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For the cities which were formerly great have, most of them, become insignificant; and such as are at present powerful, were weak in the olden time - Herodotus, The Histories.
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Australia has four of the world's best 25 Life Science clusters. Since the start of the biotech industry in the 1980s Life Sciences companies have typically formed 'clusters' around major cities or regional centres, where universities provide a source of the enabling intellectual property; where a few established biotech or medical device companies serve as incubators of the talent pool of new company founders; and where knowledgeable investors are on hand to do their due diligence on all the new startups. Often the cluster builds around what is generally regarded as one of the world's more 'livable 'cities, as per Mercer's analysis (click here). We analysed the world's stock of publicly traded Life Science companies and concluded, surprisingly, that Australia had four of the Top 25 Life Science clusters in the world, namely, Melbourne (No. 4), Sydney (7), Perth (17), Brisbane (25).
How we define a cluster and how did we rank the various clusters we identified. The way we constructed our list of clusters was simple - we took our database of publicly traded companies involved in Life Sciences, and then grouped those companies based on how far away their main offices are from some prominent city or town. The rule we set was that the border for the cluster was 60 miles from the core. 60 miles is roughly the distance from San Francisco to San Jose in northern California, which, as you'll know, roughly delineates the boundaries of the greatest technology cluster the world has ever seen - Silicon Valley.
How come there's only one Asian cluster in the Top 25? You'll see below that the only Asian cluster in the list is Tokyo. That's a function of that fact that our database selects for public companies. Singapore, Taipei and Shanghai all have the potential to turn into serious Life Science clusters over the next few years, but most biotech and medical device ventures in these cities are either privately held or subsidiaries of companies headquartered elsewhere.
How can cities or regions create a cluster or move up the rankings with their cluster? We argue that there are five main things national and local governments can do to make their city or region a Life Sciences cluster, or improve the quality and size of their cluster:
Feedback? Please get in touch. There are obviously many ways in which to judge the productivity of Life Sciences clusters wherever they are located. Please let us know anything you think we’ve overlooked or wrongly evaluated.
How we define a cluster and how did we rank the various clusters we identified. The way we constructed our list of clusters was simple - we took our database of publicly traded companies involved in Life Sciences, and then grouped those companies based on how far away their main offices are from some prominent city or town. The rule we set was that the border for the cluster was 60 miles from the core. 60 miles is roughly the distance from San Francisco to San Jose in northern California, which, as you'll know, roughly delineates the boundaries of the greatest technology cluster the world has ever seen - Silicon Valley.
How come there's only one Asian cluster in the Top 25? You'll see below that the only Asian cluster in the list is Tokyo. That's a function of that fact that our database selects for public companies. Singapore, Taipei and Shanghai all have the potential to turn into serious Life Science clusters over the next few years, but most biotech and medical device ventures in these cities are either privately held or subsidiaries of companies headquartered elsewhere.
How can cities or regions create a cluster or move up the rankings with their cluster? We argue that there are five main things national and local governments can do to make their city or region a Life Sciences cluster, or improve the quality and size of their cluster:
- Put as much infrastructure into the university campuses and research institutes as possible;
- Set aside low-cost industrial parks just for biotech and medical device start-ups and make it easy for companies to become tenants;
- Make the public transport system world-class and have Wi-Fi freely available across the network;
- Make the city as livable as possible;
- Introduce local tax breaks
Feedback? Please get in touch. There are obviously many ways in which to judge the productivity of Life Sciences clusters wherever they are located. Please let us know anything you think we’ve overlooked or wrongly evaluated.
No. 1: The Bay Area
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Country: USA
Population: 7.0 million Livable city ranking: No. 30 (San Francisco) Major universities: Stanford; University of California, Berkeley; University of California, San Francisco Major companies: Gilead Sciences; Intuitive Surgical; Agilent Technologies; BioMarin Pharmaceutical; Medivation |
The entrepreneurial culture of Silicon Valley in the 1970s meant that the Bay Area was bound to become a major Life Sciences hub once genetic engineering was invented. The creation of Genentech in 1976 kicked this off in a serious way. The Bay Area has never looked back in the four decades since
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No. 2: Boston-Cambridge
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Country: USA
Population: 4.7 million Livable city ranking: No. 35 (Boston) Major universities: Massachusetts Institute of Technology; Harvard University Major companies: Thermo Fisher Scientific; Biogen; Boston Scientific; Vertex Pharmaceuticals; Waters; Hologic; Alnylam Pharmaceuticals; PerkinElmer; Tesaro |
The elite status of Harvard and MIT combined with Boston's historic role as a leading healthcare and financial centre created a worthy competitor to the Bay area on the US East Coast from the early 1980s. The success of Biogen cemented the Bay State as a strong No. 2 to the Bay Area.
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No. 3: Greater New York City
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Country: USA
Population: 20.2 million Livable city ranking: No. 44 (New York) Major universities: Columbia University Major companies: Pfizer; Celgene; Regeron Pharmaceuticals; Becton Dickinson; Zoetis; CR Bard; Quest Diagnostics; Henry Schein; Pall Corporation; Sirona Dental Systems; Taro Pharmaceutical; Cantel Medical |
A megalopolis as productive as that which stretches from New Jersey to Connecticut will by definition house some innovative companies, if only in towns on the outskirts such as Summit, NJ (Celgene) or Tarrytown, NY (Regeneron). New York's special role as a global financial centre also means it has an important role to play
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No. 4: Melbourne
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Country: Australia
Population: 4.3 million Livable city ranking: No. 16 Major universities: University of Melbourne; Monash University Major companies: CSL Ltd; Mayne Pharma; Mesoblast; Clinuvel Pharmaceuticals; Medical Developments; Starpharma |
The Victorian gold rushes of the 19th Century made Melbourne into a leading city of the British Empire for a while, but the long-run effect of the wealth creation of that period was to channel a great deal of money into medical research, through labs such as the Walter and Eliza Hall Institute.
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No. 5: San Diego
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Country: USA
Population: 3.1 million Major universities: University of California, San Diego Major companies: Illumina; ResMed; Ionis Pharmaceuticals; DexCom; Neurocrine Biosciences; Nuvasive; ACADIA Pharmaceuticals; Ligand Pharmaceuticals; Halozyme Therapeutics |
When Lilly bought Hybritech for US$400m in 1986 it created a crop of bio-multimillionaires who subsequently created dozens of other companies in San Diego including Idec. Research institutes such as the Scripps Research Institute and the Sanford Burnham Prebys Medical Discovery Institute provide intellectual firepower for this cluster.
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No. 6: Tokyo
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Country: Japan
Population: 37.8 million Livable city ranking: No. 48 Major universities: University of Tokyo, Tokyo Institute of Technology Major companies: Astellas, Chugai Pharmaceutical, Daiichi Sankyo, Eisai, Kyowa Hakko Kirin, Otsuka |
Tokyo has long been the most powerful city in Asia for pharmaceutical development. The the fact that 7 of the Top 50 pharma companies are headquartered here gives Tokyo an edge in the new era of biotech, particularly with Japanese companies determined to lead globally in stem cells and regenerative medicine.
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No. 7: Sydney
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Country: Australia
Population: 4.6 million Livable city ranking: No. 11 Major universities: University of Sydney; University of New South Wales Major companies: Cochlear; Sirtex Medical; Nanosonics; Viralytics; SomnoMed; Lifehealthcare; Pharmaxis; Medlab Clinical |
Sydney is a bigger city than Melbourne but it tends to be more expensive to live in, which is why it ranks slightly behind. Both cities have two major bio-oriented universities and a series of established companies. Melbourne has CSL, Sydney has Cochlear. Melbourne may have the Hall Institute but Sydney has the Garvan.
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No. 8: Toronto
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Country: Canada
Population: 5.9 million Livable city ranking: No. 17 Major universities: University of Toronto Major companies: Novadaq Technologies; Titan Medical; Cronos Group; Merus Labs; Cipher Pharmaceuticals; BioSyent; Aralez Pharmaceuticals; Concordia International; IntelliPharmaCeutics; Helix Biopharma |
The Discovery District near the University of Toronto in the city's downtown also includes leading health-care facilities such as the Hospital for Sick Children. This makes Toronto something of a mini-Boston. Many early stage ventures also congregate in Mississauga to the west of the city near Toronto's international airport.
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No. 9: Tel Aviv-Jerusalem
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Country: Israel
Population: 4.5 million Livable city ranking: No. 105 (Tel Aviv) Major universities: Hebrew University of Jerusalem, Tel Aviv University Major companies: Teva Pharmaceuticals; NeuroDerm; Kamada; UroGen Pharma; Compugen; Clal Biotechnology Industries. |
Tel-Aviv has long had a vibrant biotech scene because it sits in 'Silicon Wadi', however Jerusalem, only 41 miles away, has started to take off in recent years thanks in part to the proximity of Hebrew University to the Hadassah University Medical Center. Some tax incentives helped this eastward shift.
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No. 10: Vancouver
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Country: Canada
Population: 2.5 million Livable city ranking: No. 5 Major universities: University of British Columbia Major companies: CRH Medical; Aquinox Pharmaceuticals; Arbutus Biopharma; Zymeworks; Cardiome Pharma; Neovasc |
Vancouver has historically been a city with a high level of risk capital, so naturally it will create many new biotech and medical devices. Many of them cluster along the UBC-Broadway Corridor, a major east-west thoroughfare. The BC government offers tax credits and incentives for R&D.
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No. 11: Greater Philadelphia
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Country: USA
Population: 6.1 million Livable city ranking: No. 56 Major universities: University of Pennsylvania Major companies: West Pharmaceutical Services; Globus Medical; Endo International; Auxilium Pharmaceuticals |
Philadephia benefits from the University City Science Center, America's first and largest urban research park, but the big breakthrough for Greater Philadelphia was the success of the antibody company Centocor, which seeded a large cluster along the Route 202 corridor in Chester and Montgomery counties.
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No. 12: London
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Country: UK
Population: 13.6 million Livable city ranking: No. 40 Major universities: Imperial College, London; University College London; King's College London Major companies:GlaxoSmithKline; AstraZeneca; Smith & Nephew; BTG plc; Skyepharma |
London has historically been a global centre of excellence for medical research and is also a major financial centre. Being home to two Top 50 pharma companies also makes a pool of talent potentially available. People have started talking about London, Oxford and Cambridge being a 'Golden Triangle' for biotech.
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No. 13: Maryland-Virginia-DC Metro
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Country: USA
Population: 10.0 million Livable city ranking: No. 49 (Washington, DC) Major universities: Johns Hopkins University; University of Maryland College Park Major companies: United Therapeutics; Supernus Pharmaceuticals; Emergent Biosolutions; Regenxbio; MacroGenics Sucampo Pharmaceuticals |
This is mainly a Maryland cluster. Interstate 270 from Bethesda to Frederick has seen numerous biotech companies grow around these towns' proximity to the NIH campus as well as federal laboratories and federal agencies such as the FDA. Successes such as MedImmune and Human Genome Sciences have ensured the corridor's success. Baltimore benefits from the presence of Johns Hopkins.
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No. 14: Central New Jersey
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Country: USA
Population: 3.4 million Major universities: Princeton University, Rutgers Major companies: Johnson & Johnson; Merck & Co.; Bristol-Myers Squibb; Amicus Therapeutics; Amarin |
Five counties in central New Jersey - Hunterdon, Mercer, Middlesex, Monmouth and Somerset - account for a significant amount of Life Sciences activity because of three Top 50 pharma companies. Historic biotech successes have included ImClone Systems.
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No. 15: Paris
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Country: France
Population: 12.3 million Livable city ranking: No. 38 Major universities: Ecole Normale Supérieure, Paris; Ecole Polytechnique Major companies: Sanofi; Ipsen; DBV Technologies; Guerbet; Cellectis; Stallergenes; AB Science; Nanobiotix; PCAS Onxeo; Carmat; Abivax; Pixium Vision |
Paris benefits from being home to Sanofi, Ipsen and Servier as well as the high amount of money the French state traditionally transfers through various mechanisms to Paris-based companies. Paris' 'Biotech Vallée' runs from Institut Gustave Roussy in Villejuif to the Kremlin-Bicêtre University Hospital.
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No. 16: Medicon Valley
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Countries: Denmark and Sweden
Population: 3.5 million Livable city ranking: No. 9 (Copenhagen) Major universities: Lund University; Malmö University; University of Copenhagen. Major companies: Novo Nordisk; Coloplast; Genmab; H. Lundbeck; Novozymes; Chr Hansen; William Demant; GN Store Nord; Ambu A/S; Bavarian Nordic; ALK-Abello |
The opening of the Øresund Bridge in 2000 linking Denmark and Sweden created this cluster, which spans from the Skane region in southern Sweden (Lund and Malmö) to the outskirts of Copenhagen. Medicon Valley is a region rich in pharma history now being taken forward by recent biotech successes such as Genmab.
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No. 17: Perth
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Country: Australia
Population: 1.9 million Livable city ranking: No. 22 Major universities: University of Western Australia; Murdoch University Major companies: ResApp Health; OBJ Ltd; Phylogica; Nuheara; Orthocell; SUDA; Botanix Pharmaceuticals |
Perth is a significant Life Sciences cluster because of the high level of risk appetite on the part of its investors, a legacy of the city's historic role in mining and oil deals. Having a Top 100 University and a major labs like the Telethon Institute in town helped connect this capital base to biotech and medical devices.
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No. 18: Chicagoland
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Country: USA
Population: 9.5 million Livable city ranking: No. 47 (Chicago) Major universities: University of Chicago; Northwestern University; University of Illinois at Chicago Major companies: AbbVie; Abbott Laboratories; Baxter International; Hospira |
The Chicago area's leading research hospitals - Rush University Medical Center, University of Chicago Medical Center, and Northwestern Memorial Hospital - combine withe major companies like Abbott to allow Life Sciences to flourish here.
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No. 19: Minneapolis-St. Paul
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Country: USA
Population: 3.3 million Livable city ranking: No. 62 (Minneapolis) Major universities: University of Minnesota Major companies: 3M Company, Medtronic, Bio-Techne, Cardiovascular Systems, Vascular Solutions, Tactile Systems Technology, Surmodics |
The Twin Cities has been a medical device powerhouse ever since the rise of Medtronic in the 1950s with its pacemakers, followed by St Jude Medical in the 1970s with its heart valves. The Mayo Clinic at Rochester is only 88 miles south.
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No. 20: Atlanta
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Country: USA
Population: 5.7 million Livable city ranking: No. 65 Major universities: Georgia Institute of Technology; Emory University Major companies: MiMedx Group; CryoLife; Clearside Biomedical; Endochoice |
Atlanta is a natural Life Sciences cluster due to the pro-business attitude of the city, and its being the home of the CDC, the American Cancer Society and the Yerkes National Primate Research Center alongside Georgia Tech and Emory. Many startups can be found in Alpharetta, 27 miles north.
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No. 21: Montreal
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Country: Canada
Population: 4.1 million Livable city ranking: No. 23 Major universities: McGill University; Université de Montréal Major companies: Valeant; Knight Therapeutics; Prometic Life Sciences; Theratechnologies; IntelGenx |
BioChem Pharma, which created one of the first success HIV drugs, was bought by Shire in 2001 for US$4bn. This significant win for the Montreal biotech cluster has helped it to keep going over the next 16 years. A significant group of companies congregate in La Cité de la Biotech in the northern suburb of Laval.
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No. 22: Raleigh-Durham
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Country: USA
Population: 2.0 million Major universities: Duke University; North Carolina State University; University of North Carolina at Chapel Hill Major companies: Quintiles; Salix Pharmaceuticals; Patheon |
Research Triangle Park is one of the largest research parks in the world, and the three arms of this triangle has ensured a steady stream of new Life Sciences companies in the neighbourhood. One of the strengths of Raleigh and Durham is low costs compared to Boston and the Bay Area.
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No. 23: Miami-Fort Lauderdale-West Palm Beach
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Country: USA
Population: 6.0 million Livable city ranking: No. 68 (Miami) Major universities: University of Miami Major companies: Opko Health; Catalyst Pharmaceutical Partners; Neurotrope Bioscience; Sensus Healthcare; Dyadic International; ERBA Diagnostics |
This cluster flourished because of the risk appetite of high net worth investors in southeastern Florida. The University of Florida may be over 300 miles north at Gainesville but there are labs in the region such as Scripps Florida, the Max Planck Florida Institute, and the Torrey Pines Institute for Molecular Studies
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No. 24: Stockholm-Uppsala
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Country: Sweden
Population: 2.4 million Livable city ranking: No. 20 (Stockholm) Major universities: KTH Royal Institute of Technology; Uppsala University Major companies: Swedish Orphan Biovitrum; Elekta; Nolato; Recipharm; Raysearch Laboratories; BioGaia |
Stockholm and Uppsala are only 44 miles apart. The historic success of Astra and Pharmacia, and the presence of the Karolinska Institutet in Stockholm, has helped create an environment in which new biotech companies are regularly started and fostered.
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No. 25: Brisbane
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Country: Australia
Population: 2.4 million Livable city ranking: No. 37 Major universities: University of Queensland; Queensland University of Technology; Griffith University Major companies: Impedimed; Admedus; Anatara Lifesciences; Factor Therapeutics, Analytica; Oventus |
Brisbane benefits from the inventiveness of the University of Queensland and other universities as well as labs such as the Queensland Institute of Medical Research and a state government that has made encouragement of biotech a policy priority. The sale of Panbio to Inverness in 2007 and Peplin Biotech to LEO Pharma in 2009 helped put this cluster on the map.
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Further reading
- The Creative Capital of Cities: Interactive Knowledge Creation and the Urbanization Economies of Innovation by Stefan Kratke (New York, Wiley, 2011)
- Science, the State and the City: Britain's Struggle to Succeed in Biotechnology by Geoffrey Owen and Michael Hopkins (Oxford University Press, 2016)
- The Economy of Cities by Jane Jacobs (New York: Random House, 1970)
- Job Creation in America: How Our Smallest Companies Put the Most People to Work by David Birch (New York: Free Press, 1987).
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