square-foot campus in Austin will directly create 3,635 jobs generating about $273 million in new wages over the next 10 years. The Apple facility in Texas will become one of four major global operations centers for the tech giant outside of its California HQ.

The impact of this project on the state is estimated at 16,000 jobs (direct and indirect), $1.4 billion in personal income and an overall Economic Output impact of $5.7 billion.

Austin is no stranger to BF’s annual Economic Development Deal of the Year competition. The $3.6-billion expansion of Samsung Austin Semiconductor’s huge chip fab complex was our 2010 Deal of the Year Gold Award winner.

Samsung has committed to investing more than $13 billion in the Austin facility, which has vaulted Texas into second place among national leaders in semiconductors, behind only California. The 2010 project netted more than 7,600 new jobs (direct and indirect) and came with an estimated economic impact of nearly $2 billion over the first three years of operation.

Last year, the Austin Chamber of Commerce was the winner of our first annual Economic Development Excellence Award (Population Greater Than 500k). Austin also had an excellent showing in our 2012 Metro Rankings Report, taking first place in our coveted Economic Growth Potential ranking (employment greater than 450k).

Honorable Mentions

Projects:Airbus Assembly Facility (Mobile, AL Chamber of Commerce); eBay Campus (Utah Governor’s Office for Economic Development); Caterpillar Production Plant (Georgia Department for Economic Development); Bridgestone Americas Tire Plant (South Carolina Department of Commerce).

Gov. Robert Bentley (second from right) congratules Airbus officials as they announce the selection of Mobile as the site of the European aircraft giant’s new North American assembly plant.

The number of projects deserving of recognition in our annual Economic Development Deal of the Year contest always exceeds the number of awards categories. This year, our judges have selected four entries to receive our Honorable Mention Awards.

Airbus announced in July that it will invest $600 million in an aircraft assembly facility at the Brookley Aeroplex in Mobile. The plant—which will assemble A319, A320 and A321 passenger aircraft—is expected to commence operations in 2015, creating 1,000 new jobs. The assembly facility will hit full capacity in 2018, when it is expected to produce up to 50 aircraft per year.

“Mobile’s selection as the only site in the Western Hemisphere assembling aircraft for Airbus cements Alabama’s status as an up-and-coming aerospace manufacturing giant,” said Business Facilities Editor in Chief Jack Rogers.

Mobile’s victory in the fierce competition for the Airbus plant was the culmination of a seven-year effort by state and local officials to land the prize from Europe’s aerospace giant. The triumph also marked a stunning turnaround from the disappointment of the U.S. government’s reversal of a 2008 decision to award Airbus’s parent, EADS, a huge U.S. Air Force refueling tanker project. EADS had selected Mobile as the site for tanker production, but in 2011 Congress rebid the project and awarded it to Boeing.

The decision by eBay to construct a new 40-acre campus in Draper, UT will directly bring 2,200 new jobs to the state, creating more than $1.6 million in new wages over the next 20 years.

“The ongoing eBay expansion is another success story for Utah’s burgeoning software and IT industry cluster,” Rogers said, noting that industry giants including Microsoft, Twitter, Adobe and IM Flash already have put down roots in the Beehive State.

Rogers added that the Economic Development Deal of the Year judging panel was impressed by the cooperation between eBay and Utah to develop alternative energy resources, including wind energy power generation, which will be used to provide electricity to the Draper facility.

“eBay chose Draper for a customer support center in 1999 primarily because of the quality of the workforce, favorable business climate and proximity to San Jose,” said William Lasher, eBay senior director. “As the Draper facility grew, we became increasingly aware that the business conditions in the state were ideal.”

The Economic Development Tax Increment Financing eBay received from the state, coupled with incentives from local cities, were helpful when eBay made decisions about whether to grow the Draper operation during the past 10 years (creating 1,000 new jobs). Lasher said. eBay was especially impressed with the level of involvement from state and local economic development agencies in working with eBay to solve its problems and meet its needs, he added.

Caterpillar reviewed proposals from more than 100 locations in the U.S., as well as sites in Canada and Mexico, before selecting Athens, GA to be the home of its new $200- million factory. The Georgia plant, which will employ 1,400, will manufacture construction equipment previously produced in Sagami, Japan.

Earth-moving equipment like the unit above will be produced at Caterpillar’s new plant in Athens, GA.

An emphasis on the availability of workforce training, including presentations from Georgia Quick Start and Athens Technical College, helped seal the deal. The Georgia Department of Economic Development, the Economic Development Authorities of Athens-Clarke and Oconee counties, and Electric Cities of Georgia all played a role in shaping the proposal for the Caterpillar project.

“Georgia put its best foot forward in presenting all of its resources to this industry giant,” Rogers said.

The Caterpillar project will have an estimated direct Economic Output impact of $2.92 billion over the next 10 years, directly creating more than $78 million in new wages. When it made the decision to put the new plant in Athens, Caterpillar already was operating facilities in Griffin, LaGrange, Toccoa and Thomasville, GA, so the equipment giant was very familiar with the benefits of locating in a manufacturing-friendly state.

Bridgestone Americas $1.2-billion investment in the construction of a new 1.5-million-square-foot off-road radial (ORR) tire manufacturing facility on a site in Aiken County, SC—and a 474,000-square-foot expansion of an existing tire plant nearby—marked the largest single initial capital investment in South Carolina’s history.

“Bridgestone’s decision to transplant technology and manufacturing to South Carolina that had been exclusive to its facilities in Japan is another indication of the Palmetto State’s emergence as a world-class manufacturing competitor,” Rogers said.

The Bridgestone facility is expected to have a direct Economic Output impact of nearly $2 billion over the first two years of operation, directly creating more than $362 million in new wages.

The new ORR manufacturing plant is part of the company’s global sourcing strategy. The facility will be a greenfield site in the Sage Mill Industrial Park in Aiken County. Previously, large and ultra-large ORR tires had been produced exclusively at Bridgestone’s
Shimonoseki and
Kitakyushu plants
in Japan. Bridgestone will install
ORR production
technologies developed in Japan in
the new plant to
more effectively
respond to customer needs and growing global demand. The new plant will be a green facility—it is expected to meet LEED Construction Certification environmental standards.

Business Facilities congratulates all of the winners in our 2012 Deal of the Year competition. Nominations are now being accepted for our 2013 contest here.

The post COVER STORY: 2012 Economic Development Deal of the Year Awards appeared first on Business Facilities.

The time has come for Business Facilities to once again shine our economic development spotlight on locations that have caught our eye during the year and impressed us with the scope of their efforts. As always, the task of winnowing the field to those who deserve special attention and picking the cream of the crop was tougher than singing the praises of our showcase selections.

This year’s Location Picks are a diverse group of communities which have successfully planted their flag on the battlefield for new growth sectors. The locations we have chosen present a bevy of forward-thinking programs that deserve a closer look.

Every one of the locations honored here has embraced the imperative of regional cooperation as a driver of nearly every successful growth strategy. Maximizing resources also is a critical key to success. Whether it’s leveraging a vibrant system of higher education, investing in infrastructure improvements or ensuring that a skilled workforce will continue to be available to new businesses that arrive on the scene, our Location Picks are ready to hit the ground running once an expansion, relocation or new facility comes their way Business Facilities congratulates this year’s selections for a job well done and offers a tip of the hat to the runners-up.

Pittsburgh: Healthcare Hub
Pittsburgh, PA perennially makes our list of the most livable cities in the nation. The city that rose on three mighty rivers in western PA is home to a number of industrial powerhouses, including aluminum giant Alcoa, U.S. Steel, financial services titans Highmark and PNC Financial Services, and food processing behemoth H.J. Heinz.
Pittsburgh has Pittsburgh has set its strategic sights on five growth sectors: advanced manufacturing (including robotics), health care/life sciences, financial/business services, information and communications technology and energy. [For a list of the top Fortune 500 companies with major facilities in Pittsburgh, see chart below.]

*Revenue for Fortune 500 is generally done by calendar year, and some companies’ fiscal years do not align with the calendar year. (Source: Fortune; last updated: May 7, 2012.)

A burgeoning health care industry drives the regional economy in Pittsburgh. Two of the leading employers, UPMC and West Penn Allegheny Health System, together account for more than 50,000 jobs. The federal government also has a major output in Pittsburgh: federal agencies employ 18,600 people in the city.

Pittsburgh, PA

As a top receiver of National Institutes of Health R&D funding, the region boasts assets like the pioneering transplantation techniques of Thomas E. Starzl and the jointly established Carnegie Mellon/University of Pittsburgh Computational Biology Graduate Program.

Key centers of innovation and collaboration in Pittsburgh include Innovation Works, the McGowan Institute for Regenerative Medicine, Pittsburgh Life Sciences Greenhouse (PLSG), Pittsburgh Supercomputing Center (PSC), Pittsburgh Technology Council and the Pittsburgh Tissue Engineering Institute.

Innovation Works (IW) plays a vital role in Southwestern PA’s technology economy, investing capital, business expertise and other resources into high-potential companies with the greatest likelihood for regional economic impact. IW is the single largest investor in seed-stage companies in this region and one of the most active in the country; it has invested $52.3 million in more than 152 start-ups.

The Pittsburgh Life Sciences Greenhouse (PLSG) provides capital investments and customized company information and business growth services to the region’s life sciences enterprises. PLSG supports biosciences companies with promising innovations in the following concentrations: Biotechnology Tools, Diagnostics, Healthcare IT, Medical Devices and Therapeutics. The Greenhouse accelerates technology commercialization with seed and early-stage companies; connects investors with its Investment Portfolio companies; expands established life sciences ventures and relocates biomedical companies to Pennsylvania.

Pittsburgh Supercomputing Center (PSC) provides university, government, and industrial researchers with access to several of the most powerful systems for high-performance computing, communications and data-handling available to scientists and engineers nationwide for unclassified research. PSC advances the state-of-the-art in high-performance computing, communications and informatics and offers a flexible environment for solving the largest and most challenging problems in computational science.

The Pittsburgh Supercomputing Center is a joint effort of Carnegie Mellon University and the University of Pittsburgh together with Westinghouse Electric Company. Established in 1986, PSC is supported by several federal agencies, the Commonwealth of Pennsylvania and private industry, and is a leading partner in XSEDE (Extreme Science and Engineering Discovery Environment), the National Science Foundation cyberinfrastructure program. PSC works with its XSEDE partners to harness the full range of information technologies to enable discovery in U.S. science and engineering.

Since 1983, the Pittsburgh Technology Council has been the principal point of connection for companies from four primary clusters of the technology industry that are represented by a critical mass of businesses in southwestern Pennsylvania, including the Advanced Manufacturing/Materials, Green Technology, Information Technology and Life Sciences sectors.

The Council aligns itself with key organizations and initiatives in order to improve the regional economic climate and build tech industry growth. It has partnerships with key developmental organizations, including the 3 Rivers Connect (3rc).

3 Rivers Connect is a nonprofit agency that helps individuals, educators and community leaders use information and technology to make the best possible decisions about the allocation of resources and delivery of services. 3rc works with a variety of community-oriented organizations ranging from schools and social services agencies to government and environmental groups. Through projects such as the Information Commons, 3rc is unifying community information in a way that will give everyone a better understanding of the issues and a data-driven foundation for planning and analysis.

Fort Lauderdale: A Public-Private Success Story
Greater Fort Lauderdale Alliance has forged a powerhouse collection of area CEOs into a driving force for growth. The winner of the new Achievement in Public-Private Partnership Award has set the standard for best practices in this dominant new economic development model.

The mission of Greater Fort Lauderdale Alliance is to lead Broward County in building a stronger and more diversified economy by promoting increased public/private sector collaboration, delivering business development initiatives focused on new investment and job growth, enhancing the competitiveness of Broward’s business climate and driving regional initiatives.

The CEO Council of Greater Fort Lauderdale recently has been involved in several high-profile initiatives that are raising national awareness for the region. A TV commercial produced by Zimmerman Advertising has featured CEO Council members Wayne Huizenga, Mike Jackson, Roy Krause and Keith Koenig along with County Administrator Bertha Henry and NFL Hall of Famer Dwight Stephenson. The TV ads, which aired for six months in the NY/NJ/CT and Boston markets and on JetBlue’s in-flight TV, conclude with Huizenga’s memorable tag line: “Hey, it’s not what you make, it’s what you keep.” The top execs also appeared in print display ads.

Greater Fort Lauderdale is home to a number of established, strong and growing industry clusters. From aerospace and aviation to cloud technology, biotechnology and life sciences, marine and international trade and logistics, the area offers a strong infrastructure to support these growing industries. Additionally, Greater Fort Lauderdale is home to a highly trained and skilled workforce that ensures these industries continue to grow and prosper.

Technology companies find Greater Fort Lauderdale provides a stimulating environment for business success. The region’s assets include a readily available base of skilled knowledge workers, a warm climate for creative activities, convenient access to world markets, and a cooperative spirit that helps turn research discoveries into commercial products.

South Florida has deep roots in the technology sector, including the distinction of being the birthplace of IBM’s PC in the early 1980s. Today, the technology landscape continues to attract global companies, along with successful “home-grown” businesses and innovative start-ups. Greater Fort Lauderdale’s IT/telecom companies employ more than 50,000 people, according to recent surveys. Overall, the Miami-Fort Lauderdale metropolitan area is one of the nation’s Top 100 Tech Centers as defined by bizjournals.com, with a recent ranking of 62.

Fort Lauderdale-based Citrix Systems, Inc. is a leading provider of virtual computing solutions that help companies deliver IT as an on-demand service. Founded in 1989, Citrix combines virtualization, networking, and cloud computing technologies into a full portfolio of products that enable virtual workstyles for users and virtual datacenters for IT. The $1.6 billion company serves more than 230,000 organizations in 100-plus countries.

On the up-and-coming side of the spectrum is Pompano Beach’s ServusXchange, LLC, which was ranked No. 17 on the Forbes inaugural ranking of “America’s Most Promising Companies.” The IT company’s flagship product is MyOnlineToolbox, a community platform that brings business innovations to contractors who repair and remodel homes.
Other Greater Fort Lauderdale IT companies include Microsoft Latin America; Cbeyond, Inc., a Miramar managed services provider to small businesses; and Blue Frog Solutions in Pompano Beach, a leading provider of middleware solutions for life insurance carriers, underwriters and their distributors and agents. DataBridge Corp. in Oakland Park is a computer engineering consultancy that develops turnkey computing solutions for its clients.

In the online sector, Saveology.com is a national consumer comparison-shopping provider, while eDiets.com, Inc., is a leading provider of convenient at-home diet, fitness and healthy lifestyle solutions. eStockIt.com in Hollywood is an online retailer of restaurant, janitorial and office supplies.

Motorola Mobility, Plantation, FL

As worldwide demand grows for “smart” handheld devices with powerful new applications, Greater Fort Lauderdale is home to a strong and growing cluster of wireless technology companies serving consumer, business and governmental customers. Key players include Motorola, which has a facility in Plantation that employs 1,700 and developed an advanced two-way portable radio for use by police, fire rescue and other first responders; Research in Motion, with 400 employees in Sunrise, a worldwide designer and manufacturer of wireless communications devices and services, including the famous BlackBerry family; and General Dynamics C4 Systems, also in Sunrise, which makes wireless communications and mobility information systems for military, homeland security and business customers.

After more than 18 years of planning, work finally began in late January on a new, 8,000-foot-long runway at Fort Lauderdale-Hollywood International Airport. The huge $791 million South Runway Expansion Project should be completed and ready for landings and takeoffs in September 2014.

Runway 9R-27L, located on the south side of the airport and running parallel to Griffin Road, is now being rehabilitated and lengthened. In its old configuration, the runway was only 5,276 ft. (1,608 m) long and was deemed unsuitable for the increasing amount of air traffic coming into the airport. It was closed on April 17 and construction of the new landing surface is going on top of it

The fact that the new runway will be elevated more than six stories above ground level at its eastern end makes it one of only a few elevated runways in the U.S. and only the second runway in the country to span a federal highway.

Little Rock, AR: Regional Growth Center
Little Rock, AR is a center for several major employers in a variety of industries including healthcare, service, government and agriculture.

Little Rock, population 193,524, is located in the center of the country and in the second fastest-growing region of the United States, with 40 percent of the nation’s population and buying power within a 550-mile radius. Little Rock is where ‘America Comes Together’—located at the crossroad of Interstate 30 and the most heavily traveled Interstate in the nation, Interstate 40.

Competitive wages and Arkansas’ right-to-work environment provide an excellent workforce environment for businesses. Twenty-eight Fortune 500 companies operate within the Little Rock Metropolitan Statistical Area.

The Little Rock National Airport, less than three miles from downtown, is Arkansas’ largest commercial service airport, serving approximately 2.1 million passengers annually. The airport attracts passengers from a large part of Arkansas, as well as a number of surrounding states. There are more than 120 flight arrivals and departures at Little Rock each day, with non-stop jet service to thirteen national and international gateway cities, making Little Rock truly one stop away from the world. Little Rock National is served by American Eagle, Continental Express, Delta, Delta Connection, Northwest, Northwest Airlink, Southwest and US Airways Express. The Little Rock National Airport is operated by the Airport Commission, whose members are appointed by the Little Rock City Board of Directors.

The Arkansas River runs past downtown Little Rock and is part of the McClellan-Kerr Navigation System, one of the largest projects of the United States Army Corps of Engineers. The system provides a 448-mile navigation channel for barge traffic from the Mississippi River northwest to fifteen miles east of Tulsa, Oklahoma. The Port of Little Rock, on the Arkansas River is a designated Foreign Trade Zone and a United States Customs Point of Entry. This status allows goods to be stored and processed there without custom duties or bonds being paid until products are finished and sold, or moved out of zone.

The City of Little Rock has seen a steady increase in economic development activities, which is due in large part to an active private sector and the strong leadership of the Little Rock Regional Chamber of Commerce. In addition, manufacturing, transportation and service sector employment are growing at a steady rate. Little Rock is one of the top fifteen aggressive development markets in the nation and has doubled in the past thirty years, with projections indicating it will double again in during the next twenty years.

Government leaders are committed to retaining, creating and expanding job opportunities for the service, retail and industrial sectors of the community. As a result of this commitment, Little Rock is experiencing unprecedented development and expansion in the downtown corridor. Since 1994, projects totaling $968,579,951 have been completed in the downtown area, with $175,894,720 worth of projects in progress and an additional $194 million worth of proposed projects. The River Market has resulted in new businesses throughout the River Market District, including a $7.5 million renovation and development of the Museum Center Building, which houses the Museum of Discovery, restaurants and commercial information technology enterprises. In addition, the $165 million William J. Clinton Presidential Center opened its doors in November 2004, and since opening, the Center has hosted over 300,000 visitors.

The City’s Economic Development Office administers local ‘Advantage Arkansas’ Programs and visits businesses to determine eligibility for the former Enterprise Zone Program to secure endorsements of various businesses regarding economic development programs, zoning requirements, special tax provisions and related economic incentives and information. In addition, the Economic Development Office serves as the City’s representative for the Little Rock Regional Chamber of Commerce Briefing Center, analyzes new business proposals, prepares developer packages and presents information to encourage business location. Decommissioning closely with this office is the Office of Minority Economic Development which was established in 1994 as a result of FUTURE Little Rock.

Skilled Workforce Ready In Greater Omaha
Greater Omaha continues to attract business from a variety of growing industries. And it’s no wonder. The eight-county region offers many qualities key to economic success, including: a solid, hard-working and educated workforce; available Omaha commercial real estate in a variety of specifications and locations; lower costs and available incentives for business; and a decidedly pro-business environment.

Access to an educated, skilled and motivated workforce is one of Greater Omaha’s key assets because it draws business to the area and spurs economic growth. Every year, there are more than 9,000 new graduates from area high schools and 10,000 from area colleges and universities. These individuals stay in Greater Omaha because opportunities are plentiful—both professionally and personally—and the area offers a superior quality of life.

The Greater Omaha community places a high value on the contributions businesses make to their economy and quality of life. This is why you’ll find that Greater Omaha and the state of Nebraska have been instrumental in developing incentive programs designed to increase business, investment and employment in the entire region. Available to businesses of all sizes and a wide variety of industries, these incentives benefit business in many ways, including reduction or elimination of property, payroll, income and/or sales tax liability; customized job training; and special financing, grants and loans
Greater Omaha is home to the headquarters of nine Fortune 1000 companies. Those include five on the Fortune 500 list—Berkshire Hathaway, Inc., Union Pacific, ConAgra Foods, Peter Kiewit Sons, Inc. and Mutual of Omaha.

With the nation’s largest privately held bank (First National Bank of Nebraska) and three Fortune 1000 financial services companies (Berkshire Hathaway, Mutual of Omaha and TD Ameritrade), Greater Omaha’s financial services clusters have one of the highest densities in the country.

Greater Omaha is home to Offutt Air Force Base which houses United States Strategic Command (USSTRATCOM), U.S. Air Force Weather Agency and the 55th Wing of the U.S. Air Force. As such, Greater Omaha has a global reach, emphasizing key components of the base’s core missions—including deterrence, space, cyberspace global weather, intelligence, surveillance and reconnaissance.

With its central location and outstanding infrastructure, Greater Omaha is home to key transportation companies and is a logistics center. In fact, two of Greater Omaha’s Fortune 1000 companies are in this sector, Union Pacific and Werner Enterprises.
Greater Omaha has low utility costs, a central U.S. location and excellent transportation access. Thus, Greater Omaha’s manufacturing sector has continued to thrive in areas such as agriculture-related hardware, value-added agricultural products, chemicals/fuels and finished goods.

Greater Omaha’s information technology businesses continue to flourish with numerous companies creating or opening key technology operations in Omaha. Greater Omaha has grown to be a high-tech haven with a diverse mix of technology and a highly trained IT workforce.

Airbus Lands In Mobile
Mobile, AL already is a hub for heavy manufacturing. Its largest manufacturers include shipbuilding giant Austal USA (2,500 employees), ThyssenKrupp Steel USA (1,700), ST Mobile Aerospace (1,300) and BAE Systems Southeast (850).

Joining that powerhouse lineup is Airbus, the European aircraft manufacturing giant. Airbus is preparing to build a new facility in Mobile, AL to produce commercial airliners. According to Adam Buck, a spokesman for the mayor of Mobile’s office, the $600 million facility will generate 1,000 permanent jobs.

Airbus is putting a commercial aircraft assembly line in Mobile.

This will be Airbus’ first manufacturing plant in the western hemisphere; it will be located on the site of a former Air Force base, where Airbus already has an engineering facility.

The Alabama governor’s office states that the plant will construct the company’s A320 line of single-aisle aircraft. Planes in the A320 family seat between 107 and 220 passengers, and are used “from very short-haul airline routes to intercontinental segments,” Airbus says.

“The time is right for Airbus to expand in America,” Airbus President & CEO Fabrice Bregier said in a statement. “Mobile is now becoming part of Airbus’ global production network, joining our successful and growing assembly lines in Hamburg, Toulouse and Tianjin.”

Airbus chief operating officer John Leahy told CNNMoney that having a U.S. manufacturing presence would help the company compete for new business as American airline companies replace their aging fleets.

“All things being equal, even if we have a better product, they tend to stay with a U.S. manufacturer,” Leahy said. “A good way to get a bigger place in that replacement market is not just to have the best airplane, but to have the best airplane built in America.”

Construction of the facility will begin next year, with aircraft assembly projected to begin in 2015. By 2017, the plant is expected to churn out between 40 and 50 planes per year.
Some analysts believe the Mobile facility will also allow Airbus’ parent company, EADS, to compete with Boeing for U.S. defense contracts.

The Alabama State Port Authority is in the midst of a five-year plan that is spending $360 million to improve infrastructure at the Port of Mobile. Improvements include land acquisition, new rail and inter-modal yards, cargo terminal improvements and enhancements to improve servicing of deep-water oil and gas field vessels and equipment.

Since 2000, the Port Authority has undergone nearly $500-million in capital improvements and expansion projects to serve containerized, bulk and break bulk commodities. Improvements include a new rail ferry terminal, steel terminal to service ThyssenKrupp Steel USA’s $4.6 billion steel facility in Calvert, AL, new warehousing, a new container terminal, and expansions at McDuffie.

The Port of Mobile has an estimated statewide economic impact approaching $8 billion annually.

Mobile is a picturesque city located at the mouth of the Mobile River along Mobile Bay, leading to the Gulf of Mexico. More than 590,000 residents live in the metropolitan area covering 2,828 square miles.

As one of the oldest cities in the U.S., Mobile combines Southern tradition, beauty and charm with all the elements of a fast-growing, successful community. Rich in history, Mobile was founded by French explorer Jean Baptiste LeMoyne of Bienville in 1702. French, English, Spanish and Native American influences have blended to create a unique culture influencing everything from the annual celebration of Mardi Gras to food and architecture. In 30 minutes you can be on the sandy-white beaches of Dauphin Island in south Mobile County, or ferry from there across Mobile Bay to Gulf Shores in a few minutes more. The mountains of northern Alabama are within a few hours drive.

Metro Atlanta: A Biomed Sector Keeps Growing
Gov. Nathan Deal, Baxter International Inc. chairman and Chief Executive Officer Robert L. Parkinson, Jr., and other dignitaries recently broke ground for a new manufacturing facility for biological medical treatments that Baxter will locate east of Atlanta near Covington. The facility will employ approximately 1,500 people, and total investment by the company will exceed $1 billion. Around 200 local leaders and public officials were present at the ceremony.

“Georgia supports Baxter’s mission to save lives, and this occasion is one of many milestones we look forward to celebrating with the company as it establishes a presence in Georgia,” said Deal. “Baxter’s decision to build a facility here is a watershed event for the state, not only in our goal to establish Georgia as a hub for global health, but in our mission to provide high-quality jobs for our citizens.”

Baxter announced in April its plans to build a facility in Georgia that will manufacture plasma-based therapies that treat chronic and life-threatening illnesses. The company will also locate warehouse and plasma testing laboratory facilities at the Stanton Springs site. Construction is expected to begin in the first quarter of 2013, and completion of construction of the first manufacturing buildings is planned for 2015. Additional construction will continue into 2016 and the plant is anticipated to begin commercial production in 2018. In addition to the manufacturing facility, Baxter will locate plasma collection centers in a number of communities around the state.

“Today we begin the work to construct a new state-of-the-art biotechnology facility. In a few years, Baxter team members working in facilities located on the ground where we are standing today will produce lifesaving biologic treatments for patients around the world,” said Parkinson.

In addition, Stanton Springs will also be home to a biotech training center that will provide a workforce pipeline for Baxter and other members of the state’s bioscience industry. The training center will be owned by the state and operated by Georgia Quick Start, the top-ranked customized workforce training program in the country.

“Our entire region is excited about Baxter’s arrival and joins together in extending a warm welcome to our newest corporate citizen,” said Alan Verner, chairman of the Joint Development Authority (JDA) of Jasper, Morgan, Newton and Walton counties. “We realize Baxter could have chosen any location in the world, but its decision to settle in this community means quality jobs will be available not just for us, not just for our children, but for our children’s children and generations thereafter.”

“Georgia and Baxter share the goal of building and maintaining a world-class facility operated with a Georgia workforce that will help the company provide top-quality care to patients in need,” said Chris Cummiskey, Commissioner of the Georgia Department of Economic Development.

With strong talent, a spirit of collaboration and access to the world, Georgia is at the crossroads of global health. The state offers robust public-private partnerships in bioscience, including the Georgia Research Alliance, through which the state’s six research universities collaborate with businesses to create, improve and grow science- and technology-based companies.

Additionally, Georgia boasts a strong talent pool and one of the largest state university systems in the country, graduating 44,000 students each year. Its bioscience industry cluster includes more than 320 multinational firms, consisting of many small- and medium-sized companies that include the full scope of the bioscience sector.

Georgia’s life sciences industry and university research, plus the U.S. Centers for Disease Control and Prevention, have a $23 billion annual economic impact on Georgia and employ more than 105,000 people, according to statistics from the 2011 “Shaping Infinity” report, released by Georgia BIO. The bioscience industry in Georgia created $19.5 billion in output and contributed $7.5 billion to the state GDP as well as $496 million in tax revenues for state and local governments.

Cincinnati Has Lowest Cost Of Doing Business
Cincinnati’s low costs for facility leasing, transportation and property taxes contributed significantly to its ranking as the least-costly location to do business in the United States among the 27 largest metro areas (all with populations exceeding 2 million), according to a study by KPMG LLP, the audit, tax and advisory firm.

Cincinnati skyline

Atlanta was the second most cost-competitive location in the large-cities category, followed by Orlando, Tampa and Dallas-Fort Worth, which ranked third, fourth and fifth respectively. Other locations that performed well were Baltimore, St. Louis and Cleveland.

In our 2012 Metro Rankings Report, Cincinnati also was ranked ninth in Economic Growth Potential (less than 450,000 employment), seventh in Best Quality of Life and sixth among Top 10 Manufacturing Cities.

KPMG’s Competitive Alternatives study provides a thorough biennial comparison of more than two dozen large metropolitan area business locations in the United States, offering a comprehensive guide for companies considering sites for their business operations. The KPMG study is particularly valuable for its measurement of significant factors that contribute to business operating costs and which often vary by location, including costs associated with taxes, labor, facilities, transportation and utilities.

KPMG’s 2012 Competitive Alternatives study measured 26 significant cost components in each market, including labor, taxes, real estate and utilities, as they apply to 19 industries over a 10-year analysis horizon. Information is also provided on a variety of non-cost components. The study enables companies to perform a “quick scan” of locations to determine which markets can offer an advantageous business environment.

The KPMG study reveals that Cincinnati had a cost index of 95.9, representing business costs 4.1 percent below the U.S. national baseline of 100.0. Cincinnati was followed closely by Atlanta at 96.2, Orlando at 96.3, Tampa at 96.4 and Dallas-Fort Worth at 96.5.
After a very extensive search in both Southwest Ohio and Northern Kentucky, Medpace, Inc., an international drug development services company, decided to relocate their new corporate headquarters to the former NuTone site on Red Bank Road within the City of Cincinnati. Medpace anticipates they will occupy 350,000 sq. ft. of new office space by 2014. The company will continue to maintain a presence at their Norwood location until their final lease ends in 2013.

Medpace will move employees to the new Cincinnati campus over five years with approximately 1,339 jobs occupying the entire 350,000-square-foot space by 2014. The new corporate campus will include three separate office buildings of between 110,000 to 130,000 square feet each. The average salary for employees will be $70,192.

The City’s Economic Development Division has estimated that through incentives Medpace will save approximately $7.5 million in taxes over eight years. In return, approximately $41.7 million in new corporate profits tax and local income taxes will be generated by Medpace, Inc. for the benefit of the city during the 16 years the company must remain in Cincinnati under the agreement.

Meyer Tool, Inc. is investing $2 million in a new 30,000 sq. ft. facility at 3154 Spring Grove and will expand its existing facility at 3055 Colerain Avenue in Camp Washington. The company will create 50 full time positions and retain 586 employees. The expansion allows Meyer Tool, Inc. to handle increased work volume over the next few years.
Meyer Tool, Inc. is a maker of turbine engine components and test stands for aircraft engine manufacturers. It also offers technology, multi-axis precision hole drilling, laser machining, material joining, engineering and tooling, and quality services.

University of Michigan, Ann Arbor campus

Sparking New Development In Ann Arbor, MI
The Pure Michigan campaign featuring Ann Arbor as a destination for business growth recently launched.  The four-minute video, a result of a collaborative effort between Ann Arbor SPARK, the Ann Arbor Area Convention and Visitors Bureau (CVB), the Michigan Economic Development Corporation and the Ypsilanti Area CVB, features Ann Arbor business leaders talking about the benefits of locating a company in the region. It is prominently displayed on the Pure Michigan website as well as the sites of its tourism and travel partners.

“The launch of this video propels Ann Arbor SPARK’s efforts to market our region as a destination where innovative businesses thrive,” said Donna Doleman, Ann Arbor SPARK’s vice president, marketing, communications and talent. “By showcasing global brands and startups alike, juxtaposed with scenes from downtown and our natural spaces, the Pure Michigan video tells a compelling story of ‘Why Ann Arbor’. We are thrilled to have this marketing asset as a tool in attracting businesses to consider the Ann Arbor region as a destination for location and expansion.”

The promotion features Ann Arbor SPARK’s president and CEO Paul Krutko, Patrick Doyle of Dominos Pizza, Sean Heiney of Barracuda Networks, Michael Miller of Google, Rich Sheridan of Menlo Innovations, Jan Garfinkle of Arboretum Ventures, and Mark Sutter of Terumo Ca

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By Business Facilities Staff

This year’s Rankings Report is the most comprehensive package we’ve produced to date. For our eighth annual report, we’ve created nearly 50 categories in which we evaluate the leading states, metros and international players. As always, our results are skewed towards growth potential; we tried to avoid a frozen snapshot of last year’s cold statistics—we want you to know who deserves the “up” arrow, and which locations will be home to tomorrow’s growth.

While we always take special care to make sure our rankings are a forward-looking analysis, we aren’t immune to the reality that everyone wants to know the same thing about today’s sputtering economy: Where are the jobs? So, in several of our more statistics-oriented categories, this year we have given extra credit for positive industry-specific employment numbers.

A good example of this is our annual Biotechnology Strength ranking. We’ve broken the overall biotech ranking into several categories in this year’s report, including Biotechnology Strength/Employment. There are many up-and-comers who have established a foothold in the burgeoning biotech sector, but we felt it was time to give the traditional powerhouses their due as perennial job-creators.

It seems like everyone is getting into the rankings game these days. We welcome the competition and especially the proliferation of rankings-oriented data sources in nearly every industrial sector. This has enabled us to track everything from Most Business Start-Ups to Most Wind Projects Under Construction. We will continue to refine our categories and methodology to give you the most useful information relating to your specific areas of interest. For example, this year we supplemented our traditional Best Education Climate ranking with a scorecard of the states that emerged out front in the fierce competition for federal Race to the Top education funding.

As this issue went to press, we observed with interest a nasty spat between a location that wasn’t pleased with it’s low standing in a state business ranking and the national media outlet that produced this ranking. This kerfuffle reinforced our annual decision to limit our results to the top 10 (or top five) locations in each category.

Our primary goal in this report (and every annual rankings evaluation) is to throw our spotlight on the Best of the Best. We think everyone has better things to do than to argue over who placed 40th or 41st. And so, without further ado, here is our 8th Annual Rankings Report.

Texas Rules The Roost In Best Business Climate
A perennial frontrunner for our annual Best Business Climate designation, Texas has been ranked first or second in this flagship category for each of the past five years. In our 2012 report, the Lone Star State has reclaimed the top spot in our most important business benchmark.

In addition to this year’s first-place finish, Texas also was our top-ranked state for Best Business Climate in 2009 and 2010.

“Texas has doubled down on its business-friendly tradition. The Lone Star State has been able to match and then exceed pre-Recession employment levels faster than any state in the nation,” said Business Facilities Editor in Chief, Jack Rogers.

A surging population in Texas has yielded a cost-effective workforce that is being deployed in an increasingly diversified industrial base.

“Texas has laid out the welcome mat for a variety of high-tech growth sectors, including semiconductors, biotechnology and alternative energy,” Rogers noted. “When you factor in a resurgent oil and gas industry and new manufacturing, you get an economic powerhouse that can compete against all comers.”

In addition to growing high-tech businesses, Texas has been aggressive in courting traditional manufacturers. A recent success was equipment giant Caterpillar’s decision to move its hydraulics and engine manufacturing to the state.

Texas edged out Utah, last year’s top-ranked state for Best Business Climate. With mega-incentives for big-ticket projects and low business taxes, Utah has succeeded in convincing tech giants including Adobe and eBay to put major operations in the Beehive State.

Rounding out the top five in Best Business Climate are Virginia, which is luring major government contractors to relocate their headquarters to the state (Northrop made the move, and VA is courting Lockheed); Florida, where Gov. Rick Scott has eliminated hundreds of regulations he says are impeding business expansions and new facilities in the Sunshine State; and Louisiana, which has married an unrivaled workforce training program with a bevy of new incentives that are spurring hot new growth sectors, including digital media.

Our Best Business Climate ranking evaluates an amalgamation of our key rankings results (including education climate, workforce training/availability, cost of labor, infrastructure, utility costs, credit rating and business tax climate). We give extra credit to states that have enacted and executed business-friendly policies, including new incentives, an improved business tax climate, and expanded workforce training initiatives. We also factor in the recent success of economic development efforts geared to bring in new industry segments and facilities.

Louisiana has surged to the top of this year’s Economic Growth Potential ranking, edging out last year’s number one, Virginia.

“With a diverse and well-executed economic development strategy, a workforce training program that sets the standard for the nation and a full menu of innovative incentives, Louisiana is marching forward on a path to prosperity,” Rogers said.

Louisiana moved into the top slot in BF’s coveted Economic Growth Potential ranking after finishing a close second in 2011. The Bayou State also moved into fifth place in our Best Business Climate ranking, up from seventh last year.

“Business climate and growth potential go hand in hand,” Rogers said. “Louisiana has made it clear to businesses looking to expand, relocate or establish new facilities that it is well prepared to meet their needs.”

Louisiana has buttressed its traditional industries, including natural gas and steel production, with an aggressive strategy that has successfully established new growth sectors in the state, including a red-hot digital media industry which boasts cutting-edge studios in New Orleans, Baton Rouge and Shreveport.

Virginia maintained its leadership in our Economic Growth Potential category with a second-place finish. As the Commonwealth continues to rack up an impressive tally of corporate headquarters relocations, Virginia also has established itself as a high-tech hub with its new Commonwealth Center for Advanced Manufacturing, anchored by jet-engine maker Rolls Royce.

Moving into third place in our Economic Growth Potential ranking is oil-rich North Dakota, which is racing to maximize the expanding bonanza from development of the Bakken oilfield. The burgeoning Bakken production has made North Dakota a national job-growth leader. North Dakota also topped our Employment Leaders and Credit Quality categories.

In our evaluation of Economic Growth Potential, we consider the state’s business climate, availability of skilled workers, incentives and education climate, among other criteria. We also evaluate the state’s economic development strategy, giving extra credit for diversity of new growth sectors and coordination between business, higher education and government agencies. The potential of primary industries to generate secondary relocations/new facilities and indirect jobs also is considered.

Tennessee Makes It Three In A Row As Automotive King
For an unprecedented third consecutive year, Tennessee has been named the top-ranked state for Automotive Manufacturing Strength in our 2012 rankings.

“Fueled by a national revival in the auto sector, Tennessee’s assembly lines and supplier networks continue to get bigger and better,” Rogers said.

“VW is ramping up production at its new plant in Chattanooga, Nissan is rolling out the all-electric Leaf in Smyrna and General Motors has given a new mission to the former Saturn plant in Spring Hill. The Volunteer State is putting the pedal to the metal as our undisputed automotive king,” he added.

Tennessee was followed in our annual automotive sector assessment by Kentucky, which surged from last year’s fourth place finish to the no. 2 slot in this highly competitive category.

“Kentucky’s long-term deal with Ford—which is investing more than $1 billion in its Louisville facilities —has cemented a century-long relationship that stretches back to the Model T,” Rogers noted. “When you factor in the ongoing expansion of Toyota’s huge assembly complex in Georgetown, GM’s commitment to build next-generation Corvettes in Kentucky and a new advanced battery tech center, you have the makings of a 21st century automotive powerhouse.”

Kentucky’s renewed partnership with Ford was the Gold Award winner of BF’s 2011 Economic Development Deal of the Year competition.

Rounding out the top five in BF’s Automotive Manufacturing Strength ranking are South Carolina, home to BMW’s North American manufacturing hub; Georgia, which rapidly is developing a supplier network to support Kia’s new plant in West Point, GA; and a resurgent Michigan, which has supplemented the boost it got from the federal auto bailout with a burgeoning effort to produce lithium batteries and all-electric vehicles.

Business Facilities’ Automotive Manufacturing Strength ranking places a heavy emphasis on growth potential as well as current production statistics. Labor and utility costs, workforce availability and the size of regional supplier networks are factored into the ranking, as is a state’s commitment to the development of advanced automotive technologies. Long-term plans by major automakers to ramp up production and assemble new vehicles at specific locations also are part of the growth potential assessment.

Rogers noted that this year’s automotive rankings reflect an impressive across-the-board revival in the U.S. automotive industry.

“The obituaries that were written for the U.S. auto industry were premature. This recovery is being led by manufacturing that is now globally competitive on a cost-effective basis —and the manufacturing surge is strongest in our revived automotive sector, which is hitting on all cylinders,” Rogers said.

“The United States has risen from the canvas and reclaimed its automotive heavyweight championship. When you factor in the demand from emerging overseas markets in Asia and South America, the U.S. is poised to dominate once again wherever the rubber meets the road,” he added.

Louisiana Marches In As Digital Media Leader
With innovative incentives and Oscar-worthy talent, Louisiana is the top-ranked state in our new Digital Media Leaders category.

“Louisiana’s rich culture in creativity, film, music and television has been a natural fit for the development of an emerging digital media and technology industry,” Rogers said.

“The activity in this red-hot growth sector is statewide, with new studios and projects emerging on what seems like a monthly basis in digital media hubs including New Orleans, Baton Rouge and Shreveport,” he added.

The digital media surge in Louisiana has drawn major players who already boast a bounty of impressive awards, including two Academy Awards at this year’s Oscars. The gold statuettes went to Moonbot Studios in Shreveport for its animated short subject, The Fantastic Flying Books of Mr. Morris Lessmore, and Pixomondo, whose work on the film Hugo won the Oscar for Best Visual Effects. Pixomondo announced earlier this year it is investing $1.2 million to open shop in Baton Rouge’s Celtic Media Centre.

Louisiana edged out another emerging digital media powerhouse, Utah, and outpaced perennial media centers New York and California to take the top ranking in BF’s Digital Media Leaders category.

Louisiana’s digital media industry is one of the fastest-growing in the nation. The state has almost 19,000 skilled software developers and more than 100,000 professionals with a skill-set conducive to digital media or software development. In addition, its information sector, including software publishing and telecommunications, has experienced the second-fastest growth rate in the country since June 2009.

Rogers noted that New Orleans’ robust comeback from the Hurricane Katrina disaster has been driven by an aggressive economic development strategy focused on new growth sectors. “New Orleans is undergoing an economic renaissance—and digital media is playing an integral role,” he said.

Companies drawn to Louisiana include Firebrand Games, a critically acclaimed video game development company currently working on titles for the Nintendo DS and Wii. New Orleans has attracted GE Capital’s new technology office, adding hundreds of jobs to the local workforce. GE chose New Orleans after a site selection process that scrutinized hundreds of locations.

Known as the “Creative Capital of the South,” Baton Rouge has attracted development studios such as Electronic Arts, Crawfish Games, Nerjyzed Entertainment and BitRaider MMO.

Our Digital Media Leaders ranking is calculated based upon an evaluation of available incentives, recent project activity, cluster growth potential and initiatives/job creation in digital animation, video games, graphics and film sectors.

California, Washington, Texas Soar In Aerospace
For the past few years, we have issued a Metro ranking for our annual evaluation of aerospace/defense manufacturing leaders. However, recent developments have made it difficult to get an accurate fix on the metro pecking order in this critical employment sector, as jobs continue to shift between aerospace hubs in Wichita, Charleston, Seattle and Oklahoma City. Therefore, in our 2012 report we have refocused this category as a state ranking.

An in-depth analysis prepared by Deloitte and commissioned by the Aerospace Industries Association (AIA), released in March, contains a treasure trove of data providing a clear picture of which states are dominating the aerospace/defense sector. Deloitte’s findings are derived from publicly available national- and state-level data from sources such as the Bureau of Labor Statistics (BLS), National Census Bureau, Bureau of Economic Analysis (BEA) and company financial filings with the Securities and Exchange Commission (SEC).

Southern California, Washington’s Puget Sound and the Dallas/Ft. Worth area continue to be the nation’s leading regional aerospace/defense hubs, so it comes as no surprise that California, Washington and Texas are our top three states in this category, respectively, with  Washington and the Lone Star State nearly tied for second.

More than 162,000 workers are directly employed in the aerospace/defense industries in the Golden State. Washington, with 93,925 workings in this sector, edges out Texas’s total of 87,871. Florida and Arizona round out the top five.

According to the Deloitte report, Washington actually has higher employment in aerospace products and parts manufacturing than its giant neighbor to the south, but California leads in several other subsectors. The survey also reveals that Pennsylvania leads in military land vehicle manufacturing, while Texas produces the most artillery ammo.

Deloitte estimates that the U.S. aerospace and defense industry directly employed 1.05 million workers in 2010. These workers received $84.2 billion in wages and paid $15.4 billion in Federal individual income taxes, and $1.9 billion in state individual income taxes. The U.S. government employs an estimated 845,198 aerospace and defense skilled workers at armed forces maintenance and repair depots, the National Aeronautics and Space Administration, the Federal Aviation Administration and other defense agencies including Defense Advanced Research Projects Agency (DARPA) and civilians working at the Department of Defense.

Deloitte found the industry has an estimated indirect and induced employment of 2.36 jobs for every 1 directly employed. The industry also has a large contribution to the U.S. economy, responsible for fully 2.23 percent of GDP and 7.0 percent of exports in 2010. With direct, indirect and induced employment of 3.53 million jobs spread over the entire U.S., as well as contributing an estimated $37.8 billion in tax collections benefiting local communities, state treasury coffers and the federal government, this industry is central to the U.S. economy and our largest net exporter, contributing $89.6 billion to U.S. exports, with a large portion made up of commercial aircraft bound for foreign carriers.

LA’s Faststart, Georgia’s Quick Start Tops In Training
As in 2011, innovative programs in Louisiana and Georgia are the cream of the crop among Workforce Training Leaders in our 2012 State Rankings Report. Workforce training programs in Louisiana and Georgia again finished first and second, respectively, in this category, which has grown in importance as the need for skilled workers has become an urgent priority across the U.S.

“Louisiana’s FastStart continues to be the gold standard for workforce training programs, which increasingly are an essential element in successful economic development projects,” Rogers said. “Businesses relocating to Louisiana can be certain they will have strong support from the state in acquiring and training skilled workers.”

Rounding out the top five in our Workforce Training Leaders category are Florida, New Mexico and North Carolina.

To date, FastStart has completed nearly 70 major projects for expanding companies in Louisiana. The projects touch a variety of sectors, from agribusiness to digital media software development and corporate headquarters expansions. Often, the program becomes the key reason why companies choose to expand or relocate in Louisiana rather than another state or nation.

FastStart, which is run by Louisiana Economic Development (LED), was launched in 2008 to help attract and develop workers for new projects. One of its first successes was helping convince Gardner Denver Inc. to not close its Thomas Products Division plant in Louisiana, but rather to expand it by moving production from Wisconsin.

LED FastStart became the key factor in convincing Gardner Denver to keep its Louisiana plant open, retaining 70 jobs and adding 200 new positions.

As part of a strategic incentive package, FastStart hosted job fairs and open houses in Monroe to build interest in the new jobs, and the FastStart team traveled to Wisconsin, where they performed key business analysis—defining behavior and competency requirements for the new jobs—and documented essential steps needed for a seamless transition from Wisconsin to Louisiana.

Caterpillar, Baxter International, Outdoor Network LLC, NCR, Kia Motors and ZF Industries all have identified Georgia’s Quick Start program as a key reason for choosing to locate their facilities in the state.

Quick Start provides intensive, specified training to give companies the skilled employees they need to open quickly and run efficiently. These services come at no cost to qualified new companies or those adding new jobs or technology. The basic rule is that manufacturers can receive Quick Start benefits if they create at least 15 jobs over a 12-month period.

California, NJ, PA Are Biotech Behemoths
As previously indicated, we decided to break out Biotechnology Strength ranking into Employment, Specialization and Emerging Biotech Hubs categories.

California—the “birthplace of biotech” and home to nearly a third of the industry—dominates the employment ranking, followed by perennial pharmaceuticals powerhouse New Jersey.

New Jersey recently increased its research and development tax credit program from 50 percent to 100 percent, providing technology companies additional yield on their investments in NJ. Gov. Chris Christie was named BIO’s Governor of the Year at this year’s international BIO convention in Boston.

“Despite increasing competition from emerging high-tech hubs across the nation, New Jersey has maintained its long-time status as a biotechnology powerhouse and set in place a diversified strategy that will ensure continued growth in this critical sector moving forward,” Rogers said.

*Number of subsectors in which state has employment specialization. Leaders NJ and IN have strong specialized employment in 4 of 5 sectors.

“The Garden State has supplemented its traditional leadership in pharmaceuticals with strong specialized employment across nearly all biotech sub sectors. A biotech ‘brain belt’ in the middle of the state offers an unmatched pool of skilled workers. This talent-packed workforce, along with generous R&D incentives, will keep New Jersey in the top tier for years to come.”

Since 2010, New Jersey has assisted nearly 100 life sciences companies, including 30 as retention or expansion projects. In addition to creating and supporting over 8,000 jobs, these retention and expansion projects will inject an estimated $507 million of private investment into NJ’s economy.

New Jersey’s life sciences sector employs more than 122,000 people, which is nearly four percent of the state’s private sector employment as of the third quarter of 2011. In 2010, New Jersey’s life sciences employers paid more than $14 billion in wages, or 8.1 percent of the state’s total private sector wages. The average annual wage was $114,757, which was 106 percent higher than the state’s total private sector average annual wage of $55,736 (NJ also is one of our top-ranked states in Per Capita Income). Pharmaceutical companies comprised 43.8 percent of New Jersey’s life science establishments in 2010.  Biotechnology companies account for 34.6 percent and medical device companies account for 21.6 percent.

The top five in our Biotechnology Strength—Employment category is rounded out by Pennsylvania, Illinois and Texas, respectively.

Every two years, the BIO/Battelle report provides us with a repository of rich data that we use to develop our biotech rankings. The Specialization Leaders ranking in our 2012 report is drawn from BIO/Battelle’s finding that New Jersey and Indiana stand alone as the only states with specialized employment clusters in four of the five biotech sub sectors tracked by the industry report.

As always, we also have kept our eyes peeled for tomorrow’s biotech leaders. Our Emerging Biotech Hubs categories include a bevy of states that have made a strategic investment in developing biotech as a critical growth sector. This year’s leaders among the emerging players are Utah, Virginia, Arizona, Iowa and Kansas.

2012 Alternative Energy Industry Leader: Iowa
Every year, we continue to recalibrate our flagship Alternative Energy Leaders category to factor in a diverse range of state initiatives and the increased availability of reliable data tracking the growth across all renewable sectors, including wind, solar, bioenergy and hydropower.

Our top-ranked state in alt energy for 2012 is Iowa, which has established itself as the nation’s wind power manufacturing hub with a cluster of global leaders in the production of wind-turbine components.

Iowa ranked number two in the nation in our Installed Wind Power Capacity (4,419 megawatts) and Wind Power as a Percentage of Overall Energy (18.8 percent) categories. The Hawkeye State also was the top-ranked state in our Biofuels Leaders—Ethanol category.

Iowa became one of the first states in the nation to adopt a renewable energy standard in 1983, and since then the wind power industry in Iowa has generated almost $5 billion in investment, including the 440 MW Rolling Hills Wind Farm in the southwestern part of the state.

The Environmental Law and Policy Center’s (ELPC) analysis shows 80 companies that are part of the Iowa wind industry supply chain, including seven international wind turbine manufacturers. Iowa’s wind industry supports more than 2,300 manufacturing jobs.

Several factors have helped Iowa become a leading wind energy generator and component manufacturer, including, business development resources and tax incentives. Iowa has made a significant commitment to developing and retaining renewable energy jobs through the Office of Energy Independence and its $100-million Iowa Power Fund, which is designed to encourage research and development and innovation. The Iowa Values Fund also is a funding source for projects focused on job creation or retention in the state.

Iowa has been aggressive in offering tax credits to encourage development in the alternative energy sector, including the New Jobs Tax Credit, the High Quality Jobs Program and Investor Tax credits.

Perhaps the most critical factor enabling the successful establishment of a burgeoning wind energy manufacturing cluster is Iowa’s excellent multimodal transportation system. As the wind energy sector developed in the U.S. during the past few years, turbine makers quickly realized they needed to produce the huge components for turbine installations (some of which can stand as high as 400 feet) close to the U.S. wind corridor, which runs across Iowa.

Iowa’s central location and transportation infrastructure make it a primary location for manufacturers to ship and receive wind components. The Iowa Department of Transportation works closely with the Iowa Department of Economic Development to attract wind energy manufacturers by streamlining permitting, overcoming transportation constraints and making staff available to discuss freight movements and logistics.

Global leaders in wind turbine manufacturing who have established facilities in Iowa include Vestas (Ventura, IA), Acciona (West Branch, IA) and Siemens (Fort Madison, IA).

Rounding out the top five in our flagship Alternative Energy Industry Leaders category are Arizona, Texas, Oregon and California.

California still rules the roost in Installed Solar Power Capacity. Hardly a week goes by without another announcement from the Golden State of a vast new solar farm project. Most of these mega-projects have been situated in the Mojave Desert not far from Los Angeles.

Google is funding BrightSource Energy’s solar farm in the Mojave Desert, which employs an Ivanpah Solar Electric Generating System to produce solar energy by utilizing fields of heliostats to concentrate the sun’s rays. The concentrated rays are directed towards the top of a tower where a receiver converts the rays into steam that powers a traditional turbine and generator to make electricity.

The Ivanpah Power Tower will reach approximately 450 feet tall and will use 173,000 heliostats, each with two mirrors. By the time the plant is up and running in 2013, it will be producing 392 MW of solar energy.

While most people would expect California to be synonymous with solar power, our second-place ranking for Installed Solar Power Capacity may raise a few eyebrows among those who haven’t been closely tracking the race to the top in solar energy generation. Thanks to a forward-thinking state program that started incentivizing solar panel installations years ago, the Garden State has earned its top tier status in this category. New Jersey’s installations don’t rival the scale of the mega-farms in the western deserts, but with nine million residents in one of our most densely populated states, smaller installations add up to a large bundle of megawatts.

“When people think of installed solar power generation capacity, sun-drenched places like California, Arizona and New Mexico come to mind. This makes New Jersey’s achievement as a national leader in solar power installation—second only to California—even more impressive,” Rogers said.

“With strong state support for solar power and a forward-thinking program embraced by its largest utilities, New Jersey has proven that numerous smaller-scale solar installations with direct access to the existing power grid can match the huge desert solar farms out West, megawatt per megawatt. In solar power, it’s only the size of your imagination that counts. New Jersey dared to think big on solar when it wasn’t popular to do so, and now it’s a solar energy giant,” he added.

BF’s ‘Recovery Index’
In this year’s rankings report we’ve gone out of our way to supplement our traditional business rankings (including Best Business Climate, Economic Growth Potential and Best Business Tax Climate) with several categories that we are loosely calling the Business Facilities Recovery Index. These include Credit Quality, Most Business Start-Ups and Jobs Growth Leaders.

Not surprising, North Dakota is by far the nation’s jobs growth leader on a percentage basis (6.61 percent), while Arizona emerged as the state with the most business start-ups.

Business Facilities is pleased to congratulate all of the top-ranked states in our 2012 Rankings Report for a job well done.

METRO RANKINGS

The compilation of our annual Metro Rankings always is a challenge because at last count there were nearly 350 Metropolitan Statistical Areas in the U.S. Adding to the complexity, many MSAs are not restricted to the borders of cities and towns but also encompass the surrounding region Additionally, economic development programs often are promoted on a regional basis. Our preference when doing the Metro Rankings is to structure them as much as possible to permit the results to showcase individual locations. We’ve done our best to adhere to that standard.

Cincinnati has Lowest Cost of Doing Business
Cincinnati’s low costs for facility leasing, transportation and property taxes contributed significantly to its ranking as the least-costly location to do business in the United States among the 27 largest metro areas (all with populations exceeding 2 million), according to a study by KPMG LLP, the audit, tax and advisory firm.

Atlanta was the second most cost-competitive location in the large-cities category, followed by Orlando, Tampa and Dallas-Fort Worth, which ranked third, fourth and fifth respectively. Other locations that performed well were Baltimore, St. Louis and Cleveland.

In our 2012 Metro Rankings Report, Cincinnati also was ranked ninth in Economic Growth Potential (less than 450,000 employment), seventh in Best Quality of Life and sixth among the Top 10 Manufacturing Cities.

KPMG’s Competitive Alternatives study provides a thorough biennial comparison of more than two dozen large metropolitan area business locations in the United States, offering a comprehensive guide for companies considering sites for their business operations. The KPMG study is particularly valuable for its measurement of significant factors that contribute to business operating costs and which often vary by location, including costs associated with taxes, labor, facilities, transportation and utilities.

KPMG’s 2012 Competitive Alternatives study measured 26 significant cost components in each market, including labor, taxes, real estate and utilities, as they apply to 19 industries over a 10-year analysis horizon. Information is also provided on a variety of non-cost components. The study enables companies to perform a “quick scan” of locations to determine which markets can offer an advantageous business environment.

The KPMG study reveals that Cincinnati had a cost index of 95.9, representing business costs 4.1 percent below the U.S. national baseline of 100.0. Cincinnati was followed closely by Atlanta at 96.2, Orlando at 96.3, Tampa at 96.4 and Dallas-Fort Worth at 96.5.

Atlanta’s ranking was driven by a very favorable effective income tax rate and competitive business operating costs in such areas as transportation, employee benefits, natural gas and factory leasing. Orlando benefited from very competitive costs for salaries and wages, and employee benefit plans. Tampa had the lowest labor costs of all the large U.S. cities, along with low downtown office leasing costs. Dallas-Fort Worth had particularly strong cost advantages for utilities and facilities, which contributed to the location’s ranking for lowest overall business operating costs among the large U.S. cities examined in the KPMG study.

Baltimore ranked sixth in the study with a cost index of 97.0, benefiting from the lowest suburban office lease costs among large cities and low property-based taxes. St. Louis and Cleveland followed Baltimore, both with a cost index of 97.1. St. Louis’ low costs for factory leasing and electricity contributed significantly to its ranking, while Cleveland benefited from low office lease costs.

KPMG’s baseline cost index (U.S. = 100.0) is defined as the average of business costs in the four largest U.S. metropolitan areas: New York, Los Angeles, Chicago and Dallas-Fort Worth.

Midland TX, Knoxville TN are Growth Centers
It is no wonder that expert after expert has recognized Midland,TX as having exceptional assets, the kind of assets that promote sustainable growth when other parts of the country are struggling with challenges. Midland, TX ranked second in our Economic Growth Potential (less than 450,000 employment) category.

Midland has amassed distinctions in recent years that include being ranked number one in both Inc.com’s list in overall and small cities categories and on the Milken Institute/Greenstreet Real Estate Partners’ “Best Performing Cities Index.”

Midland offers a retail trading zone population in excess of 350,000; rail service, a major interstate and two airports including Midland International Airport (MAF). The city also boasts the La Entrada Al Pacifico—a West Texas Trade Corridor between Mexico, Canada and the United States.

A well-educated workforce is essential in a competitive global environment, and workers must be able to update and expand their knowledge as new technology and ways of working evolve. Post-secondary and higher education resources are readily available in the Midland area to serve the community.

The University of Texas of the Permian Basin with an enrollment of 3,600 students offers bachelor’s and graduate degrees in business and technical areas, with an emphasis on segments that serve the Permian Basin oil and gas industry. Midland College, a level-two, comprehensive community college offers more than 50 fields of study, including programs in nursing, paralegal studies, aviation maintenance technology, aerospace manufacturing, oil and gas and wind-related technology. And, the Midland College Advanced Technology Center (ATC), a partnership of Midland College and Midland Independent School District, is designed to deliver technical workforce education programs, enabling residents to acquire technical skills and certifications.

Other workforce development resources in the Midland area include the Petroleum Professional Development Center, the Center for Energy and Economic Diversification, Texas Tech University Health Science Center, Workforce Solutions of Midland and MakeMidlandHome.com—an interactive website created to partner Midland Employers with Job Seekers by providing useful information.

Commercial service daily to eight major hubs, border entry with United States Customs, easy access to Interstate 20, plentiful land and buildings along with business jet and a corporate airport with easy access to the Central Business District means there is room for aggressive expansion in a strong market ready for new opportunities. Midland has a business park with acres of shovel-ready sites, some adjacent to runways for aviation-related industries, and numerous available sites for energy clusters, business and professional services, healthcare facilities, transportation and aviation, among other target industries in Midland.

Midland’s Central Business District (CDB) has over five million square feet of multi-tenant office space. Under the leadership of the MDC, the Downtown Midland Management District and Tax Increment Finance District Boards are aggressive in both the revitalization efforts of the CBD and bridging public-private partnerships.

Knoxville, TN earned our no. 10 ranking for Economic Growth Potential (less than 450,000 employment) and was eighth in our ranking of the Fastest Growing Cities.

“Our 2012 Metro Rankings results show that growth is synonymous with Knoxville,” Business
Facilities Editor in Chief Jack Rogers said. “Few cities can match the combination of assets the Tennessee city brings to the Knoxville-Oak Ridge Innovation Valley. Knoxville has all of the attributes that will enable it to be a growth center for years to come,” Rogers added. “With an influx of skilled workers and a world-class research infrastructure, we expect Knoxville to continue its upward climb in our key Metro Rankings categories.”

When it became clear that a huge portion of the federal stimulus effort was earmarked for research and development of alternative-energy and energy efficiency-related projects, the Knoxville, TN area was ready. It declared itself the Knoxville-Oak Ridge Innovation Valley, bringing researchers from Oak Ridge National Laboratory (ORNL) and the University of Tennessee/Knoxville together in ambitious effort to establish the region as a primary alternative energy hub.

Improved LED lights, high tech air filtration systems and lighter, stronger and easier-to-ship materials—all developed locally—are fueling a promising, and increasingly green, future for the Knoxville-Oak Ridge Innovation Valley.

Entrepreneurs and local companies in the Innovation Valley economic development region are working closely with researchers at ORNL, the Department of Energy’s Y-12 facility in Oak Ridge and the University of Tennessee/Knoxville.

Technology transfer also is at work locally at Industrial Ceramic Solutions, which produces ceramic fiber filters for industrial and diesel exhaust applications. The company, headed by former Oak Ridge materials research scientist Dick Nixdorf, is developing high-performance reinforcement fibers to improve durability of combustion chamber liners in coal-fired power plants. Nixdorf’s company also works with bon nanotubes, which could improve fuel cells and lithium. The underlying technology developed was a joint effort by ORNL and Y-12.

The synergies between research and the region’s economy are perhaps best symbolized by the ORNL lab director’s chairmanship of the Knoxville-Oak Ridge Innovation Valley economic development partnership and by such events as the Technology Resource Showcase, which has connected local researchers and their innovative technologies with local companies.

“I believe in the adage, ‘companies innovate or they die’,” said Jesse Smith, technical director for the Innovation Valley partnership. “We ask companies, why would you want to be anywhere else? What better way that to tap into DOE’s largest energy materials lab and the innovative products coming out of Y-12 and the many collaborative efforts with a major university?”

Also fueling growth in the area is increased demand for centrifuges produced at a site in Oak Ridge shared by USEC Inc. and its manufacturing partner, Babcock & Wilcox Co. Toshiba Corp. and Babcock & Wilcox Investment Co., an affiliate of Babcock & Wilcox Co., have signed a definitive long-term agreement to a three-phased investment of $200 million in USEC.

Charlotte NC: Rising Quickly
Charlotte, NC earned the top ranking in our Fastest Growing Cities category. It seems like a week doesn’t go by without some major economic development news out of the Charlotte, NC region. A skilled workforce and aggressive state programs to support relocations and new facilities are reaping a whirlwind of job-creating activity in this part of the Tarheel State. For example, tire giant Michelin North America invested $11.3 million to expand its aviation tire operations in Norwood, NC.

Center City is the central employment district for Charlotte, with businesses that range from design firms and retail shops in Historic South End to the government centers and financial, insurance, real estate, engineering and legal services companies that populate the growing skyline of Uptown Charlotte.

More than $6 billion in investment is anticipated by the end of the decade for this vibrant district, which already employs 70,000 workers in Uptown and South End. The Center is being transformed into a thriving urban neighborhood and national destination. There are four major office towers under construction, mid- and high-rise condos as well as transit-oriented development with condos and apartments are popping up along the LYNX Blue Line. There also is a growing list of tourism assets, including the Wachovia Cultural Campus and the extremely popular NASCAR Hall of Fame.
Directly across from the Charlotte Convention Center and NASCAR Hall of Fame, stretching nearly down to Duke Energy’s new office tower, sits what may be the largest piece of prime, undeveloped land in the heart of a major Eastern U.S. city.

More than 14 acres of land, now covered with neatly manicured lawns, is available adjacent to Charlotte’s thriving hub. The land has been divided into five parcels for development: a 3.68-acre parcel adjacent to a light-rail station and gateway, across from the convention center; 3.75 acres at south gateway, across from the NASCAR museum; a 2.68 parcel with easy access to highway and exiting traffic; 1.8 acres south of I-277; and 2.28 acres with street connections to nearby residential areas, retail and greenway.

All of the available parcels have Uptown Mixed Use District zoning and unlimited floor area ratio (FAR). Unlimited FAR and building height means there’s basically no limit on the size of buildings that may be constructed on the site. The land currently is all city owned.

The city is actively soliciting proposals from retail, office and residential buyer/developers, who in turn would secure tenants for their developments. A deal was reached last year for a 250-unit apartment tower on one of the parcels.

Developers of these prime parcels will get close assess to the inner belt loop of Charlotte’s interstate highways, while being within walking distance of the Queen City’s cultural gems and business heart. The parcels are three blocks from the Levine Cultural Campus, which includes three museums and a performance hall.

Center City is a thriving and diverse urban neighborhood with more than 13,000 residents. Its neighborhoods boast gleaming, high-rise condos, stately turn-of-the-century Victorian homes, apartments, town homes and houses for singles and growing families. More than 25-million visitors come to Center City to visit 120 restaurants and 50 nightspots, the Carolina Panthers at Bank of America Stadium and Charlotte Bobcats at the Time Warner Cable Arena as well as cultural venues including the Blumenthal Performing Arts Center, Discovery Place and ImaginOn, and the Mint Museum of Craft and Design.

Indianapolis: Crossroads of the U.S.
In our 2012 Metro Rankings Report, Indianapolis made the top 10 in three categories: Economic Growth Potential (employment greater than 450,000), Logistics Leaders (Air Cargo Hubs) and Top 10 Manufacturing Cities.

Indianapolis used to be the quintessential Rust Belt city. Now it’s at the center of a statewide boom in the life-sciences sector and rapidly is establishing itself as one of the Midwest’s leading transportation hubs.

A rapidly growing life sciences industry has a $44-billion total impact on Indiana’s economy, according to a comprehensive report released by BioCrossroads. The report, based on data gathered by the Indiana Business Resource Center at the Indiana University Kelley School of Business, illustrates a decade of substantial growth and measurable progress across a wide range of nationally significant indicators.

For example, the report noted that in 2009, Indiana’s life sciences exports totaled $7.4 billion, ranking the third highest in the U. S., behind only California and Texas. The state has the third-highest life sciences employment concentration nationally and has seen a 21 percent increase in life sciences employment, adding more than 8,800 new jobs to the industry since 2002. More than 50,000 workers at 825 companies comprise four life sciences sub-sectors: medical devices and equipment; drugs and pharmaceuticals; research, testing and medical laboratories; and agricultural feedstock and chemicals.

Indiana’s health information technology sector contributes an additional 2,500 workers and 72 companies. The report also highlights the progress of Indiana’s life sciences companies in discovering and commercializing thousands of new products over the past decade. There were 2,226 U.S. Food and Drug Administration filings between 2005 and 2010—the Hoosier state had the ninth highest number of 510(k) applications with 1,821, and the 11th highest number of Premarket Approval applications with 405.

“There are three key components to having a thriving innovation cluster: the sector must be based on real assets, must draw substantial corporate and philanthropic investment and must be sustained by the investments of others who care about it,” said David Johnson, president and CEO of BioCrossroads, based in Indianapolis.

“Indiana has all of those elements working together. Compared to other states and regions, we have a significant competitive advantage because of our focus on cultivating a skilled workforce, engaged university and academic institutions, strong philanthropic support, novel public-private partnerships, access to capital and a positive business climate.”

Indianapolis, which is home to big names in the field such as Eli Lilly & Co. and health insurer WellPoint Inc., is leading the transformation. Corporations like these have added the lion’s share of the state’s new life-sciences jobs. Now, they’re helping smaller companies get off the ground, too—by spinning off new businesses as well as by backing independent start-ups. Eli Lilly, for instance, has contributed roughly $60 million to seed and venture funds that are supporting entrepreneurs.

Memphis, TN: Global Logistics Hub
Memphis, TN scored an impressive double play in this year’s rankings by grabbing the top slot in both our Metro and Global Logistics Leaders (Air Cargo Hubs) rankings.

The FedEx hub was placed in Memphis because of the city’s central location, the availability of the workforce, a strong relationship with the local airport authorities and generous economic incentive programs.These qualities have fueled major FedEx expansions in the Memphis area, including a facility in Collierville, TN.

The Memphis region has a variety of headquartered companies primarily located in the Metro area. In addition to FedEx and AutoZone, (two Fortune 500 headquarters) are Dunavant Enterprises and International Paper, two recognized Forbes “private 500” companies. Additionally, Sparks is the largest commodity trader in the world, Morgan Keegan is one of the largest investment bankers, Belz Enterprises is one of the nation’s leading development companies, The Kemmons Wilson Companies (founder of Holiday Inn) also is a major privately held company located in Memphis.

The University of Tennessee Health Science Center (UTHSC), St. Jude Children’s Research Hospital and the region’s medical centers provide the necessary research and training to build and support economic activity in the bio-med health sciences field. Together, these institutions enable business incubation and startups to be facilitated. An example is the TriStar incubator, a private research facility created by UTHSC.

Memphis bills itself as “America’s Aerotropolis,” a moniker it has trademarked as the leading aerotropolis in North America.

“In many communities the idea of the aerotropolis is aspirational, but in Memphis it’s reality,” says Arnold Perl, chairman of the Memphis-Shelby County Airport Authority Board.

“Since Memphis was first identified as the closest thing to an aerotropolis in North America by Dr. [John] Kasarda in an article in Fast Company magazine in 2006, the aerotropolis infrastructure has deepened and it has become much more integrated into our community’s strategic planning, ”The federal government has now recognized that the aerotropolis is a job incubator and has put aerotropolis language into both the Federal Aviation Reauthorization Act as well as the Highway Reauthorization bill. In the past year, a HUD grant was provided to Memphis to enable creation of the first formal master plan for the aerotropolis. That plan will provide greater alignment and a sense of purpose for where we are headed.”

The Memphis aerotropolis is now recognized as a global “airport city.” But Memphis is not resting on its laurels. Instead, regional economic developers have come together to make significant improvements to the airport’s entire transportation infrastructure.

“If we listed some of the improvements we made in the past few years, we’ve spent about $65 billion on transportation projects,” says Dexter Muller, senior VP of Community Development for the Greater Memphis Chamber (GMC). “We have four workgroups that work on the aerotropolis initiative here: transportation and access; master planning and redevelopment; gateways and beautification; and marketing and branding. Every year we try to move projects in those areas forward.”

Some of the forward progress that was made over the last 18 months includes:

• Access to $56 million in funding to complete an outer loop in the next two years to facilitate freight movement by truck
• Completing an environmental impact study to build “The Southern Gateway,” an intermodal bridge across the Mississippi river with lanes for trucks and passengers and also rail
• Approval to complete building the highway 78 corridor that will connect Memphis to Interstate 22, which will connect it with Birmingham, AL. “The highway 78 corridor is one of our highest priorities,” says Muller, “We’ve got approx. 60 to 75 billion square feet of industrial space around that corridor and it’s right near where the Burlington Northern Railroad has just built their new intermodal yard that will triple the capacity that they have here. So that’s kind of ground zero for our industrial development. So everything’s been approved around it and we are ready to go for right-of-way acquisition on it.”
• Completion of a new interchange modification study from the state transportation department. Memphis now has a final design that’s been accepted by the Federal Highway Administration
• Completion of a landscape master plan; for the first phase, the Memphis City Council appropriated $1.2 million to plant about 2,000 trees as part of their gateway beautification plan. “We also had a consulting firm work on a gateway design plan for the eight entrances into the airport city area.

We’ve looked at each one of those to see what treatment we should have for them, so when you come into the area you know you’ve entered it. The marketing end of this is important to us [in order to communicate] our branding to everyone, because we want people to know this is our air city, this is our aerotropolis,” says Muller.

Memphis signed a memorandum of understanding with another leading aerotropolis, Charles De Gaulle Airport [and the Invest in Paris agency] in France to do joint marketing to ensure that when they have companies in Europe who want to do business in the U.S., Memphis is their point of contact.

The post COVER STORY: 2012 Business Facilities Rankings Report appeared first on Business Facilities.

By Jenny Vickers

When it comes to the biotech sector, the bloom is off the rose. Prior to the global financial meltdown in 2008, venture capitalists were placing big bets on a wide range of biotech initiatives—including startups in biomed, agricultural biotech, biofuels and industrial biotech—with the conventional wisdom nearly unanimous that these initiatives could leap from the labs to the marketplace and scale up quickly. But as the gloom of the Great Recession permeated, seed money for biotech became scarce and competition for a dwindling pool of projects became fierce. One benchmark puts this new landscape in bold relief: foreign direct investment in the biotechnology sector dropped by 20 percent in 2011.

Although the recovery appears to be solidifying (at least in the U.S.), the pre-collapse excitement that heralded biotech as a hot growth sector has given way to a more realistic assessment that biotech hubs will have to be built the old-fashioned way, with long-term planning and comprehensive strategies that do not expect instant success.

Industry analysts still believe there will be a hefty return in new jobs and revenues for those who stay the course and build a firm foundation for tomorrow’s biotech bonanza. In this year’s annual report on the state of biotech and pharmaceuticals, we zero in on several locations that are well positioned for future success.

Florida: Bastion Of Biotech
Over the past decade, Florida has established itself as one of the top locations for biopharmaceuticals innovation and industry growth. The state also is home to some of the nation’s most highly regarded bioscience research centers and several major hubs of cutting-edge science and business development, including Scripps Florida, the Sanford-Burnham Medical Research Institute, Torrey Pines Institute for Molecular Studies and the Max Planck Florida Institute.

Florida is currently the 2nd-fastest growing biotech industry in the U.S. According to the Florida BioDatabase, a freely accessible public database that tracks the biotechnology industry in Florida and is published by the University of Florida’s Sid Martin Biotechnology Incubator, the number of Florida bioscience companies grew 42 percent to a current total of 193 from 136 in 2008. Biotech companies tracked by the BioDatabase are characterized by having a true research and development core that helps fuel the innovation of new products for Florida’s growing biomed industry.

“Florida is on track to become a strong player in the biotechnology industry,” said Dr. Michael Schmitt, editor of the Florida BioDatabase. “Our state has the key ingredients for growth including a strong research base and an increasing trend in venture capital funding.”

Overall, the percentage growth of venture capital funding for the biomedical industry in Florida outpaced the national average with investment dollars in 2011 rising by 210 percent over 2010 to $87 million.

Most of Florida’s bioscience growth is centered in the central and southern regions. The Lake Nona Medical City is under construction in Central Florida. Some tenants include the University of Central Florida College of Medicine, the Sanford-Burnham Medical Research Institute at Lake Nona and the Orlando VA Medical Center. Construction is also under way on the University of South Florida’s Center for Advanced Medical Learning and Simulation in the Tampa Central Business District. In South Florida, the new science and technology park at the University of Miami is helping to shape a strong innovation community.

Outside of new development projects, existing bioscience companies are expanding across the state.

In April 2012, Arthrex, Inc. broke ground at its new 190,000-square-foot manufacturing plant in Collier County. Arthrex is a manufacturing company that makes orthopaedic surgical supplies. More than 3,000 such products have been developed by Arthrex and are marketed worldwide. The company also provides educational services for orthopaedic surgeons and their patients.

Collier County commissioners gave Arthrex the green light in January, offering the company more than $2 million in financial incentives over the next five years if the company creates 600 new jobs. The commissioners are excited one of the fastest-growing companies in the nation has decided to stay and grow in Collier County. In 2011, Arthrex was named to Inc. magazine’s prestigious Inc. 500|5000 list, an exclusive ranking of the nation’s fastest-growing private companies.

In April 2012, the Metro Orlando Economic Development Commission announced that Orlando-based AcariaHealth Inc. is receiving a $400,000 tax refund to create up to 80 new jobs in the next three years. AcariaHealth is a specialty pharmacy focused on handling the medication needs for patients with hemophilia, hepatitis C, Crohn’s disease, multiple sclerosis and rheumatoid arthritis.

The expansion includes a $600,000, 20,000-square-foot addition to its existing facility. The company also has plans to bring a distribution center to Orlando. The new jobs will pay an average of $47,000 annually, adding $3.8 million to the local economy.

In the same month, medical technologies company Medtronic Inc. announced it will soon break ground on a $14-million expansion project in Jacksonville, FL. The project includes a new 75,000-square-foot building to expand its surgical technologies division headquarters in Jacksonville. Medtronic expects to create 175 new full-time jobs by the end of 2015. Medtronic has nearly 700 employees in Jacksonville. The surgical technologies business designs and manufactures products for the diagnosis and treatment of ear, nose and throat diseases and cranial, spinal,  and neurologic conditions.

Incentives from the city and state were approved in August 2011. Medtronic, based in Minneapolis, reported overall revenue of $15.9 billion in fiscal year 2011 with surgical technologies making up about 8 percent of that revenue.

Palm Beach County is home to a thriving biotechnology and life sciences cluster with more than 4,180 people employed in life sciences and related industries, more than 115 companies primarily engaged in R&D or manufacture of biotechnologies, medical devices, and pharmaceuticals, and 50 additional companies primarily engaged in the environmental and biological sciences. The county is home to two world renowned biomedical institutes—Scripps Florida and Max Planck Florida Institute.

Scripps Florida is home to the Translational Research Institute, a collection of scientific centers employing cutting-edge technologies to speed development of new therapies and products, translating breakthroughs into practical applications.

Scripps Florida is a state-of-the-art biomedical research facility located in Jupiter, FL. Using the latest cutting-edge technologies, researchers at Scripps focus on basic biomedical research and drug discovery. As of January 2011, more than 400 faculty members, scientific, technical and administrative staff were employed at the 350,000-square-foot campus, which is comprised of three research buildings. By 2014, the campus is expected to house more than 60 faculty and 550 total staff.

Scripps Florida also is home to the Translational Research Institute, a collection of scientific centers employing cutting-edge technologies to speed development of new therapies and products, in essence, beginning the important process of “translating” breakthrough scientific discoveries into practical applications.

The Max Planck Florida Institute, located at Florida Atlantic University’s McArthur Campus, is the first Institute the German-based Max Planck Society has established in the U.S. The startup costs of the Institute were supported by $86.9 million from Palm Beach County and $94 million from the state’s Innovation Incentive Fund. The Institute, which focuses on brain function and neural circuits, adds a strong international component to Palm Beach County’s life sciences cluster and to the general economic base.

BioFlorida, the state’s trade organization for the life sciences, has been working to ensure that Palm Beach County remains an epicenter for the state’s biosciences industry. BioFlorida joins Scripps and Max Planck in forming the Life Tech Initiative, a consortium of all public and private universities along the I-95 corridor from Miami to Port St. Lucie, involving academia, research institutes and the biotechnology industry in southeast Florida.

The Initiative provides an overarching umbrella for the entire Southeast region. The consortium also includes the Business Development Board of Palm Beach County (BDB); Florida Atlantic University; Palm Beach State College; the Research Park at Florida Atlantic University; Florida International University; and the other public universities, colleges and economic development organizations in Southeast Florida.

BioFlorida also has partnered with the Life Science Technology HUB (LST HUB), which supports the life sciences and technology industries in Palm Beach County, to extend its reach across the state.

The LST HUB was created with the intent to grow the cluster specifically in Palm Beach County, modeled on a San Diego organization credited with the growth of the high-tech and life science cluster there. LST HUB is gathering resources—investors, business and marketing professionals—and integrating them with life science and technology professionals, students and educators. The goal is creating an ecosystem for the growth of new companies and jobs.

Indian River State College is at the center of a regional effort to boost interest and achievement in science, technology, engineering and math. IRSC has launched a wide range of initiatives that foster scientific aspiration in these STEM disciplines. The College’s state-of-the-art science laboratories are utilized by an increasing number of students each semester to develop the skills they need for a career in biotechnology—skills sought by the biomedical research firms moving here. In fact, an IRSC chemistry student Jason Fenwick was one of the first laboratory technicians hired by Torrey Pines Institute for Molecular Studies when the California firm expanded to this area.

Now under construction, IRSC’s STEM Center at the St. Lucie West Campus will serve as a feeder program, providing skilled employees for nearby research institutes.

The three-story facility will provide much-needed classroom space and sophisticated teaching laboratories in genetics, chemistry, ecology, molecular science, botany and microbiology. The focus will be on linking math and science concepts to real-world applications.

Indiana: 100 Years & Counting
Indiana has been a center of innovation in the life sciences, pharmaceutical and medical device industries for more than a century. Driven by intellectual capital, public support, academic partnerships, workforce excellence and business and industry collaborations, Indiana has established itself as one of the nation’s leading life sciences states.

Indiana is home to more than 500 life sciences companies and is one of the nation’s top four life sciences leaders in terms of the number and concentration of life sciences jobs. Indiana has the second highest concentration of biopharmaceutical jobs in the nation. The state’s pharmaceutical industry ranks fifth in the nation in terms of sales, shipments, receipts and revenues. In addition, Indiana is among the top 10 states for medical technology and is one of only five U.S. states to specialize in three of four key biosciences areas: agricultural feedstock and chemicals, drugs and pharmaceuticals and medical devices and equipment.

Pharmaceutical and medical device industry leaders like Eli Lilly and Company, Zimmer, Biomet and DePuy Orthopedics are based in Indiana. The state also is home to WellPoint, the nation’s largest health benefits company; Roche Diagnostics, the top medical diagnostics company in the world; and the internationally recognized Regenstrief Institute, home of the largest coded, continuously operated electronic medical records system in the U.S.

Indiana’s growing network of 28 business incubators and 19 Certified Technology Parks (CTPs) are helping to encourage the growth of startup life sciences and high-technology companies in Indiana. The CTP program was formed to create special tax districts to encourage the development of technology incubators; to leverage the intellectual and equipment resources of nearby universities; and to attract talented technology entrepreneurs.

Under the program, 100 percent of state income and sales taxes generated by businesses located in technology parks are used to finance the technical, environmental and capital improvement projects for public use areas within the park.

Indiana’s strength in life sciences, biopharma and medical technology is helping to attract top leaders in the medical fields and innovation.

In April 2012, medical-device maker Cook Group announced its purchase of General BioTechnology, an Indianapolis company that specializes in cell and tissue processing and cryopreservation technologies. Cryopreservation is low-temperature storage of a living organism so it can later be revived and restored.

Bloomington-based Cook didn’t disclose what it paid to acquire the company, which also runs an umbilical cord blood and tissue bank for individuals and a reproductive tissue bank.

Birck Nanotechnology Center, Purdue University Discovery Park

In February 2012, BASi announced the opening of a new Discovery Center, located at its corporate headquarters in the Purdue Research Park of West Lafayette. The purpose-built facility is designed to provide pharmaceutical and biotech companies with the information they need to evaluate new compounds in the earliest stages of development.

The lab features the Culex® automated in vivo sampling system that provides multiple streams of data from stress-reduced subjects and allows for rapid decisions based on more accurate information.

“Our unique in vivo discovery service offers a high value option for our discovery customers in generating tight, reliable data, which makes for better predictive decisions,” said John Devine, vice president of non-clinical services.

The facility has 4,800 square feet of dedicated research space and state-of-the-art environmental systems to maintain and monitor lab conditions. The discovery center is part of BASi’s plan to expand its capabilities in drug discovery to meet client demand. The company also renovated a building at its preclinical toxicology site in Evansville, Ind. The improvements provide scientists with more flexibility and space to complete multiple studies.

In January 2012, California-based NantWorks, LLC, announced plans to locate a new pharmaceutical manufacturing plant in Terre Haute, IN, creating up to 234 new jobs by 2016.

The pharmaceutical company plans to invest $85.5 million to redevelop the former Pfizer facility on approximately 210 acres on the south side of Terre Haute. The new manufacturing plant, which is expected to be operational in 2015, will produce critical care injectable and oncological drugs.

“With the strength of our life sciences industry and a first-class work force, it’s no surprise that innovative companies from high-tax, business-hostile states continue to choose Indiana as the home for new investment,” said Indiana Gov. Mitch Daniels. “With its established executive leadership and groundbreaking pharmaceutical research, NantWorks has all the right ingredients to flourish in the Hoosier State.”

Dr. Patrick Soon-Shiong, chairman and chief executive officer of NantWorks, has previously developed two pharmaceutical companies addressing the unmet needs of critically ill patients. His injectable drug company APP was the nation’s only safe source of heparin during a supply crisis in 2008 and his biopharmaceutical company Abraxis Bioscience developed the world’s first protein nanoparticle cancer drug for breast cancer. Soon-Shiong sold these companies in 2008 and 2010, raising several billion dollars to pursue his vision of personalized medicine.

The Indiana Economic Development Corporation offered NantWorks, LLC up to $2 million in conditional tax credits and up to $100,000 in training grants based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. Vigo County will consider additional property tax abatement at the request of the Terre Haute Economic Development Corp.

KBA Makes Big Plans in KS
Bioscience is among the fastest-growing sectors of the Kansas economy—with good reason. Visionary leaders in Kansas have created a welcoming environment for bioscience researchers, entrepreneurs and industry leaders.

The Kansas legislature established the Kansas Bioscience Authority (KBA) in 2004 to help grow the bioscience sector into a pillar of the Kansas economy. The authority makes investments in sectors in which Kansas has established leadership and expertise including animal health, human health, bioenergy, biomaterials and plant biology.

In 2011 alone, KBA investments helped drive more than $200 million into the Kansas economy. Since its inception in 2004, KBA investments have fueled the state’s economy by more than $800 million. This includes 1,347 new bioscience jobs created by Kansas companies and universities, generating $354 million in annualized wages.

Kansas Bioscience Park Venture Accelerator

To provide bioscience entrepreneurs a bridge from innovation to success, the Venture Accelerator incubator at the Kansas Bioscience Park opened for business last year.

The 38,723-square foot building is customized with office space, wet labs and shared equipment designed to help startups get to market efficiently and successfully. The award-winning design and green features helped the facility earn gold LEED certification. The Venture Accelerator is located within the Kansas Bioscience Park and is home to eight resident companies advancing drug development, medical devices, animal health technologies and more. KBA staff also resides in the Venture Accelerator, offering tenants ready access to KBA expertise and hands-on business assistance.

The Kansas Bioscience Park in suburban Kansas City is a unique research and office park with a powerful mix of deep academic research resources, industrial strength and personalized business assistance. Located in the heart of the Kansas City Animal Health Corridor, which encompasses one-third of the world’s $19 billion animal health industry, 42 acres of land will be granted to qualifying bioscience companies to build facilities within the park.

The Kansas State University Innovation Campus is located within the park itself, while the tremendous research capabilities of the University of Kansas and the University of Kansas Medical Center are minutes away.

Bevy of Incentives Builds Biotech in Pennsylvania
Pennsylvania is a national leader in the life science industry and home to a cohesive community that unites biotechnology, medical device and diagnostics, pharmaceuticals, research institutions and holds significant financial strength. The Pennsylvania Department of Community & Economic Development (DCED) has played a significant role in helping to grow its biotech sector through the following initiatives:

• Increasing the R&D Tax Credit from $40 million to $55 million last fiscal year and level funding of $55 million proposed for this year.
• Supporting early stage bioscience companies access to capital through support of the Life Sciences Greenhouses and Ben Franklin Technology Partners.
• Expanding access to venture capital across the state with recent investments of $8 million into several funds that will leverage between $24 and $60 million for investment.
• Directing recent U.S. Treasury funding provided to the commonwealth to support bioscience and early stage companies—$5 million is earmarked for that effort.
• Opening global markets for Pennsylvania’s life science industry by participating and supporting companies at trade shows in the U.S. and around the world. DCED will be promoting PA products at the upcoming Medical Design and Manufacturing Show in Philadelphia this month.
• Accelerating the growth of emerging firms through the funding of the Keystone Innovation Network that will support our entrepreneurs and university startup companies across the state.
• The current budget also “evergreened” the Tobacco Health Venture funds so in the future it can be reinvested into Pennsylvania bioscience venture capital

Pennsylvania is home to one of the largest, urban research parks in the U.S. Located in Philadelphia, the University City Science Center accelerates technology commercialization, regional economic development and the market availability of life-enhancing scientific breakthroughs by bringing together innovations, scientists, entrepreneurs, funding, laboratory facilities and business services. Graduate organizations and current residents of the Science Center’s Port business incubators have created more than 15,000 jobs that remain in the Greater Philadelphia region today and contribute more than $9 billion to the regional economy annually.

A biotech company formed out of the University of Pennsylvania with the support of the Science Center is one of two new companies to locate in the Port Business Incubator in Philadelphia. Nelum Sciences, a spin out of the University of Pennsylvania’s School of Engineering, is occupying lab space while Oxo Pharma, headquartered in France, has established its U.S. presence in the Bullpen, the Port’s newest co-working space.

With its headquarters in Paris and operations in Lyon, France, as well as a recently opened office in Shanghai, Oxo Pharma is an international consulting firm supporting the life science industry by helping to improve performance, quality and regulatory compliance. The firm plans to increase customer support in major markets with plans to open offices in Benelux and Morocco within the next few years.

Oxo Pharma is the latest participant in the Science Center’s Global Soft Landing program, which fosters international business in the U.S. by helping global companies establish a foothold in local life sciences and IT markets.

Chester County, Pennsylvania will soon be home to Endo Pharmaceuticals, a U.S.-based, specialty healthcare solutions company. In January 2012, Pennsylvania Gov. Tom Corbett cut the ribbon for the future site of Endo’s corporate headquarters. At the event, the Governor praised the company for its continued commitment to the region and its plans to create more than 150 high-paying jobs.

“Here in Pennsylvania we are employing the kind of creative cooperation that says yes to opportunity. And today we are cutting the ribbon on a new headquarters,” said Gov. Corbett. “This investment in the future means we have saved 475 existing jobs and will create another 154 positions over the next three years.”

Endo Pharmaceuticals operates in three key business segments: branded pharmaceuticals, generics and devices and services, delivering a suite of complementary products and services to meet the needs of patients in areas such as pain management, pelvic health, urology, endocrinology and oncology.

Endo entered into a 10-year lease for approximately 315,000 square-feet of office space which will house their corporate headquarters. The company will retain their 475 existing employees and 100 contractors while also creating 154 new positions to be filled over the next three years.

Texas Biotech Packs a $75-billion Economic Wallop
Texas has a dynamic biotechnology marketplace with an estimated annual economic impact of $75 billion. A significant number of top global biotechnology companies have Texas locations, underscoring the state’s vitality in this industry. In 2009, one out of every 19 U.S. biotechnology employees worked in Texas while one out of every 15 U.S. biotechnology establishments was located in Texas.

Currently, the Lone Star state is home to more than 3,500 firms involved in biotechnology-related manufacturing, research or testing. More than 108,600 workers are employed in the biotech sector in Texas at an average annual salary of over $74,800.

Although biotech industry growth takes place statewide, there has been a huge development push in San Antonio and Austin.

San Antonio is seeking to become a bigger player in health care and the biosciences, nationally and internationally, and several new announcements could help give the Alamo City a leg up.

In May 2012, the Texas Technology Development Center (T3DC), which seeks to identify promising tech startup companies and provide them with early-state seed funding, announced plans to invest $100,000 each in two biotech startup companies: OtoMetrix Technologies and Rapa Holdings Inc.

OtoMetrix has a patent on a medical device that it says will make diagnosing ear infections in pediatric patients quicker and more accurate. The company is currently completing work on a prototype of the device and hopes to begin clinical trials soon.

Rapa Holdings Inc. is working to bring a promising anti-cancer agent known as rapamycin to market. Rapamycin is a synthetic compound originally derived from organic materials found on Easter Island in the 1960s. During the 1990s, it was commonly used as an anti-organ rejection drug. But today, researchers believe it has qualities that would be useful in the treatment of age-related diseases, such as cancer and Alzheimer’s.

“We think these are both very promising startups and this gives us equity in those companies,” said Randy Goldsmith, president of T3DC. “They both represent solid growth opportunities for San Antonio.”

In April 2012, four of San Antonio’s large research institutions announced they have formed a new partnership to develop new vaccines. The new partnership, called the San Antonio Vaccine Development Center, could have almost $1 million in new funds to spur scientists in new directions, said Kenneth Trevett, president of the Texas Biomedical Research Institute.

The group, whose members include the University of Texas Health Science Center, University of Texas at San Antonio (UTSA) and the Southwest Research Institute, has raised $600,000 in private donations —including a corporate gift from USAA and a personal donation from NuStar Energy LP Chairman Bill Greehey. With that, they’ve applied another $300,000 from the Texas Research Incentive Program, a state fund that provides a 50 percent match for private gifts of up to $1 million to emerging research universities such as UTSA.

Initially, four $50,000 grants will be awarded to researchers from among the four partners, with priority given to collaborations between two or more of the institutions.

“The center leverages and builds on core scientific resources, expertise and talent at the four institutions in San Antonio,” said Bernard Arulanandam, associate dean for research at UTSA, whose own work includes development of an experimental chlamydia vaccine in collaboration with scientists at the health science center.

Other research at the four institutions includes vaccines against tularemia and Lassa virus, both potential bioterror threats, under development at Texas Biomed; and vaccine delivery systems at Southwest Research.

Ann Stevens, president of BioMed SA, an Alamo City-based biotech booster group, said infectious disease research “is one of five areas we have identified where San Antonio has recognized strengths of national or international caliber. So clearly this is an area where San Antonio can leverage its expertise, both for regional economic benefit, and also to protect human health around the world.”

BioMed SA is finalizing work on a strategic asset initiative in an effort to determine the city’s areas of strength in the bioscience arena. In addition to infectious disease research, it has identified regenerative medicine as another top area. According to BioMed SA, if San Antonio can become a major international player in regenerative medicine, that could have a profound impact on the city’s multibillion-dollar health and bioscience industry—and it could attract the attention of other researchers and companies interested in relocating to the region.

Regenerative medicine is a rapidly evolving interdisciplinary field that draws on fundamental knowledge from biology, chemistry and physics to create materials, devices, systems and therapeutic strategies—including cell-based therapies that augment, repair, replace or regenerate organs and tissues.

GenCure, which was launched last August as an arm of the South Texas Blood & Tissue Center, is helping to propel San Antonio’s regenerative medicine industry on a national and international scale. The non-profit center currently provides expertise in cell and tissue services for regenerative medicine—including patient treatment and clinical research. One such potential being studied is the use of certain cells from umbilical cord blood to improve brain activity in stroke victims.

“Those components of cellular therapies and tissue engineering are very unique to regenerative medicine,” says Mary Beth Fisk, president and chief operating officer for the Blood & Tissue Center and GenCure. “That’s what GenCure is all about.”

GenCure has already teamed up with a number of researchers and is involved in multiple clinical trials in the U.S.—and in other parts of the world, including Brazil and China. One of GenCure’s collaborations is with the University of Illinois and involves the restoration of specialized cells as part of a treatment for Type I diabetes.

The Alamo City is also gaining important ground on the cancer front. In January 2012, South Texas Accelerated Research Therapeutics (START), a local health care group that operates one of the world’s largest Phase I medical oncology programs, announced it is spearheading the development of a new war on cancer that could have a far-reaching impact.

That effort, dubbed the San Antonio 1,000 Cancer Genome Project, will pull together competing Alamo City physicians, researchers and institutions in a collaborative attempt to amplify and expedite efforts to better attack the deadly disease.

San Antonio project officials plan to make their data available to cancer researchers locally, nationally and internationally. Those same officials say that their efforts will encourage the development of new research and could attract more companies, further expanding the city’s multibillion-dollar bioscience industry.

The City of Austin has seen a lot of growth in biotech in recent years, including medical devices, pharmaceuticals and diagnostics. Helping to spearhead this growth is the group BioAustin, which represents over 140 life science companies with over 7,500 employees operating in the five-county Austin and Central Texas region. Companies included in BioAustin operate in the areas of bio-related activities including research, diagnostics, reference laboratories, pharmaceutical, CRO, medical device, agbio and bioveterinary. This group works closely with the hundreds of companies providing services to the bio-related industry and the outstanding healthcare providers in the area.

Austin, TX Biomed Expansions 2009-2012

According to BioAustin, its biotech companies are achieving significant breakthroughs, especially in the area of lymphoma and drug delivery technology. In May 2012, Austin-based biotechnology company Mirna Therapeutics, Inc. announced the publication of new results in the journal Leukemia demonstrating that the therapeutic delivery of microRNA-34 (miR-34) mimics and inhibits tumor growth in an animal model of lymphoma.

Mirna, founded in 2007, has received significant funding from the State of Texas, both through the State’s Emerging Technology Fund and from the Cancer Prevention and Research Institute of Texas (CPRIT). Mirna also is the recipient of a $10.3 million commercialization award from the Cancer Prevention and Research Institute of Texas (CPRIT).

In May 2012, Caisson Biotech, L.L.C. a biopharmaceutical company with a patented heparosan-based drug delivery technology, announced that it has entered into a Development and License Agreement with Novo Nordisk A/S, a global healthcare company and leader in diabetes care. The agreement gives Novo Nordisk the exclusive rights to use Caisson’s proprietary heparosan-based drug delivery technology to engineer and develop compounds within undisclosed therapeutic areas.

Caisson is funded and managed by Emergent Technologies, Inc. a leading life sciences technology investment and management firm headquartered in Austin.

Under the terms of the agreement, Caisson will receive an undisclosed upfront payment and contract research and manufacturing payments. In addition, Caisson will be eligible to receive milestone payments upon achievement of certain predefined clinical, regulatory and commercial targets plus royalties on the global sales of the therapeutic products developed under the agreement; representing a total deal potentially in excess of $100 million.

Utah: Beehive of Biotech
In 1982, a team of University of Utah researchers, engineers and clinicians successfully implanted the Jarvik 7 artificial heart in a Seattle dentist. This was one of Utah’s notable early successes in the medical device industry. Since then, the state has built upon this success and has become a thriving location for life science, biotech and medical device companies.

Today, Utah is home to more than 600 life science companies and 26,000 of their employees. Over 100 of these organizations are medical device companies that make everything from MRI and ultrasound equipment to pacemakers, hearing aids and surgical instruments. In fact, Utah companies currently produce 70 percent of all arterial and vascular access devices utilized worldwide.

In addition, Utah was ranked first among western states for life science business per capita and second for overall industry growth by the Milken Institute. The Bureau of Labor Statistics noted in 2010 that Utah has the highest concentration of biomedical engineers in the country. Utah’s advantages include:

• Direct access to innovative programs at major universities, including the University of Utah, Utah State and Brigham Young University
• The state-funded Utah Science, Technology and Research (USTAR) initiative that fosters research-related economic development in Utah’s colleges and universities—particularly in the biomedical device, nanomedicine and related specialties
• The Technology Commercialization and Innovation Program, which helps fund and transform University-generated ideas into products and companies
• Bioinnovations Gateway, an educational and workforce training facility that provides laboratory and resource access for high school students and entrepreneurs
• Expanded Engineering Initiative, to develop the workforce of the future. Biomedical engineering is a key element of the Initiative
• Life Science Tax Credit program, which encourages early-stage investments and capital for product development and expansion.

In April 2012, more than 400 people from academia, industry and government attended the ribbon cutting of the new James L. Sorenson Molecular Biotechnology Building—USTAR Innovation Center at the University of Utah.

The $130-million interdisciplinary research facility—funded by the state’s USTAR initiative and private donations—demonstrates how architecture and workplace design can support transformative research and business expansion by encouraging interaction across disciplines.

It is the new home of the Brain Institute, the Nano Institute and the Department of Bioengineering, along with USTAR faculty researchers plus junior faculty, administrative and laboratory personnel. The building contains wet lab and research computing space, faculty office space, meeting rooms and public areas designed to promote interaction within the scientific community and industry.

It also includes a state-of-the-art nanofabrication facility with 18,000 square feet of cleanroom space, biobay, and a 5,300-square-foot microscopy and materials characterization suite. The equipment in the microscopy suite ranges in cost from $300,000 to $3 million and is available for use by industry partners.

At USU’s North Logan Innovation Campus a similar story emerges around the 118,000-square-foot USTAR BioInnovations Center. This multidisciplinary facility houses the Synthetic Bio-Manufacturing Institute, the Center for Human Nutrition Studies, the Veterinary Diagnostics and Infectious Disease team, and other life science and renewable energy efforts. USU USTAR teams have a broad portfolio of industry collaborations, including such diverse partners as USANA, a Utah-based nutraceuticals company, and Inovar, an electronics company.

The building has a BioSafety Level 3+ lab (one of the few at that rating in the Intermountain West), as well as extensive multipurpose lab, research kitchen and clinical space.

NJ: Global Medicine Chest
New Jersey is, by any measure, the center of the world’s pharmaceutical industry. The state is home to more than 300 biotechnology companies and 20 pharmaceutical and medical technology firms and 17 out of the world’s top 20 have major facilities in the state. The state also boasts the highest concentration of scientists in the U.S., a total of 150,000 trained pharmaceutical, biotech and medical technology workers. This concentration offers extraordinary opportunities for joint ventures, recruiting and research.

In December 2011, Jones Lang LaSalle, a multinational financial and professional services company specializing in real estate, published its 2011 Global Life Sciences Cluster Report ranking New Jersey/New York as the no. 2 biotech region in the country. Boston was the top-ranked region. The report noted that the region has the highest concentration of college graduates in the nation, and the world’s highest concentration of academic institutions. The report also cited a spate of big-name Pharma firms leasing or buying space in New Jersey, including Bayer and Novo Nordisk.

Championed by U.S. Sen. Robert Menendez, BioNJ and the Biotechnology Industry Organization (BIO), the $1 billion Qualifying Therapeutic Discovery Project was created to further research into critical areas of unmet medical needs by providing early-stage companies conducting that research with additional financial resources. In 2011, the program provided $53 million for the state’s biotech industry—the third largest portion of grant money in the country. A total of 133 New Jersey companies received either tax credits or grants under the program, and these funds are being used to advance more than 225 research projects in therapeutic areas such as cancer, Alzheimer’s disease and Fabry disease.

Oncobiologics was able to access some of the resources it needed to get started through $244,000 in grants from the program. The company, established in January 2011, celebrated the grand opening of its new 25,000-square-foot research and development facility in Cranbury this past October.

“Qualifying Therapeutic Discovery Project funding was critical to helping us get Oncobiologics off the ground,” said Dr. Pankaj Mohan, founder of Oncobiologics. “We had assembled a world-class team and this government backing helped with early equipment investments, while also helping to establish our credibility with future partners.”

Oncobiologics currently employs 20 professionals and plans to employ 200 within two years.
At the end of 2011, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs were reauthorized for a six-year period. The programs include a provision that allows venture capital-backed companies to compete for up to 25 percent of SBIR grants from NIH, DOE and NSF and 15 percent at other agencies, reversing a policy that has hampered R&D at startup and early-stage companies for several years.

The Technology Business Tax Certificate Transfer Program was restored to $60 million in the 2011-2012 budget cycle after a cut to $30 million in the previous cycle. This innovative program enables companies to sell New Jersey tax losses and/or research and development tax credits to raise cash to finance their operations. Since the incentive was established in 1999, over 1,530 applicants have been approved for $630 million. The 75 emerging biotechnology and technology businesses approved to receive funds in 2011 received, on average, approximately $800,000—more than double the previous average.

Companies that benefited from the program in 2011 include Princeton-based Advaxis, Inc., a biotechnology company developing immunotherapies for cancer and infectious diseases, and Cedar Knolls-based Emisphere Technologies, Inc., a biopharmaceutical company that focuses on improved delivery of pharmaceutical compounds, medical foods and dietary supplements.

New Jersey recently raised the Research and Development Tax Credit rate from 50 percent to 100 percent as of January 2012. Previously, R&D spending in New Jersey was used to offset up to 50 percent of corporate tax liability. The new law allows critical and economically beneficial R&D spending in the State to be used to offset all of the corporate tax liability.

In November 2011, Allergan, Inc., a global multi-specialty health care company, announced it will relocate to New Jersey from California, building a $12 million R&D development facility.

The new facility will create several hundred high-quality jobs over the next few years and will be integral to Allergan’s pursuit of new therapies for patients. To help support this project, the New Jersey Economic Development Authority (EDA) approved a $14.9 million grant for the company through its Business Employment Incentive Program. Allergan currently employs 20 people at a subsidiary in Bedminster, New Jersey and receipt of this grant was a critical factor in the company’s decision to grow in the State.

In April 2011, Bayer HealthCare also announced it will expand in New Jersey. The company plans to consolidate its entire East Coast business in the state, keeping 1,000 jobs and adding up to 500 more. The NJEDA awarded Bayer grants totaling $38.2 million, contingent on the company’s planned growth.

Adding to this economic momentum, LEO Pharma, a Danish subsidiary headquartered in Parsippany, New Jersey, announced expansion plans in 2011 as well. The company opened an office in the State two years ago with five employees and expects to have approximately 300 employees in early 2012.

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The digital media sector is developing rapidly, creating thousands of jobs as millions of pixels are aligned in the unbelievable images its artists generate for the latest feature films and video games produced by the multi-billion-dollar entertainment industry. While most of the workforce still is centered in traditional locations like California, Massachusetts and New York, several states have aggressively introduced incentives that are geared to jump-starting new digital media clusters. Among the emerging leaders in this thriving new industry are Utah, Louisiana, Rhode Island and Oregon.

Utah Aims for Digital Peak

In Utah, the digital media industry, which consists of businesses in animation, graphics, film and digital gaming, currently accounts for 1,500 jobs and $415 million in revenue for the state. But now, the goal is to double that by 2016.

In November 2011, the Utah Cluster Acceleration Partnership (UCAP) announced its strategy to double the number of digital media jobs and turn the industry into an $800 million contributor to Utah’s economy by focusing on the state’s unique creative and technology strengths. UCAP is an innovative effort in which Utah’s institutions of higher education become regional hubs of economic activity and the respective presidents become “regional economic stewards.”

“UCAP was started about three years ago,” said Gary Harter, managing director for the Utah Governor’s Office of Economic Development (GOED), which includes the Utah Clusters Initiative. “UCAP connects industry demands for skill sets today and skill sets necessary for the future.”

UCAP’s Utah Digital Media Cluster Report was finalized in fall 2011 after a collaborative effort between Utah Valley University, the Utah System of Higher Education (USHE), the Utah Department of Workforce Services (DWS), GOED and Grow Utah Ventures.

“The digital media industry is growing rapidly here in Utah,” said T. Craig Bott, president and CEO of Grow Utah Ventures. “The partnership’s goal with the digital media cluster strategy is to make Utah a ‘must connect to’ state for any business that hopes to succeed in the global digital media industry. We certainly have the talent and innovation here to make this happen.”

Many of the state’s colleges and universities are rapidly adding or expanding programs to meet the demand for educated workers in the industry. In Utah County, Brigham Young University has established a world-class digital media program that is sponsored by digital media giant Pixar. Through the program, BYU students have garnered numerous “Student Emmys” from the Academy of Television Arts and Sciences, as well as several “Student Academy Awards” from the Academy of Motion Picture Arts and Sciences.

Meanwhile, the University of Utah’s Entertainment Arts and Engineering video game development program, ranked second nationwide, represents one part of Utah’s flourishing video game industry that employs 600 people and generates about $242 million in revenue annually.

“The University of Utah’s game development program has been great for us,” said Ben Bell, Executive Producer at Electronic Arts (EA) Salt Lake City. “They have passionate faculty and we work closely with them on curriculum. We’ve had great luck working with them. It’s a really great asset that the state has with respect to the momentum of digital media.”

EA is one of the top producers of digital games in the world. Bell credits the state’s successful workforce as one of the reasons why the company chose to locate in Utah.

“In our industry we live and die by our talent,” said Bell. “We need great game creators and great business creators. Utah is home to an established talent pool. Essentially that’s why we are there, the talent is there.”

Utah’s success in digital gaming is showing. In addition to EA Games, the state is rife with blockbuster studios including The Walt Disney Co.’s Disney Interactive Studios, Epic Games Inc.’s ChAIR Entertainment Group, Silverlode Interactive and Smart Bomb Interactive.

In 2010, EA expanded to a larger, state-of-the-art, custom-designed studio in downtown Salt Lake City where it has produced several top-selling games, including The Sims brand, one of the most successful video game series of all time, and Hasbro’s Monopoly, Littlest Pet Shop and Nerf.

One of EA’s latest successes is its release of RISK: Factions Game for Facebook. The EA adaptation of Hasbro’s popular RISK game represents a brand new dimension in social gaming and the first major Facebook game to be developed in Salt Lake City.

“Social gaming is an important part of growth that’s happened in our industry,” said Bell. “With social games you need a blend of talent that includes creative, business and analytic skills. The great success story for us and I think for the state is that we were able to build a team that could deliver a competitive Facebook game and we did it in a market where we had never done it before.”

Another example of Utah’s success is Avalanche Software, which is known for creating the recent video game for Pixar’s “Cars 2” movie.

Avalanche was founded by four lead programmers from Sculptured Software in 1995. The company has developed for every console platform since the Sega Mega Drive/Genesis and SNES days and has grown to a staff of over 100 since its inception. The company is headed up by Vice President and General Manager John Blackburn.

“I started in the industry in 1992 as a programmer working on Super Nintendo games,” said Blackburn. “After a few years of programming, I co-founded Avalanche with a few friends. We mainly did conversions of coin-operated arcade games to the home systems initially, and then started to make our own original games after 2000.”

Since 2001, the company, which works primarily on kids and family titles, became a well-known developer of games such as Tak and the Power of Juju games for THQ (Toy Head Quarters) and Nickelodeon and Chicken Little for Disney. In 2005, Disney Interactive Studios, the interactive entertainment affiliate of The Walt Disney Company, announced its plans to expand its focus into the video gaming industry. The Walt Disney Company acquired Avalanche and created the Fall Line Studio in Salt Lake City.

Utah-based Avalanche Software created the video game for Pixar’s “Cars 2″ movie. (Photo: Avalanche Software.)

“The working relationship with Disney was good and they wanted to acquire developers to lock down talent in the industry, so it was a good match,” said Blackburn. “Working for Disney has been a great learning experience because we have been exposed to working with some of the most talented entertainment creators of our generation. Sometimes it is truly surreal.”

In addition to a healthy talent base, Blackburn says that Utah’s quality of life and location are attractive to digital media companies. “We are close to the west coast and most of the major publishers, but the cost of living is cheaper and quality of life is higher in many ways,” said Blackburn. “We have really good universities with excellent programs in computer science and computer arts that allow us to grow local talent.”

Although Utah’s digital media industry has a long way to go to reach the “critical mass” of entertainment capitals like California and New York, the state is certainly well on its way.

“Utah is now focusing quite a bit on workforce,” said GOED’s Gary Harter. “Through the UCAP initiative, we are making sure we are going toward where an industry needs to be. We want to meet their demands today but be forward-looking and meet their demands for the future.”

Louisiana Digital is Red Hot

Louisiana’s rich culture in creativity, film, music and television has been a natural fit for the development of an emerging digital media and technology industry. The state first began cultivating video game development in 2005 when it passed the digital media tax credit program, attracting major game developer EA Games to the state.

In 2009, Gov. Bobby Jindal and the Louisiana Economic Development (LED) office decided to shift its focus to the whole space of digital media, expanding the program’s definition of “digital interactive media” and making the program more effective for all digital companies. The program, which is now available to any type of software development for commercial sale, including national security and IT applications, offers a bottom-line savings in the form of a 25 percent tax credit for expenditures and a 35 percent tax credit for Louisiana labor.

An Oscar for Shreveport

Moonbot Studio, based in Shreveport, LA, created the Oscar winning interactive short, “The Fantastic Flying Books of Mr. Morris Lessmore.”

Moonbot, an animation and visual effects studio, has helped put its hometown of Shreveport, LA on the global digital media map. At the 84th Academy Awards™, Moonbot won an Oscar for Best Animated Short for its digital interactive storybook for children, The Fantastic Flying Books of Mr. Morris Lessmore.

Moonbot was founded in Shreveport in 2009 by William Joyce, a Shreveport-native who has worked for Disney/Pixar; Brandon Oldenburg of Reel; FX Studios, an award-winning design, visual effects, animation and entertainment studio; and Lampton Enoch of GWave Productions, a company which produced a slate of television movies for the Disney Channel and ABC Family.

In 2009, after bouncing back and forth between two coasts for work, Joyce decided he’d spent enough time on the road and was determined to find a way to base his work in his native Shreveport. It was then that he started Moonbot with Enoch and Oldenburg and Mr. Morris Lessmore was born.

“The idea for the story started with longtime children’s books publisher William Morris, Joyce’s mentor at HarperCollins,” said Enoch. “Joyce wrote this little story about a guy who gives his life to books on a flight en route to visit Morris. He read it to him when he went to see him and then Morris died just a few days after that. That story became the film, and it was also inspired in equal measures by Hurricane Katrina, Buster Keaton, The Wizard of Oz,and a love for books.”

The company credits the state’s FastStart workforce training program and digital media incentives for helping get their story off of the shelves and onto the screen. “Much of what has allowed Moonbot to flourish creatively can be attributed to the company’s strong local support, including LED’s FastStart program,” said Oldenburg. “We can’t emphasize enough how much the support of LED and the Shreveport community has helped to get Moonbot where it is in such a short time. With the support of State incentives and workforce training programs, we’ve been able to build a strong team of talented artists and storytellers and have far exceeded our expectations for what we could accomplish in our first months of business.”

The company was in the middle of production on Mr. Lessmore when Apple announced the new iPad. Moonbot used FastStart to help quickly train their programmers to learn the new technology in order to turn the children’s tale into an iPad App. Within weeks after they released the App, Mr. Lessmore soared to the top tier of Apple’s most popular apps for iPad.

“The app for ‘Morris Lessmore’ came about almost by accident, well into production on the short film and book, when the iPad was introduced, and filled a previously unarticulated void,” said Oldenburg. “It wasn’t a book and it wasn’t a movie—it was something in between. We had been wanting that, but not knowing what that was. The filmmakers found it to be a fitting way to stretch the multimedia potential of Morris Lessmore.”

A digital artist at Moonbot puts the finishes touches on a frame of the shop’s award winning animated short.

Moonbot is currently housed in the BioSpace 1 building in Shreveport’s InterTech Science Park, home to several of the area’s newest high-tech companies. The studio’s latest project is “The Numberlys” featuring a black and white aesthetic inspired by Fritz Lang’s silent film, “Metropolis.” The interactive storybook app offers a unique cinematic experience and innovative game play to engage users in an imaginative, interactive story about the origin of the alphabet.

“We envision the future of storytelling is a whole new class of interactive content that transcends traditional boundaries between traditional film and written text,” said Enoch.

“Our vision is to transform the art of story-telling into a multimedia experience. Working on so many versions of the same story at once may sound a little nuts, but the multi-platform approach has been the key to becoming a viable company.”When asked what they would tell other digital media companies about Louisiana, Oldenburg and Enoch both echoed the same sentiment: “Come on down!”

“We feel like the more the merrier,” said Oldenburg. “We have already collaborated with several local companies which has led to some amazing results. You won’t find a more supportive state and the Louisiana Economic Development department is phenomenally proactive.”

The LED also has implemented strong incentives for technology and film growth through its Technology Commercialization Tax Credit and the Louisiana Motion Picture Investor Tax Credit, as well as best-in-nation workforce and job training incentives through its FastStart and Quality Jobs Programs.

These incentives have helped to create thousands of new jobs in the state and catapult the region to the forefront of a rapidly growing digital media industry. Between 2001 and 2007, employment at Louisiana digital media firms—which include Smartphone App and video game designers, software developers and more—grew 9 percent, according to a 2009 report by the firm Economics Research Associates.

“Digital media and software development is at the top of our targeted growth industries,” said Stephen Moret, Secretary of LED. “We’ve been working hard to cultivate it, it’s a great fit for Louisiana and we are experiencing a lot of success right now.

Louisiana’s digital media industry is one of the fastest growing in the nation, growing at a rate of more than 100 percent, according to Moret. The state has almost 19,000 skilled software developers and more than 100,000 professionals with a skill set conducive to digital media or software development. In addition, its information sector, including software publishing and telecommunications, has experienced the second fastest growth rate in the country since June 2009.

“What’s really exciting is that it’s happening all over the state,” said Moret.” Essentially we’ve got significant digital media and software development and telecommunications activity in roughly five cities: Baton Rouge, New Orleans, Shreveport, Monroe and Lafayette.”

Baton Rouge—Creative Capital of the South

Known as the “Creative Capital of the South,” Baton Rouge has attracted development studios such as Electronic Arts, Firebrand Games, Crawfish Games, Nerjyzed Entertainment, BitRaider MMO. Now, the city will soon be home to a new international Academy Award-winning visual effects studio, Pixomondo.

In February 2012, Pixomondo announced it is investing $1.2 million to open shop in Baton Rouge’s Celtic Media Centre, a state-of-the-art movie studio.

Pixomondo won an Oscar for Best Visual Effects (VFX) at the 84th Academy Awards for Martin Scorsese’s 3D epic-adventure, Hugo. The film, which is based on Brian Selznick’s novel The Invention of Hugo Cabret, is about a boy who lives alone in a Paris railway station and the enigmatic owner of a toy shop there. The company completed more than 800 shots as the primary visual effects vendor on the film.

Opening in May, the Pixomondo Baton Rouge studio will be the German company’s 12th international location. Annual salaries will average more than $65,000, plus benefits, and Pixomondo will hire 50 people in its first year, expanding to 75 by the end of its second year. The project will result in the creation of 49 indirect jobs, the LED estimates, for a total of more than 120 jobs.

“Pixomondo already operates a dozen VFX studios worldwide and they could have chosen anywhere to create a new studio,” Gov. Jindal said in a press release. “Their decision speaks volumes about how far Louisiana has come when it comes to improving our business climate and providing competitive incentives.”

Founded by CEO Thilo Kuther in 2001, Pixomondo offers 24/7 visual effects production and supervision, CG character creation, 3-D animation and pre-visualization for the feature film, television and commercial industries. The company has created visual effects for more than 30 feature films, including Journey 2: The Mysterious Island, Red Tails, Sucker Punch, Super 8, Fast Five, Percy Jackson, The Olympians: The Lightning Thief, 2012 and Hugo. The company is currently in production on VFX for Snow White and the Huntsman, The Amazing Spiderman and TV series that include Game of Thrones, Terra Nova, Hawaii Five-O and Grimm.

The state began working with Pixomondo six months ago to gauge the company’s interest in establishing a visual effects studio that could partner with major movie and TV productions in Baton Rouge and Louisiana. The company was drawn to Louisiana due to its rapidly growing film industry, as well as generous LED incentives including digital media and film production tax credits, FastStart and the Quality Jobs Program.

“Opening an office in Baton Rouge fits perfectly with our overall company vision,” said CEO Kuther. “Louisiana offers a very generous production tax credit that we can pass on to our clients to bolster our project load as well as growing teams in Los Angeles, London and Germany—not to mention China and Canada. Baton Rouge is a beautiful city with a wealth of resources. We’ve already connected with the Louisiana State University computer science department to help set up remote render farms and virtualization with our other studios.”

Digital Marches into NOLA

New Orleans is undergoing an economic renaissance—and digital media is playing an integral role.

Companies drawn to New Orleans include Firebrand Games, a critically acclaimed video game development company currently working on titles for the Nintendo DS and Wii, and Fortune 500 company CenturyLink, the third-largest telecommunications company in the U.S.

At the same time, the city has attracted GE Capital’s new technology office, adding hundreds of jobs to the local workforce. After examining hundreds of locations for its new project, the company announced it is choosing New Orleans.

“When selecting a location for a center of this importance, we considered many attractive options across the country,” said Brackett Denniston, GE Senior vice president and general counsel. “Louisiana rose to the top of our list because of the advantages it offers in terms of talent, infrastructure, location and environment. Gov. Jindal and the Louisiana delegation presented a compelling case for locating in Louisiana.”

Denniston said cooperation between the state and the company helped make the project a reality. “We are thrilled to be part of what is rightly called the renaissance of New Orleans” said Denniston. “This is one of America’s signature cities, and we wanted to be a part of that.”

The state began cultivating IT-related economic development opportunities with GE in late 2010, and those efforts intensified in collaboration with local partners Greater New Orleans (GNO) Inc., the New Orleans Business Alliance and the New Orleans Mayor’s Office in 2011 as GE Capital was conducting a nationwide search for its new IT Center of Excellence. The center, which is expected to open by mid-year, will focus on developing software, processes and technology for the GE Capital financial services arm of the company.

New Orleans also attracted Paris-based Gameloft, one of the world’s largest publishers of digital and social games, to establish a major new game development studio in New Orleans, creating 146 new high-paying jobs over the next decade.

Gameloft credits the LED’s FastStart as one of the major reasons it decided to locate in New Orleans.

“Over the last 10 years, we’ve sold over 200 million titles, said David Hague, Studio Manager of Gameloft, on LED’s website. “We’ve calculated that we sell three games every second. What FastStart does is make sure we have the people that will help us create a great game. FastStart comes in and says I understand how you recruit and the type of person that you are looking for, your corporate culture, and tailors that perfectly.”

According to Hague, New Orleans emerged as the front-runner among many other sites not only because of the state’s strong digital media and workforce incentives, but also because it offers a quality of life and lower cost of living and doing business, which is important in a globally competitive market.

“Throughout the search process, we went through a lot of the gaming technology hubs of the U.S.,” said Hague on the LED’s website. “Last on our list was New Orleans. After being here for just under 24 hours I quickly realized that this was a city where we would be able to pull a workforce to have a great cost of living and a very fun lifestyle when people aren’t at work.”

“Gameloft was worried that they couldn’t attract the same number of applicants to their studios compared to New York and California,” said Moret. “Yes, we are smaller, but what we lack in size we make up for in exceptional targeted resources for recruitment and training. It turned out that they had the same quality and number of applicants for their New Orleans studio as they did in NYC—and NYC is a vastly bigger pool.”

According to Hague, the state‘s customized solutions got the company running in half the time.

“We’re really starting to create a hub that can really grow to become one of the meccas that you see in some of the other large cities in the U.S.,” said Hague. “These jobs are here and they’re here to stay.”

Rhode Island’s Winning Pitch

In 2004 and 2007, pitching ace Curt Schilling helped the Red Sox win the World Series. He is now taking aim at the video game industry and has picked Providence, Rhode Island as the home for his hot new video game studio, 38 Studios.

“The staff at 38 Studios is incredibly excited about our relocation to Providence and we expect to be the first of many relocating knowledge-economy companies that will take advantage of the opportunities Rhode Island provides,” said Jen MacLean, chief executive officer of 38 Studios, in a press release. “Providence has some of the best students in the nation, a vibrant arts community and a dynamic urban environment with easy access to public transportation.”

In February 2012, 38 Studios released its first game, Kingdoms of Amalur: Reckoning, which became the No. 4 best-selling video game and the only new franchise to crack the top ten, according to consumer market research group NPD.

The company is located in downtown Providence’s “Knowledge District”—an area with a strong creative and arts culture and in close proximity to internationally recognized schools such as the Rhode Island School of Design, The University of Rhode Island and the New England Institute of Technology. The gaming company also has a second studio in Maryland for its Big Huge Games subsidiary.

The state was able to lure 38 Studios to the state thanks to Rhode Island’s Job Creation Guaranty Program, which authorizes the RIEDC to use up to $125 million in loan guarantees to facilitate critical economic development projects.

38 Studios is receiving $75 million through the loan guarantee program and in turn will employ 450 people in the state by late 2013.

“The program is one piece of a state strategy to build Rhode Island into a leader of innovation, into a world-class incubator for 21st century growth industries,” said KeithStokes, executive director of the Rhode Island Economic Development Council (RIEDC). The addition of 38 Studios to Rhode Island’s growing knowledge economy is a critical step in further developing the state’s digital media sector, Stokes said.

“As an ‘anchor tenant’, 38 Studios will be a magnet for other related businesses that will set up shop here and generate thousands of additional jobs in our state,” he said.

Another anchor tenant to set up in downtown’s Knowledge District is Hasbro, a top-selling toymaker turned digital media conglomerate.

In July 2011, Hasbro announced it is expanding into a 136,000 square-foot facility in downtown Providence. The $24 million project will bring at least 284 full-time jobs within the first three years with annual wages averaging $80,290.

The RIEDC conferred “Project Status” on Hasbro, making the company eligible for a sales tax exemption on the purchase of construction materials and equipment and other items such as furniture and computers related to its expansion in Providence.

“As Hasbro continues to grow and evolve, we are excited about expanding our presence not only in Rhode Island but in the Capital City of Providence as well,” said Brian Goldner, CEO of Hasbro, in a press release. “Rhode Island has been our home since 1923 and we look forward to remaining an active and important part of this community.”

Hasbro’s expansion is part of the company’s continued emergence as a branded play company. No longer just a toy and game company, Hasbro is creating global experiences for its consumers with its brands like Transformers, Littlest Pet Shop, Nerf, Monopoly and G.I. Joe into a wide range of areas including film, digital gaming, licensing and television.

“Hasbro has transformed itself for the 21st century as a branded play and multi-platform entertainment company,” Stokes said in a press release. “So too will the larger Knowledge District area in Providence with the addition of another powerful anchor institution acting as a magnet for the strong digital media and IT cluster already in place.”

The post COVER STORY: Digital Media Takes The Prize appeared first on Business Facilities.

By Business Facilities Editorial Staff

Gold

Project Title: Kentucky-Ford Partnership
Entered By: Kentucky Cabinet for Economic Development

Diversity was the watchword in the competition for Business Facilities’ 2011 Economic Development Deal of the Year Awards. The contest featured 23 big-ticket projects from 17 states, all of which cut across a wide-ranging mix of growth sectors, including emerging hot-button technologies and established industrial powerhouses.

The resurgent U.S. automotive sector and its ever-growing aerospace complex were well represented among the nominees, as were high-tech manufacturing, logistics and alternative energy concerns. Some of the contenders touted well-planned expansions of corporate headquarters, and there even were a couple of tasty entries from leading coffee and candy makers.

As always, our award recipients were chosen by a blue-ribbon panel of industry experts who pored over economic impact statistics and project narratives submitted by the finalists. The judges were confronted by some tough choices, as all of these projects were worthy of consideration for top honors. While our awards are limited to the top vote-getters, we can state without hesitation that in our eyes all of the candidates were winners.

The judges have spoken, and we have summoned the successful developers of top-flight projects from Kentucky, South Carolina and Arizona to stand in our spotlight and take a bow as they snatch the top awards in the 2011 Economic Development Deal of the Year competition.

The Kentucky-Ford Partnership was the consensus choice of Business Facilities’ blue-ribbon judging panel for our Gold Award, the top honor in the Economic Development Deal of the Year Awards contest.

The nearly two dozen big-ticket projects from across the country that vied for our Gold standard all promised substantial positive economic impact for their communities and regions. But Kentucky’s success in expanding its long-standing relationship with Ford stood out as a model of planning and execution that put it head and shoulders above the field for our top honor.

In today’s challenging economic environment, locations can’t assume that a longstanding industrial relationship—or even, in the case of Ford’s Louisville plants, an historic relationship that dates back nearly a century to the Model T—automatically means these facilities are guaranteed commitments for future production. This especially is true in the highly-competitive automotive sector, in which emerging hubs aggressively are laying claim to heavyweight status.

Kentucky brought its “A” game to this competition and deployed all of the tools at its disposal, not merely settling for the preservation of existing jobs but instead setting its sights on long-term growth.

Ford’s $1.2-billion investment in its Louisville facilities will bring a bonanza of jobs to the region, anchored by more than 3,100 positions directly tied to plants and extending to a growing supply network in the surrounding area. The lead agency involved in securing the project, the Kentucky Cabinet for Economic Development, estimates the overall economic impact of this deal will be nearly $13 billion for the Bluegrass State; counting indirect and induced jobs as well as direct employment at the affected plants, more than 17,000 jobs will be generated by Ford’s long-term investment. These positions will bring in more than $180 million annually in new wages to the area.

Ford’s decision to go “all-in” on its Louisville facilities—with an estimated direct economic impact to the area of $5.2 billion—was spurred by a creative $240-million incentives package.

“Our judges really were impressed by the creative use of incentives in this project,” Business Facilities Editor-in-Chief Jack Rogers said. “The incentive package for the Kentucky-Ford Partnership was structured in a way that it could be renegotiated to induce additional investments made at either of Ford’s plants in Louisville, giving the state more flexibility to negotiate.”

Nearly half of the overall investment is being used to transform Ford’s Louisville Assembly Plant (LAP) into the automaker’s most flexible high-volume plant in the world. Second and third shifts are being added at LAP, which opened in 1955 on the south side of town near Louisville International Airport. Ford has been building cars in Louisville for nearly a century, beginning with Henry Ford’s first Model T in 1913.

Kentucky Gov. Steve Beshear (right) tours the recently retooled Ford Motor Co. Louisville Assembly Plant. (Photo: Ron Bath)

The auto giant also is investing $600 million to modernize tooling at its Kentucky Truck Plant in Louisville for next-generation F-Series Super Duty trucks and Expedition/Lincoln Navigator SUVs.

“It’s clear that our strategic effort to secure Ford’s long-term investment in Kentucky and its workers was successful,” Gov. Steve Beshear declared in October. “These kinds of commitments don’t just happen. They are the result of ongoing relationships, cooperation and forward thinking. I’m proud that Ford recognizes that.”

Over the years, Ford’s Louisville plants have produced some of the automaker’s most popular vehicles, including the Ford LTD, Ranger, Bronco II, Explorer, F-Series Super Duty pickup trucks and the Lincoln Navigator luxury SUV.

However, as Ford and the rest of the U.S. auto industry sank into hard times, the labor force dwindled and older plants like the Louisville facilities grew more obsolete. For the first time in decades, Kentucky was not sure if there was a Ford in its future.

The Kentucky Cabinet for Economic Development sprang into action in 2007 with a new incentives program known as the Kentucky Jobs Retention Act. The act promised that up to 50 percent of new investment could be recovered through a credit against corporate income tax and a wage assessment for the jobs that were preserved or created over time, as well as credits remaining unused from previous agreements if the company agreed to make an investment of at least $100 million.

Initially, the total incentive to Ford was $24 million; this amount was increased to $180 million in 2008 and boosted once again to $240 million in 2010. The new incentive package was structured in a way that it could be renegotiated to induce additional investments at either Ford plant in Louisville.

Curtis Magleby, director of government relations for Ford said the auto giant wanted to make sure the Commonwealth prized reinvestment and job retention was on a par with new investment and new jobs. Tax refundability also was an important consideration as Ford made its future plans.

“Manufacturers go through adjustments, and are not always in a profit position,” he said, adding that incentives need to be able to account for those swings. “The way you get the incentive in Kentucky is a refund of your five-percent payroll tax, so it becomes a bottom-line operational cost improvement. Many of the old development tools are solely corporate tax liability, and those come and go.”

Training also was an important component of Ford’s new deal with Kentucky, and Greater Louisville Inc. joined the Kentucky Cabinet for Economic Development in stepping up and making sure training needs were met. According to Magleby, these agencies “demonstrates the state’s understanding of the need to continually upskill.” The city of Louisville will share in funding the payroll tax refund portion of the Ford incentive—Ford must invest at least $1 billion and reach 7,150 total jobs to receive the full incentive, a target the company says it will “easily exceed.”

The third shift at LAP, which brings 1,300 new jobs into play, will increase overall employment at the facility 4,200—making it Ford’s second largest plant in North America. According to the automaker, a new labor agreement with the UAW maintains combined compensation at the Kentucky plants as the highest in the industry, even when a wage freeze in the new contract is factored in.

Ford’s drive to become the greenest carmaker also was a component of its agreement with Kentucky. LAP is one of 11 Ford facilities in the U.S. participating in the Advanced Technology Vehicles Manufacturing Incentives Program, which is helping to develop advanced-technology vehicles. According to Erik Dunnigan, the Kentucky Cabinet’s commissioner for Economic Development, the state also is working to persuade Ford to produce a hybrid or all-electric vehicle in Louisville.

Kentucky is a major player in the advanced-battery industry, with construction nearing completion on the new Kentucky-Argonne Battery Manufacturing Research & Development Center in Lexington. Toyota produces a hybrid Camry at its Georgetown, KY plant and Hitachi recently announced major expansions of its Kentucky operations to produce lithium ion battery packs. These and other developments propelled Kentucky to the number four position for Automotive Manufacturing Strength in Business Facilities’ 2011 State Rankings Report.

“The Bluegrass State has put itself in a very strong position to contend for the top of our annual automotive ranking in 2012,” Rogers said.

Silver

Project Title: Continental Tire the Americas/Sumter County Plant
Entered By: South Carolina Department of Commerce

The Silver Award in Business Facilities’ 2011 Economic Development Deal of the Year contest goes to the South Carolina Department of Commerce for Continental Tire America’s (CTA) new plant in Sumter County, SC.

This project—the tire giant’s first new U.S. manufacturing facility—will bring nearly 6,000 new jobs to a less-developed part of the Palmetto State over the next 10 years, with an overall economic impact of $1.82 billion for the region. The new 1-million-square-foot manufacturing facility, located on a 330-acre Greenfield site off U.S. Highway 521, will be opened in 2013 and is expected to reach its production capacity of five million tires/year in 2017. A second-phase expansion is being planned that will take the capacity up to 8 million tires by 2021.

“This world-class, $500-million tire manufacturing facility is the largest industrial investment ever made in Sumter County,” Business Facilities’ Editor-in-Chief Jack Rogers said. “It will be a huge shot in the arm for the growth potential of the entire region.”

Jochen Etzel, CEO of Continental Tire the Americas, lauded the cooperative effort of numerous South Carolina development agencies in bringing the project to fruition, including the South Carolina State Ports Authority and South Carolina Public Railways.

Gov. Nikki Haley speaks at the Sumter Opera House about Continental Tire’s decision. (Photo: SC Dept. of Commerce)

“[This project] would not have been possible without the strong support of the State of South Carolina, Governor [Nikki] Haley and Secretary [Bobby] Hitt,” Etzel said. “South Carolina offered us the most compelling business climate that allows us to create these well-paying jobs with competitive benefits for the people of this great state.”

The October announcement of the Continental deal was the third significant tire-related construction project announced in the Palmetto State last fall. On September 21, Bridgestone Americas announced $1.1 billion in projects for a new giant OTR tire plant in Aiken County, SC, and further expansion of its consumer tire plant there.

With South Carolina Gov. Nikki Haley on hand, Continental AG board member and head of its tire unit Nikolai Setzer unveiled the $500 million two-phase project, which directly will create 1,600 jobs. The first phase of production capacity at the plant is expected to be nearly five million passenger and light truck/SUV tires annually when the plant reaches full production levels in 2017.

“This important announcement is part of Continental’s growth strategy worldwide and, especially in this case, for the U.S. market,” Setzer said. “Increasing demand for Continental and General brand passenger and light truck tires in the U.S., as well as the improved business results for CTA, has made this significant investment possible. On behalf of the 160,000 employees of Continental worldwide, I would like to offer our sincere thanks to Governor Haley, the state of South Carolina, the Port Authority, the city of Sumter and Sumter County.”

The superior logistics offered by the Sumter County location played a major role in the tire giant’s site-selection decision, officials said.

According to Setzer, the primary reason the company decided to build its new plant in the U.S. was to be close to its customers and to optimize logistics. “We also see a great workforce potential here. We see the U.S. as a key market for us and this announcement is a key component of growing our presence here,” he said.

“Continental is a world-class company, and it is truly exciting that they have chosen South Carolina for this new $500 million investment that will create nearly 1,700 new jobs. This announcement is a big win for our state,” said Gov. Haley.

“Tires produced here will be mainly for the U.S. market with the goal of improving fill rates, but because of Continental’s global manufacturing structure, the capability exists to export to meet demand elsewhere,” Etzel added, according to press reports.

CTA opened its headquarters in Lancaster County, SC in 2009 and currently employs 350 people there. Due to the significant growth at Continental Tire, the company has been hiring additional employees at a steady pace. In addition to the new plant, Etzel announced a $4 million expansion of company HQ in Ft. Mill, SC. The investment will provide for a 16,000-square-foot addition, bringing the total size of the building to 91,000 square feet, and the creation of 80 new jobs there.

Continental expects to begin construction of the new tire plant in mid-2012 and complete the facility in 2013. Once completed, the plant will occupy nearly 1 million square feet. The plant will produce all lines and sizes of Continental and General brand passenger and light truck/SUV tires. For the first three years of operation, all tires produced will be for the replacement market, officials said. After those three years, production will then be for both replacement and original equipment manufacturing markets.

Bobby Hitt, South Carolina’s secretary of commerce, also hailed the deal in October. “Today’s announcement further strengthens South Carolina’s membership in the automotive club. This is also the fourth announcement this year involving the recruitment of 500 or more jobs,” said Hitt.

Code named ‘Project Soccer,’ the location of the proposed U.S. plant had been a matter of considerable speculation since Continental AG chairman Elmar Degenhart’s April statement that the tiremaker would build a passenger and light truck/SUV tire plant in the U.S. In May, then-CTA CEO Matthias Schoenberg said the tire manufacturer was focusing on potential sites in several Southern states, including Georgia, Tennessee, North Carolina and Alabama.

According to Etzel, “exhaustive measures” were undertaken by Continental Tire to run logistics analytics for this project to ensure the success of the company’s building model. The company also reportedly is set to receive $35 million in incentives from South Carolina as part of the deal.

The success in nailing down the Continental deal could not come at a better time for Sumter County, where the unemployment rate languished last fall near 12 percent, higher than the state average in recent months. The average Continental job is expected to pay $21.50/hour, equating to $41,000 annually. The most recent capita income figures for the county set the average at $29,302 in 2008. “In a matter of a few short years, this new facility will go from an idea to one of the largest economic drivers in our community,” Sumter Development Board Chairman Greg A. Thompson said.

“At more than $500 million, it is the largest industrial investment the county has ever seen. It will have an impact not only on Sumter County and its people, but workers and families throughout the region. We welcome Continental Tire to Sumter County and we couldn’t be more excited about both its future and our own.”

Continental had sales of more than $40 billion worldwide in 2010. The company is an international supplier of brake systems, components for powertrains and chassis, instrumentation, infotainment systems and vehicle electronics, in addition to tires and technical elastomers, with about 160,000 employees in 45 countries.

Landing the new tire plant earned kudos for Hitt and his team, who aggressively pursued the CTA project even as it was working nonstop to put together logistics and an incentive package to land Bridgestone’s new plant and expansion effort.

Business Facilities congratulates our Deal of the Year Silver Award winner for a job well done.

Bronze

Project Title: First Solar in Arizona
Entered By: City of Mesa, AZ

When the world’s largest manufacturer of thin-film photovoltaic (PV) solar modules was considering sites for a new U.S. manufacturing center, almost the entire country was in play.

First Solar was willing to evaluate locations in every state in the lower 48. Apparently, only Alaska and Hawaii were not in contention.

It took a few years, but Arizona emerged as the big winner in this crowded field. First Solar’s decision to put its $323-million manufacturing facility in Mesa, AZ has earned the City of Mesa our Bronze Award in the 2011 Economic Development Deal of the Year competition.

Rendering of aerial view of First Solar’s Mesa plant. (Image: First Solar)

The new thin-film solar module plant will directly generate 6,000 jobs in the first year of the project, including 4,800 workers involved in the build-out. In the next 10 years, the facility is expected to create nearly 1,700 permanent positions, including 1,200 in the first 12 months.

The project is expected to have a direct economic impact for the Greater Phoenix area of nearly $7 billion over the coming decade.

“Our judges were very impressed with the extraordinary team effort in Arizona to land this important project, which will anchor an extremely important growth sector in the Greater Phoenix area for years to come,” Business Facilities Editor-in-Chief Jack Rogers said.

In August 2010, CH2MHill, a global site-selection firm, contacted the Greater Phoenix Economic Council (GPEC) regarding First Solar plans. A pseudonym was used to shield First Solar’s identity. GPEC put together an overview of potential state incentives and available sites.

During the initial phase of the site-selection review, Mesa, AZ, Austin, TX and Albuquerque, NM were quickly identified as the leading candidates for the thin-film PV module plant. The Arizona site had an inside track because First Solar’s headquarters already was located in Tempe, AZ.

However, a snag quickly developed for the Arizona team. Soon after First Solar told Mesa it had selected a potential site there, the city had to inform the company that the selected land was under purchase agreement and no long available. With the risk of losing the deal looming, GPEC and the City of Mesa scrambled to find an alternative.

DMB Associates, a real estate developer and GPEC investor, offered a solution: the General Motors Desert Proving Grounds. The site already was zoned for manufacturing, a critical requirement needed to meet First Solar’s strict timeline for the project.

It took a cooperative effort by the City of Mesa, Maricopa County, utility company Salt River Project (SRP), the Arizona Commerce Authority (ACA) and GPEC to develop a package that met First Solar’s site selection preferences, including its unique build-out, infrastructure and workforce—all of which had to be put in place to meet an accelerated timeframe. Mesa dedicated a significant portion of its development personnel exclusively to the project.

First Solar’s environmental specialists were particularly impressed with the state-of-the-art water reclamation plant that was included in Mesa’s offer. SRP, meanwhile, committed to meet First Solar’s requirement for electric power and was able to do so at a discounted rate that was competitive with the offers from Austin and Albuquerque.

The utilities package even earned praise from one of the competing sites. Joe Beceiro, director for clean-energy programs at the Austin Chamber later told the Arizona Republic: “Industrial power rates here in Austin are substantially cheaper than in other parts of the country, so if Arizona was about to beat what we were offering, then kudos to them.”

ACA worked to clarify Renewable Energy Tax Incentive program rules and tax treatments for the project. GPEC, Maricopa County and the region’s Board of Supervisors worked to create an Economic Development Jobs Fund to support new job creation by providing public infrastructure cost offsets and job-training support to First Solar.

Simultaneously, presentations by ASU Polytechnic, Intel, Boeing and local workforce recruitment companies reinforced the availability of a skilled labor force and continued research ventures in Arizona. The City of Mesa also went the extra mile in addressing facility design standards, road improvements and regulatory processes, solidifying the city’s position as the top site for the new plant.

Both New Mexico and Texas were able to offer more in incentives and deal-closing funds than the $50 million put on the table by Arizona. But First solar officials said the united front presented by the collaborative effort of the city, county and state in Arizona convinced the company that the Mesa team was fully committed to the growth potential of the thin-film PV industry.

“The successful effort by Mesa and its partners to creatively address all of the unique requirements of the First Solar is a case study in the best practices for a major site selection competition,” Rogers noted.

When First Solar decided last spring to put its 135-acre technology campus in Mesa, it awarded the Arizona city one of the largest solar manufacturing projects in the U.S. The project will generate 600 jobs in its first phase with average annual wages of $48,575, a rate 150 percent higher than the average median wage for Maricopa County. Potential expansions may eventually generate an additional 4,800 jobs.

The new Mesa facility will include four manufacturing lines with a capacity to produce more than 250 megawatts (MW) of advanced thin-film photovoltaic (PV) modules per year. This factory, combined with First Solar’s recently expanded facility in Perrysburg, OH, will increase First Solar’s U.S. production capacity to more than 500MW per year.

The Mesa plant will include a 3MW rooftop solar installation as well as an extensive ground-mounted PV testing facility. The factory will utilize First Solar’s continuous manufacturing process which transforms a sheet of glass into a complete solar module in less than 2.5 hours, which contributes to the industry-leading energy payback time and low carbon footprint of systems utilizing First Solar’s thin-film modules.

Module shipments are scheduled to begin from Mesa in the third quarter of 2012.

The new Mesa facility is approximately 30 minutes from First Solar’s corporate headquarters in Tempe, where it employs about 200 associates. First Solar also is currently building two utility-scale PV projects in Arizona, the 290MW Agua Caliente project in Yuma County for NRG Energy and the 17MW Paloma Solar Plant in Gila Bend for APS, which are expected to create more than 500 construction jobs.

First Solar’s North American project pipeline includes more than 2.4 gigawatts (GW) of projects expected to create approximately 2,000 construction jobs and drive $6 billion of infrastructure investment over three years.

Greater Phoenix now is home to two of the world’s leading renewable energy manufacturing leaders, First Solar and Suntech Holdings. This hub is expected to grow exponentially—Arizona officials say seven additional renewable energy companies are planning headquarters or manufacturing facilities in the Greater Phoenix area, with “dozens more in the pipeline.

Honorable Mentions

Projects: Mars Chocolate (GO Topeka); Green Mountain Coffee Roasters (Virginia Economic Development Partnership); Boeing Relocation (Oklahoma City Chamber); GM Wentzville Plant Expansion (Missouri Department of Economic Development); ITT Exelis (Utah Governor’s Office of Economic Development); Caterpillar-CAMO Forsyth (North Carolina Department of Commerce)

Our 2011 Economic Deal of the Year Competition featured a cornucopia of big ticket projects which all merited consideration for our top awards. The quality of the entries was reflected in our judges decision to cite six projects for Honorable Mention awards.

One of the projects that left a good taste in our judges mouths—literally, as well as figuratively—was a very sweet deal that brought a new Mars Chocolate facility to Topeka, KS.

This joint effort by GO Topeka and Shawnee County baked a $250-million “cake” that is expected to have a direct economic impact of $3.24 billion over the next 10 years, while directly creating up to 425 new jobs.

The 350,000-square-foot Kansas facility, which broke ground in August and is expected to be up and running in 2013, will be the first Mars Chocolate factory built in the U.S. in more than 35 years. It will produce some of the candy giant’s iconic brands, including M&M’s and Snickers.

“This is the most significant economic development announcement for Topeka and Shawnee County in many years,” said Doug Kissinger, president and CEO of the Greater Topeka Chamber of Commerce and GO Topeka Economic Partnership. “The positive economic impact for the community will last for decades.”

Mars’ decision capped an intense 10-month recruitment process spearheaded by GO Topeka that ultimately involved 30 state and local entities, including the Kansas Department of Commerce, the KS Department of Transportation and the Office of Gov. Sam Brownback.

When the site-selection process began, Mars was considering dozens of locations in at least 13 states, a field that eventually was narrowed to three finalists, including the Topeka site.
The candy conglomerate was impressed by the well-coordinated state and regional effort mounted by the Topeka team to land the project.

“The policy environment advocated by the governor and legislature makes Kansas much more hospitable than other states,” said Mark Broadhurst, director of public affairs and government relations for Mars, Inc. “And GO Topeka is a top-notch, professional outfit. They know their stuff, and they genuinely work hand in globe with site selection teams. The personal relationship and enthusiasm and the reception we received from day one in the community were very rewarding.”

GO Topeka assembled a $9.1-million incentive package, which included 150 acres of land, infrastructure improvements and various job-creation incentives to help seal the deal. However, Mars officials noted the local labor pool and the logistics network available in Topeka were key criteria in the site-selection decision.

“The site itself and the highly skilled workforce were critical factors,” said Broadhurst. “A site close to rail was a key factor. Incentives were not the driver. We are a privately held business, [and] being private enables us to take a long-term approach. This is a 50-year project for Mars.”

The new chocolate candy plant is expected to generate $269.7 million in taxable sales and purchases over the next 10 years, for a rate of return on investment of nearly 31 to 1. Revenues to Topeka and Shawnee County over that period would be $31.2 million.

The Mars project dovetails perfectly with Topeka’s other recent successes, which are establishing the Kansas city as a regional food processing hub. These include Frito-Lay’s 2010 announcement of a $53 million expansion of its 40-year-old Topeka plant. Frito-Lay’s announcement was quickly followed by Allen Foods’ (a subsidiary of Bimbo Bakeries) decision to build a 135,000-square-foot production plant in Topeka.

Mars had a set of unique requirements for its new factory, including rail access, significant acreage and the development of a customized training program on the company’s proprietary equipment. Another challenge was maintaining confidentiality during the site selection process despite the involvement for 30 state and local organizations. As a result, the Mars project originally was known to GO Topeka staff only as “Project Sweetness.”

Local officials in Topeka went the extra mile to impress Mars by amending the city’s fee structure to make it more business friendly to potential large projects. In January 2011, the City Council agreed to cap the city’s commercial building permit fees by assessing the same $156,000 fee for all projects of $30 million or more.

Topeka also shined in meeting Mars’ requirement for a 50-year “vision” statement. GO Topeka responded with a 12-page summary of all of Topeka’s business assets, ongoing initiatives, key policy issues and an analysis of available sites and infrastructure improvement plans.

After satisfying their sweet tooth with the Mars project, our judges took the next logical step: they reached for a tasty cup of coffee. Thus, an Honorable Mention Award was bestowed on the Virginia Economic Development Partnership for its successful effort to lure Green Mountain Coffee Roasters Inc. (GMCR) to the rural Isle of Wight County on the James River in southeast Virginia.

As a result of a collaborative effort by the state, the VA Partnership, the Isle of Wight County Department of Economic Development and the Hampton Roads Economic Development Alliance, GMCR decided to invest $180 million in a facility in the Shirley T. Holland Intermodel Park.

The project is expected to generate 800 new jobs over the next five years and have a direct economic impact on Isle of Wight County of $1.9 billion over 10 years, bringing direct wages of $144 million to the county over the same period.

GMCR has made environmental stewardship a hallmark of its coffee business. The new project in Virginia was no exception: the coffee company will offset 100 percent of its direct greenhouse gas emissions, invest in sustainably grown coffee and allocate at least five percent of its pre-tax profits to social and environmental projects in the area.

Virginia was able to attract Green Mountain because it provided a strategic location that aligned the company’s production facility with its supply chain, workforce and logistical needs. In addition to the Commonwealth’s central location on the East Coast, Isle of Wight County is only minutes from the Port of Virginia, providing easy access to a global supply chain.

Virginia is home to 525 food processing companies that employ more than 33,000 people. This food and beverage cluster continues to grow, with more than $2 billion invested since 2000, generating 6,900 new jobs. New projects like Green Mountain are supported by a burgeoning supply base, including packagers like Phoenix Packaging Operations, which has invested $37.5 million over the past 18 months in Pulaski County, VA.

To help seal the GMRC deal, Gov. Bob McDonnell approved a $4 million grant from the Governor’s Opportunity Fund to assist Isle of Wight, the second largest grant awarded by the program thus far. The Virginia Department of Business Assistance additionally provided funding through its Virginia Jobs Investment Program to help recruit and train the Green Mountain workforce.

Oklahoma City, the Greater Oklahoma City Chamber and the Oklahoma Department of Commerce (ODOC) earned an Honorable Mention for their successful effort to convince aerospace giant Boeing to relocate 550 jobs from Long Beach, CA to Oklahoma.

As a result of defense cuts that started to bite during the Great Recession, Boeing reexamined its cost structure and began to look for low-cost, high-productivity locations.

Boeing approached key economic development agencies in five states with the potential project, which involved positions with salaries approaching $100,000 each. These jobs belonged to business support and embedded software engineers who write code of C-130 transport and B-1 bomber aircraft and missile systems.

The fact that Boeing has had a presence in Oklahoma City since World War II automatically made it a contender for the relocation project, but officials said its low cost of doing business, workforce productivity, incentives and quality of life tipped the scales when it was time to make the decision.

Among the incentives that attracted Boeing to OKC were the state’s 21st Century Quality Jobs program (which supports highly skilled engineering positions), Aerospace Engineering Tax Credits and $3.5 million from OKC’s Strategic Investment Program.

The Boeing relocation to OKC is expected to have a direct economic impact to the region of more than $220 million over the next three years, bringing direct income (wages) totaling more than $98 million.

Also winning Honorable Mention kudos from our judges were the Missouri Department of Economic Development’s winning effort to land a $380-million upgrade for General Motors’ plant in Wentzville, MO; North Carolina’s Department of Commerce, for the Caterpillar-CAMO Forsyth project; and the Utah Governor’s Office of Economic Development, for the ITT Exelis project.

GM’s Wentzville upgrade is expected to generate a direct economic impact of $5.16 billion over the next 10 years, directly creating more than 2,200 jobs during the same period.

A big driver in landing the project was the Missouri Automotive Manufacturing Jobs Act, passed in July 2010, which allows qualified manufacturing facilities or suppliers that bring next-generation production lines to Missouri to retain withholding taxes typically remitted to the state. The incentives are triggered by substantial capital investments in production capacity along with job-creation targets; reimbursements are required if targets are not met.

GM plans to produce a redesigned mid-size Colorado pickup truck at Wentzville, creating at least 1,260 new jobs. The auto giant also is adding a second shift of 400 workers on the production line for its Chevrolet Express and GMC Savana vans.

“As we celebrate the 100th anniversary of Chevrolet, it is exciting to bring this new global product to the Wentzville team. They also have a strong heritage—a long-standing commitment to building quality products,” said Cathy Clegg, GM vice president of labor relations.

When the opportunity to compete for an expansion of ITT Exelis’ advanced composites manufacturing developed, Utah marshaled a team effort to snare the prize. Working closely with the Economic Development Corporation of Utah (EDCUtah), the Governor’s Office of Economic Development (GOED) and the state developed an incentive package in cooperation with the Salt Lake City Economic Development office to offer several sides able to accommodate ITT’s ambitious expansion plans for Exelis.

The 2,700 jobs that will be generated over the life of the project all exceed 125 percent of the county average wage. The project will have a direct economic impact of more than $4 billion over the next 10 years and serve as an anchor for Utah’s growing aerospace composites cluster.

Caterpillar’s decision to build a new manufacturing plant in Forsyth County, NC resulted from the combined efforts of the North Carolina Department of Commerce, Forsyth County, the City of Winston-Salem, Duke Energy, Winston-Salem Business Inc. and NC Community Colleges.

The new facility, an investment of $426 million, will generate new jobs paying an average annual wage of $40,352. Caterpillar currently employs more than 1,000 workers in Wake, Johnston, Lee, Macon and Burke counties in the Tarheel State.

A creative and generous package of incentives helped seal the deal. Caterpillar was awarded $600,000 from the One North Carolina Fund and the state also provided a Job Development Investment Grant (JDIG) equal to 75 percent of the state personal income withholding taxes derived from the creation of new jobs for each of the 11 years in which the company meets annual performance targets. The JDIG grant could yield $4.68 million in maximum benefits for the company.

Business Facilities congratulates all of our Honorable Mention award winners.

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Recovery has given way to resurgence. At least that’s what indicators and forecasters say about the world’s economy in the wake of the worst recession in decades. Trade and investment followed two years of steep declines by returning to growth in 2010, and flows continue to gain momentum. But such success is occurring amid a quickly evolving global economic landscape that is far different than that of just a few years ago.

Emerging markets are faring better than their developed counterparts in attracting foreign direct investment (FDI), as advanced economies battle unemployment, weak demand and rising debt, among other challenges. Today, the emerging powers, from Brazil to China, are major drivers of the global economy. And tomorrow, even more up-and-coming regions will gain greater shares of the growth picture.

According to IBM’s Global Location Trends report, the turbulence of recent years has had a major impact on corporate location decisions. Companies are rethinking their business strategies and models, and repositioning themselves in the increasingly integrated global economy. Location decisions will play an increasingly important role in corporate strategy due to changes in the global market, talent and cost efficiencies, according to the IBM report.

For city and national leaders in both the developed and the emerging economies, the changing environment presents new challenges in attracting and retaining companies and jobs. More than ever, attracting foreign investment requires regions to focus on their economic strengths and weaknesses, and to target their competitive sectors in their investment and promotion efforts.

Klaus Schwab, founder and executive chairman of the World Economic Forum, commented recently on the changing environment:

“Policy-makers are struggling with ways of managing the present economic challenges while preparing their economies to perform well in a future economic landscape characterized by uncertainty and shifting balances,” Schwab said. “In such a global economic environment, it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development.”

From the emerging economies to the developed world, the battle for investment is on.

Berlin Draws Big Bucks in Life Sciences

One of the terms René Gurka, managing director of Berlin’s official promotion agency, uses to describe business in Berlin is “fast-moving,” and the same can be said of the atmosphere around his office over the past year. In 2010, Berlin Partner GmbH provided assistance to 105 companies locating to Berlin or expanding their existing operations, supporting the creation of 4,540 new jobs and $356 million in investments. Additionally, his office worked jointly with the ZAB Brandenburg Economic Development Board in the surrounding federal land of Brandenburg to bring in seven more companies, for another 234 more jobs and $78 million.

The investment figures are more than double that of 2009, when Berlin Partner brought in 77 businesses with 2,020 jobs. Even that year, during the depth of the economic crisis, Berlin defied the global crisis with 1.7 percent growth.

“Diversity and innovation are the keys,” Gurka says, adding that the research-driven environment in Berlin is concentrated in the life sciences, ICT, creative industries, clean-tech, services and tourism sectors. “These industries were hardly affected by the financial crisis at all,” he says. “The real estate sector in Berlin is stable, even growing, and Berlin is by far not as dependent on the financial sector as other European cities like Frankfurt or London.”

Among the projects arriving in Berlin in 2010: Mercedes-Benz Bank moved into the Königstadt Carrée at Alexanderplatz with plans to create up to 700 new jobs. Pfizer subsidiary Wyeth brought 200 positions to the city. The U.S.-based Sykes Enterprises, one of the world’s leading providers of integrated customer service management solutions, opened its 22nd call center worldwide in the city’s Friedrichshain-Kreuzberg district, planning to employ some 600 people. In bringing its supply chain management center to Berlin, ThyssenKrupp Elevators will be hiring 50 employees. Florida Eis, a well-known Berlin ice cream manufacturer, created 40 new jobs in its new production plant in the district of Spandau. Vistaprint, a leading U.S. online provider of graphic design and customized printing, opened a print service bureau. And U.S.-based COGO Optronics is developing products for the global market at its new plant in Berlin, where it has invested around $11.7 million.

And the list goes on.

“Only one day ago I met with Google,” Gurka says in an April interview. “They plan to establish a research institute in Berlin together with Humboldt University.” The American company will reportedly strengthen its sales and engineering presence in Germany while partnering with academic institutes to research Internet-based innovations, regulatory frameworks and the connected copyright issues.

Berlin sees an average of 11 FDI projects for every million inhabitants, attracting twice as many cases of direct investment from abroad as the national average. Its fastest-growing sectors during the past few years have been the life sciences, creative industries, services and tourism, a trend that Berlin Partner expects will continue in the years ahead. Biotech companies like Noxxon Pharma AG and Caprotech have been attracting more venture capital, as have web 2.0 companies such as Research Gate and Soundcloud, both tied to Silicon Valley.

There are no signs of slowing down in Berlin, where orders and sales in construction and heavy industry are higher than a year ago, according to the city’s economics division. Growth for Berlin in 2011 is expected to come in around 2.5 percent.

Israeli Economy: Picture of Resilience

The global recession was nothing more than a mild downturn for Israel, whose sturdy economy managed to weather the crisis thanks to sound macroeconomic fundamentals and strict fiscal policies. The IMD World Competitiveness Yearbook ranked the Israel economy highest for its durability in the face of the financial crisis, and rated the Bank of Israel first among central banks for its efficient functioning. After a two-year slowdown, the nation’s GDP grew by 4.6 percent in 2010, exports were up 40 percent, and unemployment and inflation dropped.

Multinationals have continued to invest in Israel, thanks both to the government’s business-friendly policies and the growing competitiveness of the economy. Consider that Microsoft and Cisco both built their first R&D centers outside the U.S. in the Tel Aviv region; Motorola’s Israel facility there is the company’s largest development center worldwide; IBM chose the Haifa region for its first VC investment outside the U.S.; Intel has four R&D facilities and two manufacturing centers throughout Israel, employing 7,000 locals; and Google opened two R&D centers in Haifa and Tel Aviv.

Why such an attraction from foreign investors?

“The general reason is the unique ecosystem of the country,” said Yoni Ben-Zaken of the Investment Promotion Center at the Israel Ministry of Industry, Trade & Labor. This includes Israel’s “superb educational opportunities,” its network of industrial parks, modern R&D facilities, high-tech incubators and thriving industry.

The fast-growing economy, upgraded in 2010 from an emerging to a developed market by the MSCI Index, has become increasingly globally-oriented and technologically advanced, displaying high-tech capacity in telecommunications, information technology, electronics and life sciences, the latter producing a wealth of groundbreaking and valuable innovation over the last decade. The life sciences sector is supported by a foundation of academic excellence, including some of the world’s leading research institutions, renowned R&D facilities and cutting-edge medical centers. Joining Israeli companies such as Teva, Given Imaging Insightec and Medinol in this high-tech environment are global giants such as Johnson & Johnson, Perrigo, GE Healthcare and Phillips Medical.

The continued local and foreign investment can be partly attributed to support from government agencies, a network of technology incubators and an active private venture capital system. Israel provides extensive support for new technologies and assists further development in the more traditional industries. Its new Encouragement of Capital Investment law sets corporate taxes between 6 and 12 percent for eligible companies, placing the nation among the most competitive locations for tax structure and incentives for the exporting industry.

“I believe that foreign companies should be aware of the many incentives of the ministry. They are tailored to suit the investor, investing at different stages,” Ben-Zaken said.

To strengthen the financial services IT sector, the ministry recently launched an innovative support program directed at attracting foreign multinational financial and banking corporations. Through the Competitive Advantages Plan, companies creating new financial R&D centers can receive upfront grants of 40 percent of approved budgets for the first two years, followed by 30 percent and 25 percent. Projects set up in Israel’s periphery in the north and south can receive grants of up to 50 percent.

One company that has already taken advantage of the Competitive Advantage program is the Barclays Capital investment bank, which has announced plans to open a technology R&D center in Tel Aviv. The operation will supply development and engineering services to support the company’s international financial activity. Barclays plans to hire 200 Israeli employees trained in technology and finance.

Foreign interest is expected to remain significant for Israel, a small country whose liberalized economy now stands out as one of the world’s most competitive.

Barbados is a Global Entrepreneurial Hub

Barbados: The No. 1 entrepreneurial hub in the world? That description is feasible by 2020, according to a group of senior executives from Barbados and other territories that have organized to achieve that goal. And in doing so, the newly launched Barbados Entrepreneurship Foundation has set up a strategy consisting of five pillars—business facilitation, financing, government policy, talent education and mentorship and networking. Among the key goals are creating an enabling environment for enterprise in Barbados, first by ensuring that the island has 100 percent Wi-Fi access by Nov. 11, 2011, matching new businesses and entrepreneurs with seasoned businesspersons for mentorship, and increasing the availability of equity and debt financing options to SMEs in Barbados.

The foundation will measure its success by having Barbados ranked among the top 20 world’s most competitive countries; bringing its GDP per capita from $13,000 to $26,000 by 2020; growing the island’s annual revenue to $5 billion for global companies, with $50 million annual turnover; and achieving significant increases in the productivity index.

Such is the latest signal of Barbados’ growing ambition to become an international business center. The nation, ranked fifth-highest for FDI among the world’s small island states, boasts a welcoming and business-friendly environment, with unique legal, tax, logistics and human capital advantages for growing companies.

The 166-square-mile island, the most easterly in the Caribbean, is home to more than 4,000 transnational companies. Although agriculture and tourism continue to be critical pillars of the local economy, Barbados’ other targeted growth sectors include international business, financial services and light manufacturing. The island has been able to attract international manufacturers of high-tech products and equipment that generally are neither price-sensitive nor large, so that freight is not a major factor. Florida-based Lenstec Inc., for example, has a manufacturing facility in Christ Church where it produces intra-ocular lenses for cataract replacement, and Pyramidal Technologies selected the island for the manufacturing of its new ballistics testing system, ALIAS.

The nation is boosting efforts to attract biotech companies and build on a current inventory that includes Ontario-based pharmaceutical firm Biovail Laboratories International SRL. The government recently announced plans to create a state-of-the-art laboratory for R&D initiatives and form an oversight agency to establish and regulate research.

“We intend to make Barbados the destination of choice for innovative biotech companies that are prepared to submit to a stringent regulatory process but also want to bring their ideas to the marketplace as quickly and cost effectively as possible,” says Wayne Kirton, CEO of Invest Barbados.

The biotech project will be run by a public-private joint venture on land provided by the government and capital from private industry. The new research facility is to include both private and shared labs, equipment, offices and administrative resources. Construction is hoped to be completed by late 2012. Kirton says companies considering Barbados should contact his agency now and may still be able to influence decisions regarding the future entity.

Southern Hemisphere’s Economic Powerhouse

When President Barack Obama visited Brazil in March for an historic business summit set up to strengthen economic ties between the two nations, he mentioned the age-old prediction that Brazil is “the country of the future.” That future, he said, has arrived. Indeed, Brazil has emerged over the last decade or so as one of the world’s major financial and economic powers.

Latin America’s largest market, Brazil is now the world’s seventh-largest economy, and a resilient one at that. The country was the last to enter the recession and the first to exit it. Thanks in large part to its commodities exports, Brazil saw a 7.5 percent increase in GDP in 2010, representing the highest level of growth since 1986, and continuing a cycle that began in 2007 with 6.1 percent growth and 2008 with 5.1 percent. The financial crisis limited expansion to 0.6 percent in 2009.

“The 2010 growth rates demonstrate that the Brazilian economy is growing at a significant and sustainable pace, which supports the country’s plans for long-term investment projects,” Finance Minister Guido Mantega said in a statement in March. “The performance of gross fixed capital formation and the domestic market, along with a low and stable inflation rate, suggest that high levels of growth will be maintained over the coming years.” The Central Bank of Brazil’s latest survey of economists estimate growth of 4.5 percent this year.

Such gains—in the face of sluggish rebounds throughout the developed world—demonstrate that Brazil is now among the major engines driving the global economy.

And a growing number of foreign investors have been seizing business opportunities around the country. Data from the central bank shows that FDI flows have been growing in recent years, reaching a record $48.5 billion last year. Notably, Brazil’s IT-BPO market has grown in recent decades to become the world’s eighth-largest internal market in this sector. A quickly growing location for offshoring of Indian IT and BPO service providers, projections have Brazil’s IT services exports now at $5 billion and potentially rising to $20 billion by 2020.

While tourism, oil and gas and electronic components are other target areas for growth, the nation has a quickly developing biotechnology and health care industry thanks to a skilled workforce, the existence of technology parks, joint efforts with universities and financial incentives. More than 1,000 companies operate in the life sciences segment alone, making Brazil the Latin American center for the industry.

Oil and gas production in Brazil is expected to more than double in the next 10 years. This, according to the investment promotion agency Apex-Brasil, will demand heavy investments in the construction of maritime support ships, drilling and production units, as well as in the development of the subsea equipment and services subsector.

Obama, in an effort to create business opportunities between the U.S. and Brazil, announced during his March visit that the countries would seek to expand trade and investment, promote economic cooperation, streamline regulations and launch a new partnership to work together on biofuels. “In the last two centuries, there has never been a moment of greater promise for Brazil,” he said. “You now have the seventh largest economy in the world, and one of the fastest growing of any country.”

Bavaria is Growing Cluster by Cluster

Terms like “network” and “cluster” are far more than buzzwords in the German state of Bavaria, where companies, schools, associations and political groups have been working together to grow the economy of Germany’s largest state. And when these clusters work, they do wonders to generate productivity and growth.

A case in point of such synergy is Bavaria’s satellite navigation sector, a network of research, industry and service providers that includes Galileo Industries’ headquarters in Munich, along with some 50 specialized enterprises, the German Aerospace Center, two universities, state and federal armed forces involvement and several innovative service providers. The whole value chain is here, from information technology and telecommunications to software and chip development. And, in turn, as this satellite navigation cluster grows, it nurtures other sectors, networking through cross applications with companies in the automotive, logistics, IT and tourism industries.

But satellite navigation is just one example of 19 fields that Bavarian officials have defined as clusters—regional networks that interlink business and science to activate innovation and productivity. These include, among others, aerospace, logistics, automotive engineering and railway technology, chemical engineering and nanotechnologies, ICT, financial services, power electronics, biotechnologies and energy.

“Cluster management brings together thought leaders in their respective fields of expertise,” says Martin Zeil, Bavarian minister for economic development, infrastructure, transport and technology. “This strategy fosters innovation, productivity and economic growth within these clusters, allowing the development of new products and processes.”

Zeil says the cluster initiative is already successful. Notably, Munich’s Biotech and Pharma Cluster has been recognized for its excellence in personalized medicine, and the Center of Excellence for MedTech of the Medical Valley in Nuremberg is seen as a model region for healthcare in Europe.

“The clusters have succeeded at developing close strategic cooperation between companies and universities, fostering joint research projects and forming new companies and new jobs in the region,” Zeil says. “The cluster initiative will have an increasingly substantial economic impact in future years in Bavaria, as the ties between our companies, universities, research institutes and government organizations continue to flourish.”

The strategy appears to be a winning one for Bavaria, which overcame the economic crisis by posting GDP growth of 3.9 percent in 2010, driven by innovative capacity in industry. The primary driver behind the state’s economic growth is its hypercompetitive high-end manufacturing sector, whose output increased 12.9 percent in 2010.

“Bavarian companies were able to ramp up quickly as demand rocketed in response to stimulus programs around the world,” Zeil says. “Employers Germany-wide approached the crises by making use of federal programs to keep their workforces intact.” These included the so-called “short work” program that allows companies to retain their skilled workers at reduced hours while the government makes up most of the lost wages.

Reports from economic research institutes predict further growth in Bavaria this year, with some anticipating a 3 percent expansion. New jobs are signaling confidence, with BMW and Audi expected to hire thousands of workers this year to develop electric vehicles and expand factories to deal with increased demand. Bavaria has also strengthened its competitiveness in global markets, with unit labor costs down 15 percent over the last decade due to labor reforms and productivity increases.

And the international business community has taken note. Over the past year, Australian global real estate company Goodman constructed a logistics center near the Munich Airport for the DSV Group, Denmark’s largest shipping and logistics company. Grocery retailer EDEKA invested 100 million euro in a state-of-the-art logistics center in Landsberg am Lech that will employ 300. Speaking of logistics, in March, Bavarian officials announced they had won one of the biggest investment projects of recent years—U.S. online retailer Amazon plans to operate a logistics center in Graben, creating up to 1,000 long-term jobs and 2,000 seasonal positions at peak times.

Solar energy is one industry that will play a key role for Bavaria in terms of future investment. A range of high-tech companies based locally have formed the Desertec consortium with plans to build solar power generation plants on a massive scale. The project, which could see an investment of 400 billion euro by 2050, is headquartered in Munich. Meanwhile, Solimpeks Solar Energy Corp., Turkey’s leading manufacturer of solar energy systems, recently opened its first foreign branch in Munich. And Sud-Chemie AG invested 28 million euro in a research-related project in renewable energies at the BioCampus in Straubing. The company plans to construct Germany’s largest facility for obtaining biofuels from straw.

Austria Enjoys Spike in International Investment

With advantages including its central location in Europe, business-friendly tax system and its No. 5 ranking worldwide for the quality of its skilled labor, it’s no wonder Austria’s economy has enjoyed a major upswing since the global slowdown. Growth last year was up 2 percent, and projections are calling for 2.5 percent this year. National investment promotion agency ABA reported an impressive 25 percent rise in international investments in 2010, representing its third best year in the company’s history. The agency worked with 198 foreign companies setting up business operations there, bringing $322 million (USD) in investments and 1,383 new jobs.

Recently, Durst Phototechnik of the Italian province South Tyrol invested nearly $22 million in a new research center in Lienz; Refrion, a Udina, Italy-based manufacturer of heating systems, established a production facility in Hermagor, Carinthia; and Colorado-based Webroot Software Inc. located a research hub in Linz, representing the second R&D location outside the U.S. for the Internet security systems company. And the projects have continued to come.

“On the basis of a portfolio of 664 projects ABA is processing at the present time and its special business promotion initiatives Research Location Austria, Headquarters Location Austria and Strategic Business Location, we expect further moderate growth this year,” says René Siegl, ABA’s managing director. “However, the required macroeconomic basis does not exist yet which would enable us to once again repeat our performance of the record year 2008.”

Germany has maintained its position as Austria’s biggest investor, and in 2010 accounted for 42 percent of all projects. ABA helped 83 German firms set up business operations, up 56 percent from the prior year. Siegl expects the trend to continue, noting that the investment agency began this year with 155 open German investment projects. Forty-five of the companies that located in Austria last year were from countries in Central, Eastern and Southeastern Europe.

And while Italian company investments were down, accounting for 17 new projects, Austria is seeing increased interest from BRIC countries. Some 21 investment projects came from Brazil, Russia, India and China. This was led by 13 projects from Russia and four from Brazil, including Vale, a raw materials company setting up in Salzburg.

There are a variety of regionally targeted industry sectors in Austria —financial services in Vienna; glass and wood manufacturing in Tyrol; iron, steel, chemical and mechanical engineering in Upper Austria; and electronics in Salzburg. But the overall Austrian landscape is shaped by innovative small- and medium-sized enterprises. According to Christoph Leitl, president of the Austrian Federal Chamber of Commerce, the nation’s industrial sector maintains a high share of the economy, but there is great promise for the services sector, with future-oriented fields such as power engineering and environmental technology playing a major role.

Austria has a natural asset in its location bordering no fewer than eight countries. Every destination in Europe is reachable within a three-hour flight. This helps explain why some 300 international companies, including 28 Fortune 500s, have set up their Central Eastern European headquarters in Austria.

Renewed Economic Focus in Wales

Small, welcoming and full of character are a few ways that have been used to describe Wales. These days, another would be a thriving knowledge economy.

More than 6,300 international companies, mostly from North America, Japan and the European Union, are doing business in the nation, adding to its impressive supply chains across various industry sectors. Once heavily industrialized, the UK nation has undergone enormous changes in recent decades, and the result is a new economic face and a recently renewed focus. Thanks in part to its 10 universities producing about 5,000 graduates in business and ICT disciplines, Wales has become a rapidly growing financial services location, where local businesses compete alongside major financial services firms such as Zurich, GE, GMAC and Legal & General, whose largest UK office is in Cardiff. The country’s financial services sector employs over 32,000 people in 1,800 companies, according to the Welsh Assembly Government.

Wales also now has one of the UK’s largest sustainable technologies sectors, employing more than 40,000 and covering areas from sustainable building to environmental sciences. It is home to Npower, one of the UK’s leading renewable energy developers, home and business energy supplier EDF Energy and others. The growing automotive sector employs over 20,000, with Ford and Toyota among more than 170 automotive companies setting up shop.

The emerging aerospace and defense sector here includes companies like Cassidian, BAE Systems, British Airways, Airbus UK and General Dynamics. General Dynamics has two sites in south Wales and is looking to expand to a third, adding to the 1,600 currently working for its UK operation. Other notable sectors in Wales include ICT, with over 1,200 operations and 33,000 employees; and the life sciences, accounting for 330 companies with 15,000 people. Recent highlights of the latter sector include Siemens Healthcare Diagnostics Products relocating the majority of its manufacturing and distribution operations from Los Angeles to Llanberis, North Wales; and Biomet basing its largest European subsidiary and UK headquarters in Bridgend, South Wales.

The Welsh government recently unveiled a plan for economic renewal calls for a new approach to better meet the needs of business, including investments in high-quality and sustainable infrastructure, encouraging innovation and targeting its business support. Support will be focused on the six key sectors of ICT, life sciences, financial and professional services, energy and environment, advanced materials and manufacturing and the creative industries.

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Twenty million years ago, the oceans covered the area now known as Panama, flowing through a large gap in the continents of North and South America.

Beneath the surface, two plates of the Earth’s crust were slowly colliding with each other, forcing the Pacific plate to slide under the Caribbean plate. The pressure and heat produced by this collision spawned underwater volcanoes. About 15 million years ago, some of these volcanoes grew tall enough to break the surface, forming a chain of islands. The islands gradually filled out as the two tectonic plates pushed up the sea floor, and, about three million years ago, the Isthmus of Panama emerged from the sea, a narrow strip of land dividing the two great oceans.

According to scientists, the formation of the Isthmus of
Panama was one of the most important geologic events on Earth in the past 60 million years, with great impact on the planet’s climate and environment. The sliver of land re-routed the currents of the great oceans, creating the Gulf Stream and warming the denizens of northwestern Europe. Biodiversity on the continents increased exponentially, as animals were able to migrate on land to all corners of the world.

Nobody complained about this magnificently unfolding
ecosystem until the guys with boats arrived. In the late 19th century, global commerce was carried on ships. Because there was no easy way to get from the Pacific to the Atlantic and vice versa, these ships had to travel thousands of miles out of their way to reach their destinations, through treacherous waters at the bottom of South America near Antarctica.

This nagging problem was solved by one of the greatest feats
in the history of human engineering, with a big assist from a political force of nature named Theodore Roosevelt. On August 14, 1914, the Panama Canal was completed, opening a 48-mile waterway between the two oceans and revolutionizing international commerce.

CLOGGED ARTERY

Over the past century, the waterway cutting through the Isthmus has been a reliable and indispensable artery for the world’s goods. But, like all arteries, it became clogged as traffic—and, more importantly, the size of ships—increased.

More than nine decades after it first opened for business, the Panama Canal finally maxed out. Designed before Titanic-sized ships were launched and air travel was limited to test flights on the outer banks of North Carolina, about 14,000 vessels carrying 5 percent of the world’s ocean cargo—280 million tons—pass through the locks of the waterway each year. Each day, on average, more than 40 massive ships, many of them three times as long as a football field and piled high with cargo, ride at anchor in impromptu fleets that stretch across the horizon. On the Atlantic side, most of the ships carry grain from the American heartland, bound for markets in Asia; the vessels on the Pacific side from the Far East are jammed with cars and electronics destined for the East Coast of the U.S. Some ships with daily operational costs of $40,000 wait as long as a week for passage.

During periods when traffic backs up, canal officials sometimes institute an auction to determine which ships get through first. A few years ago, during a particularly busy August, BP Shipping bid $220,300, a record for oil tankers, to jump to the head of the line. When combined with the regular transit fee, the passage cost BP $400,000. The auction price was not an anomaly: it was the fourth oil-tanker record that week.

For years, major shipping companies built vessels designed to fit the canal’s 110-ft.-wide lock chambers. These so-called Panamax ships carry the bulk of the cargo that transits the canal. Increasingly, however, global shippers are building even bigger vessels, known as post-Panamax ships, that cannot fit through the current canal. (In North America, goods that bypass the canal typically cross the U.S. or Canada by rail). In 2011, those vessels represent 37 percent of the world’s container ships. Egypt’s Suez Canal already handles 20 percent more traffic than the Panama Canal and generates more than twice as much revenue. The lockless, sea-level shortcut between Europe and Asia can accommodate supertankers that dwarf the largest vessels now utilizing the Panama Canal.

A $5.25-BILLION BIRTHDAY PRESENT FOR THE CANAL

Today, this problem is being addressed with a $5.25-billion expansion of the Panama Canal that is scheduled to be completed on the Canal’s 100th anniversary in August 2014. The expansion will permit large ships from Asia to travel directly to East Coast destinations instead of offloading their goods on the West Coast and shipping them across the country by rail and road. With 15 percent of the world’s maritime fleet unable to use the Canal because the ships are too large, the expansion project will have a major impact on trade across the world.

In 2006, then Panama President Martin Torrijos announced a plan to double the capacity of the Canal. Included in the plan were new sets of locks, dredging of the approach channels and deepening the passage between each set of locks. In October 2006, 76.8 percent of Panama’s voters approved in a national referendum a $5.25 billion plan to expand and modernize the canal. The project will include two new sets of single-lane, three-step locks—one set at the Atlantic entrance and one at the Pacific; two new navigational channels to connect the new locks to existing channels; and deeper, wider versions of existing shipping lanes. In all, canal crews will dredge 130 million cubic meters of rock and soil, enough to fill the Empire State Building nearly 130 times. The new traffic lane will be large enough to accommodate post-Panamax ships and will double the canal’s capacity.

The impending unveiling of the new and improved Panama Canal has created a frenzy among major East and Gulf Coast ports, all of which are aspiring to be the destination-of-choice for ships passing through the Canal. Economically, the stakes are enormous—the “winner” will reap billions of dollars in new shipping business.

The current scramble among U.S. ports reaches all the way up the coast to New York and beyond. For example, there currently is a push to replace the Bayonne Bridge in northern New Jersey, because the current bridge is too low for larger container ships to enter New York/New Jersey port facilities. If the bridge structure is not altered, its is likely the Port of New York and New Jersey will lose jobs after the expansion of the Canal is completed.

In Savannah, GA, they are working around the clock to scrape six feet of mud from the bottom of the Savannah River. Port officials are racing to complete a $625-million channel deepening project by 2014.

Ports from New York to Miami are scrambling to spiff up their harbors and shipping channels. Baltimore and Norfolk already have 50-ft. channel drafts, and the Port of Philadelphia is upgrading. According to a recent report in The New York Times, the competition to become the go-to port for ships passing through the Canal is fiercest in the Southeast and the Gulf Coast, which has the closest ports to the Isthmus.

“Everyone is lined up, and the door is about to open,” Bob Pertierra, vice president of supply chain development for the Metro Atlanta Chamber, told the Times. “If you can imagine the crowded three- or four-lane highway you’re driving on suddenly getting expanded to 12 lanes, you can picture what’s about to happen.”

Joining Savannah in the jousting are Charleston, SC, Jacksonville, FL, Miami and more than a dozen other ports, including major inland ports like Memphis. One hurdle that contenders must overcome is the fact that most major port expansions require Congressional approval, studies by the Army Corps of Engineers and a significant amount of federal funding.

According to another Times report, some sharp elbows are being thrown as state and local officials vie for the pole position in the big ports contest. Curtis Foltz, executive director of the Georgia Port Authority, noted Savannah already is a much larger port than Charleston. “All you have to do is look at the numbers,” he said. “The stats speak for themselves.”

The incoming governor of South Carolina picked up the gauntlet at a recent annual dinner for SC ports, which was held the same day last month that the Corps of Engineers announced its approval for Savannah’s dredging project.

“You now have a governor who does not like to lose,” Gov.-elect Nikki Haley declared. “Georgia has had their way with us for way too long, and I don’t have the patience to let it happen anymore.”

Somewhere, Teddy Roosevelt is smiling. May the best port win, and earn a well-deserved “Bully!” from Mt. Rushmore. Here is an up-close look at some of the contenders.

GEORGIA PORTS BRING THEIR ‘A’ GAME TO CANAL CHALLENGE

Facilitating global trade though strategic East Coast gateways, the Georgia Ports Authority (GPA) currently operates two deepwater seaports and two inland ports in Georgia. Its two Atlantic seaports are the Port of Savannah and the Port of Brunswick; its two inland ports, both linked to the Gulf of Mexico, are Port Bainbridge and Port Columbus. The Port of Savannah is based in Garden City and the Port of Brunswick is located in Brunswick. Each of these ports hosts multiple terminals. The Port of Savannah, by far the largest, is the flagship port.

Georgia’s ports are critical to continued economic growth in the state. Combined, its deepwater ports and inland barge terminals support more than 295,000 jobs throughout the state annually and contribute $15.5 billion in income, $61.7 billion in revenue and $2.6 billion in state and local taxes to Georgia’s economy.

In preparation for the Panama Canal expansion in 2014, the GPA has embarked on an expansion and modernization plan to more efficiently accommodate newer, larger vessels that already are calling on East and Gulf Coast ports. These vessels like the CMA CGM Figaro, which called on Savannah in August 2010, offer more capacity and lower cost per container compared to current Panamax vessels.

The GPA is working with federal and state agencies toward the approval of the Savannah Harbor Expansion Project (SHEP), which would deepen the Savannah River from 42 feet to 48 feet. Although the port is able to serve 8,500 TEU (20-foot equivalent unit, the standard measure of container capacity) vessels, a deepened harbor will enable the port to more efficiently serve larger ships, the frequency of which will grow exponentially once the Panama Canal’s expansion project is completed.

“We’ve worked more than a decade to make deep water a reality here,” said Curtis J. Foltz, executive director of GPA. “This is the last piece of the puzzle. This tells our customers this state, this port is committed to being here for them.”

According to GPA, completion of SHEP is critically important to continued economic growth in the Southeastern U.S. and Georgia. As the fastest-growing and fourth-largest container port in the nation, the Port of Savannah was responsible for moving 8.3 percent of the U.S. containerized cargo volume and more than 18 percent of all East Coast container trade in FY 2010 (July 1, 2009—June 30, 2010). The port, which boasts a uniquely balanced export-import ratio, handled 12 percent of all U.S. containerized exports, a total of 1.14 million TEUs. The port also is a gateway to more than 44 percent of the U.S. population and 42 percent of all job-creating companies, officials said.

“This project—one of the most important and productive civil works projects in the country—will maintain and create jobs and commerce throughout the nation, while significantly reducing transportation costs for U.S. shippers,” said GPA Chairman Alec L. Poitevint. “As the Southeast’s gateway to the world, our harbor must be able to accommodate these vessels without tidal restrictions in order to efficiently serve global commercial demands.”

The project, recently approved by the U.S. Army Corps of Engineers is moving to construction. The project cost of $576 million will result in a 4.3-to-1 benefit-to-cost ratio, meaning that for every dollar spent on the project, more than $4.00 in benefits will be realized.

GPA’s Focus 2020 is a strategic development plan to invest more than $1 billion on innovative capital improvements to its terminals. Focus 2020 puts Savannah’s Garden City Terminal, with two on-terminal Intermodal Container Transfer Facilities (ICTFs), at the epicenter of its plans to proactively increase the capacity of the port to handle the anticipated growth in container cargo moving across its docks over the next decade.

The GPA plan includes equipment upgrades such as the ongoing addition of “reefer racks” for containers transporting temperature-sensitive cargoes, installation of nine additional super post-Panamax cranes (to be completed by 2020) and 64 rubber-tired gantry cranes. The project also includes construction of a “Cargo Beltway” to accelerate commercial traffic between the terminal and major near-by interstates.

Georgia’s ports provide a strategic gateway to rail and road distribution networks that offer the most efficient and reliable intermodal access to markets across the Southeast and Midwest. Served by Class I rail service—Norfolk Southern Railroad and CSX Transportation—Savannah offer unrestricted double-stack service and two- to three-day transit times to major hubs throughout the Midwest, Gulf Coast and Southeast, including overnight service to Atlanta, the fastest of any North American port. Immediate interstate access is available via Interstates 95 (North/South) within 5.6 miles and I-16 (East/ West) within 6.3 miles.

Currently, about 20 percent of the cargo the Port of Savannah handles moves by rail; that is expected to increase to as much as 25 percent over the next five to ten years, according to John Wheeler, GPA’s senior director of trade development.

“Shippers wanting to discharge their cargoes as near to inland markets a possible are seeing that Savannah’s rail connections give them a distinct advantage over moving their shipments through a West Coast port,” said Wheeler.

That, Wheeler says, makes Savannah “the head of the logistics funnel that moves cargo in a triangle from Chicago to Dallas and Atlanta and everywhere in between.”

In February, GPA announced significant volume gains at the Port of Savannah, reflecting the global demand for Georgia-based exports. In January 2011, Savannah posted the second best month ever with 132,257 containers (237,004 TEUs), which yielded a fiscal year-to-date increase of 14.3 percent and 13.3 percent, respectively. Container tonnage posted the third best month ever with 1,887,179 tons. More than 200 vessels called on the port, an increase of 20 percent compared with January 2010.

Breakbulk tonnage for the ports of Savannah and Brunswick totaled 171,761 tons, which is an increase of 43 percent compared with January 2010. At the Port of Brunswick, auto and machinery units practically doubled compared with January 2010, moving 37,313 units in January 2011.

“Accommodating recent increases in volume without impacts on our world-class speed and efficiency levels is due to the hard-working men and women on our terminal, but also to the strategic infrastructure upgrades,” said Poitevint. “As larger vessels continue to call on the

Port of Savannah, the increased global demand for trade through our ports necessitates the efficiency and additional capacity of a deepened harbor.”

PORT OF NEW ORLEANS IS READY

New Orleans has been a center for international trade since 1718, when it was founded by the French. Today, the port is one of America’s leading general cargo ports, holding the nation’s top market share for imported steel, natural rubber, plywood and coffee.

The Port of New Orleans has six trunk line railroads, more than any other seaport in the U.S., which are connected to the docks by a short line railroad, the New Orleans Public Belt Railroad. The Mississippi River and its tributaries provide 14,500 miles of navigable waterways. Barge traffic reaches major markets in the American heartland including Chicago, St. Louis, Tulsa, Memphis, Pittsburgh and many other locations.

The Port’s cargo profile is primarily breakbulk, heavy-lift and containerized cargo. It is the largest importer of natural rubber in the U.S. and the second largest importer of green coffee. Other important commodities include steel, non-ferrous metals (New Orleans is a certified London Metal Exchange Port), forest products, frozen poultry and chemicals.

The port’s facilities include 22 million square feet of cargo-handling area and more than 6 million square feet of covered storage area that accommodate an average of 2,000 vessel calls each year. The port ranked sixth in total trade by cargo volume in 2008 and moved 229,067 TEUs in 2010, according to statistics from the American Association of Port Authorities.

In anticipation of capturing a big chunk of the transpacific Asian trade previously destined for West Coast ports, the port is ramping up expansion projects to assure the availability of adequate terminal capacity and address transportation infrastructure needs and marketing for all-water Asian liner service. The port hopes to have finances secured and expansion projects completed by 2014.

“The Port of New Orleans and all of the ports on the Gulf Coast are preparing for the expansion of the Panama Canal,” said Gary P. LaGrange, president and CEO, Port of New Orleans. “We are in the process of adding incremental capacity to our container terminal through the addition of two gantry cranes and by adding marshalling area. In 2011, we increased our container volumes by 31 percent. We have an expansion footprint that allows us to continue to increase capacity as the need arises and as funding becomes available.”

Over the past 10 years, the port has invested more than $400 million in new state-of-the-art facilities. Improved breakbulk and container terminals feature new multipurpose cranes, expanded marshalling yards and a new roadway to handle truck traffic.

Currently, two gantry cranes are under construction in Korea for a total price of about $25 million and are expected to arrive in New Orleans by the end of 2011. The 100-foot gauge cranes will have the outreach needed to handle the super post-Panamax container ships.

The Crescent Corridor project, currently underway, will link the Port of New York and New Jersey to the Port of New Orleans. The Crescent Corridor is a railroad corridor expansion program that will be operated by the Norfolk Southern Railway (NS). The line, proposed by NS in 2007, will run along Interstate 81 and will be a major intermodal corridor running between Louisiana and New Jersey.

The port currently is looking to raise $150 million in financing for a $237 million expansion of its Napoleon Avenue Container Terminal Complex, the second of a three-phase, $500 million development. The Napoleon Avenue Container Terminal, completed in 2003, increased the depth available for container vessels at New Orleans from 33 feet to 45 feet. Subsequent investments have improved efficiency by adding space for the storage of empties and chassis, and building a near-dock rail yard that allows containers to be transferred quickly from ship to rail and vice versa. Right now, the port is in the process of adding four acres of marshalling area to the terminal.

As part of a Katrina recovery project, the port is building a new refrigerated terminal at Henry Clay Avenue Wharf on the Mississippi River. The facility includes a 140,000 square-foot warehouse able to store 35 million pounds of product between 15 and 40 degrees F and to blast-freeze 1.2 million pounds of product in 20 hours or less. This capacity will be available at the dock, adjacent to where refrigerated ships will call.

In January, the port started a project to renovate the Julia Street Cruise Terminal. The estimated $13.7 million project will renovate two smaller terminals at Julia Street into one large, modern terminal. The project includes the installation of a new climate-controlled articulated gangway, currently under construction in Sweden. The terminal will be home to Royal Caribbean’s Voyager of the Seas, which will home-port in New Orleans beginning this fall. The 1,020-foot cruise ship carries 3,838 passengers and will be the largest cruise ship ever to call on the Port of New Orleans. The project is expected to be completed in October.

PORT OF VIRGINIA’S CAPACITY GROWS BY LEAPS AND BOUNDS

For the past six years, the Virginia Port Authority (VPA), which owns and operates the Port of Virginia, has been working on various projects to prepare for the Panama Canal expansion. VPA’s lease of the massive APTM intermodal terminal at Portsmouth and its capacity expansion at the Norfolk International Terminal both help Virginia to be positioned favorably, as do the move of the local railroad line, and the planning for even more capacity at Craney Island.

The port is one of two ports on the East Coast which can already handle the channel depth of 50–55 feet and height clearance (approximately 50 feet) which are needed for the larger ships that would begin coming through the widened canal (the other is Baltimore). Its Suez-class cranes can handle ships loaded 26 containers across, giving them the ability to handle vessels larger than any currently built.

“With our 50-foot-deep channels, no overhead (bridge) obstructions, double-stack rail to Chicago and modern container terminals, Virginia is well-positioned for the future,” said Jerry A. Bridges, the executive director of the VPA. “There is no other port on the U.S. East Coast that has a comparable list of assets. So we are ready for an expanded Panama Canal—we’ve been ready for almost six years.”

In January, the port began the first phase of its $2.2-billion, multi-phase terminal project to build the Craney Island Marine Terminal, which will be the fourth state-owned, deepwater marine cargo terminal. The first phase involves construction of the foundations for a network of dikes that eventually will support a 600-acre marine terminal. The foundation work will be done in phases as finances permit.

“Another key asset of the Port of Virginia is our ability to expand,” said Bridges. “Right now, construction on Craney Island is underway; that long-term project could feasibly double the capacity at our port. All the permitting and paperwork is complete and we received $27 million in [President Obama’s] proposed budget for fiscal 2012.”

Last September, the VPA awarded two contracts worth a combined $30.9 million for this phase of work. The total cost to complete the 600-acre site is $700 million and that will be done through a 50-50 cost-share agreement with the federal government.

Projected benefits of the Craney Island Eastward Expansion Project:

• The construction phase will generate 1,176 jobs and $37 million in wages

• When it is complete, the cargo moving over Craney Island will generate 54,000 jobs, $1.7 billion in wages, and $155 million in state and local tax revenue.

• Its cumulative economic impact on the Commonwealth will be $5 billion annually

• It will generate $6 billion in national economic development benefits—money that will not have to be invested by the federal government in large transportation infrastructure projects needed to move goods to consumers

In July 2010, the VPA signed a 20-year lease agreement that gives the agency control over all operations at APM Terminals North America in Portsmouth, VA (APTM). The 576-acre terminal is heralded as the most technologically advanced marine cargo facility in the Americas. The lease agreement unifies all the marine cargo container terminals in the Hampton Roads harbor under the VPA flag for the next two decades.

“This asset presents a host of opportunities for The Port of Virginia,” said Bridges. “It gives us ample container capacity now and in to the future; we will be able to market the technology and efficiency of this facility to our customers; and it gives us on-dock rail capabilities that we previously didn’t have.”

In February 2011, following its 41-day voyage from China to Virginia, the Zhen Hua 24 eased its way into the Chesapeake Bay carrying two fully-erected Post-Panamax container cranes that were bound for service at APMT. Once the units are put into service, APMT will have eight post-Panamax cranes. In total, the VPA will have 22 container cranes in the Hampton Roads Harbor, Panamax-class and larger.

In April 2010, the port began work on phase II of its Central Rail Yard at Norfolk International Terminals (NIT). The $10.1-million project will add six new tracks to the existing Central Rail Yard configuration. The 648-acre facility, the port’s largest terminal, has 4,000 linear feet of berth and 3.3 miles of on-site rail with links to NS and CSX that boasts a current capacity of 1.4 million TEUs annually, with room for further expansion. It is home to 14 of the biggest, most efficient cranes in the world. These ZPMC cranes are the only cranes capable of handling the “ships of tomorrow.” Completion of the project is expected sometime in the spring of 2011.

The port’s rail business has always been one of its strongest areas of growth and with the completion of the Heartland Corridor, a three-year, public-private partnership project, the port now has fast, direct, double-stacked access to Chicago. This project is critical to East Coast ports since they move freight from the ports to inland locations quicker, cheaper and greener.

Called one of the largest railroad engineering projects of the past century, Norfolk Southern raised the height of 28 tunnels in the Appalachian Mountains to open the Heartland Corridor. The benefits to the port began immediately—nearly 250 miles will be sliced from current routes saving up to two days in transit time for shippers. In September, the VPA sent its first-ever double-stack train, which was more than 4,300 feet long, on its way through the corridor to Chicago.

“This project provides us with a solid, competitive advantage that has been drawing a significant amount of interest from our customers,” said Bridges. “Couple this capability with our 50-foot-deep channels and an expanded Panama Canal, Virginia is well-positioned for the future.”

PORT OF BROWNSVILLE: WORLD-CLASS AND CONFIDENT

The Port of Brownsville, which opened more than 70 years ago, is a world-class deepwater seaport located at the southernmost tip of Texas at the western-most terminus of a 17-mile channel that flows into the Gulf of Mexico at the Brazos Santiago Pass, which was the landing place of Spanish conquistador Pineda in 1519, and others.

The port, which is the only deepwater port directly on the U.S.-Mexico border, plays a significant role in the movement of goods between Mexico and the U.S., as well as globally. In April 2010, Breakbulk Magazine ranked the port as third among top 10 U.S. ports for steel imports, eighth for steel exports and third for steel imports and exports.

With over $90 million currently invested in infrastructure projects, the port is positioning itself to remain very competitive and to provide multi-modal transportation options in anticipation of the increased shipping activity in the Gulf of Mexico as a result of the Panama Canal expansion.

“As cargo increases in the Gulf as a result of the canal expansion all ports in the Gulf region will benefit,” said Eduardo A. Campirano, Port Director and CEO. “Businesses make a logistical decision based on proximity to their facilities and the cargo’s final destination. We are a versatile port that can handle most of the cargo that comes through the Gulf region and feel very comfortable with our opportunity to compete.”

Finding new ways to give the port a new dynamic as a center of intermodal freight movement, the port is implementing an aggressive rebuilding and renovation infrastructure plan. Focusing mainly on capital improvement transportation projects, some of the latest developments at the port include the SH 550 Project, which will facilitate the movement of cargo to and from the port, the new Port Entry Road that will tie into the SH 550 Project, improvements to the Overweight Corridor and road and utility improvements inside the port.

“Our Overweight Corridor helps manufacturing plants keep costs low,” said Manuel Ortiz, public information officer for the Port of Brownsville. “Plants are able to load trucks at Mexican weight standards that are 1.5 times higher than U.S. standards—this cuts down on the number of trips and therefore overall expenses.”

In order to accommodate new ocean-going ships, the port is working to deepen and widen the Brownsville ship channel, which will help it to offer a cost savings through economies of trade and expand its growing transloading capabilities. Other projects include improving its short-sea shipping capabilities; pursuing expansion of its deep draft heavy lift general cargo dock to expand its break bulk capabilities; and constructing an additional oil dock to keep up with a growing petroleum and liquid cargo business.

The port recently received the U.S. Department of Transportation “Marine Highway Designation” due to its work on a Marine Highway Project with its partner Port Manatee, FL. The Marine Highway links not only two regions of the country, but also two countries, which is highly beneficial for the community and the environment because it improves job creation and federal funding potential and reduces the number of trucks on the already congested U.S. highway system, thereby lowering greenhouse gas emissions.

“In essence the Marine Highway is a virtual highway linking Port Manatee, Florida and the Port of Brownsville,” said Ortiz. “The designation is important because of the positive impact it will have from both a commerce and environmental standpoint. The designation will allow us to more effectively compete for future funding, which will in turn allow us to continue to develop this service.” To date the port has received over $3 million out of an initial $7 million dollars available for the funding of federal projects.

The port’s infrastructure already in place allows the region to maximize its potential and provides a way for the Rio Grande Valley region to transport goods globally. It is connected with the Mexican Port of Lazaro Cardenas and inland ports in Monterrey, San Luis Potosi and Saltillo by a rail line.

Since it was established in 1983, the Brownsville and Rio Grande International Railroad (BRG) line has grown to be a very successful operation. The BRG is a subsidiary of the Brownsville Navigation District and provides efficient and reliable railroad service. Operations are 24/7 with an average monthly load of 2,700 plus cars.

From 1994 to 2009, BRG saw an increase of 114 percent in car counts per year. In 2010, BRG was not only able to post a successful year financially—it also posted a record month in October. On average, BRG moves approximately 2,700 car loads per month; however, in October it moved 3,784 carloads.

According to Norma Torres, president and CEO of BRG, this is due to increased demand for scrap metal by refineries located in Monterrey Mexico. “We expect demand to increase over the next year,” said Torres.

With this demand, BRG is hoping to not only purchase additional equipment but also to build a new rail yard. “The development of the north rail yard is going to be a crucial component to our future,” said Torres.

In addition to having one of the largest Foreign Trade Zones (FTZ No. 62) in the U.S., the port offers over 40,000 acres of land, along with 12 cargo docks, four oil docks, one liquid cargo dock, 650,000 square feet of covered storage and 2.3 million square feet of open storage.

“We have sufficient draft, with intermodal capabilities, and we have the services in place to compete with every Port within the Gulf region,” said Campirano. “In addition, we have ample land to continue to grow as demand increases in the future.”

PORT OF SOUTH LOUISIANA: HEAVYWEIGHT TONNAGE KING

The Port of South Louisiana, a 54-mile port district on the Mississippi River between New Orleans and Baton Rouge, is the largest tonnage port in the Western Hemisphere. Over 4,000 oceangoing vessels and 55,000 barges call at the port each year. In 2010, the facilities within St. Charles, St. John the Baptist and St. James parishes handled more than 246 million short tons of cargo brought to its terminals via vessels and barges. With exports of over 48 million short tons of cargo in 2010, the port also is the highest- ranked exporter in North America.

The port offers users a strategic location at the intersection of the Mississippi River and the Gulf of Mexico and an intermodal transportation network of waterways, roadways, rail and air featuring access to four interstate highways, four Class I railroads, Louis Armstrong International airport and St. John Parish Airport, and deepwater via the Mississippi River. The inland barge system, comprised of 19,262 miles of waterway, moves more than 124 million short tons of cargo upriver to major U.S. markets in the Midwest and Northeast.

In the heart of the port lies the Globalplex Intermodal Terminal, a 335-acre maritime industrial park for both vessels and barges that provides handling and storage for bulk, breakbulk and containerized cargos. Its deep-draft bulk terminal has one of the largest cement facilities in North America. Cargo is quickly moved to and from landside storage via an extensive covered conveyor system.

The proposed expansion of the Panama Canal is a key factor influencing Louisiana ports. The expansion will allow the Panama Canal to approximately double its logistics capacity, which will significantly increase cargo volume.

“We believe that Louisiana can win a significant share of new logistics business and that Chinese investment funds are a potential source of Louisiana foreign direct investment,” said Don Pierson, assistant secretary of Louisiana Economic Development. “Moreover, the Panama Canal has traditionally been a gateway for dry goods, such as grains, minerals, fertilizers, coal and liquid goods, such as chemical products, crude oil and oil derivates. These are all strong suits for Louisiana.”

In April 2010, port and economic development agency executives traveled to Asia to share some of the advantages and benefits Asian companies—which typically ship via ports located on the west coast of North America—would have in the Port of South Louisiana. Since then, the port has been even more committed in expanding its operations and in securing new capital investment within the region, such as the planned terminal on the Mississippi River at the Bonnet Carré Spillway.

In June 2010, the port officially opened Transit Shed #4 at Globalplex Intermodal Terminal. The $6- million warehouse, which was designed to withstand 130-mph winds, was funded in part by $4.8 million from LA DOTD’s Port Construction and Development Priority Program. Erected adjacent to the general cargo dock access bridge, the building layout and location will permit future expansion of the structure to triple its current size in addition to the installation of conveyors connecting the warehouse to the general cargo dock and to nearby railroads.

In the summer of 2010, the port began an $18.9-million project to construct a 65-foot-wide x 700-foot-long finger pier adjacent and downriver from the existing general cargo dock that will allow the berth of a Panamax-size vessel and direct vessel-to-barge transloading. The project is expected to be completed in the fall of 2011.

The Port of South Louisiana offers access to 66 percent of the North American market and access to Mexico and Latin America in 2-7 days. It provides 60 percent of the nation’s grain exports and 7 grain transfer facilities, 50 million short tons of crude oil imports on average per year and four major oil-processing plants, which refine more than 1 million barrels daily, and 11 petrochemical manufacturing facilities. In short, within the 108 miles of deepwater frontage on both banks of the Mississippi are more than 50 piers and docks. Its impressive group of resident tenants includes Chevron Phillips, ArcelorMittal, Cargill, Dow, ADM, DuPont, Motiva Enterprises, Marathon, Shell and Nucor Steel.

PORT FREEPORT: POISED FOR GROWTH

Port Freeport, TX is expanding in depth and width, as well as in economic impact for the state of Texas. Located on the Gulf of Mexico, Port Freeport’s traffic has increased substantially in recent years with the opening of the Freeport LNG facility and growth in the importation of windmill components, pipe and project cargoes. In fact, the port has grown from being the 29th port in the U.S. to the 16th port in the U.S. in international business in the last 10 years with about $2 billion in investment in that time period in the port, according to Michael Wilson, Director of Trade Development. Last year total tonnage for Port Freeport was up 6 percent over 2009. And that growth shows no signs of slowing down, with new improvements and enhancements being done to the port on an ongoing basis.

In 2009, Port Freeport was granted permission by the U.S. Army Corps of Engineers to widen the offshore entrance and jetty channels to the Freeport harbor. The widening of the six-mile offshore entrance and jetty channels up to 600 feet from the current 400-foot width will allow larger LNG, crude oil and other cargo vessels to access Port Freeport.

“The deepening and widening project that we’re doing right now would bring our channels down to 55 feet and 600 feet wide, and that would allow post Panamax-type vessels to call in Freeport,” says Wilson. “Right now the largest vessel we’ve had in the port is probably 900 feet long, and most of the Panamax vessels are about 925 feet long and the Post-Panamax vessels are about 1,200 linear feet long, and hold up to 8,500 or 10,000 containers in a vessel.”

The results of the Army Corps of Engineers’ first phase study were so good that they pushed the second phase of the project by 18 months. The port is coming to the end of the second phase of the project, which is a study of the economic impact, return on investment and calculations related to trade and volume to justify the federal government spending on the project. Basically it’s a written recommendation by the Corps to tell the federal government to move ahead on the project. Once that’s done the engineering and construction phase can begin. The $350 million project will make Port Freeport the deepest port in the West Gulf of Mexico enabling it to handle the largest container ships, largest LNG ships, largest chemical tankers and second largest crude tankers in the world.

“Fort Freeport is considered to be a strategic national asset,” says Wilson. “We’re one of the few ports in the U.S. that has 8,000 acres on deep water, and we do both 28 million barrels of crude, plus LNG and we can distribute all over the U.S. with the infrastructure that we have here. So when you look at our project, we actually only have a seven-mile channel, so it’s not as expensive to maintain us or to finish us out to the new depth as it would be for those ports that might have 50-mile long channels or to have to deal with bedrock as they do in the northeast or some of the other things that they have to do with this type of infrastructure improvement.”

Along with the widening and deepening project, Port Freeport has spent the past few years developing the Velasco Terminal having begun construction in 2006. Velasco Terminal is a 120-acre site designed to become an 800,000 container capacity terminal. Around 800 feet of the berthing line and 20-acres of back plan have been completed already. When it is complete it will have 2,400 feet of berthing line with an operational depth of about 47 feet and have 90 acres of back land. Total build out is estimated at about $280 million.

A final project at Port Freeport includes a multi-modal facility with five unit trains of capacity designed in it. The port is working with Union Pacific Railroad to create the rail improvements and new rail lines on this $40 million project.

“When you look at these three major infrastructure investments, what you see is a positioning for the future,” says Wilson. “Not necessarily just for the Panama Canal, but for the future of this port and Texas and the U.S. There are going to be shifts in the global patterns and a lot of people are trying to predict what’s going to happen with the Panama Canal.”

Current growth projections for Port Freeport, even without the addition of the Panama Canal freight, are expected to be at a 10 percent to 15 percent growth rate per year for the next 15 years.

PORT EVERGLADES IS MOVING TO DEEPEN HARBOR AND CHANNELS

As one of South Florida’s leading economic powerhouses, Port Everglades is the gateway for international trade and cruise vacations. Already one of the busiest cruise ports worldwide, Port Everglades is also one of the nation’s leading container ports and South Florida’s main seaport for receiving petroleum products, including gasoline, jet fuel and alternative fuels.

Located in Broward County, Port Everglades reached another milestone toward expanding its cargo-handling capabilities when Board of County Commissioners recently reaffirmed the need to increase berth space at the port’s Southport Turning Notch as well as to continue toward the completion of the U.S. Army Corps of Engineers Deepening and Widening Study, which called for a deepening of the port’s channels to 50 feet from the current depth of 42 feet.

“This is a two-pronged plan to expand berth capacity and increase operating depths that points to the comprehensive strategy to meet future service demands,” said Port Everglades Director Phil Allen. “We are pleased with the Army Corps’ recent findings because they justify the need for a deeper harbor at Port Everglades to handle the increase of ship traffic that we expect to see as a result of the Panama Canal expansion and the anticipated growth of the market in South Florida.”

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The global energy industry and our economy are vastly different today than they were even just a few years ago. We are witnessing a sea change in the way we look at, approach and handle energy.

Climate change, rising oil and gas costs, an ever-growing global demand for fossil fuels and other world events have caused the U.S. to make a decided shift towards investment in domestically available resources and alternative energy.

This is a good sign for a fractured U.S. economy that currently has as many as 30 million people looking for work. While other industries shrink and lose jobs, clean energy grows. According to a November 2010 study by Scotts Contracting, “2011 Outlook for Clean Energy Jobs in the U.S.—Beating the Trend,” more than 2.5 million people will be working for the clean energy industry by 2025. This means that 8 percent of the 30 million unemployed in America would have employment. Yet, this sector has the potential to grow even more.

President Obama is calling for the U.S. to get 80 percent of its power from cleaner sources by 2035 and has passed two federal laws to help spur growth. Under the American Reinvestment and Recovery Act (ARRA) passed in February 2009, the U.S. Treasury Department implemented a program to issue cash grants in lieu of investment tax credits for renewable energy projects. Congress also has extended the 30 percent federal investment tax credit (ITC) to both residential and commercial solar installations until December 31, 2016.

A major growth area for the U.S. alternative industry is solar. Driven by taxpayer subsidies, state renewable energy standards (RES) and federal investment tax credits and cash grants, the U.S. market for utility-scale solar energy farms is expected to double each year between 2010 and 2015, to $8 billion, according to a study released in November 2010 by GreenTech Media, a Cambridge-MA-based research group. In 2010, 274 megawatts (MW) of utility-scale solar plants were expected to be connected to the grid—a 370-percent increase from 2009. Projects are expected to double in 2011 and reach 5,600 MW by 2015.

“You’d be hard pressed to find another industry with a 26 percent job growth rate for 2011,” said Rhone Resch, president of the Solar Energy Industries Association (SEIA) on the industry trade website renewableenergyworld.com

The Solar Foundation released its National Solar Jobs Census 2010 at Solar Power International last October, showing that the solar industry is creating jobs at a much faster rate than the overall U.S. economy, which is expected to grow at around 2 percent this year. The report documents, through 2,500 interviews with employers throughout the country, that over the next 12 months more than half of U.S. solar firms expect to add jobs, while only 2 percent expect to cut workers. Firms are adding employees in all 50 states and the fastest-growing jobs are installers and electricians.

Jobs for installers are growing because installations are growing at very high rates as well. SEIA along with GTM Research recently released a report that shows solar installations in 2010 were up more than 100 percent over 2009. The U.S. Solar Market Insight report compiled data for the first half of 2010 and shows significant growth in the U.S. solar industry.

According to Resch, if the industry meets its goal to install 10 gigawatts (GW) annually by 2015, it would create as many as 220,000 jobs.

The bio-energy sector also holds enormous potential. A report released from the World Economic Forum suggests that the U.S. will be a leader in bio-energy and bio-based products. According to the Biotechnology Industry Organization (BIO), the biorefinery industry currently accounts for 40,000 jobs. Commercialization of second- and third-generation biofuel energy is expected to generate 800,000 new jobs—610,000 indirect and 190,000 direct—by 2011 in the U.S. In addition, the biorefining industry is likely to generate tens of thousands of jobs in the upcoming five years.

President Obama and the U.S Department of Agriculture (USDA) are working together to promote alternative energy development— especially biofuels—in rural areas. In January 2011, the USDA announced support to help private companies create hundreds of jobs building three new refineries producing advanced biofuels. In 2010 alone, the USDA invested more than $1 billion in improving the entire supply chain of biofuels and bio-energy, from research and development, to production and commercialization.

To help states and utilities meet the growing demand for energy in a way that is eco-friendly and reliable, the U.S. is in the process of developing next-generation electric power grids (the “Smart Grid”) using intelligent communications and IT systems.

The Smart Grid introduces and fosters new types of energy efficiency by allowing the operation of the entire electricity system to be dynamically optimized at all times. By using smart-grid technologies and smart- grid practices like demand response, the electricity system can accept and manage the amount of renewable energy that policymakers and the renewable energy industry desire and expect to be developed.

Smart grids are absolutely essential for clean power, but they also are key components to economic growth. According to Lux Research, there will be a $20-billion spending surge in smart technologies in the next 10 years, led by electric utilities and global grid giants. Nearly 75 percent of that money will come from utilities updating their grids to make way for the coming smart grid revolution.

Already the impact of alternative energy growth is visible across the nation. From several large-scale renewable projects, including 150 MW of new solar plants being built across Arizona and the nation’s first renewable energy market hub being established in New Mexico to five new bio-energy projects announced in Kentucky and a $50-million wind turbine production plant in Indiana, Business Facilities has searched across the country to uncover the latest in alternative energy developments. What you will discover in this article is that states across the U.S. are implementing alternative-energy focused policies and programs that are helping to create high-paying (and sustainable) jobs and putting Americans back to work.

INDIANA IS AN ALTERNATIVE ENERGY CROSSROADS

With more than 100 years of advanced manufacturing success and innovation, and a central U.S. location, Indiana has become a national manufacturing hub for solar, wind, electric vehicles and battery technologies. The state’s clean energy strategy so far has been focused on maximizing its potential, including going after a diverse range of clean-energy industries.

“Indiana has not been focused on one sector, we’ve gone after everything,” said Cathy Tripodi, director of energy, Indiana Economic Development Corporation (IEDC). “Indiana has been recognized as one of the most successful states in pursuing various industries. Companies that are past the incubation stage tend to locate here because they can be on both sides of the country in one day. We’ve had tremendous success in the green electric vehicle space and solar and we are a big player in wind.”

Although coal still makes up 95 percent of the state’s electricity supply, Indiana is blessed like many of its Midwestern neighbors with plentiful wind and biomass resources. Even though it lacks a statewide RES, Indiana has been able to attract a substantial amount of investment capital and renewable energy jobs. Indiana has numerous large-scale wind farms in operation and is ranked 6th in the nation in ethanol production.

According to the American Wind Energy Association, Indiana is a leading state in new wind capacity—ranking second in the U.S. in 2009 and first in 2008. Its four wind farms represent some of the largest in the country and amount to an estimated $2.1 billion in capital investment. Big industry players such as Horizon Wind, BP Wind Energy, Duke Energy, EnXco, and Orion Energy have completed their projects in Indiana.

In May 2010, Brevini Wind USA, which produces wind gearboxes for wind turbines, announced it began production at its Yorktown, IN operation in the fourth quarter of 2010 representing an addition 450 jobs at the plant.

Brevini Wind, which is part of the Brevini Group, is investing more than $50 million for the new production plant in Yorktown, enabling the manufacture of a complete range of reliable and innovative main gearboxes for wind turbines ranging from 0.9 MW to 3.5 MW.

The Brevini Group, headquartered in Italy with production facilities in Italy, Germany, China and now the U.S., is not new to the wind power sector. It is an international player with more than 10 years of experience in the industry. Its gearboxes have become a standard for wind turbines worldwide due to their state-of-the-art technology and cost effectiveness. In 2009, Brevini had consolidated revenue of about $420 million and employed 1,700 worldwide doing business in 21 countries with its 11 product lines.

Brevini’s decision to locate in Indiana is a clear symbol of the opportunities Indiana and the U.S. have to offer.

“We are preparing ourselves for a robust market around the corner,” said Renato Brevini, president and founder of Brevini Group. “We have the wind, we have the technology, and, thanks to the support of the State of Indiana, the local authorities and the U.S. Department of Energy, we have the opportunity. That is why I am absolutely confident that the U.S. wind market will be the biggest in the world, and Brevini Wind will be a major player.”

According to IEDC, the state is also home to the largest U.S. solar manufacturing plant in the country. In July 2010, Colorado-based Abound Solar announced it is investing $500 million to take over the empty Getrag plant near Kokomo, IN, creating as many as 850 jobs over the next three years.

Abound Solar received a $400- million federal loan guarantee to open the Tipton County facility and expand an existing plant in Colorado. The company also is eligible for a total of more than $12 million in performance-based tax credits and other training grants from IEDC. In May 2010, Tipton County leaders approved another $13 million in incentives to help lure the company to Indiana.

“State and local representatives from Indiana were particularly instrumental in our efforts to finalize plans for this state-of-the-art facility and create high-paying jobs for Hoosier workers,” said Steve Abely, Abound executive. “We are excited about the opportunity to make America a global driver of renewable, affordable and abundant solar energy.”

In December 2010, Indiana became the first state in the nation to have electric cars in a government fleet. Its ThinkCity cars, which have zero local emissions and an energy efficiency three times that of a traditional combustion- engine car, is essentially a home-grown vehicle. The cars are manufactured in Elkhart, IN and also have Indiana-made EnerDel batteries in them.

Ener1, which makes the EnerDel battery, has three manufacturing facilities statewide. The company manufactures cells, packs, and energy storage systems, serving the automotive electric-drive market, including Toyota Prius. The company also is conceiving and developing energy storage with battery management systems to support and advance the next generation of power grids (smart grids) for their use of digital technology to route and regulate power.

Several business incentives are helping to support clean energy growth in the state. The Net Metering and Interconnection program requires the state’s investor-owned utilities (IOUs) to offer net metering to residential customers and K-12 schools. The Green Power Purchasing program requires all state buildings within Marion County to purchase 10 percent of their electricity by 2010 through Indiana Power and Light’s (IPL) Green Power Option program. The program allows its customers to purchase electricity generated from wind, solar, geothermal, and/or biomass systems. In addition, the state offers tax incentives including a property tax exemption for the entire cost of a renewable energy system and the affiliated equipment that is unique to the system, including equipment for storage and distribution. The exemption is allowed every year that an eligible system is generating energy.

Overall, Indiana has had great success as a clean energy manufacturing state, but according to IEDC’s Cathy Tripodi its power lies in its philosophy. “We have an interesting philosophy here in Indiana where we identify, produce, deploy and embrace our own products,” said Ms. Tripodi. “We have world-renowned colleges, universities and training programs. This all has a multiplying effect on the industry. We don’t have one solution for it, so that’s why we are going after it all. We can’t pick the winners or losers, but we are having success so it’s been worth the effort.”

ARIZONA: STILL THE SOLAR KING

Arizona, a state with more sunshine to harvest than anywhere in North America, is considered a bright spot in the U.S. solar economy.

The state has built huge solar manufacturing plants for some of the biggest names in the industry (First Solar, Inc. and Suntech Power, to name two). Gov. Jan Brewer hopes to continue this expansion into 2011 through tax incentives that have already proven successful.

Through its Bill SB1402, Arizona has clearly indicated intentions to become a hub for solar energy companies. The bill, which took effect on January 1, 2010, has been credited for the creation of approximately 900 jobs and an influx of about $119.2 million in investment.

The federal government also is playing a role in advancing solar. In January, the U.S. Department of Energy (DOE) announced a $967- million loan guarantee for the Agua Caliente Solar Project in Yuma County, Central Arizona.

The Agua Caliente Solar Project consists of a massive 290 MW capacity PV solar-generating facility that is expected to create 400 construction jobs. The project’s sponsor, NRG Solar, estimates that, upon completion, this project will constitute the largest solar electricity facility in the world.

“The DOE Loan Programs Office plays an important role in enabling the deployment of utility-scale renewable energy resources such as Agua Caliente, supporting financing terms commensurate with the long-lived nature of a photovoltaic solar power plant,” said Frank De Rosa, First Solar’s senior vice president of Project Development, North America, in a statement. The project was initiated by First Solar—which will be supplying thin-film solar panels for the project—before it was obtained by NRG Solar.

The company anticipates the project will negate approximately 237,000 metric tons of greenhouse gas emissions per year, equivalent to taking over 40,000 cars off the road annually. In addition, at full capacity, NRG estimates the project will have the potential to provide electricity for approximately 100,000 homes.

Greater Phoenix’s renewable energy industry has grown dramatically since the Renewable Energy Tax Incentive Program was signed into law in 2009. Since then, the program has drawn more than eight companies, 1,350 jobs, and $153.2 million in capital investment.

In January, Power-One Inc., a manufacturer of power inverters for the renewable energy industry, opened its first North American manufacturing facility in Phoenix. The factory eventually will employ 350 people and produce PV and wind-energy inverters.

The facility will reach a capacity of 1 GW of production by the end of the year, with available site capacity reaching 4 GW, the company says. The inverters manufactured at the site will be installed in residential, commercial and utility settings.

Power-One says it decided to move to Phoenix because of the region’s skilled workforce, access to intellectual resources at Arizona State University, and strong support from Gov. Brewer, the Arizona Commerce Authority, the City of Phoenix and the Greater Phoenix Economic Council.

Innovation is the key for a successful clean energy industry. Tucson-based Global Solar is playing a crucial role in helping to advance a high-tech BIPV industry in Arizona. In September 2010, the company rolled out its new flexible solar module, the PowerFLEX BIPV, at its 100,000 square foot facility.

BIPV (building-integrated photovoltaics) are systems that are applied directly to a building, without glass-clad frames or mounting frames, which can be costly. This technology, which is expected to be a leading sector of solar growth in the next few years, is helping Global to remain competitive in a quickly shifting and growing solar industry. NanoMarkets, a VA-based market research firm, projects that worldwide shipments of BPIV products will grow from about $1.9 billion in 2010 to nearly $6 billion in 2014 and more than $16 billion by 2017.

Utilities Are Pitching In

Arizona’s RES, which requires regulated utilities to produce 15 percent of their power from renewable resources by 2025, is prompting utilities to help propel Arizona’s solar industry. In 2011, the RES was increased—calling upon the Tucson Electric Power Corp (TEP) to secure 3 percent of its power from renewables, including solar energy, wind, biogas and other resources.

TEP already is involved in some 150 MW of renewable energy projects, including more than 130 MW of new solar plants by 2013. Six of those projects are expected to go online by the end of 2011.

In January, TEP unveiled a large PV array to provide power for a new program that offers customers a unique opportunity to buy solar energy directly from TEP. The new 1.6 MW tracking array was developed for TEP by Tucson-based SOLON Corp. in the Solar Zone at the University of Arizona’s (UA) Science and Technology Park in southeast Tucson.

“This system is the first of more than a dozen local solar projects that will be built over the next few years to help us take full advantage of southern Arizona’s most abundant renewable energy resource,” said Paul Bonavia, chairman, president and CEO of TEP and its parent company, UniSource Energy.

There are five other solar-power systems planned for development in the Solar Zone, where solar industries and R&D projects are coming together on a single 200-acre site.

One of the planned systems includes a 5 MW solar concentrating thermal plant. The system, being built by Bell Independent Power Corp, with expected completion in 2013, will store heat to keep generators running hours after sundown.

“The UA and Tucson Electric Power have a common interest in leveraging solar technology and innovation for the benefit of the region,” said UA President Robert N. Shelton. “We realize there is a great long-term economic potential for job creation in southern Arizona if we can be at the forefront of creating new, advanced technology for use in the solar sector.”

Maricopa County has been experiencing regionally significant bio-energy industry growth. In August 2010, Pinal Power, LLC, announced its plans to construct a facility that will generate 30 MW of electric power fueled entirely by landscape and agricultural waste.

The project represents $92 million in capital investment; 120 construction jobs during 2011 and 2012; 20-25 workers on site at full build-out; and the creation of up to 100 or more induced jobs due to the need for fuels delivery, maintenance and other spinoff activities. The project is expected to be fully operational in 2013.

According to Bob Buckingham, leader of the project’s development team, Western Bio-Energy Inc., the facility will be located to the west of the existing Pinal Energy’s ethanol plant, Arizona’s first ethanol plant creating a ‘Renewable Energy Zone’.

“Maricopa’s central location is perfect for transportation logistics, there was ample land available for our needs and co-locating with Pinal Energy’s ethanol plant made it a home run,” said Mr. Buckingham.

Pinal Energy’s ethanol plant, which began production in August 2007, produces 50 million gallons from roughly 18 million bushels of corn or milo annually. The fuel-grade ethanol is used in blending with gasoline components to produce E10, a 10-percent ethanol blend. The ethanol also is used for E85, a clean-burning blend of 85 percent ethanol and 15 percent gasoline for use in flex-fuel vehicles. It currently provides 45 jobs for the Maricopa area.

Bio-Energy Inc. has worked on more than 20 similar projects since the early 1980s. The fuel source for the facility is truly green and will consist of landscape waste that currently is delivered to local landfills and farm crop agricultural waste high in BTU’s (British Thermal Units) from surrounding Pinal County areas. Local residents also will be able to visit the facility, dropping off green waste for free instead of paying a fee to dispose of material at area landfills.

“This type of development can lead the way for other industries to consider Maricopa for their operations,” said Danielle Casey, economic development director, City of Maricopa. “The location of this site is ideal for additional industrial developments.”

FLORIDA SHINES ON BIOFUEL AND SOLAR ENERGY

These days everyone is talking about going green. In Florida, state and local leaders are making it happen. According to the Pew Charitable Trusts, Florida is a leader in establishing a green-energy economy. A recent report shows the state added more than 31,000 clean-energy jobs from 1998 to 2007, ranking it among the top 10 states. Florida clean-energy jobs grew at a rate of 7.9 percent, while nationally jobs only grew by 3.7 percent.

Although its solar industry certainly can’t compare to Arizona’s and the state has yet to pass an aggressive RPS (Renewable Portfolio Standard)—some incentives are helping the industry tap into the state’s vast economic potential.

In 2010, Florida launched the Clean Energy Investment Program, which will help the state increase investment opportunities in renewable energy and energy-efficiency technologies. The $36-million program provides funding for companies to upgrade their energy systems.

The Clean Energy Investment Program is a direct investment initiative that will provide qualifying Florida businesses with funding primarily for three uses:

• Facility and equipment improvement with energy efficient products and materials
• Acquisition or demonstration of renewable energy products for use in their operations
• Improvement of existing production, manufacturing, assembly or distribution processes to increase energy efficiency.

“The state program will fund projects and companies that, in turn, will provide returns that can fuel additional clean-energy investments in Florida businesses,” said Jennifer Dunham of Florida First Partners, manager of the Florida Opportunity Fund. The state is currently working to identify companies and projects that would be eligible to participate.

Utilities also are playing their part in Florida’s renewable energy transformation. In January 2011, Florida Power and Light Company (FPL) announced its commissioning of its Martin Next Generation Solar Energy Center, the world’s first solar hybrid power plant. Over the past two years, construction of the Martin County plant employed 1,000 people, and the plant’s reduction in fossil fuel consumption will save FPL customers $178 million in fuel costs over the life of the project.

According to FPL’s Senior Director of Project Development, Buck Martinez, Florida’s renewable energy industry shows tremendous potential.

“Due to Florida’s climate and geographic location, it could position itself as a global leader in renewable energy and as an exporter of intellectual property and energy products to islands in the Caribbean and other countries,” Martinez said.

However, according to Martinez, the state legislature must pass enabling legislation which would allow utilities to choose to invest in more renewable energy, on behalf of their customers, at a low cost. This would further help the state tap into the vast potential of the solar market. In Florida alone, 700 MW of solar energy would create 40,000 jobs and $8.1 billion in economic impact, according to a recent study by the Washington Economics Group.

Federal incentives also are helping to grow Florida’s renewable energy industry, particularly biofuel.

In January 2011, INEOS Bio and its joint venture partner, New Planet Energy, announced they have received a conditional commitment for a $75-million loan guarantee from the USDA 9003 Biorefinery Assistance Program. Funds will be used for construction of the world’s first INEOS BioEnergy Center to be located near Vero Beach. The BioEnergy Center will produce eight million gallons of advanced biofuel per year together with six megawatts (gross) of renewable power from biomass including yard, vegetative and wood wastes and municipal solid waste. Financing from the USDA program is provided to advance the next-generation bio-energy technologies into the commercial sector.

“We are encouraged by the continued confidence and commitment the federal government has shown in assisting with the commercial development of this new bio-energy technology,” said Peter Williams, CEO of INEOS Bio and chairman of INEOS New Planet BioEnergy. “These programs are providing the funds needed to enable the U.S. to achieve a leading position in the bio-energy sector through projects such as ours. As well as directly assisting construction of the INEOS New Planet BioEnergy commercial plant, the loan guarantee also represents an important step along the road to replication of this exciting new technology through INEOS Bio’s licensing program.”

The BioEnergy Center will process waste from local citrus and agricultural operations, yard wastes, wood waste and municipal solid waste, turning them into energy. Site preparation and construction are underway at the BioEnergy Center, which has created 55 new jobs to date. The center, slated to begin operations in 2012, is anticipated to provide 175 jobs during construction and 50 full-time jobs once the facility is completed.

The heart of INEOS Bio’s technology is a patented anaerobic fermentation step, through which naturally occurring bacteria convert gases derived directly from biomass into ethanol. Unlike other technologies that rely on one primary source of feedstock, the INEOS Bio process can produce ethanol and renewable energy from numerous feedstocks, including construction waste, municipal solid waste and forestry and agricultural waste, while breaking the link between food crops and ethanol production. This flexibility allows facilities like the Florida BioEnergy Center to be built anywhere in the world wherever there is biomass waste, providing jobs and locally sourced renewable energy for urban and rural communities.

When it is completed, the plant is expected to produce 8 million gallons per year of cellulosic ethanol and 6 MW of electricity. That is enough to power more than 11,000 cars and 4,700 homes for a year.

NM PIONEERS A SMART GRID

Former Gov. Bill Richardson of New Mexico (he left office in January) pursued policies to attract green companies and earn New Mexico recognition as the West’s clean-energy manufacturing hub, with a particular emphasis to grow its thriving and cutting-edge solar industry and to develop a green smart grid.

In June 2010, Gov. Richardson announced that two new green energy projects, the CFV Solar Test Laboratory and the Fraunhofer R&D Facility will begin operations in the former Advent Solar site at Mesa del Sol in Albuquerque by the end of 2010. The two entities will create 30 to 40 new renewable energy jobs.

“As we build a thriving solar industry in New Mexico, it is important that we attract all aspects of the industry,” said Gov. Richardson. “That is why I am pleased to announce the establishment of the CFV Solar Test Laboratory and the Fraunhofer R&D facility. This shows that our renewable energy policies and pro-business attitude continue to draw international interest and investment.”

The test laboratory is a joint effort between the Fraunhofer Center for Solar Energy Systems of Freiberg, Germany; the Fraunhofer USA Center for Sustainable Energy Systems in Cambridge, MA; the Canadian Standards Association-International of Toronto (CSA International); and VDE Testing and Certification Institute of Offenbach, Germany.

After a thorough evaluation process, CSA International chose to locate its new facility, which will test products for certification to North American and international PV test standards, at the Mesa Del Sol development in Albuquerque. The Mesa Del Sol facilities are close to the airport, Sandia National Labs, the University of New Mexico and other major players in the PV supply chain.

“The decision to place this new solar testing facility in New Mexico puts us in the epicenter of the PV installation market in the U.S.” said Randall W. Luecke, president, CSA International. “The conditions, from a business and testing perspective, made choosing Albuquerque a strategically smart move that will allow for market growth and excellent outdoor test conditions.”

Mesa del Sol, a master-planned community, provides real-world physical domains for data collection and technology demonstrations to advance the state-of-the-art in renewable energy and sustainable communities. Its facilities also are helping to attract other high-tech companies.

In May 2009, Schott Solar opened its new 200,000 square foot solar factory at the development. The company invested more than $100 million in the facility, which will produce PV modules and receivers for concentrating solar thermal power plants. Schott is one of the largest solar equipment manufacturers in the world, with operations in 41 countries and 16,800 employees.

“This Schott Solar facility is one of our biggest successes,” said Gov. Richardson. “It is one of the most significant economic development projects in recent state history and is a tremendous boost to our fast-growing clean-energy sector.”

In July 2010, MSR-FSR, a local supplier of technical services, announced it will also occupy space at the former Advent Solar building at Mesa del Sol. The company provides support services to the semiconductor, solar and pharmaceutical industries, including material and equipment supply, cleaning, repair, removal, conversion and installation.

CFV Solar and Fraunhofer will take a combined 27,000 square feet, while MSR-FSR will occupy 46,000 square feet and use the existing clean room.

In addition, Sandia National Laboratories announced it is planning to open in its Aperture Center at Mesa del Sol to demonstrate new technologies and methodologies including: smart grid and microgrid; energy monitoring and storage; concentrating solar technologies; and energy control and security. Sandia is one of the nation’s leading energy research and development laboratories.

Overall, these projects add new dimensions to New Mexico’s emergent solar industry, helping to build an economic climate that will attract companies who want to take advantage of the state’s solar resources.

“Mesa del Sol has a vision,” said Jason Lott, director of leasing at Mesa del Sol development and building owner Forest City Covington. “Mesa del Sol just experienced success when it landed three tenants in one building. It’s a pretty big coup given this commercial real estate market.”

Planning the Economic Backbone of the Future

One key challenge facing New Mexico’s alternative energy industry continues to be increasing long distance electric transmission capacity that can adapt to the state’s changing electricity infrastructure. Projects that choose to locate in other states because of New Mexico’s inadequate transmission infrastructure represent billions of dollars of lost in-state capital investment. To address this problem, the state is in the process of establishing a green smart grid, which will integrate an increasing amount of renewable energy into the electric system in a seamless fashion.

In order to greatly expand its alternative energy generation options, New Mexico helped establish the nation’s first renewable energy market hub in 2009. The Tres Amigas SuperStation, which will be located in Clovis, will for the first time provide the capability to transfer thousands of MW of power between the three U.S. power grids.

“By enabling the exchange of wind, solar and geothermal power between all three grids, the Tres Amigas SuperStation will help break our nation’s transmission bottleneck,” said Phil Harris, CEO, Tres Amigas, LLC.

Two other big announcements to help enhance the grid came in 2010.

In June, Gov. Richardson announced that 19 Japanese companies, including Toshiba, Kyocera and Hitachi, selected two sites in New Mexico for testing smart grid technologies as part of a $30 million U.S.-Japan Smart Grid Collaborative Demonstration Project being conducted between 2010 and 2014.

The statewide project, which will break ground in late 2011 or early 2012, is being carried out by the New Energy and Industrial Technology Development Organization (NEDO) in collaboration with the state of New Mexico, Los Alamos County, PNM Resources, Mesa del Sol, and Sandia and Los Alamos national labs.

“This NEDO-New Mexico project can be a major resource for future introduction of wind, solar and other renewable forms of energy into our main grid,” said Thomas Bowles, Science Advisor to Gov. Bill Richardson.

NEDO picked the LEED silver certified Aperture Center in Mesa del Sol as a test site for a commercial microgrid, to aid in the introduction of renewable technologies into the power supply. Los Alamos County was selected for the residential component of the project. There, the project will implement and demonstrate three basic components: smart meters, utility scale PV and a smart feeder.

“The Aperture Center in Mesa del Sol has been selected after a thorough search for the right building for smart grid evaluation,” said Kazuyuki Takada, the NEDO representative, from Washington D.C.

“We are committed to energy solutions, and this project seeks to put Mesa del Sol at the forefront of creating a workable smart grid in the near future using renewable energy forms,” said Michael Daly, president of Mesa del Sol.

Also in June, Santa Fe Clean Line LLC, a subsidiary of Houston-based Clean Line Energy Partners, announced its acquirement of the Santa Fe transmission line project from Integrated Transmission Solutions LLC. The clean line will transmit up to 3,500 MW of energy from new, renewable generation projects via an approximately 750 mile long overhead high voltage, direct current (HVDC) transmission line. Potentially running from eastern New Mexico to Arizona and other western states, the project, when built, will facilitate the construction of billions of dollars of new clean energy generation.

“There is a tremendous untapped renewable energy resource in eastern New Mexico but infrastructure to move electricity from attractive wind resource areas to consumers in distant western markets is insufficient,” said Clean Line President Michael Skelly. “This transmission line will provide a solution to that problem and will enable the electric industry in the West to provide their customers with access to the most affordable clean energy available.”

The project, in the early stages of development, is expected to take five years to complete and cost approximately $2 billion. Clean Line expects to fund all development costs and does not plan to seek cost recovery through the electric rates paid by consumers. Once built, the project will enable an additional $7 billion in investments in new wind and solar projects which today cannot be built because of the lack of transmission. These projects could power more than a million American homes.

GREEN INNOVATION IN KY

As the third-largest coal-producing state with the highest per capita consumption of residential electricity, Kentucky has been responding to its energy challenges in a number of ways.

State legislation and a new roadmap developed by the Kentucky Department for Energy Development and Independence (DEDI) is helping the state establish mechanisms to promote renewable energy projects and energy efficiency technologies within the state and help to develop alternative transportation fuels from its coal and biomass resources. Currently, the state relies on renewable resources for less than 3 percent for its energy generation. The roadmap outlines a goal to triple this amount to provide the equivalent of 1,000 MW of clean energy by 2025.

Kentucky uses only 5 to 10 percent of its potential biomass resources for the production of biofuels such as ethanol and biodiesel. By 2025, DEDI’s goal is to derive 12 percent of its motor fuels demand from biofuels.

In 2010, the DEDI awarded $800,000 for five bio-energy related research projects, including combined heat and power and biomass-fired power plant projects, through the Energy Commercialization and Research grant. If enacted, the plan will provide 30,000-40,000 new jobs as a result of a booming diversified energy sector, according to DEDI.

One such project is using the power of algae and other non-food crops to produce biofuels. Algae are some of the fastest growing plants in nature and have the ability to convert large amounts of carbon dioxide into oxygen. In fact, they help produce as much as 80 percent of our planet’s oxygen.

The production of biofuels from algae does not reduce atmospheric carbon dioxide (CO2) because any CO2 taken out of the atmosphere by the algae is returned when the biofuels are burned. However, they do potentially reduce the introduction of new CO2 by displacing fossil hydrocarbon fuels.

In September 2010, Alltech Inc., a global leader in natural animal nutrition based in Nicholasville, KY, announced the acquisition of a state-of-the-art algae fermentation facility in Winchester, KY from Martek Bioscience Corporation for $14 million.

The 23-acre site, slated to open in mid-to late March 2011, will be renamed Alltech Winchester and will represent a further increase of more than 1 million liters of fermentation capacity for the company and become its 5th primary production site in North America and 10th globally. At full production, the plant is expected to have 50-plus technical jobs.

“For Alltech, algae fermentation presents our latest technological platform from which we expect incredible opportunities in the areas of food, feed and fuel to arise.” said Alltech Founder and President, Dr. Pearse Lyons. “We have worked in this area for several years and see it playing a major role in both human and animal health and nutrition as one of the world’s more renewable food and energy sources.

Its potential for biofuel has garnered the most attention due to algae’s ability to produce more fuel than corn. Alltech is conducting a pilot project at East Kentucky Power Cooperative to grow algae to sequester flue gas inside coal-burning power plants. The goal is to then grow these algae, which produces a product rich in oil, proteins and carbohydrates which could be used to power vehicles.

“Algae are one of the most diverse organisms in the world and their potential for product development is tremendously exciting for us,” said Becky Timmons, Alltech’s Director of Applications and Quality Assurance.

Alltech’s existing rural community biorefinery plant in Springfield, which currently employs around 93 people, is one of the first in the nation to utilize cellulose, such as switch grass, corn cobs and corn stover, at raw material levels of up to 30 percent. The cellulose is then converted to ethanol and other value-added products.

Argonne: U.S. Battery Center

Kentucky’s efforts to bring Argonne National Laboratory’s new battery manufacturing research center to the state are helping to attract high-tech companies.

In July 2010, Governor Steve Beshear announced nGimat LLC, a subsidiary of Atlanta-based nGimat Co., is establishing a new lab facility in Lexington to develop advanced lithium titanate energy storage nanomaterials for use in next-generation lithium-ion automotive batteries, as well as in energy storage components for the emerging electrical smart grid.

This announcement represents an initial investment of $740,000 and will create 18 new high-tech jobs over three years, followed by an additional 50 full-time jobs in production and administrative positions.

nGimat received a $250,000 forgivable loan from Kentucky’s Cabinet for Economic Development’s High-Tech Investment Pool, a program used to support technology-based and research-intensive companies and projects with tax incentive benefits up to $550,000 through the Kentucky Business Investment (KBI) program. In addition, the company received $60,000 through the Kentucky Enterprise Act (KEIA), a program that allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in R&D and electronic processing equipment. The company is collaborating with the Argonne battery research center in Lexington. Governor Beshear announced formation of the Battery Manufacturing R&D Center in April 2009. Argonne is the federal government’s lead laboratory for applied advance battery R&D. The center is leveraging the expertise and research facilities at the University of Kentucky and the University of Louisville to develop and deploy a domestic supply of advanced-battery technologies for vehicle applications.

Together, nGimat and the center will help the U.S. develop advanced battery technologies, bridge the gap between research and commercialization and help ramp up domestic production capabilities.

Currently, the U.S. is far behind in developing electric vehicles and batteries for them, so there are certainly challenges ahead. Nearly all large-scale advanced battery production is in Asia, with the U.S. having only limited manufacturing capabilities. But according to Dr. Ralph Brood, who was selected in July 2010 to lead the center and has decades of experience in advanced battery technologies, the new center will help to remedy this situation.

“We are beginning to see the development of a battery but we have a long way to go,” said Dr. Brood. “The center is going to bring out the best of Kentucky’s efforts to further develop the Commonwealth’s manufacturing base and create jobs, and of Argonne and its broad-based and world-class energy storage R&D program.”

Dr. Liang Hu and his research team at 3H Company have developed a process to capture and absorb carbon dioxide (C02), a major contributing factor to climate change.

In 2010, the Bluegrass Business Development Partnership and Kentucky Science and Technology Corporation’s SBIR-STTR program recently announced a nearly quarter-of-a-million grant to 3H to help expand its groundbreaking and state-of-the-art work.

3H Company moved to the University of Kentucky campus in 2009 to develop a patented process to increase the rates of CO2 capture and reduce the capture cost which will improve energy efficiencies by saving as much as 80 percent of the current technology costs for doing so.

“CO2 is a by-product of combustion and when it is successfully captured from post combustion flue gas (coal fired power plant emissions), it can be utilized commercially,” said Dr. Hu. “Our CO2 capture process cannot only significantly lower the costs of captured CO2, but it will also reduce toxic emissions present in flue gas.”

The company’s groundbreaking work has attracted significant interest worldwide, with investors including E on US, SaskPower, EPRI (Electric Power Research Institute) and NExant. In addition, other funding has come from the Department of Energy, the National Science Foundation, and the EPRI.

“My team and I have been welcomed in Kentucky, one of the nation’s largest coal producing states, and we are most appreciate of the levels of funding we have received,” said Dr. Hu.

VALERO ENTERS BIOFUELS MARKET IN SAN ANTONIO

Darling International Inc., a food industry “rendering” company, which collects used cooking oil and processes it for new purposes like biodiesel, has teamed with Valero Energy Corporation of San Antonio to expand its energy products to include a renewable fuel.

The joint venture will be known as Diamond Green Diesel, LLC. Valero will use loan funds to design, build and operate a biodiesel facility near Norco, LA (near New Orleans). Darling will supply used oil (and other fats, oils and greases) to Valero at its St. Charles refinery.

The facility is projected to generate 137 million gallons of biodiesel per year, which would nearly triple the nation’s biodiesel production capacity. The plant would add 700 temporary (construction-phase) jobs and 60 permanent (operational phase) jobs helping to energize a local economy still feeling the affects of Hurricane Katrina not to mention the current recession.

As a company with six of its 13 refineries stationed in Texas, it leaves much to be desired in terms of bringing green jobs to Texas. The Diamond Green facility is one of many recent ventures into clean energy by Valero amongst wind, natural gas, and ethanol production. That is great news for the country as green jobs are added to the industry, a larger production level of native fuel is produced and a decrease in the percentage of imported fossil fuel is needed. However, of Valero’s 10 ethanol production plants, only one is in Texas adding green jobs to the state. As for San Antonio, it is likely that the only green jobs created for the area are less to do with the trade skills and more to do with the administrative tasks associated with sale of the energy (the corporate headquarters, which house administrative functions of the company, is in San Antonio).

All of the alternative energy business in Texas do not necessarily involve projects built in the Lone Star State. For example, a 50-megawatt solar thermal power plant will be built in India, but it’s also an Abilene project, with Lauren Engineers and Constructors taking the lead in designing and building the power plant, according to company officials.

In the last state legislative session in Texas, more than 60 bills related to solar energy were filed, according to a report by the House Research Organization for the Texas House of Representatives. Those efforts seek to take maximum advantage of the state’s wide-open skies, which may have more solar resource potential than any other state.

Another Abilene, TX-based company, Empower Energy Solutions, reportedly has found a market for its products in Belize. Executives from Empower traveled with members of the Houston Chamber of Commerce to the Central American country in 2008, giving leaders in Belize a demonstration of solar technology. The group found a receptive audience because rolling blackouts are the norm for the impoverished country. According to reports, the company is working on a solar installation that will be used to power a school and possibly a hospital as well.

Lauren Engineers, founded in the 1980s, has always been in the power industry. The company first undertook a solar project in 2005, taking over a role to design and construct a 64-megawatt plant in Boulder City, NV known as Nevada Solar One. Lauren had about 1,000 workers involved with the 16-month project, including about 150 in Abilene. Design work was done locally, as was some pipe fabrication needed for the project. The company also was involved in a solar project in Florida that is producing 75 megawatts of power.

The energy grid that powers most of Texas primarily uses coal and natural gas, which provide more than 75 percent of the state’s electricity. The share of energy produced by wind has increased to 7.8 percent from less than 5 percent in 2008; solar energy has provided less than 1.5 percent of the power load.

Compared with other states, Texas ranked 13th in solar energy production in 2009, according to the Texas House of Representatives research group, with only 8.3 megawatts of electricity-generating capacity. However, in the next two years the percentage of energy generated by solar installations is expected to increase dramatically.

A 27-megawatt concentrating solar plant called Western Ranch is scheduled to be online soon. Municipal utilities in San Antonio and Austin also reached agreements to purchase power from photovoltaic solar plants. Solar installations are being developed in San Angelo, with Terra-Gen planning to build a solar farm near the city.

Texas had 3,068 solar jobs in 2010, according to an estimate published by The Solar Foundation, a nonprofit group that promotes solar energy. Nationally, the group estimated that there were 135,458 solar jobs.

MICHIGAN: BUILDING A GREEN ENERGY FUTURE

In a state as impacted by the economic downturn as Michigan, green is gold. And the rush to cash in is on, as solar, wind and lithium-ion battery manufacturers and suppliers bring new, vital industry to the state.

Case in point is the triple announcement last year that came from Midland-based Dow Chemical Co., Michigan’s biggest corporate investor. Dow plans to develop wind, solar and alternative battery power projects totaling more than $1 billion and creating 2,500 direct jobs and 4,400 spinoff jobs. The Michigan Economic Development Corp. (MEDC) awarded Dow $61.3 million in tax credits over 15 years for the projects. On the solar end, Dow will build its first full-scale production facility for its Powerhouse® Solar Shingle in Midland. The company’s revolutionary roofing shingle was unveiled in October. Also, Dow will team with South Korean partner TK Advanced Battery, calling itself Dow Kokam, to construct a manufacturing facility for its lithium-polymer batteries for electric vehicles. The facility entails a $294 million investment from Dow Kokam over the next three years. For the wind energy component, Dow will partner with Oak Ridge National Laboratory in a separate venture to develop a facility focused on low-cost carbon fiber for wind turbine blades and other projects.

“Taken together, these investment decisions total more than $1 billion and constitute a huge stamp of approval by a global corporate leader that maintains facilities in 23 states and 51 countries worldwide,” Greg Main, president and CEO of the MEDC, tells Business Facilities.

Also of note is General Electric’s recent announcement that it will open an advanced manufacturing technology and software center in Van Buren, near Detroit, with a focus on wind energy technology and other renewable energies. The center will include a new $100 million, 100,000-square-foot research and development facility. The state is providing $60 million in incentives over the next 12 years to support the center.

Michigan also is home to United Solar Ovonic, which manufactures solar panels, and Evergreen Solar, as well as a host of manufacturers of lithium-ion batteries. Last year, four battery production projects, including Dow Kokam’s operation, were announced after winning a combined $860 million in federal grants to help launch production. A123 Systems Inc., which has operations in Ann Arbor and Novi, will invest more than $600 million in a new battery plant in Livonia. Korean-based LG Chem and Troy-based subsidiary Compact Power, in partnership with General Motors, will invest $244 million to jointly establish a 660,000-square-foot lithium-ion battery cell manufacturing facility. And Milwaukee-based Johnson Controls-Saft Advanced Power Solutions will invest $220 million in an advanced battery production plant.

“Our greatest successes have been luring significant investment in the solar and advanced battery industries by global best practice companies that would have never considered Michigan without our aggressive and strategic initiatives,” Main says.

A growing number of major wind turbine manufacturers and tier one suppliers also have or are planning operations in Michigan including Danotek Motion Technologies, Global Wind Systems, Great Lakes Towers, Cascade Engineering and Accio Energy. Michigan recently passed a renewable portfolio standard mandating that 10 percent of its electricity come from renewable sources by 2015 and 25 percent by 2025. A 10 percent by 2015 RPS would generate a demand for approximately 1,250 new wind turbines during the next seven years.

“Michigan is executing a very aggressive economic diversification strategy, and developing a robust renewable energy industry is a key component of that plan,” Main says. “We are working hard to leverage the state’s unique strengths such as our engineering and R&D expertise, manufacturing know-how, our universities, natural resources and competitive business climate to attract and grow companies in this competitive sector.”

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