06 January 2025

'Dynamic' science park sector growth driven by quest tor talent

Science parks are on the same rapid  growth path that the logistics sector was on a few years ago. That's the view of René Buck, president and chief executive of BCI Global, who spoke with Real Asset Media's Richard Betts at EXPO Real in October. 
"Tenant demand is set to grow exponentially over the next few years," said Buck. "For real estate investors it is a great opportunity as risks are low. In five years' time this will be regarded as a major asset class. In the US many investors only focus on science parks, while in Europe there are a few local heroes, but it has yet to gain momentum." 
Profitability prospects are good over the long term, and risks are low because even if some startups will inevitably not make it and go bankrupt, others will swiftly take their place. It's a dynamic and promising sector best suited to investors with a long term perspective, as it takes a few years for the growth phase to begin if starting from scratch. 
 

THE RIGHT TECH ECOSYSTEM 
"R&D and innovation are key to companies' growth and they work better when shared and open," said Buck. "Science parks and areas of innovation offer the right tech ecosystem and innovation environment, where it is possible to work with like-minded people, exchange views and learn from each other." 
Real estate developers have two options: the traditional large out-of-town science parks, usually located near universities and research centres; or the fast-growing innovation centres, which tend to be in an urban setting. And a clear focus is key, added Buck: "Some established locations like California, New Jersey or Tokyo have it all, but other locations need to specialise." 
He added: "Innovation districts are multi-functional urban areas with a mix of large and small companies, education facilities, housing, retail and amenities, combining to create a thriving environment. They are not an alternative to out-of-town science parks, but rather a welcome addition, an alternative for companies to find the ideal business environment for them, and companies are increasingly investing in them." 
There are four crucial steps to setting up a successful science park or innovation district, Buck said. First, select a promising tech niche, such as regenerative or precision medicine, molecular imaging or tissue engineering in the life sciences sector, or critical infrastructure security, managed service or encryption in the cyber security space. The idea is to be small and focused and market that specific capability rather diluting the message and trying to be all things to all people. 
Second, develop a tech value proposition, highlighting the benefits of the location, the support and expertise available 
such as the presence of universities, tech institutes, research centres and technology experts nearby. The value proposition should be client-focused and tailor-made for a specific target group with specific technological information. 
Third, identify target companies based on the value proposition and compile a database of these with a corporate profile matching the science park's specific focus. 
Finally, the fourth step is reaching out to these target companies, ideally arranging one-to-one meetings as building personal relationships is key to success. Buck's advice is to focus the marketing strategy not only on large, well-known companies, as the growth in new R&D centres is mainly at mid-size and involves small, dynamic companies. 
"Each company decides what they regard as the most important factors for their business, it's a question of prioritising because it's hard to find a location that ticks all the boxes." said Buck. "But there is a reason why tech-driven companies choose established innovation and science parks." 
Most companies are not too concerned about the cost, noted Buck, because what matters most to them is the availability of talent and the cooperation with other companies and with universities, labs or medical centres so that their R&D efforts can be successful. 
 

COLLABORATIVE INNOVATION EFFORTS 
Open innovation - which means that companies are conducting more R&D and collaborative innovation efforts together with universities, research organisations, suppliers and spin-offs - is playing an increasingly important role and is a key element in accelerating innovation on a regional and national level. 
"The importance of access to knowledge has increased due to open innovation, which often starts with informal face-to-face contacts, fostered by physical proximity," said Buck. "Proximity of interconnected companies, people and ether organisations leads to a community in which people trust each ether and knowledge is easily being spread. That is called local buzz." 
On the one hand, the development of new technology products, processes and platforms is always international, and the competition for new intellectual property, products and processes is a global one. In that sense, distance is not a barrier. 
On the ether hand, proximity is crucial. Being located on a science park, innovation campus or technology hub brings advantages to companies in terms of easy access to knowledge, research facilities, image ('the place to be') and common facilities and services. 
Spatial concentration of economic activity is caused by the fact that people and companies experience benefits from being located close to each ether. 
A well-functioning and well-designed science park attracts international knowledge workers, which is a key element in the international battle for talent. It works as a 'self-reinforcing magnet' that attracts people and organisations looking for knowledge. 
"Science parks are a really interesting asset class to invest in, but it's important to understand its unique characteristics, because it is not like logistics or offices," Buck said. "It's a different world."

Source: Real Asset Insight | Issue 32 December 2024

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