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Sky’s the Limit for High Tech in the Grand Canyon State


A skilled, knowledge-based workforce and a competitive business climate have given Arizona one of the fastest-growing economies in the nation.

Arizona’s tech sector is heating up the sun-kissed state due to a number of unique university programs and government economic development initiatives, as well as a growing biotech hub.

Businesses interested in expanding and relocating to Arizona will find one of the fastest-growing economies in the nation, a skilled, knowledge-based workforce, and a competitive business climate and tax structure. Phoenix, the state’s capital, is now the fifth most populated city in the country.

The Grand Canyon State is well known for its technology-related industry specializing in semiconductors, aerospace and defense, navigation and controls, and business information services. One of the largest portion’s of the state’s high-tech industry is semiconductor manufacturing, which produces chips for a myriad of consumer electronic products such as MP3 players, cell phones, and computers.

The industry was recently enhanced when ASIC North, a Vermont-based semiconductor design company, announced plans to expand its operations to Tempe in September, creating 25 new jobs with an annual payroll of $1.75 million. Its location in Tempe puts the company in close proximity to other major semiconductor producers such as Intel, Freescale, Microchip Technology and ON Semiconductor.

After looking at many locations, including the Pacific Northwest, North Carolina and Austin, TX, ASIC North selected metro Phoenix because of its large semiconductor industry, good transportation and proximity to Silicon Valley, where many of the firm’s customers are located.

“ASIC North is growing into new markets,” says ASIC North president Mike Slattery. “After surveying many cities it was apparent metro Phoenix was the best choice to provide the new business opportunities and skilled workforce needed for our expansion.”

Arizona also is home to a burgeoning bioscience industry. According to the Greater Phoenix Economic Council, bioscience employment and number of establishments has outpaced nationwide growth since 2002. Between 2002 and 2006, employment in Arizona’s bioscience industry increased 18.5 percent (compared to 4.7 percent nationally), adding more than 12,600 jobs totaling 80,909. The number of bioscience establishments in the state increased 16.7 percent during the same time period, rising from 639 to 745. In addition, through three-quarters of 2007, Arizona already had recorded its most successful year in attracting bioscience venture capital ($77 million) since 2002.

Earlier this year, Abraxis BioScience, a Los Angeles pharmaceutical company that uses nanotechnology to kill cancer cells, announced plans to locate in Phoenix. The now- opened 200,000-square foot-facility will create 205 jobs with an average annual salary of $72,200. Its location in Phoenix puts the company in close proximity to global bioscience leaders such as the Mayo Clinic, Covance, Barrow Neurological Institute and Medtronic Microelectronics Center, as well as world-class research establishments, such as Arizona State University, Translational Genomics Research Institute, and Sun Health Research Institute.

The new facility allows Abraxis to expand its manufacturing capabilities and provide the necessary infrastructure for worldwide growth of the company. In 2005, Abraxis received approval from the U.S. Food and Drug Administration for a drug called Abraxane to treat metastatic breast cancer with nanoparticles. The drug accounted for $78.7 million in revenue during the second quarter of 2007.

For businesses locating and expanding in Arizona, the state offers one of the largest workforce footprints in the West, a myriad of unique government programs, as well as targeted incentives that produce some of the lowest effective tax rates in the nation.

One such program helping to train workers in the state is Arizona’s Job Training Program. Considered one of the best cash grant job training programs in the country, it has been successful in helping businesses train, create new jobs and help increase the skill and wage levels of employees. Qualified businesses can receive up to 75 percent of the cost to train new employees and up to 50 percent of the cost to train incumbent employees.

This program is helping Victory Industrial Products, a company which designs and manufactures equipment for power generators, train new employees at their new 30,000-square-foot facility in Tolleson, AZ. Victory is making an initial capital investment of $3 million and expects to have an annual payroll of $3.5 million with 100 new jobs.

The state also has launched two new programs to attract and retain new businesses. Arizona’s new R&D tax credit program provides income tax credit for qualified research and development done in the state, including company-funded research at a state university. Qualified companies can receive up to $2,500,000. The Arizona Innovation Accelerator Program offers a unique combination of grants, tax credits, seminars and other tools to help businesses develop technologies for the marketplace.

ARIZONA FAST FACTS

Population (2006): 6,166,318

Largest Cities (2005): Phoenix, 1,461,575; Tucson, 515,526; Mesa, 442,780; Glendale 239,435

Targeted Industries: Biotech, environmental technology, food, fiber and natural products, optics, advanced composites, metal fabrication, transportation and distribution, software

Key Incentives: Commerce and Economic Development Commission grants;R&D Tax Credit Program; Enterprise Zones; Governor’s Strategic Plan for Economic Development; Arizona Technology Incubator; Small Business Innovative Research Loans

INVESTMENT ACTIVITY

• Abraxis BioScience CEO, Dr. Patrick Soon-Shiong, announced    a $14-million letter of intent to establish Catapult Bio, a    non-profit that will accelerate research to commercialization.
• Science Foundation Arizona is committed to investing $100   million over the next four years to strengthen the region’s   existing scientific, medical and engineering research   infrastructure.
• The $20-million TRAC fund finances early-stage life science   companies located in Arizona or those planning to move to the   state.
• Mayo Clinic in Scottsdale received a $49-million grant to   accelerate cancer research and treatment.
• The Angel Investment program is a state tax credit to expand   early-stage investments for targeted.

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