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COMPANY ATTRACTION STRATEGIES
INSIGHTS FROM INTERNATIONAL BEST PRACTICE
Author: Joerg Kistler, Director Institute for Innovation in Biotechnology,
The University of Auckland
Date: 1st August 2012
Disclaimer: This report is based on international research of best practice models and does
not necessarily represent the views of the University of Auckland.
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Table of contents
Executive summary
3
Report
5
Case studies
20
Copenhagen, Denmark
20
Zurich and Greater Zurich Area, Switzerland
29
Basel region, Switzerland
36
Regensburg region, Germany
40
Singapore
44
Melbourne, Australia
50
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Executive summary
An important aspect of regional economic development is the attraction of foreign direct
investment (FDI). This includes the attraction of investment to expand already established domestic
and foreign companies in the region as well as the attraction of new foreign companies to establish
an active hub. This report summarizes research on international best practice models for foreign
company attraction based on case studies from six cities/regions:

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


Copenhagen, Denmark
Zurich, Switzerland
Basel, Switzerland
Regensburg, State of Bavaria, Germany
Singapore
Melbourne, State of Victoria, Australia
Central to company attraction is the international marketing and promotion of the
city/region/country as a premium business location. This is achieved through close collaboration
between the investment promotion agencies at national, greater regional (state), and city levels.
They each run their own promotional campaigns but do this in a coordinated and collaborative
fashion between the different level agencies. All case study cities emphasized the importance of
coordination to ensure that the outside world receives consistent messages about the benefits of
establishing a hub in the country, state, and region.
It became evident from all case studies that location marketing and value proposition to attract
foreign companies is closely linked into economic development strategies. All of the case study
cities foster a strong innovation culture and aim to attract R&D and high-tech manufacturing
activities. This is underpinned with public investment in large-scale research facilities (Melbourne),
technology parks and industry estates (Singapore, Regensburg), and/or functional thematic clusters
(Copenhagen, Basel, Zurich). Two of the case studies (Copenhagen, Regensburg) provide very
compelling practices how strategies for economic development and company attraction can be
closely coordinated through high level steering committees which connect all relevant stakeholders
– industry, universities, technology parks, investment promotion agencies and other relevant
government departments.
The next question then is how foreign companies perceive the primary attractions to a region when
considering the establishment of a new hub. Different cities/regions can have very different
perceived attractions. For example, ‘strategic location’ (close to customer, gateway to large
markets, easy transport access) is the primary attraction for the Greater Zurich Area where the
establishment of European headquarters for foreign companies is a major driver. In contrast,
feedback from foreign companies established in the Copenhagen region prioritizes ‘innovation
culture’, ‘quality talent pool’ and ‘collaboration with universities’. ICT companies often prioritize
‘strategic location’ as their hubs serve mainly sales and service support functions. In contrast,
science/engineering companies establishing an R&D hub prioritize ‘quality talent pool’. Overall,
‘quality talent pool’ ranks very highly and well ahead of ‘tax incentives’ and ‘quality of life’. ‘Trust’
plays a major role in the final decision of a company to establish a new hub. A company may have
existing relationships or collaborations with partnering organisations in the region, or may have
acquired a company in the region which it will continue to use as a base for existing and/or new
functions.
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The interest of companies to establish additional hubs is further enhanced by recent global trends.
For example, universities globally are opening up to industry and are playing an increasing role in
the attraction of foreign companies. New opportunities are arising because large multinational
companies are increasingly diversifying their R&D functions across multiple countries to benefit
from local cluster strengths, university partnerships and high quality talent pools. This creates a
kind of ‘peer pressure’ among companies to have a presence in locations which have strong
innovation clusters and a track record of substantive academic/industry partnerships.
The report concludes with a ‘tool box’ of best practices deemed suitable for the Auckland region.
They have been selected on the basis that Auckland is not in a ‘gateway’ location to large consumer
markets and that Auckland’s strongest value proposition is more likely to be as ‘Innovation City’ to
accommodate R&D centres for multinational companies. The tool box aims at maximising
alignment of strategies for economic development and company attraction, and at achieving
maximum collaboration between all stakeholders. The tool box includes the following best
practices:
1. Investment promotion agencies are represented on a high-level steering committee for
regional economic development strategy and provide an international context
2. Thematic cluster development aligns with location marketing and company attraction
3. Universities make large-scale partnerships with industry a priority and aim to develop joint
research centres
4. Science/technology parks offer space for foreign companies where suitable
5. A strong ‘brand name’ supports location marketing and company attraction
6. The value proposition to foreign companies is strong, consistent and focused
7. Regional and state investment promotion agencies collaborate closely
8. Location marketing and company attraction are prioritized within the FDI framework
9. Investment promotion agencies work more strategically in fewer target countries
10. Investment promotion agencies are aware of expats in senior positions of international
companies
11. Company feedback is regularly sought to fine-tune company attraction strategies
In conclusion, there are opportunities for Auckland to attract R&D centres of foreign companies by
exploiting an increasing global trend of corporate diversification over multiple geographical
locations. Auckland has recognised regional strengths and emerging industry clusters. Of key
importance is that Auckland develops a strong brand for location marketing, that the universities
and technology parks take an active role in company attraction, and that maximum coordination
between all stakeholders is achieved.
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Report
Introduction
The objective of this study was to examine strategies applied by state and regional investment
promotion agencies to attract new companies into their economic zones. When considering the
entire ‘company attraction’ process, this includes a sequential flow of activities starting from the
formulation of a regional economic development strategy and value proposition, all the way to the
settlement of a new company in the region:
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Develop a strategy for regional economic development based on local strengths and
objectives

Develop local strengths into thematic clusters that gain international visibility

Develop a value proposition by aligning strategy and global industry trends. What is the
competitive advantage compared to other regions internationally?
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Conduct market research and agree on international geographical regions and specific
industry sectors to target

Develop an international campaign to promote the region/state to attract foreign
companies
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Research and identify companies with potential to establish a hub in the region
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Contact company executives and invite to meetings, presentations and other events
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Lead generation – follow up with company prospects that have expressed interest

Lead management – increase interest through information and invitation to visit potential
locations for the establishment of a hub and meet with potential partners

Mentor company through planning phases by providing advice and information

Assist with all aspects of the establishment of a company hub by connecting with
government authorities, real estate providers, potential partners etc.

After-care: continue good relationships with and attend to needs of the companies after
establishment

Seek feedback from foreign companies about the key attraction points that made them
decide to establish a hub in the region. Use this information to fine-tune location
marketing and company attraction strategy.
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What this report focuses on:
The present report focuses primarily on the development of a regional value proposition and
competitive position in the international context, the development of an international marketing
campaign for location promotion and company attraction jointly between state and regional
government agencies, and stakeholders from industry and academia to achieve positive outcomes.
What this report does not touch on:
This report does not touch on the detailed activities state and regional agencies undertake to
identify target markets, industries and company prospects, conduct lead generation and
management, and mentor companies through the settlement process.
The study was conducted by developing in-depth case studies for six city regions/states across
three continents. From these case studies both common patterns and regional differences emerged
which indicate both generally applicable best practice models and specific adaptations to regional
value propositions, respectively. The case study cities/states were selected on the basis of
comparable populations, transparent economic development strategies, a common focus on
innovation, and different strategic geographical locations. Key features for the six case study
locations are summarized and compared to Auckland/New Zealand in Table A:
Table A: Comparison of case study states/city regions by population size and GDP
Case study regions
Denmark/Copenhagen
Switzerland/Canton Zurich
Switzerland/ Canton Basel
Stadt & Land
Bavaria/Regensburg
Singapore
Victoria/Melbourne
Population: state
5.5 million
7.8 million
7.8 million
Population: greater city area
1.8 million
1.3 million
461,000
GDP: state (USD)
310 billion
528 billion
528 billion
GDP: city (USD)
80 billion
160 billion
36 billion
12.5 million
5 million
5.6 million
134,000
10 billion
4 million
567 billion
209 billion
305 billion
New Zealand/Auckland
4.4 million
1.5 million
127 billion
47 billion
250 billion
First, brief summaries of the key findings are given individually for each region, followed by a
general analysis of practices and synthesis of best practice models. The report concludes with a
selection of best practices deemed suitable for Auckland. Individual full case studies and in-depth
data analysis are attached as six appendices to this report.
Copenhagen,
Denmark
Denmark has developed a world-class innovation industry underpinned by a network of science
parks and universities that are open to collaborations. Economic development and international
competitiveness is led by robust strategies to develop thematic clusters jointly with industry,
universities, and science parks. Primary cluster strengths include life sciences, cleantech and ICT.
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Medicon Valley (spanning between the wider Copenhagen area and southern part of Sweden) is
among the top three European life sciences industry clusters (the others are Basel and Cambridge).
It is a cluster of around 400 companies carrying out R&D, manufacturing, service functions, and
employing over 40,000 people. More recently, a strong cluster around cleantech is being developed
with support from the EU and matching local funding. Overall 3400 international companies have a
presence in Denmark – 3000 of these are located in the wider Copenhagen region. The marketing
strategy for company attraction builds strongly around the Danish innovation culture, its industry
cluster strengths, and Denmark being an ideal test market for new products. Feedback from
international companies with a hub in Denmark emphasises the primary attraction points as ‘talent
pool’, ‘innovation culture’, and ‘openness of Danish universities to collaboration with industry’. The
successful attraction of joint industry-academic research centres is a key feature illustrating the
latter point (for example: Siemens Centre of Knowledge Interchange jointly with Danish Technical
University). In 2011 – Copenhagen Capacity played a part in the creation of 1400 new jobs in 32
investment cases in the Copenhagen region. Approximately 70% of cases were new company
attractions, 30% were expansions of existing companies.
Zurich and Greater
Zurich Area,
Switzerland
Zurich is primarily known for the strong presence of financial services companies - employing close
to 40% of the national workforce in this sector. Zurich and Greater Zurich Area (which includes 7
neighbouring cantons) also have significant industry cluster strengths around ICT, life
sciences/medical devices, cleantech and nanotechnology, all of which are supported with sectorspecific networks that connect industry and universities. Innovation precincts/technology parks
cater for life sciences companies (BioTechnopark Schlieren) and ICT companies (TechnoPark Zurich).
There are also joint industry-academic research centres – foremost the IBM Research Centre for
Nanotechnology jointly with the ETH). Generally, however, companies are mostly accommodated in
private buildings across the wider region without strong geographical cluster focus. The marketing
strategy for company attraction emphasises the region’s strategic central Europe location and
transport connectivity. In 2010, 102 foreign companies established a hub in the GZA economic
zone, 809 new jobs were created. Feedback from international companies which established a
presence in the region indicates their primary objective to establish European headquarters and
being ‘close to customers’.
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Basel region,
Switzerland
Basel is Europe’s largest life sciences cluster employing close to 40,000 people in this sector. There
are over 900 companies involved in the life sciences – among them are two of the largest global
pharmaceutical companies, Novartis and Roche. Included are also about 120 suppliers and 140
service companies which together provide a complete supply chain for the industry. Somewhat
surprisingly, despite the strong R&D focus of the industry, there appear to be no joint industryacademic research centres in Basel. A well functioning bio-incubator accommodates start-up
companies, and there are several innovation parks offering space to more advanced companies.
The strong growth of the industry has led to the development of a large amount of privately owned
laboratory space available to new companies moving into the region. The marketing strategy
focuses strongly on international companies establishing R&D and manufacturing functions in the
Basel region. However, Basel also attracts companies establishing European headquarters and/or
sales and service functions. A highly qualified and multi-lingual talent pool which also draws in
specialists from Germany and France, is promoted as another major company attraction.
Regensburg region,
Bavaria, Germany
The State of Bavaria, and one of its main cities, Regensburg, promotes itself primarily as a top
location for high-tech R&D centres and manufacturing plants. Bavaria is the primary location of
numerous leading German technology companies (for example BMW) as well as 1300 international
companies (including 740 from the USA). Despite its relatively small size, Regensburg has attracted
a large number of significant companies with R&D and manufacturing functions in the region.
Regensburg’s success to attract new companies builds on the City Government’s long-term
thematic cluster strategy which aligns industry and academic strengths around sensor technologies,
ICT, engineering, and life sciences. Regensburg invested and continues to invest in the development
of industrial precincts and innovation infrastructure which greatly facilitates the accommodation of
new companies. BioPark Regensburg is closely connected into the regional economic development
strategy and currently hosts 32 companies (550 employees). The marketing strategy for both
Bavaria in general and Regensburg in particular to attract new companies has evolved around both
its high-tech cluster strengths and economic development strategies, as wells as being a gateway to
Eastern Europe and having easy access to major transport routes.
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Singapore
With a population of 5 million and one of the highest GDP per capita globally – Singapore’s
economy is based on its ability to attract foreign companies to establish major R&D centres and
manufacturing plants for high value products. Singapore’s company attraction strategy is firmly
linked into its economic development plan based on on-going investments in thematic clusters,
innovation parks, public sector research institutes, and industry estates. The key sectors include life
sciences with a strong biomedical focus, medical devices, ICT and financial services. Numerous
multinational companies have established dedicated R&D centres in Singapore, many in
partnership with public sector research institutes and universities. Public-private partnerships and
government support for science and technology are primary attractions for international
companies. Companies benefit from thematic clustering and sharing of infrastructure/services both
in innovation parks (eg Biopolis Shared Facilities - BSF) as well as in industry precincts such as
Jurong Island which includes around 100 petrochemical companies. In addition, Singapore markets
its strategic location as gateway to Asia which is important for companies wishing to establish
regional headquarters.
Melbourne, State of
Victoria, Australia
Melbourne’s location marketing to attract international companies is firmly anchored in its
longstanding strategy and investment in being an R&D and high-tech manufacturing capital. Cluster
strengths around life sciences (mainly biomedical), medical devices, ICT, and advanced
manufacturing (automotive, aerospace) are supported with major investments in research
infrastructure (examples include the Australian Synchrotron and the Victorian Life Sciences
Computation Initiative) and in world-class research centres linked to its universities (for example
WEHI, Bio21). The openness of universities to collaborate with the industry has resulted in the
successful attraction of global companies to establish joint research centres in Melbourne – among
them the IBM Research and Development Laboratory (one of 11 globally) at the University of
Melbourne. The 45% R&D tax credit is strongly promoted internationally and cited as a major
attraction for foreign companies to establish an R&D hub in Melbourne.
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Talent pool, innovation capabilities, thematic clusters, strategic market location are the four
primary aspects for the development of competitive value propositions
Marketing material in all six case studies covers extensively the number of tertiary education
institutions in the region, their international reputation and rankings, and the total number of
students. These points are made to underpin two value propositions:


Region has a high quality talent pool available for employment
Region has an innovation culture and proven research capabilities
While these two value propositions form a common pattern between the case studies, different
approaches become apparent for the next value proposition:
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Region has thematic clusters and offers many opportunities for companies to collaborate
with partners
For example, Basel markets its high density of life sciences companies and cluster benefits offering
business opportunities for new companies, contract research organisations (CROs), and service
companies. Copenhagen similarly highlights the cluster benefits of the longstanding and highly
successful Medicon Valley and of the more recent but rapidly growing cleantech cluster.
Copenhagen also strongly promotes the openness of Danish universities to collaborate and
establish joint academic-industry research centres.
Melbourne promotes itself as Australia’s ‘Knowledge Capital’ with major R&D and manufacturing
activities. The marketing material highlights major investments in public sector research facilities
such as the Australian Synchrotron and the recent installation of one of the world’s largest
supercomputers at the University of Melbourne. Detailed sector-specific reports are available
documenting the underlying strategies, key features and growth metrics of thematic clusters.
At the extreme end, Singapore’s trump card is the totally coordinated package of public sector
research institutes inviting industry collaborations, a network of technology parks for industry
research centres (for example Biopolis), and several industry estates for manufacturing (for
example Tuas Biomedical Park, Jurong Island). This total coordination is made possible by working
through a single government agency – the Economic Development Board of Singapore, which
develops economic strategy, invests in all aspects of research and infrastructure, and markets the
region to attract foreign companies.
The next major value proposition exploits the geographical location of the region:

Region has ‘gateway’ position with access to large consumer markets
Most of the case study regions use this point in a prominent way. Zurich probably has the strongest
such marketing by emphasizing its location in the centre of Europe and having access to high quality
transport infrastructures (Zurich airport, high speed trains). Consistent with this, Zurich has a very
high density of European headquarters for international companies. Feedback from companies
established in the Greater Zurich Area also mentions the strategic location of being close to
customers as the primary reason for moving into the region.
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Other locations also commonly use the phrase ‘gateway to ...’. For example, Copenhagen is
marketed as gateway to North Europe; Regensburg as gateway to East Europe; Singapore as
gateway to South Asia; Melbourne as gateway to Australia.
The above four attractions and a diverse range of other marketing points are summarized in Table B
which illustrates regional differences and company feedback where available.
Table B: Attraction points ranked by priority in marketing material and company feedback
Attraction
Melbourne
Singapore
Copenhagen
& Denmark government
Talent pool
Innovation
culture
Proximity and
collaboration
with
universities,
hospitals
Flexible labour
laws
Ease to do
business
Synergistic
clusters &
infrastructure
Strategic
location, close
to customer
Cost efficient
Tax
advantages
Quality of life
Patent
protection
3
4=
6
3=
4
3
3=
2
4=
3=
6
7
7
1
1=
8
8
1=
Copenhagen &
Denmark –
company
feedback
1
2=
Regensburg
Basel
Zurich & GZA government
2
4
3
3
Zurich &
GZA –
company
feedback
2
2=
3
2
4
6
4
4
1
5=
6
3=
5=
1
7
2
7=
5
7=
9=
9=
1
5
5
4
1
1
2
3=
5
5
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The marketing material also commonly refers to matters of taxation and often includes
comparisons with other locations to highlight regional advantages. Singapore and Zurich emphasize
their favourable tax environments. Melbourne advertises Australia’s unique 45% tax rebate for
R&D expenditure as a primary attraction for obvious reasons. The first sentence on the website of
Invest Victoria Melbourne reads: ‘Australia’s new R&D tax credit has made Melbourne one of the
most attractive locations for research and development. Australia’s tax burden is 88% lower than in
the USA’.
‘Ease to do business’ is another marketing point given significant emphasis. Liberal labour laws and
the short time it takes to register a new company are commonly mentioned both in the marketing
material as well as in company feedback commentary. Denmark/Copenhagen strongly emphasize
the liberal labour laws which make staff reductions easy thereby giving the company increased
flexibility to adapt to adverse business conditions.
‘Quality of life’ including personal safety, cultural and environmental offerings, while also
commonly mentioned in all marketing materials, somewhat surprisingly ranks well behind most
other considerations. This is consistent also with company feedback which mentions quality of life
aspects as an important consideration albeit with a lower ranking than the more direct business
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attractions. It would appear that quality of life issues (including schools, living environment, health
system, cultural events etc) become important in the later planning stages when addressing staffing
matters before the company makes a final decision whether or not to establish a hub in the
location.
Trust plays a major role in the final decision of a company to establish a new hub
While Table B lists the main attraction points commonly cited in marketing material as well as in
company feedback commentary, there are additional factors that play a role in the decision process
to establish a new hub. These factors can include:

Company has existing relationship with a regional partner – example: BGI European Centre
at COBIS in Copenhagen (longstanding collaborations with University of Copenhagen)

Company executives have close ties to region – example: Siemens CKI at DTU in
Copenhagen (one of the senior executives at Siemens was educated at DTU)

Company acquires local company – example: Apple research centre in Haifa, Israel (Apple
acquired Israeli start-up company Anobit)
Common to these points is that the company has existing relationships with local partners directly
or indirectly. This establishes trust and access to networks – key factors when setting up a hub in a
foreign locality. In terms of company attraction strategies, it is therefore important to maintain
links to expats employed as senior executives in large multinational companies in other countries.
Similarly, collaborations with foreign companies may appear insignificant at first but may develop
the level of trust needed when a company makes the final decision from a shortlist of possible
locations to establish a new hub. Being acquired by a large international company is often one of
the exit strategies for start-ups – this is increasingly happening and often results in the buyer
establishing an R&D centre in the location. This way the company may be able to retain high quality
employees and continues to benefit from local expertise and networks.
Thematic innovation clusters are an integral part of company attraction strategies
All six case study regions use the benefits of thematic innovation clusters as a key point to establish
a value proposition and international competitiveness for the attraction of foreign companies into
the location. Investment promotion agencies commonly provide access through their websites to
sector-specific cluster information, reports, and provide links to cluster websites which themselves
provide a wealth of information including lists of companies established in the cluster. The aim is to
establish credibility of regional innovation power, emphasize the ease to collaborate with partners
facilitated through regional critical mass, and to indicate opportunities for access to relevant
research facilities and government funding. While several worthwhile examples could be
documented here, the recent development of the Copenhagen Cleantech Cluster stands out as a
best practice example of the triple helix approach to economic development and the attraction of
foreign companies.
The Copenhagen Cleantech Cluster initiative is led by Copenhagen Capacity – the Danish Capital
Region’s official inward investment agency. The cluster’s secretariat is co-located in the offices of
Copenhagen Capacity. This effectively links economic development with international location
marketing and attraction of foreign companies. Moreover by bringing senior executives from
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universities, science parks, and industry into a steering group that jointly develops the cluster
strategy, academia is directly included in the economic development mandate.
The cluster has a dual mission: internally it networks stakeholders and facilitates collaboration.
Externally, the cluster networks with similar clusters internationally and thereby becomes visible as
a cornerstone of the regional economy. It establishes innovative credibility to the outside world and
thus becomes an important element in location promotion and company attraction strategies.
The administration for the Copenhagen Cleantech Cluster is co-located in the building occupied by
Copenhagen Capacity. The initiative is supported with a 5-year EU funding of around USD 25 million
on the basis that it will be matched by the cluster partner organisations.
The salient features of the Copenhagen Cleantech Cluster are summarized in Table C.
Table C: Summary of vision, mission and objectives for the Copenhagen Cleantech Cluster (from
website www.cphcleantech.com)
Vision:
Mission:
Launched by Danish cleantech companies, research institutions
and public organisations, our vision is to develop one of the
world’s leading and most renowned cleantech clusters, creating
superior value for the cluster companies and research
environments and to differentiate ourselves by tying cleantech
technologies and communities together across sectors, value
chains and borders.
Objectives:







Creating 1000 new jobs
Attract 25 foreign companies to the cluster
Creating 30 new research- and innovation
collaborations between companies and research
institutions, for example start-ups or joint research
applications/projects
Establish collaboration with 15 international
cleantech clusters
Create a unifying and self-supporting organisation
with a minimum of 200 members
Secure the growth and momentum of 25
entreprenueurs
Host a minimum of 200 events



To create continuous growth for existing cleantech
companies
To support and assist new cleantech companies
To attract more foreign cleantech companies to the
region
Partners (abbreviated):




University of Copenhagen, Danish Technical University
(DTU)
Science parks
Industry – 10 major companies
Government institutions including Copenhagen
Capacity which is responsible for international location
marketing and company attraction
It is clear from the mission goals and objectives that this cluster initiative is focussed on economic
development (creating jobs) and on developing an additional value proposition to attract foreign
companies into the region. The initiative also creates new opportunities for the universities to
further step up collaborations with industry. The recent establishment of the Siemens Centre for
Knowledge Interchange (CKI) at the Danish Technical University (DTU) is a case in point.
In summary, this case example emphasizes the importance of innovation clusters – they create real
opportunities for all regional innovation stakeholders – universities, technology parks, industry, and
government agencies to directly engage in the formulation of economic development strategies,
and linked with this – contribute to the international marketing of regional innovation strengths
that have the potential to attract foreign companies.
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Investment in innovation infrastructure and attraction of foreign company R&D centres are
strongly related
Singapore stands out by its consistent investment track record in large scale innovation
infrastructure and public research institutes. The attraction of R&D and high-tech manufacturing
functions of foreign companies is at the heart of its economic development strategy. Accordingly,
Singapore is a leader in company attraction and is fulfilling its ambition of being recognized as one
of the world’s largest R&D centres. An increasing number of international companies establish their
own research centres in Singapore, often in state funded technology park precincts, particularly
Biopolis. Moreover, Singapore’s investment in its universities and public research institutes pays
dividends in that this strategy is attracting some of the largest global companies to establish publicprivate joint ventures to collaborate in research and development.
The State of Victoria/Melbourne is another region among the case studies that strongly links
company attraction strategy with on-going investments in innovation infrastructure. Melbourne
shares a similar ambition with Singapore in that it aims to position itself as Australia’s innovation
capital. Table D summarizes public research facilities and major foreign company R&D centres.
Table D: Research infrastructure and industry partnerships as part of location marketing
Features
Innovation
centre or
technology park
Copenhagen
-Symbion Science
Parks
-COBIS
-Scion DTU
Large scale public
research facilities
Industryacademic
research centres
Siemens/DTU
Stand-alone
foreign company
research centres
-BGI/COBIS
-Microsoft
-Ferring
Pharmaceuticals
-Otto Bock
Healthcare
Zurich
-BioTechpark
Schlieren
-Technopark
Zurich
EMPA
Regensburg
BioPark
Regensburg
-IBM/ETH
-WaltDisney/ETH
-Amgen/BioPark
Singapore
Biopolis
Melbourne
12 publically funded
research institutes and
facilities
-Synchrotron
-Victorian Life Sciences
Computation Initiative
-Melbourne Centre for
Nanofabrication
-IBM/Uni Melb
-Microsoft/Uni Melb
-GSK/Monash
-CSL/Bio21
-Roche/NUS
-FORMA/NTU
-MediaTek/NTU
-Vestas/NTU
-Novartis/Biopolis
-Takeda/Biopolis
-MSD
-Danone
-Microsoft
-Siemens
-Rolls Royce
The table also reflects recent successes of the ETH in Zurich in establishing major joint research
centres with two leading US firms. IBM’s investment in the joint nanotechnology research centre
has been reported to be around USD 100 million which is at the top end internationally for an
academic-industry joint venture. Further north, the well advertised openness of Denmark’s
universities and their engagement in cluster initiatives is attracting an increasing number of
collaborations with the industry. Siemens is the first company that has established a joint
academic-industry research centre in this region. The recently established centre is based at the
Danish Technical University (DTU) and is a partner in the Copenhagen Cleantech Cluster.
There are real opportunities to attract foreign companies that are in search of academic
collaborations. Until recently collaborations with universities have been mostly based on relatively
small projects with individual academic leaders in a selected research field of interest to the
company. This paradigm is rapidly changing. Large multinational companies are increasingly
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consolidating their research collaborations in the form of fewer but larger partnerships with
selected universities or consortia of universities. These partnerships can be set up as alliances with
campus-wide activities or they can be established as a physical research centre where company
staff and academics work together in a dedicated space or building. In the latter model, the
company thereby establishes a hub and employs its own staff in the region. While in some cases
such joint centres may start small initially, they have the potential to grow and result in the
establishment of a larger company presence in the region over time.
Case studies on a number of large scale joint university-industry research centres are available in a
report commissioned by the Science/Business Innovation Board AISBLT and published in 2012. The
report is available on the web www.sciencebusiness.net/news. Table E includes a selection of
university-industry joint R&D centres covered in the report:
Table E: Examples of large scale joint industry-university research centres
Industry partner
BP (UK)
Audi (Germany)
IBM (USA)
SKF Group (Sweden)
GE (USA)
Nokia (Finland)
University partners

UC Berkeley

Lawrence Berkeley National Laboratory

University of Illinois
Technical University of Munich
ETH Zurich
University of Cambridge
Technical University Munich
UC Berkeley
Foundation year
2007
2004
2011
2009
2004
2009
Value
USD 500 million
Term
10 years
USD 100 million
10 years
A survey of large multinational companies highlights a growing trend to diversify R&D locations
The establishment of R&D centres of international companies in the case study regions and at
universities in other locations as covered in Tables D and E, indicates a trend of such companies to
diversify its research activities across multiple locations. Global companies will invest their research
budgets where they can obtain the best returns and networks of research partnerships can be
established on a global basis. The motivation for this diversification includes search for new talent
pools as well as bringing R&D functions closer to major consumer markets. For example, nutrition
companies may wish to develop new products for the specific tastes in market populations.
Pharmaceutical companies may benefit from population characteristics for clinical trials. Not
surprisingly, most large companies are establishing multiple R&D centres in the Asian continent.
To demonstrate that this diversification is real and is becoming a general trend on a global scale, a
selection of large multinationals are surveyed in Table F showing the number of locations of their
R&D centres around the world. The table simply captures the number of locations of R&D hubs for
a selection of the world’s largest companies – the numbers include stand-alone company R&D
centres as well as those established with public sector partners (universities, public research
institutes).
16
Table F : Large multinational companies and number of R&D locations
Company
Corporate headquarters
Company focus
Danone
Nestle
Kraft Foods
Astrazeneca
Novartis
Roche
GSK
Pfizer
Bristol Myers Squibb
Takeda
IBM
Microsoft
Apple
Hewlet Packard
Nokia
Walt Disney
Siemens
Rolls Royce
GE
France
Switzerland
USA
UK
Switzerland
Switzerland
UK
USA
USA
Japan
USA
USA
USA
USA
Finland
USA
Germany
UK
USA
Nutrition
Nutrition
Nutrition
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
Pharmaceuticals
ICT
ICT
ICT
ICT
ICT
Creative industries
Engineering
Engineering
Engineering
Number of R&D
locations
26
5
6
7
11
18
10
8
12
4
11
11
3
7
13
6
12
7
3
Locations downunder
Sydney
Melbourne
Melbourne
Many of these R&D centres have been established in recent years indicating a growing trend of
such diversification. The pharmaceutical industry has been known to struggle filling their drug
development pipelines through internal research for quite some time. As a consequence, the
industry has been undergoing significant restructuring of research activities with increasing
academic partnerships and acquisition of synergistic companies becoming a major part of drug
discovery and development. The survey shows that other industry sectors are similarly diversifying
research activities into different locations – in most cases across multiple continents. While the
main locations are in Asia (particularly in Singapore, China, India), the USA and Europe, a few R&D
centres have moved also down-under to Melbourne and Sydney.
Auckland’s value proposition for the attraction of foreign companies aligns most closely with
Copenhagen and Melbourne
Auckland is not in a ‘gateway to...’ strategic position in the international context. Within the sample
of the six case study regions in this report, Auckland would seem to be most comparable to
Copenhagen and Melbourne. Both these cities place less value on their geographical locations.
Instead, the primary attraction points in their location marketing strategies are primarily their
regional innovation capabilities and high quality talent pools. In both cases, their universities are
promoted as being open to collaboration with industry and having established significant joint
industry-academic research centres with foreign companies. Also common to both cities is the
strong focus on building thematic innovation clusters as a central strategy to economic
development. International location marketing directly draws on the strengths of these clusters
including the underlying research infrastructure and critical mass of companies. Taken together, the
primary focus of their investment promotion agencies is on attracting R&D and high-tech
manufacturing activities of foreign companies into their regions.
Auckland is well positioned to further increase its international competitiveness in attracting
foreign companies. Auckland can draw on a multi-cultural, multi-lingual, and highly educated talent
pool. It has universities with significant international rankings and strengths in selected technology
disciplines. There are many tangible successes from collaborations with industry and the
commercialisation of academic research. Other attractions are the animal disease-free status of
17
New Zealand and that R&D cost are substantially lower than in the USA and Europe. The Auckland
region has visible industry strengths around food technologies, life science & health technologies,
ICT, and marine technologies. In the case of the food technologies sector, for example, some
innovations around natural products and functional foods are unique to New Zealand and cannot
easily be replicated elsewhere. This could create a significant incentive for foreign nutrition
companies to establish an R&D centre. The development of the Wynyard Quarter Innovation
Precinct is underway with the aim to provide R&D space for mature and start-up technology
companies. Auckland is an ‘innovation city’ and has the potential to grow into a global centre for
research and development.
Six case studies provide a ‘tool box’ of best practices for an Auckland perspective
A number of best practices for the attraction of foreign companies taken from the six case study
cities would also seem suitable for Auckland. They include the following:
1. Investment promotion agencies are represented on a high-level steering committee for
regional economic development strategy and provide an international context
Such a steering committee could be of the type of the Regional Growth Forums in Denmark
including senior executives of the academic and industry sectors, science parks, relevant
ministries, and regional and national investment promotion agencies. Economic
development strategy includes all relevant stakeholders and is set in a context of internal
strengths and international competitiveness. Economic development strategy feeds directly
into location promotion and company attraction strategies.
2. Thematic cluster development aligns with location marketing and company attraction
A best practice model for this is the Copenhagen Cleantech Cluster. Its primary mission is to
create new jobs by attracting investment and foreign companies into the region. The
secretariat of the cluster is co-located in the offices of the regional investment promotion
agency. High-level steering groups oversee the on-going development of the clusters and
ensure relevance in the international context. The steering groups include senior executives
from the academic and industry sectors, science parks, relevant ministries, and regional
and national investment promotion agencies.
3. Universities make large-scale partnerships with industry a priority and aim to develop
joint research centres
Large multinational companies operate R&D centres in multiple geographic locations. They
look for high quality talent and innovation capability in the area of the company’s interest.
There is a growing trend that such research centres are established jointly with academic
partners and are located near or on university campuses. University senior executives work
closely with investment promotion agencies to develop value propositions for foreign
company attraction. They work together identifying and approaching company prospects.
Several of the case study cities have examples for large-scale joint academic-industry
research centres – the research centres of IBM jointly with the University of Melbourne and
jointly with the ETH in Zurich serve as best practice models.
4. Science/technology parks offer space for foreign companies where suitable
They provide attractive locations for the accommodation of foreign companies establishing
a new hub. Singapore’s Biopolis which accommodates research centres of several of the
world’s leading pharmaceutical companies, stands out as a best practice model in this
regard. Another example is COBIS (Copenhagen) which attracted the European
18
headquarters and service facility of the Chinese genome sequencing company BGI. Mission
goals and management of science parks are closely linked into economic development
strategies. Technology parks work closely with the economic development departments
and investment promotion agencies. One way to facilitate this is through joint
appointments between regional economic development agencies and science parks.
BioPark Regensburg serves as a best practice model. Furthermore, City Councils may rent a
significant floor area in a technology park and thus gain the ability to sub-let space to
incoming foreign companies under their own terms.
5. A strong ‘brand name’ supports location marketing and company attraction
The best example here is Medicon Valley. This brand name is internationally recognized as
one of Europe’s leading life sciences clusters and is probably better known as such than the
fact that it is located in the Copenhagen region. Melbourne promotes itself as ‘Knowledge
Capital of Australia’, Zurich as a leading ‘Global Financial Centre’.
6. The value proposition to foreign companies is strong, consistent and focused
The value proposition is led by a clear vision for the type of companies and corporate
functions a city wishes to attract. This vision directly links into the regional economic
development strategy, regional industry strengths, and prominent thematic clusters.
7. Regional and state investment promotion agencies collaborate closely
It is important that the outside world sees consistent messages about the value proposition
that might attract foreign companies into a state/region. The Swiss Osec serves as a best
practice example. A high level steering group regularly reviews national location promotion
and company attraction strategies in consultation with regional partners. There is a
transparent framework that apportions primary responsibilities and activities between
national and regional agencies.
8. Location marketing and company attraction are prioritized within the FDI framework
There is a distinction between attracting investors to support the expansion of existing
companies and attracting foreign companies to establish a hub in the region. Both activities
fall into the FDI framework and are pursued simultaneously. They are clearly both
important. It is evident that the majority of the case study cities give priority to the
attraction of new companies, and their website and promotional materials clearly reflect
this. For example, Invest in Denmark and Copenhagen Capacity websites are entirely
focussed on location promotion and company attraction. Accordingly, around 70% of their
investment projects are new company settlements, 30% of projects are expansions of
existing companies.
9. Investment promotion agencies work more strategically in fewer target countries
A trend became evident in several case study cities, namely that the focus of marketing
campaigns was being narrowed to fewer countries. Instead the activities in these strategic
locations were stepped up. There are increasing opportunities to attract foreign companies
from the rapidly growing Asian economies.
10. Investment promotion agencies are aware of expats in senior positions of international
companies
The final decision for a foreign company to select from a shortlist of cities offering space
and services to the company is often facilitated by an established ‘trust’ situation. This trust
may be based on existing collaborations with a local company or university, or an expat in
19
the senior executive team of the company. Investment promotion agencies work closely
with agencies that maintain networks with expats in senior roles overseas (for example KEA
in New Zealand). Investment promotion agencies should also be well aware of existing or
previously successful collaborations between local organisations and foreign companies.
11. Company feedback is regularly sought to fine-tune company attraction strategies
Location attraction points marketed by the regional investment promotion agencies
generally synergize with the perceptions of foreign companies with a local presence. The
Greater Zurich Area’s website serves as an excellent case example. As part of the after-care
processes, investment promotion agencies regularly seek feedback from foreign
companies. A set format is used for the questionnaires so that responses are suitable for
high-level analysis. This serves two functions: it provides valuable material to support the
marketing campaign, and it helps to fine-tune marketing strategies from time to time.
Concluding remarks
There are opportunities for Auckland to attract R&D centres of foreign companies by exploiting an
increasing global trend of corporate diversification over multiple geographical locations. Auckland
has recognised regional strengths and emerging industry clusters. Of key importance is that
Auckland develops a strong brand for location marketing, that the universities and technology parks
take an active role in company attraction, and that maximum coordination between all
stakeholders is achieved.
20
Case studies
Copenhagen, Denmark
The key players:
Invest in Denmark, Ministry of Foreign Affairs of Denmark – a unit within the Ministry focussing
primarily on international company attraction.

Website: www.investindk.com

‘Invest in Denmark provides your company with a tailor-made solution for locating your
business in Denmark. We measure our success by how well we contribute to yours. So if
your company is considering a business or R&D set-up, or looking to access one of Europe’s
most skilled talent pools, make us your first stop.’

Identifies and works with companies to help establish a hub in Denmark

Arranges fact-finding tours

Provides comprehensive benchmark analyses

Offices in Copenhagen, Paris, New York, Shanghai
Copenhagen Capacity – Danish Capital Region’s official inward investment agency.

Website: www.copcap.com

Copenhagen’s Capacity mission is to promote the region internationally with the aim of
attracting and maintaining foreign companies, and to attract new foreign talent.

Leads cluster development in Copenhagen region (eg Copenhagen Cleantech Cluster)

Identifies and works with foreign companies to help establish a hub in Copenhagen

The services include business information, access to an extensive network of consultants,
authorities and businesses

Provides unbiased and unique cost calculation and location tools, knowledge sharing and
practical assistance during the entire investment process

Works with local representatives in Germany, UK, USA, China, and India
Invest in Denmark and Copenhagen Capacity attract international companies and talent
The websites of both agencies focus primarily on promoting Denmark/Copenhagen as a top
business location internationally. The target audience is unambiguously foreign companies and
people with technology skills. The information content of both websites is extensive and well
structured. Both sites make a very compelling case why international companies should establish a
21
hub in Denmark and Copenhagen. Primary marketing elements are the Danish innovation culture
and R&D capabilities, and the strategic location in Northern Europe. The website information goes
into considerable detail about possible company structures, tax rules, employment matters – all
designed to make it easy for foreign companies to establish a hub in Denmark. Invest in Denmark’s
website has a special section with a large number of excellent case studies where foreign company
executives comment on the reasons why they established a hub in Denmark. They seem to answer
mostly to a consistent set of questions which allows interested parties to draw out meaningful data
to assemble an overview of the primary attractions that helped foreign companies decide to set up
a hub in Denmark.
R&D capabilities and cluster strengths are major marketing tools for company attraction
Cleantech (foremost wind power), life sciences, and ICT as primary R&D strengths are extensively
promoted by both agencies. Large multi-national corporations in these disciplines have established
R&D hubs in Denmark. The country has a strong focus on R&D, design and innovation, market
testing, and high-tech production.
Denmark has a long tradition of close collaboration between basic research institutions, academic
as well as commercial researchers and highly skilled companies. Examples of R&D centres and
academic collaborations include:

Japanese screen company DNP acquired a local company and established a collaborative
research programme with the Danish Technical University (DTU)

Ferring Pharmaceuticals (Sweden) and Ottobock Healthcare (Germany, medical devices)
both established R&D centres with strong collaborative links into Danish universities and
hospitals

BGI (China) is a global leader in genome sequencing and established its European
headquarter and R&D centre at the life sciences innovation centre in Copenhagen (COBIS)

Microsoft Development Centre Copenhagen (MDCC) is one of a network of R&D centres of
the company internationally. MDCC is the largest of the company’s European centres

Siemens and the DTU jointly established the Centre of Knowledge Interchange (CKI). DTU
was chosen as partner because of its competencies in power engineering and environment,
transportation, healthcare and automation. CKI is located on the DTU campus. CKI selection
criteria illustrate why Siemens established a centre in Denmark:
- Leadership in at least two relevant future research areas – strategic and
business/application-oriented
- Broad and excellent infrastructure allows for long-term co-operation
- International research reputation: high status in international rankings
- Proximity to relevant markets for Siemens
- Access to regional/national funding programmes
- Strong political and academic network. Global top university for talent acquisition.
Overall 3400 international companies have a presence in Denmark. Around 3000 of these have set
up business in the Copenhagen region. In 2011 – Copenhagen Capacity played a part in the creation
22
of 1400 new jobs in 32 investment cases in the Copenhagen region. Approximately 70% of cases
were new company attractions, 30% were expansions of existing companies.
The Medicon Valley life sciences cluster is a major brand for the attraction of foreign companies
Medicon Valley is among the top three life sciences clusters in Europe (with Basel and Cambridge)
and spans the greater Copenhagen area and the Skane region in the southern part of Sweden. The
official Medicon Valley website (www.mediconvalley.com) is supported by Copenhagen Capacity
and Invest in Skane (Sweden). The two agencies are responsible for the cluster’s international
marketing and strive to the common goal to make Medicon Valley the most attractive bioregion in
Europe. The website guides international companies in their search for R&D partners, new
technologies, investment options, or helps them establish a hub in Medicon Valley.
A primary company attraction as stated on the website is: ‘There are many good reasons why
Medicon Valley is an attractive location for life science companies, perhaps the most compelling is
the unique interplay between hospitals, universities, public research institutions and investors.
Another area that makes Medicon Valley a preferred choice among leading life science companies
is the unique conditions for clinical trials.’
Copenhagen Capacity and Invest in Skane assist with:
-
Finding the right partners or investment opportunities
Finding the right location and other practicalities to establish a company hub
Visiting programme and introductions to key people/players
Benchmarks analyses comparing different business locations internationally
In Medicon Valley there are more than 150 biotech companies with own R&D, major R&D based
pharmaceutical companies, more than 200 medtech companies, more than 50 relevant service
providers, CROs and CMOs, and a dozen experienced life science VCs. There are also 33 hospitals
including 11 university hospitals in this region. Around 44,000 people are currently employed in the
private life sciences sector in Medicon Valley.
A more recent cluster initiative, the Copenhagen Cleantech Cluster, links economic development
with attraction of foreign companies
The Copenhagen Cleantech Cluster initiative is led by Copenhagen Capacity. The cluster’s
secretariat is co-located in the offices of Copenhagen Capacity. This effectively links economic
development with international location marketing and attraction of foreign companies. Moreover
by bringing senior executives from universities, science parks, and industry into a steering group
that jointly develops the cluster strategy, academia is directly included in the economic
development mandate.
The cluster has a dual mission: internally it networks stakeholders and facilitates collaboration.
Externally, the cluster networks with similar clusters internationally and thereby becomes visible as
a cornerstone of the regional economy. It establishes innovative credibility to the outside world and
thus becomes an important element in location promotion and company attraction strategies. The
salient features of the Copenhagen Cleantech Cluster are summarized in Table A.
23
Table A: Summary of vision, mission and objectives for the Copenhagen Cleantech Cluster (from
website www.cphcleantech.com
Vision:
Mission:
Launched by Danish cleantech companies, research institutions
and public organisations, our vision is to develop one of the
world’s leading and most renowned cleantech clusters, creating
superior value for the cluster companies and research
environments and to differentiate ourselves by tying cleantech
technologies and communities together across sectors, value
chains and borders.
Objectives:







Creating 1000 new jobs
Attract 25 foreign companies to the cluster
Creating 30 new research- and innovation
collaborations between companies and research
institutions, for example start-ups or joint research
applications/projects
Establish collaboration with 15 international
cleantech clusters
Create a unifying and self-supporting organisation
with a minimum of 200 members
Secure the growth and momentum of 25
entreprenueurs
Host a minimum of 200 events



To create continuous growth for existing cleantech
companies
To support and assist new cleantech companies
To attract more foreign cleantech companies to the
region
Partners (abbreviated):




University of Copenhagen, Danish Technical University
(DTU)
Science parks
Industry – 10 major companies
Government institutions including Copenhagen
Capacity which is responsible for international location
marketing and company attraction
In summary, both cluster examples emphasize the importance of innovation clusters – they create
real opportunities for all regional innovation stakeholders – universities, technology parks, industry,
and government agencies to directly engage in the formulation of economic development
strategies, and linked with this – contribute to the international marketing of regional innovation
strengths that have the potential to attract foreign companies.
International promotion focuses strongly on Danish innovation culture
The following tables summarise attraction points as promoted by these agencies and the primary
activities of foreign companies operating in the area.
24
Table B: Attractions promoted by Copenhagen Capacity and Invest in Denmark
Copenhagen Capacity
Invest in Denmark
www.copcap.com
www.investindk.com
‘Copenhagen is a city where productivity is redefined to support
technology & style, decisions & creativity, happy employees &
high performance and career & family’
Unique, secure, and flexible labour market
‘The best place to do business’
Balanced life style – quality of life
Productive and innovative workforce – Danish work culture
Key industries – Copenhagen holds exceptionally strong
capabilities within industries such as life sciences, ICT, creative
industries, cleantech
Financial stability and transparency. Member of the EU but not the
common currency
Ease to do business
Low risk – flexible labour laws. Flexible hiring and firing. Highly
qualified and multi-lingual employees
Market access to EU market. Hub for Scandinavia, Northern
Europe
World-leader in innovation – strong focus on R&D, high-tech
production, academic-industry collaboration, thematic clusters
Denmark is hailed as the best test market in the world
World-class industries:
World innovation leader in energy and cleantech.
200 companies are in the wind cluster
Global life science hub – Denmark has the 3rd
largest drug development pipeline in Europe
ICT industry leader – Denmark in the top 10
nations in the world for developing and applying
new technologies
High level of collaboration between universities and private
companies in research
Attractive tax schemes for foreign employees
Table C: Type of international technology companies and primary activity in Denmark
Company name
Discipline
Corporate HQ
UK
Sweden
Primary activity
in Denmark
R&D
R&D
Primary focus in
Denmark
clinical trials
GSK
Ferring
Pharmaceuticals R&D
Centre
Genmab/GenPharm
Shanghai ChemPartner
Bayer
B-K Medical/Analogic
Corp
Otto Bock Healthcare
R&D Centre
BGI
pharmaceuticals
pharmaceuticals
pharmaceuticals
pharmaceuticals
chemicals
medical devices
USA
China
Germany
USA
R&D
sales/services
sales/service
R&D
mab
medical devices
Germany
R&D
biotech services
China
R&D
Better Place
engineering/electronics
USA
R&D
Siemens Centre of
Knowledge Interchange
(CKI)
Suzlon
DNP
engineering/electronics
Germany
R&D,
manufacturing
engineering/electronics
engineering/electronics
India
Japan
R&D
Furuno
engineering/electronics
Japan
R&D
Huawei
Microsoft Development
Centre
Dell
IT
IT
China
USA
sales/service
R&D
IT
USA
sales/services
Acquisition of
local company
ultrasound
equipment
acquired
Neurodan
genome
sequencing
electric vehicles
testing
wind power
wind power
invested/acquired
local company
maritime
electronics
acquired Navision
25
Talent pool and academic collaborations are primary attractions for international companies
The following tables report on company feedback commentary about the primary considerations
which attracted them to Denmark. The data have been extracted from www.investindk.com and
analysed to obtain the greater picture of international company attractions to Denmark.
Table D: Attractions to Denmark cited by companies ranked by priority
Company name
GSK
Discipline
pharmaceuticals
Second priority
Medicon Valley
cluster
Third priority
talent pool
pharmaceuticals
First priority
local strength in
company’s area of
interest
talent pool
Ferring
Pharmaceuticals
R&D Centre
Genmab/GenPhar
m
Medicon Valley
cluster
pharmaceuticals
cost efficient
talent pool
Shanghai
ChemPartner
Bayer
pharmaceuticals
talent pool
chemicals
strategic location
Medicon Valley
cluster
flexible labour laws
collaboration with
universities,
hospitals
local strength in
company’s area of
interest
strategic location
B-K
Medical/Analogic
Corp
Otto Bock
Healthcare R&D
Centre
BGI
medical devices
talent pool
cost efficient
medical devices
talent pool
innovation culture
biotech services
Better Place
engineering/electronics
collaboration with
universities,
hospitals
innovation culture
collaboration with
universities,
hospitals
talent pool
talent pool
Siemens Centre of
Knowledge
Interchange (CKI)
Suzlon
engineering/electronics
ease to do
business
ease to do
business
flexible labour
laws
innovation culture
engineering/electronics
collaboration with
universities,
hospitals
talent pool
DNP
engineering/electronics
talent pool
strategic location
Furuno
engineering/electronics
innovation culture
talent pool
Huawei
IT
talent pool
quality of life
local strength in
company’s area of
interest
local strength in
company’s area of
interest
local strength in
company’s area of
interest
collaboration with
universities,
hospitals
flexible labour
laws
innovation culture
Microsoft
Development
Centre
Dell
IT
talent pool
innovation culture
quality of life
IT
cost efficient
talent pool
innovation culture
flexible labour laws
Fourth priority
collaboration with
universities,
hospitals
tax advantages
Medicon Valley
cluster
ease to do
business
collaboration with
universities,
hospitals
tax advantages
ease to do
business
strategic location
local strength in
company’s area of
interest
flexible labour laws
26
Table E: Priorities of attractions analysed by type of company
Talent pool
Innovation
culture
Collaboration
with universities,
hospitals
Local strength in
company’s area of
interest
Flexible labour
laws
Ease to do
business
Medicon Valley
cluster
Strategic location
Cost efficient
Tax advantages
Quality of life
Ranked as first
priority by
pharmaceuticals,
chemicals,
biotech
companies
2
1
Ranked as first
priority by
medical
devices
companies
Ranked as first
priority by
engineering,
electronics
companies
Ranked as
first priority
by IT
companies
Ranked as
first priority
by all sectors
Mentioned by
companies as a
priority at any
ranking level
2
2
2
2
8
2
14
7
2
7
1
6
1
1
5
4
4
1
1
1
1
2
3
3
2
2
Additional reasons helping foreign companies decide to establish a hub
While Table E lists the main attraction points commonly cited in marketing material as well as in
company feedback commentary, there are additional factors that play a role in the decision process
to establish a new hub. Two such factors are illustrated in the following examples:

Company has existing relationship with a regional partner – example: BGI European
Centre at COBIS in Copenhagen. This company – a leading global genome sequencing
company with headquarters in China, considered London, Zurich, Berlin and Copenhagen in
its final evaluations of locations to establish European headquarters for the company.
COBIS, investment promotion agencies, and the University of Copenhagen worked closely
together to convince the company that Copenhagen was the best location for the company.
Longstanding collaborations between BGI and the University of Copenhagen, as well as the
option to fit out the top floor in the COBIS building for the specific requirements of BGI,
helped the company to make the final decision.

Company senior executives have close ties to region – example: Siemens CKI at DTU in
Copenhagen. In this case, one of the senior executives at Siemens was educated at DTU and
knew the benefits of the Danish innovation environment and local high quality talent pool
from own experience. This established a level trust in and familiarity with local processes
and support structures which helped the company decide to establish a research centre in
Denmark.
Both examples also highlight the importance of close collaboration between universities,
technology parks, and investment promotion agencies. To facilitate this, Denmark is divided into
five regions which each operate so-called ‘Regional Growth Forums’. Growth Forums are high-level
steering committees for economic development strategies. They include senior executives
representing industry, academia, technology parks, and government agencies. The committees can
27
have up to 20 members appointed by the Regional Council and are generally led by an independent
chairperson.
Regional Growth Forums have the following primary objectives (from
www.oecd.org/cfe/leed/forum/partnerships):





Support business development and improve Danish business competitiveness globally
Improve the framework conditions for business growth, international cooperation and
trade
Promote regional economic development and employment
Strengthen public authorities’ cooperation and business development
Stimulate co-operation between public and private sector on business development
Technology parks and innovation centres provide space for foreign companies
Denmark operates a network of technology parks which work closely with the investment
promotion agencies. As an example, the Copenhagen Bioscience Park COBIS is currently host to
four foreign companies. BGI is the largest company and occupies the entire top floor in this
innovation centre. This floor was previously kept as an empty shell to be fitted out to the specific
requirements of a prospective anchor tenant – the BGI hub was established in 2011.
COBIS is situated in the centre of Copenhagen. It has 26 companies (150 employees) in its current
building with around 5000m2 floor space. Construction of a second building with 7000m2 floor
space has recently started. It is expected that the expansion will provide space for another 25-35
companies.
Support and incentives

Corporate tax rate is 25%. Effective rate is lower as business expenses and depreciation are
tax deductible

Depreciation on machinery and equipment etc is 25% pa – it is tax deductible

Unlimited loss can be carried forward

Tax treaties with most countries to avoid double taxation

Most international companies establish a Danish registered company as a separate tax
entity instead of a branch to avoid any double taxation issues

No capital gains tax

Danish employers pay no social security contributions over and above EUR 1000 flat fee

Employees pay a social security tax of 8% which is tax deductible

International employees are offered income tax rates of 25% for a limited number of years
28
Conclusions
Denmark with a population size of 5.5 million (1.8 million in the greater Copenhagen region) has
developed a world-class innovation industry underpinned by universities and hospitals that are
open to collaborations. Denmark also operates a network of technology parks and innovation
centres which host both Danish and foreign companies. Thematic clusters connect companies into
active networks both internally as well as internationally. The clusters are supported by all
stakeholders including industry, academia, technology parks, government agencies and through EU
funding. The longstanding Medicon Valley life sciences cluster and the more recent Copenhagen
Cleantech Cluster stand out as solutions to effectively link all stakeholders into economic
development, international location marketing and company attraction. Innovation capabilities and
high quality talent pool are intensively marketed to foreign investors and companies to establish a
hub in the region. The primary focus of Invest in Denmark and Copenhagen Capacity is on attracting
R&D and high-tech manufacturing activities. The marketing strategy clearly reflects this and the
marketing package to attract foreign companies is focussed and compelling.
Acknowledgments

Rasmus Beedholm-Ebsen, Regional Project Manager, Invest in Denmark, Ministry of Foreign
Affairs of Denmark. Email: [email protected]

Lone Strand Overgaard, Director, Investment Promotion, Copenhagen Capacity. Email:
[email protected]

Anne Have Kjaerholm, Investor Development Manager, Copenhagen Capacity. Email:
[email protected]

Morten Molgaard Jensen, CEO, COBIS. Email: [email protected]
29
Zurich and Greater Zurich Area, Switzerland
The key players:
Osec - Business Network Switzerland – a non-profit organisation working under 4-year renewable
contracts for the Ministry for Economic Development of Switzerland.






Websites: www.osec.ch; www.invest-in-switzerland.com
Supports companies to export and internationalise
Promotes Switzerland as business location
Attracts international companies and refers to regions and cantons for work with
companies to establish a hub
Operates from 18 business hubs internationally
Collaborates with regional agencies
Greater Zurich Area AG (GZA) – funded by members of the Foundation ‘Greater Zurich Area
Location Marketing’. Members include Cantons Glarus, Grisons, Schaffhausen, Schwyz, Solothurn,
Zug, Zurich; the cities of Zurich and Winterthur; Chamber of Commerce Zurich; several private
firms.





Website: www.greaterzuricharea.ch
Promotes member regions as business location – covers an area within about 1 hour drive
from Zurich airport
Attracts foreign companies jointly with Osec and refers to cantons to work with companies
to establish a hub
Priority focus on precision engineering including machine engineering, cleantech, medical
devices
Has its own staff in USA and China; collaborates with Osec in all other areas.
Department for Economic Affairs (DEA), Canton of Zurich – funded by the Canton Zurich.







Website: www.awa.zh.ch
Promotes Canton Zurich as business location
Assists international companies to establish a hub
Major focus on companies establishing European headquarters
Thematic cluster focus on ICT, life sciences, cleantech, nanotech, financial services
Develops cluster networks, cluster strategy, and publishes regular sector reports
Collaborates with GZA and Osec
Osec encourages foreign companies to locate in Switzerland through consistent location
promotion strategies
Osec’s role is described on its website www.osec.ch as follows: ‘Osec plays a role in encouraging
foreign companies to locate in Switzerland by implementing measures to promote the country as a
business location. Encouraging foreign companies to settle in Switzerland is a joint undertaking
conducted at both federal and canton level. Osec has been commissioned by the Swiss government
and the cantons to ensure that Switzerland presents a consistent image abroad; to transmit
information between foreign companies and the cantons; to coordinate marketing activities and to
create the right environment for smooth cooperation with the cantons as far as the location of
foreign companies in Switzerland is concerned. Osec's Swiss Business Hubs open the door to
Switzerland and its public authorities abroad.’
30
Switzerland consists of 26 cantons which are bundled into 5 regions for purposes of location
promotion (including Greater Zurich Area and BaselArea which are covered in this report). A joint
steering committee including members from these regions, MED, and Osec meets regularly and
develops strategic priorities. For example, the primary focus for Osec has been narrowed to seven
target countries: Germany, France, USA, Russia, India, China and Japan. Priority target industries
are also defined – they include life sciences, engineering, ICT and financial services.
Osec employs over 100 staff in its head office in Zurich and its offices in Lausanne and Lugano. The
Swiss Business Hubs – 18 hubs mostly co-located in Swiss embassies – serve as working interfaces
with international markets. Over 80 experts work for Osec world-wide. Their activities range from
trade and investment consulting, procurement of information, producing market analyses,
providing organisations with contacts, and representing Switzerland officially at business events.
In 2011, Osec made 7519 initial contacts and published 179 media reports. Osec led 80 events in
seven target markets including investor seminars, road shows, business forums (note that Osec no
longer uses trade fairs for location marketing as this has not delivered value). Representatives for
the regions and/or cantons often participate in these events. Regions and/or cantons can also task
Osec to carry out projects in countries outside the primary target group but they will have to carry
the cost themselves.
As a case study from one of the target countries and within the above total activities in 2011, the
Swiss Business Hub in Mumbai, India, organised 16 CEO round tables, investor seminars and
receptions as part of the campaign to market Switzerland as a business location. The exclusive
ambassador lunches were attended by 124 selected companies, the management meetings by 83.
In total, 700 initial contacts were made. There were 41 media reports on the various activities. As a
result, six companies established a hub in Switzerland and a further five investment projects are
currently being progressed.
Osec informs through numerous significant publications relevant for location promotion,
investment and company attraction, and export support. These include major books such as
’Handbook for Investors’ (142 pages); Switzerland – Business and Investment Handbook’ (760
pages); as well as a large number of information brochures, information sheets, and two very
comprehensive websites.
In 2011, 400 foreign companies established a hub in Switzerland. The nation maintained its first
ranking as the world’s most competitive country ahead of Singapore and Sweden (World Economic
Forum ‘Gobal Competitiveness Report 2011-12). It also holds first rank for ‘Labour market
efficiency’; ‘Technological readiness’; ‘Innovation’.
Activities between Osec, GZA and DEA are collaborative and coordinated
Osec refers expressions of interest from companies to the relevant cantons who are invited to
make proposals to accommodate a company. Cases referred to GZA will be passed on to the
member regions for proposals. GZA and its member cantons/cities can also proactively work with
Osec to identify and recruit international companies of interest. Representatives from GZA and/or
member cantons may take part in Osec organised events in the target markets.
31
In the case of DEA, more than half of the relocation projects are direct approaches from interested
companies or approaches via management firms/law firms managing the company’s interests. DEA
works on around 30 major relocation projects per annum.
Taking together the GZA region with its seven membership cantons – over a hundred relocation
projects are being worked on at any time.
Statistics 2010: 102 new companies moved into the GZA economic zone. 809 new jobs were
created. 38 companies were from the USA, 24 from Germany, 12 from the UK, 12 from Asia. The
predominant sectors were ICT and financial services (39 companies).
Strong cluster priorities underpin company attraction in the Canton of Zurich
The DEA is responsible for the development of thematic clusters in the Canton of Zurich. The
clusters are closely networked and have become an important attraction for international
companies to establish a hub in the canton. A brief summary table illustrates the critical mass of
these clusters in the Canton of Zurich relative to the overall sector size across Switzerland. The data
are from the Cluster Report 2009-2010 published by the DEA.
Table A: Industry clusters in the Canton Zurich in the overall Swiss context (employee FTE rounded
to nearest thousand)
Cluster themes
Finance
Life sciences
ICT
Creative industries
Cleantech
Nanotechnology
Aerospace
Employee FTE in Canton of Zurich
81,000
21,000
38,000
47,000
21,000
16,000
18,000
Employee FTE in Switzerland
208,000
149,000
132,000
169,000
155,000
100,000
35,000
The DEA promotes networking and cooperation between various industry stakeholders in the
various clusters. The agency actively engages with industry networks and umbrella organisations,
universities, research institutes and hospitals, technology transfer organisations, and technology
parks. The following example serves as an innovative illustration of direct connections between
stakeholders: Mr Adrian Stettler, Director, New Businesses Unit & Life Sciences, DEA, who has a
primary role in company attraction and establishment in the Canton of Zurich, serves also as a
member of the Board for Bio-Technopark Schlieren which hosts 35 companies/600 staff. This direct
link supports the cluster strategy and effectively connects innovation infrastructure with economic
development.
Core tasks and services provided by regional agencies focus on company attraction
DEA and GZA are working in close coordination to attract new companies into the region. The
synergies become evident through the following tables:
32
Table B: Core tasks of regional agencies DEA and GZA
Department of Economic Affairs (DEA), Canton of Zurich
Greater Zurich Area AG (GZA)
www.awa.zh.ch
www.greaterzuricharea.ch
We inform, accompany, expedite and create networks. Our staff
has a broad knowledge of many topics concerning the business
location in general and the cantonal administration.
We are the point of contact for: Companies interested in
relocating, from Switzerland or abroad
We are the point of contact for: Individuals who would like to
found a company
We are the point of contact for: Resident companies requiring
assistance from the cantonal administration or a number of
administrative units (eg relocation involving construction work)
We are the point of contact for: Companies, educational
institutes and technology transfer agencies that will strengthen
Zurich’s economy
The Greater Zurich Araea AG is in charge of promoting and
marketing the Greater Zurich Area business region abroad
To promote awareness of the Greater Zurich Area in selected
markets and lines of business
To encourage foreign companies to settle in the Greater Zurich
Area
To provide complimentary support to international companies at
the location evaluation stage in cooperation with business
promotion agencies in the member cantons and cities
To make an important contribution to Switzerland’s
competitiveness as a business location and create jobs in emerging
technologies and industrial sectors, by attracting people and skills
from abroad and importing know-how to the area
We are the point of contact for: Organisations and associations
acting on behalf of companies in the Zurich area
Table C: Services provided by regional agencies DEA and GZA
Department of Economic Affairs (DEA), Canton of Zurich
Greater Zurich Area AG (GZA)
www.awa.zh.ch
www.greaterzuricharea.ch
Relocation: we support companies interested in moving to Zurich
beginning with the evaluation process through to the start of
business operations and beyond
Work permits: we check and process applications
Providing information about the Greater Zurich Area business
region
Business maintenance and support: we support resident
companies with projects that require the assistance of the
cantonal administration
Cluster activities: we promote the networking of companies and
institutions along the value chain
One-stop-shop: for complex projects – we coordinate between
agencies and speed up the process
Door-opener services in the network: we keep in touch with
numerous foreign and domestic partners and offer assistance
with the provision of contacts
Administrative relief for companies: our Regulatory Affairs Unit
provides assistance
Assisting international companies to evaluate their future business
location in the Greater Zurich Area
Advising companies with their investment projects and providing
help in establishing a company
Evaluating the ideal company structure and possible tax savings in
close collaboration with tax professionals
Organizing tailored visitor’s programmes
Facilitating the right contacts in any field
Establishing contact with the authorities in the member cantons of
Glarus, Grisons, Schaffhausen, Schwyz, Solothurn, Zug and Zurich,
and the cities of Zurich and Winterthur
Providing specific expertise in life sciences, ICT, high-tech and
headquarter structures
Providing assistance with detailed questions about: establishing a
company, market environment, taxes, real estate, work permits,
human resources, financing, research facilities, technology transfer
etc
Strategic location is promoted as a major attraction for foreign companies
The GZA region and particularly Zurich are strongly promoted to international companies to
establish European headquarters because of for the central location and access to large markets. A
secondary focus targets R&D activities and is underpinned by the presence of highly ranked
universities and well defined cluster strategies.
33
Table D: Attractions as promoted on agency websites
Department of Economic Affairs (DEA), Canton of Zurich
Greater Zurich Area AG (GZA)
www.awa.zh.ch
www.greaterzuricharea.ch
Over-riding phrase:
Over-riding phrase:
“Zurich for work, research and finance”
High quality of life
Top universities, research institutes and think tanks
Balanced mix of businesses with numerous innovative companies
Internationally oriented business location
Attractive tax climate, liberal labour market and political stability
Local availability of qualified staff
Multi-lingual, open-minded people
Excellent links to international transport systems
Rich cultural and gastronomic tradition
The world’s safest metropolis
“First choice for your international business success in Europe”
Europe’s no 1 business location
Excellent labour market
Europe’s lowest tax rates
Highly developed and reliable infrastructure
Open market and close relationship with the European Union
World-renowned financial centre
Leading centre of knowledge and innovation
Internal stability and external neutrality
Feedback from companies on attractions emphasizes strategic location as primary consideration
Feedback from international technology companies was analysed as to which were the primary
attractions to establish a hub in the Greater Zurich Area. 63 companies are captured in this analysis.
The selection criteria were: (1) Corporate HQ is located outside Switzerland. (2) Companies have a
technology focus.
Table E: Type of company and primary activity in GZA region
Type of company
Number of
companies in this
survey
Primary activity –
sales/service
IT
Engineering/electronics
Medical devices
Pharmaceuticals/chemicals
Other
Totals
33
10
9
7
4
63
30
6
4
7
3
50
Primary activity manufacturing
Primary activity
– R&D
3
2
2
5
Hub established
through
acquisition of
existing local
company
1
1
2
1
6
7
Table F: Attractions to GZA region cited by companies ranked by priority
Attraction
Close to customers
Talent pool
Central Europe/airport
Tax advantages
Ease to do business
Quality of life
Universities
Synergistic clusters
Patent protection
First priority
25
10
8
4
4
1
3
3
Second priority
1
9
7
4
2
5
1
1
1
Third priority
7
5
2
3
2
2
Fourth priority
1
1
2
1
1
Totals
27
26
20
11
11
8
7
5
1
34
Table G: First priority attraction analysed by company type and activity in GZA region
Attraction
Close to customers
Talent pool
Central
Europe/airport
Tax advantages
Ease to do business
Quality of life
Universities
Synergistic clusters
Patent protection
First
priority
25
10
8
Primary activity
– sales/service
24
4
7
Primary activity
- manufacturing
4
4
1
3
3
3
3
1
1
1
4
1
3
Primary
activity – R&D
1
2
1
Type of
company - IT
22
2
3
Type of company –
science/engineering
3
8
5
3
3
2
1
1
1
2
1
3
Being close to customers, strategic location, and talent pool have been the primary considerations
for foreign technology companies that established a hub in the GZA region. The sample is
dominated by IT companies which may have skewed the responses somewhat. Science/engineering
companies have a stronger focus on R&D/manufacturing and put a greater emphasis on the
availability of a high quality talent pool.
Support and incentives
The following points list some of the support and incentives available to international companies:









Corporate tax: Zurich 20-22%; Zug 15%
Some tax relief can be negotiated for new companies in cases where companies serve the
economic development goals of the Canton Zurich. Maximum relief period 10 years.
Another condition is that such tax relief does not create competition with other businesses
paying the normal tax rate. The primary goal of the tax relief is to make the Canton Zurich
more attractive to international companies. The company must make a case including the
following:
Market size for company’s products/services
Investments planned
Anticipated employment growth
Projected revenues
Switzerland offers tax deductions of up to 10% of revenues for R&D expenditure
Personal income tax deductions for non-Swiss employees for cost of rent, school fees,
relocation and travel cost, for the first 5 years or until position becomes permanent.
The Commission for Technology and Innovation (CTI) offers grants for research –
particularly for collaborations with universities.
35
Conclusions
DEA and GZA are very strongly marketing their region as a strategic business location in Europe’s
centre. Annually, an average of around 100 new companies establish a hub in the GZA region. The
primary reasons for a majority of companies (particularly IT companies) to move into the region are
the establishment of European headquarters and being close to customers. Companies with R&D
and manufacturing activities emphasize the availability of high quality talent as primary reason to
move into the region. The region has a focus on selected industry sectors and supports this focus
with a clearly defined cluster strategy and the development of dedicated infrastructure and
networks.
Acknowledgments


Hans Joerg Jegge, Director Location Promotion, Osec. Email [email protected]
Adrian Stettler, Director, New Businesses Unit & Life Sciences, Department of Economic
Affairs, Office for Economy and Labour, Canton of Zurich. Email: [email protected]
36
Basel region, Switzerland
The key players:
Osec - Business Network Switzerland – a non-profit organisation working under 4-year renewable
contracts for the Ministry for Economic Development of Switzerland.






Websites: www.osec.ch; www.invest-in-switzerland.com
Supports companies to export and internationalise
Promotes Switzerland as business location
Attracts international companies and refers to regions and cantons for work with
companies to establish a hub
Operates from 18 business hubs internationally
Collaborates with regional agencies
BaselArea – regional economic development agency funded by the Canton Basel-Stadt/Basel-Land
and the Chamber of Commerce BS/BL.





Website: www.baselarea.ch
Promotes Basel region (Cantons BS, BL, Jura, and Fricktal region of Canton Aargau) as
business location
Attracts international companies jointly with Osec
Helps companies to establish themselves in the region
Strong focus on life science companies
Osec encourages foreign companies to locate in Switzerland through consistent location
promotion strategies
Osec’s role is described on its website www.osec.ch as follows: ‘Osec plays a role in encouraging
foreign companies to locate in Switzerland by implementing measures to promote the country as a
business location. Encouraging foreign companies to settle in Switzerland is a joint undertaking
conducted at both federal and canton level. Osec has been commissioned by the Swiss government
and the cantons to ensure that Switzerland presents a consistent image abroad; to transmit
information between foreign companies and the cantons; to coordinate marketing activities and to
create the right environment for smooth cooperation with the cantons as far as the location of
foreign companies in Switzerland is concerned. Osec's Swiss Business Hubs open the door to
Switzerland and its public authorities abroad.’
Switzerland consists of 26 cantons which are bundled into 5 regions for purposes of location
promotion (including Greater Zurich Area and BaselArea which are covered in this report). A joint
steering committee including members from these regions, MED, and Osec meets regularly and
develops strategic priorities. For example, the primary focus for Osec has been narrowed to seven
target countries: Germany, France, USA, Russia, India, China and Japan. Priority target industries
are also defined – they including life sciences, engineering, ICT and financial services.
Osec employs over 100 staff in its head office in Zurich and its offices in Lausanne and Lugano. The
Swiss Business Hubs – 18 hubs mostly co-located in Swiss embassies – serve as working interfaces
with international markets. Over 80 experts work for Osec world-wide. Their activities range from
trade and investment consulting, procurement of information, producing market analyses,
providing organisations with contacts, and representing Switzerland officially at business events.
37
In 2011, Osec made 7519 initial contacts and published 179 media reports. Osec led 80 events in
seven target markets including investor seminars, road shows, business forums (note that Osec no
longer uses trade fairs for location promotion as this has not delivered value). Representatives for
the regions and/or cantons often participate in these events. Regions and/or cantons can also task
Osec to carry out projects in countries outside the primary target group but they will have to carry
the cost themselves.
As a case study from one of the target countries and within the above total activities in 2011, the
Swiss Business Hub in Mumbai, India, organised 16 CEO round tables, investor seminars and
receptions as part of the campaign to market Switzerland as a business location. The exclusive
ambassador lunches were attended by 124 selected companies, the management meetings by 83.
In total, 700 initial contacts were made. There were 41 media reports on the various activities. As a
result, six companies established a hub in Switzerland and a further five investment projects are
currently being progressed.
Osec informs through numerous significant publications relevant for location promotion,
investment and company attraction, and export support. These include major books such as
’Handbook for Investors’ (142 pages); Switzerland – Business and Investment Handbook’ (760
pages); as well as a large number of information brochures, information sheets, and two very
comprehensive websites.
In 2011, 400 foreign companies established a hub in Switzerland. The nation maintained its first
ranking as the world’s most competitive country ahead of Singapore and Sweden (World Economic
Forum ‘Gobal Competitiveness Report 2011-12). It also holds first rank for ‘Labour market
efficiency’; ‘Technological readiness’; ‘Innovation’.
Osec and BaselArea work closely together
Osec refers expressions of interest from companies to the relevant cantons who are invited to
make proposals to accommodate a company. BaselArea will follow up with companies suitable for
location in the Cantons of Basel-Stadt, Basel-Land, Jura, and in the Fricktal of the Canton Aargau.
BaselArea also proactively works with Osec to identify and recruit international companies of
interest.
Projects worked on by BaselArea have mixed origins including from contacts established at trade
fairs, referrals, and direct approaches.
BaselArea helps companies to set up by providing information about Basel region, by connecting
companies with relevant administrational agencies for permits, tax matters etc, by mentoring
companies throughout the entire set-up phase, by providing all relevant information for company
and employees including schools, real estate etc.
Basel has a well functioning bio-incubator for start-ups and has recently opened a technology park
next door. There are also several private technology park facilities available to accommodate young
companies, for example Technology Zentrum Reinach, Innovation Zentrum Allschwil. There is a
wide range of privately owned laboratory buildings available for rent or purchase. Moreover, there
are plans under development for a regional hub of the proposed Swiss Innovation Park (SIP)
Network. The lead agency for cluster strategy and the development of a SIP hub is the Chamber of
Commerce BS/BL.
38
The Basel region is particularly attractive for life sciences companies
Basel is a natural life sciences cluster that has grown over the past two centuries. The cornerstone
are clearly the large pharmaceutical and other life sciences companies (Lonza, Novartis, Roche,
Syngenta) with the later addition of many small and medium sized enterprises, from commercially
established companies to successful biotechnology start-ups, as well as a full range of service and
supplier companies.
Table A. Primary attractions and regional strengths
Seven good reasons for coming to Basel
Regional strengths
www.baselarea.ch
www.baselarea.ch
Dynamic life sciences industry – Basel has one of the highest
concentrations of successful life-science companies in the world
First-class education and research – five highly ranked universities are
located in Basel and surrounding area
International and multi-lingual workforce – multi-nationals in Basel
employ specialists from up to 150 countries
Openness and tolerance – Basel is direct neighbour to France and
Germany and is accustomed to diverse cultures
Prime quality of life – excellent range of cultural activities, pleasant
climate and environment. Good healthcare and personal safety
Excellent connections – easy access to high-speed trains and airports
Attractive conditions – liberal labour laws, efficient administration and
political stability
Pharma and biotech
Chemicals and nanotech, medtech, engineering
Precision engineering, watches, machine engineering
Logistics and trade hub
Creative industries – arts, fashion, design, architecture
IT
Financial services
Table B: Primary activity in Basel region for international technology companies
Type of company
R&D
R&D and
manufacturing
Sales/services
HQ in USA
HQ in
Europe
HQ in Asia
& Pacific
Pharmaceuticals
Engineering/electronics
Chemicals
IT
Medical devices
Other
9
1
5
3
2
2
1
8
2
2
4
2
2
11
3
1
1
2
7
1
1
5
2
2
Presence
through
acquisition of
local company
3
1
2
1
1
2
Support and incentives
The following points list some of the support and incentives available to international companies:


Corporate tax: 18-22%
Tax incentives are available on a case-by-case basis. Criteria include:
-


Anticipated taxable profit during period of requested relief
Number of jobs created
Direct and indirect investment undertaken
Change in the competitive situation
Switzerland offers tax deductions of up to 10% of revenues for R&D expenditure
Basel may offer additional tax deductions for R&D expenditure
39


Personal income tax deductions for non-Swiss employees for cost of rent, school fees,
relocation and travel cost, for the first 5 years or until position becomes permanent.
The Commission for Technology and Innovation (CTI) offers grants for research –
particularly for collaborations with universities.
Conclusions
BaselArea has a strong track record of attracting international technology companies into the
region. The business location marketing strategy targets R&D functions as well as sales/service hubs
and aligns closely with regional cluster strengths particularly around the life sciences. Companies
moving here include a mixture of R&D and manufacturing companies, supply companies and
contract research organisations. Establishment of company hubs in the region is greatly facilitated
by a wide range of privately owned laboratory buildings available for rent or purchase.
Acknowledgments


Hans Joerg Jegge, Director Location Promotion, Osec. Email [email protected]
Sheena Bethell, Business Consultant, BaselArea, Economic Promotion. Email:
[email protected]
40
Regensburg region, Germany
The key players:
Bavarian State Ministry for Economic Affairs, Infrastructure, Traffic and Technology – a division of
the Bavarian State Government.







Website: www.stmwivt.bayern.de
Supports companies to export and internationalise
Promotes Bavaria as business location
Attracts German and foreign companies
Attracts foreign direct investment
Co-invests in innovation infrastructure (eg BioPark Regensburg)
Collaborates with regional agencies
Department for Economic Development, City of Regensburg – primary regional economic
development agency, a division of the Regensburg City Council.







Website: www.regensburg.de
Promotes Regensburg regional economic zone
Attracts German and foreign companies
Assists companies during the set-up phase
Priority focus on sensory technologies, electrical engineering, automotive, biotechnology, IT
security
Longstanding thematic cluster strategy is the main driver for economic development
Co-invests in innovation infrastructure (eg BioPark Regensburg) and land for industrial
precincts.
State and city agencies synergistically promote technology clusters for R&D and manufacturing
Invest in Bavaria is the business development team within the Bavarian State Ministry for Economic
Affairs, Infrastructure, Traffic and Technology. Invest in Bavaria focuses entirely on the promotion
of Bavaria as business location, and on attracting new companies and investment into the state.
Location promotion for the whole state is done through trade fairs, trade missions, and
presentations/seminars etc. Invest in Bavaria operates through 22 international office locations.
Expressions of interest from companies are passed on to regional agencies across Bavaria which are
asked to submit proposals on how to accommodate interested companies.
Invest in Bavaria’s responsibilities include:





Marketing of Bavaria as top business location
‘pitching’ the State of Bavaria to investors
Disseminating information to help international companies identify optimal location to
establish a hub
Arrange site visits
Providing investors setting up and expanding operations with all necessary services
1300 foreign companies are located in Bavaria, including 740 from the USA. Bavaria is the German
state with the largest number of US companies located in its region.
41
The City of Regensburg makes proposals to accommodate companies referred through Invest in
Bavaria. It also actively identifies and attracts companies with strategic fit into the Regensburg
technology clusters.
Regensburg’s cluster strategy is a primary marketing tool
The City of Regensburg follows a longstanding cluster strategy and promotes itself as ‘City of
knowledge, business and science’. The University of Regensburg was founded in 1967 with
economic development as a primary focus. This changed the culture in the city in several ways. The
demographics changed favourably to a large increase of young people. The University of
Regensburg and adjacent University of Applied Sciences together have 28,000 students. The
population of Regensburg is 150,000. The City Council and universities work closely together
through joint committees and direct access between executives on both sides. They have
developed the cluster strategy together. Therefore industry strengths and university strengths
match each other. Industry endowed Chairs at the universities are increasing.
The life sciences innovation precinct BioPark Regensburg was established with co-investment from
the City of Regensburg, State of Bavaria, German Government and the EU. The City runs BioPark as
a subsidiary company GmbH. BioPark is located adjacent to the University of Regensburg. It consists
of three buildings with 18,000m2 floor space and currently hosts 32 companies/550 staff.
There is a new development underway to further increase the innovation infrastructure: the City of
Regensburg recently bought the former ‘Kaserne’ land next to the University of Regensburg and
BioPark to develop a new Technology Innovation Park. The focus will be on sensory technologies,
mobility etc. – any technologies other than biotechnology. The development is earmarked for 2015.
It is envisaged that public funding will pay for the first building. Private investors will pay for the
next buildings.
An important part in the cluster strategy is that the City of Regensburg undertook a programme of
land purchases in strategic locations in order to develop industrial precincts and accommodate
companies of interest. The success of this strategy is illustrated, for example, by the attraction of
BMW in 1983 to establish an R&D and manufacturing plant in the region – currently employing
10,000 staff.
The coordination between key innovation stakeholders works very well because the Vice Mayor
Dieter Daminger oversees economic development, finance, and sciences. He also has a part-time
appointment as Chief Financial Officer of BioPark Regensburg. This effectively connects cluster
strategy, innovation infrastructure, and regional economic development into a seamlessly
coordinated programme.
Major attractions for companies include both strategic location and innovation clusters
The technology competencies and innovation infrastructure are strong drivers in the national and
international marketing of Bavaria and Regensburg as top locations to establish a business. The
immediate availability of land in dedicated industry precincts is another selling point. Equally, the
region promotes itself as gateway to Eastern Europe.
42
Table A. Attractions as promoted by Bavaria and City of Regensburg
(www.regensburg.de; www.stmwivt.bayern.de):
Heart of Europe – proximity to Munich, one of the top economic centres in Germany
Turntable East-West Europe – gateway to Eastern Europe
Excellent transport infrastructure – close to two major airports, major railway connections, motorways, river port on the Danube
Diversity of highly developed innovation centres and business areas
One of Germany’s largest logistics centres
High quality talent pool – 2500 graduates from regional universities per annum
3 universities with major focus on engineering and life sciences
Technology focus of industry and universities well aligned
Location of many global hi-tech companies
Products carry globally recognised quality label ‘Made in Germany’
High quality of life – Regensburg is a World Heritage site
Regensburg has become the magnet for German and international high-tech companies
Major companies are listed in alphabetical order as taken from www.regensburg.de and other
sources):
Table B: Major companies in the Regensburg region
Company name
Andritz Fiedler
GmbH & Co. KG
Amgen Inc
Antisense Pharma
GmbH
AREVA
Energietechnik
GmbH
Bionorica AG
BMW AG
CipSoft GmbH
Continental Corp
Dallmeier Electronic
EMZ-Hanauer GmbH
& Co KGaA
Eswegee Vliesstoff
GmbH
GeneArt AG
Gerresheimer
Regensburg GmbH
Haupt Pharma
Amareg GmbH
Infineon
Technologies AG
Maschinenfabrik
Reinhausen GmbH
Linhardt
Metallwarenfabrik
GmbH & Co KG
OneVision Software
Corp
Corporate
headquarters
Austria
Company focus
Employees in
Regensburg
Location
USA
Pharmaceuticals/biologics. HT-screening unit
18
Germany,
Regensburg
Germany,
Regensburg
Biotech company developing human therapeutics based
on anti-sense technologies
Develops novel medium voltage technologies
74
BioPark
Regensburg
BioPark
Regensburg
Germany,
Neumarkt
Germany,
Munich
Germany,
Regensburg
USA
Germany,
Regensburg
Germany,
Nabburg
Germany, Hof
Produces therapeutics from natural products
546
Produces 240,000 cars/annum at Regensburg plant
10,000
Develops on-line games for various platforms
36
One of the top five automotive parts suppliers globally
Develops software solutions and high quality camera
technologies for security applications
Mechatronic systems for a wide range of applications
6000
Medical devices company
450
Germany,
Regensburg
Germany,
Duesseldorf
Germany,
Berlin
Germany,
Munich
Develops novel therapeutics using synthetic gene
technologies
Develops and produces glass modules for medical
research
GMP production of pharmaceuticals, contract
manufacturer
Formerly a division of Siemens, independent since 1999.
Produces chips for automotive/industrial engineering,
and for security systems
Develops and produces transformer control systems for
energy companies
Produces aluminium and polymer tubular systems
190
Germany,
Regensburg
Germany,
Viechtach
USA
High-tech paper and perforating technology company
Develops software for automation in the printing
industry
850
650
350
270
3100
1200
BioPark
Regensburg
43
Osram AG
Germany,
Munich
PreSens GmbH
Germany,
Regensburg
Germany,
Muenchberg
Germany,
Mainz
Germany,
Munich
Germany,
Regnsburg
Germany,
Zwiesel
Raumedic AG
Schott-Rohrglas
GmbH
Siemens
Starkstrom
Geraetebau
Zwiesel Kristallglas
AG
The company’s divisions for Opto Components and Lamp
Modules are situated in Regensburg. Focus on laser and
sensor technologies. Market leader for light-emitting
diodes for motor vehicles
Develops sensory technologies for the life sciences
industry
Medical devices company
1600
Produces glass tubes for various applications
1000
Electrical installations
1600
Develops and produces transformers for industrial
applications
Develops crystal glass products for various applications
630
60
BioPark
Regensburg
480
The above list of companies highlights the region’s cluster emphasis on high-tech R&D and
manufacturing – particularly in the areas of sensory technologies, IT, engineering and automotive,
and life sciences. Only the major employers have been listed, there are also a much larger number
of small to medium size businesses operating in the region.
Support and incentives
The following points list some of the support and incentives available to international companies:






Various grants are available to companies investing and locating in Bavaria
Grants are funded by the State of Bavaria and EU schemes – often targeted at collaboration
with universities
Industrial land can be offered at somewhat lower cost than prevailing real estate values
due to the longstanding City programme to purchase strategic land portions
Bavaria/Regensburg are NOT allowed under the law to offer any tax relief – neither for
corporate tax nor personal income tax
The City of Regensburg is NOT allowed to offer rent subsidies
Corporate tax in Germany is approx. 30%
Conclusions
The Regensburg region promotes itself primarily as a top location for high-tech R&D centres and
manufacturing plants. The success of the region to attract new companies clearly builds on the City
Government’s long-term thematic cluster strategy which aligns industry and academic strengths.
Regensburg invested and continues to invest in the development of industrial precincts and
innovation infrastructure which greatly facilitates the accommodation of new companies.
Regensburg also strongly promotes its strategic location as a gateway to Eastern Europe and its
easy access to major transport routes.
Acknowledgments


Dieter Daminger, Vice Mayor, Councillor for Economic, Financial and Research Affairs, City
of Regensburg. Also Chief Financial Officer, BioPark Regensburg. Email:
[email protected]
Thomas Diefenthal, CEO, BioPark Regensburg. Email: [email protected]
44
Singapore
The key players:
Economic Development Board (EDB) Singapore – a division of the Singapore Government.







Website: www.edb.gov.sg
Lead government agency for planning and executing strategies to enhance Singapore as a
global business centre
Attracts investments and international companies to Singapore
Develops cluster strategy and innovation infrastructure
Funds the development and operation of innovation parks (eg Biopolis), and funds research
institutes and grants through its science/technology agency A*STAR
Assists with the development of industry precincts through JTC Corporation
Operates EDB Investments (EDBI) – the independent equity investment arm of EDB
International Enterprise Singapore – trade promotion agency funded by the Singapore
Government.



Website: www.iesingapore.gov.sg
The primary focus is to promote the overseas growth of Singapore companies and
international trade
A secondary focus is the international promotion Singapore as a top business location
Cluster strategy and infrastructure development are the key drivers for company attraction
Singapore’s business model follows its well developed strategy of investment in science and
technology to become a global centre for R&D and high-tech manufacturing of large international
companies. Singapore markets itself as a knowledge intensive global hub. The government has
developed a comprehensive cluster strategy with emphasizes the following key sectors:
-
Life sciences with a strong biomedical focus
Medical devices
ICT
Financial services
The cluster strategy is underpinned through the development of several thematic innovation parks
(eg Biopolis), the establishment of 12 academic and public research institutes, and a variety of
public-private partnerships for joint R&D centres with the industry. EDB has made and continues to
make large scale investments in science and technology – at present public investment of around
USD 13 billion is forecast for 2011-2015. In addition, the cluster strategy also includes the
development of thematic industry precincts for manufacturing (eg Tuas Biomedical Park, Jurong
Island Industry Estate for chemical manufacturing).
An integrated network of public sector research institutes offers rich opportunities for the industry
to collaborate - this is promoted as a key attraction for international companies to establish an R&D
hub in Singapore. Attractions as cited by EDB include:


Benefits from collaboration with Singapore funded research institutes - Singapore is a
strategic research partner
Gateway to Asia and its rapidly growing market potential
45


Strategic location to develop novel therapeutics – strong translational medicine, clinical
trial capabilities, biomedical cluster focus
Ease to do business – business friendly policies
The success of these strategies and investments is evident by the presence of over 7000
international companies in Singapore (including 1500 from China, 1500 from India). Together these
companies invest in R&D at the rate of 2.5% of GDP. The biomedical sector alone earns USD 14
billion annually from the sale of manufactured products and contributes 4.1% to Singapore’s GDP.
The biomedical industry employs more than 16,000 people in Singapore.
Government investments in innovation infrastructure underpin company attraction strategy
Industry real estate and innovation precincts are being developed through Jurong Town
Corporation (JTC), the Government’s real estate development agency (www.jtc.gov.sg). The
following precincts are examples of real estate solutions attracting international companies:

Jurong Island: a world-class chemicals hub which is home to around 100 global petroleum,
petrochemicals, and special chemicals companies. With its dedicated ‘plug and play’
infrastructure, Jurong Island enables companies to enjoy cost savings through shared thirdparty utilities and services, and at the same time build synergy through product integration.
Public/private investment in Jurong Island facilities to date amount to approx. USD 35
billion.

Tuas Biomedical Park: this 312 hectares industry real estate hosts R&D and manufacturing
hubs of large international pharmaceutical companies including Pfizer, Roche, MSD, GSK,
Novartis, Lonza.

Clean Tech Park: a new initiative currently under development, this 50 hectares park aims
to attract companies focusing on environmental technologies. Several international
companies as well as the Nanyang Environment and Water Research Institute (NEWRI) and
the Energy Research Institute (ERI), both institutes of Nanyang Technological University
(NTU), are expected to move into the first building in 2012.

One-North Park: this is a 200 hectare development which includes several research and
business parks, foremost the world-renowned Biopolis.

Biopolis: operated by A*STAR, Biopolis has around 300,000m2 of laboratory and office
space for several large scale public research institutes and for the R&D centres of 15
international companies including Novartis, Abbott, Eli Lilly, MSD, Takeda.
International companies establish research centres at Biopolis and as joint ventures with
Singapore’s research institutes/universities
International companies are attracted to Singapore by the state-of-the-art innovation infrastructure
and opportunities to collaborate with publically funded research institutes and universities. Many
multinationals are diversifying their R&D centres around the globe in search of talent and joint
ventures with the public sector. Singapore attracts a large number of such R&D centres – a direct
consequence of its investment in thematic clusters and public sector research infrastructure. Some
prominent examples are listed below:
46

Takeda Gobal Research and Development Centre – one of four international R&D centres of
this Japanese pharma giant (Biopolis)

Novartis Research Institute for Tropical Medicine (Biopolis) – one of 11 Novartis Institutes
for Biomedical Research (NIBR) globally

Danone (corporate headquarters in France) – Research Centre for Specialised Nutrition
(Biopolis) – one of 26 R&D centres of Danone internationally

Bruker Centre for Excellence (Biopolis) – Bruker (USA) produces hi-tech analytical
equipment

Roche Singapore Hub for Translational Medicine – investment of USD 95 million in a joint
venture with National University of Singapore (NUS) and Singapore Health Services
(established in 2010)

MSD Translational Medicines Research Centre – MSD operates 12 research centres globally

FORMA Therapeutics (USA) established a research centre jointly with Nanyang Technical
University (NTU)

Media Tek (Taiwan) – a global leader in mobile phone chip manufacturing – R&D centre in
partnership with NTU

Vestas Wind Systems (Denmark) – the world’s largest wind turbine manufacturer
established the Joint Materials Lab in the School of Materials Science and Engineering at
NTU

Applied Materials, a leading US manufacturer of semiconductor equipment – joint research
laboratory with Institute of Microelectronics
R&D and manufacturing are the primary company motivations to establish a hub in Singapore
To document a representative sample of company motivations to have a presence in Singapore, all
project announcements and press releases during 2011 as listed on EDB website (www.edb.gov.sg)
have been screened for international technology companies establishing a new hub or expanding
their existing hubs in Singapore. The following table provides insights into their primary activities in
Singapore, and into the size of investments and the primary attractions to establish a hub in
Singapore where available. The list follows in chronological order of the announcements.
47
Table A: Project announcements 2011 from EDB website (www.edb.gov.sg)
Date
Company name
Headquarters
16.12.11
Evonik
USA
8.12.11
Mead Johnson
Nutrition
USA
5.12.11
Air Liquide
France
29.11.11
Triton Water
Germany
24.11.11
Visy Industries
Australia
2.11.11
Phoenix Solar
Germany
1.11.11
Clariant
Switzerland
1.11.11
1.11.11
MEMC
Heraeus
USA
Germany
1.11.11
21.10.11
Trina Solar
MSD
USA
USA
Primary activity in
Singapore
R&D; manufacturing
speciality chemicals
R&D, manufacturing
paediatric nutrition
products
Manufacturing industrial
gases
R&D centre. Water
treatment technologies
Regional HQ. Recycling
technologies
Regional HQ. Solar cells,
cleantech
Regional HQ. Speciality
chemicals
R&D centre. Solar cells
R&D, manufacturing.
Solar cell technologies
Regional HQ
R&D, manufacturing
pharmaceuticals
Investment
USD 325 M
USD 420 M
EDBI equity investment in
company
-strategic location
-talent pool
-R&D
infrastructure
-stable political
environment
-academicindustry
collaborations
USD 250 M (expansion of
existing plant)
MSD total investment in
Singapore USD 1.5 billion
since 1996
12.10.11
Ifm Electronic
Germany
6.10.11
Netherlands
8.9.11
DSM Dyneema
Technical Centre
Pall Corp
1.9.11
Zeon Corp
Japan
28.7.11
Sinopec
China
25.7.11
Takasago
Japan
7.6.11
Lonza
Switzerland
3.6.11
ON Semiconductors
USA
1.6.11
Infineon Technologies
Germany
1. 6.11
Lanxess
USA
25.5.11
Bruker
USA
24.5.11
Caterpillar
USA
USA
R&D, manufacturing.
Automation equipment
R&D, regional HQ.
Polymer fibre products
R&D, regional HQ.
Filtration technologies
Manufacturing rubber
products
Manufacturing lubricant
products
R&D, manufacturing
flavour compounds
Manufacturing biologics
Regional HQ.
Semiconductor products
R&D, manufacturing
computer chips
Manufacturing synthetic
rubber products
Regional HQ. Analytical
equipment
Manufacturing mining
machines
Feedback on
attraction
-good business
climate
-innovation
culture
-transparent
regulatory
processes
USD 7 M
USD 190 M
-strategic location
-IP protection
-access to
feedstock
USD 91 M
USD 35 M (expansion of
existing plant)
USD 12 M (expansion of
existing plant)
USD 3 M
USD 250 M (expansion of
existing plant)
USD 200 M
-talent pool
-ease to do
business
-innovation
culture
-collaboration with
universities
48
27.4.11
Ying Li Green Energy
China
21.4.11
USA
13.4.11
IMFS (joint venture
Intel and Micron
Technology)
Applied materials
1.4.11
Danone
France
11.3.11
Hoya Surgical Optics
Japan
11.3.11
Medtronic
USA
4.3.11
Media Tek
Taiwan
2.3.11
Menicon
Japan
15.2.11
28.1.11
HCL Technologies
Life Technologies
India
USA
21.1.11
IFF
USA
USA
R&D, regional HQ. Solar
energy technologies
Manufacturing flash
memory chips
R&D centre jointly with
Institute of
Microelectronics
R&D centre for
specialised nutrition
Manufacturing
intraocular lenses
Manufacturing
pacemakers
R&D centre.
Semiconductors
R&D, manufacturing
intraocular lenses
R&D. ICT
Regional distribution
centre
R&D, manufacturing
flavour compounds
USD 3 billion
USD 100 M (expansion of
existing facilities and
collaboration with NTU)
USD 100 M
USD 60 M
From these 34 EDB news items in 2012 it is evident that R&D and manufacturing activities are the
primary focus for international technology companies in Singapore:




R&D centres – 9 companies
R&D and manufacturing – 8 companies
Manufacturing – 10 companies
Regional headquarters/distribution centres – 7
The results of this analysis provide direct evidence that Singapore’s economic development
strategy towards becoming a leading centre for R&D and manufacturing of large multinational
companies is making global impact.
Support and incentives
The following list documents a number of incentives to attract international companies to
Singapore:

Low tax regime

Corporate tax 17% max.

Personal income tax 20% max.

Industry-specific tax incentives to grow specific sectors (eg banks, financial institutes).

EDB has wide authority to negotiate individual deals for tax breaks, rent relief in
research/manufacturing parks

Pioneer Industry Tax Incentive (either tax holiday or reduced tax rate): given for approved
manufacturing sectors only
49

Pioneer Service Tax Incentive (either tax holiday or reduced tax rate)

The word ‘Pioneer’ means never before, new and innovative. EDB also needs other
justifications such as value if investment, technology, employment, GDP increased etc

There is an R&D tax rebate under the law and it is administrated by the Inland Revenue of
Singapore. For qualified R&D project, the scheme can be either a cash incentive or a tax
rebate based on the amount of R&D spending.

Singapore does not offer rent subsidies in rental buildings. The EDB may help discuss with
JTC for making available industrial land for investors in new qualifying manufacturing
projects

Singapore does neither subsidize land cost nor contribute to construction cost

EDB offers employee up-skilling/training grants

EDB provides R&D grants for qualifying projects.
Conclusions
With a population of 5 million and one of the highest GDP per capita globally – Singapore’s
economy is based on its ability to attract international companies to establish R&D centres and
manufacturing plants for high value products. Singapore’s company attraction strategy is firmly
linked into its economic development plan based on on-going investments in thematic clusters,
innovation parks, public sector research institutes, and industry estates. Numerous multinational
companies have established dedicated R&D centres in Singapore, many in partnership with public
sector research institutes and universities. Public-private partnerships and government support for
science and technology are primary attractions for international companies. Companies benefit
from thematic clustering and sharing of infrastructure/services both in innovation parks (eg Biopolis
Shared Facilities - BSF) as well as in industry precincts such as Jurong Island which includes around
100 petrochemical companies. The strategic location of Singapore as gateway to Asia is important
for companies establishing regional headquarters but appears to be of secondary importance when
considering the larger picture.
50
Melbourne, Australia
The key players:
Austrade (Australian Trade Commission) – statuary agency within the Ministry for Foreign Affairs
and Trade.







Websites: www.austrade.gov.au; www.investinaustralia.com
Promotes exports and assists Australian companies to internationalise
Promotes Australian goods and services internationally
Promotes Australia as top business location
Attracts foreign direct investment in Australian companies
Attracts international companies to establish in Australia but leaves it to the State
Governments to compete for business location
Works through its international offices, trade missions, trade fairs, presentations – takes
State Government representatives along where appropriate.
State Government Victoria, Department of Business and Innovation (DBI) – also includes Invest
Victoria Melbourne. DBI is the lead agency for location promotion and company attraction.










Websites: www.dbi.vic.gov.au; www.invest.vic.gov.au
Liaison between businesses and all levels of government
Develops economic planning around strategic sectors/clusters
Invests in the development of capabilities and infrastructure
Supports companies to internationalise and export
International promotion of Victoria’s education providers
Attracts investment in State of Victoria companies
Markets the State of Victoria as business location
Attracts international companies
International representation through Victorian Government Business Office (VGBO)
network – offices in 12 locations in Asia, USA and Europe.
Enterprise Melbourne – a business support agency of the City of Melbourne.





Website: www.melbourne.vic.gov.au
Promotes Melbourne
Provides information on industry sectors
Business support
Assists with company establishment and expansions (in collaboration with DBI)
Melbourne promotes itself as knowledge, technology and innovation capital
DBI is the lead agency for cluster strategy, innovation infrastructure development, and attraction of
both international and Australian companies into the State of Victoria and Melbourne. The
following table summarizes the key attractions. The focus is on attracting R&D and high-tech
manufacturing activities. This strategy is underpinned by major investments in innovation
capabilities and infrastructure. KPMG recently researched 95 cities in 10 countries and ranked
Melbourne number one for best R&D location.
51
Table A: Why invest in Victoria and Melbourne?
Invest in Australia
DBI – medical devices sector
Invest Victoria Melbourne (DBI)
www.investinaustralia.com
www.investvictoria.com
www.invest.vic.gov.au
Competitive and dynamic business
environment
Skilled and innovative workforce. 40% of
residents in inner city area of Melbourne
have a bachelor or postgraduate degree
World-class infrastructure
Innovation infrastructure
45% R&D tax credit
World-leading research institutes
Quality of life
Highly skilled and innovative workforce
Supportive government
Talent pool is young – half of 5.5 million
population is under 35
Competitive business environment
Strong culture of collaboration
Victoria is the manufacturing, services,
innovation and knowledge powerhouse of
Australia. Strong innovation culture
Melbourne is a cosmopolitan, globalised
city of 4 million people with high quality
talent pool
English speaking gateway to Asia-Pacific
markets
Safe, proven investment destination
Ease and transparency to start a new
business
Government support innovation
Melbourne has more than 30 tertiary institutions teaching over 70,000 students (including approx.
25% international students). Victoria has 13 major medical research institutes, 7 teaching hospitals
and 9 universities, and is home to 140 biotech companies.
Openness of universities, public research institutes and hospitals to collaborate is a major draw
card
The proximity of 8 universities and industry in Melbourne facilitates collaboration between
companies and academia. World-leading research institutes, a highly skilled workforce, a
competitive business environment, and a strong culture of collaboration are promoted as major
attractions for international companies to establish an R&D hub in Melbourne. Examples of major
industry-university partnerships in Melbourne include:

IBM Research and Development Laboratory (one of 11 IBM R&D Centres globally) was
established at the University of Melbourne in 2011

CSL – Australia’s largest biotechnology company co-located its R&D division in Bio21 at the
University of Melbourne in 2007

GSK is operating a major R&D centre and manufacturing plant in Melbourne in close
association with the Monash Institute of Pharmaceutical Sciences (MIPS) at Monash
University

RMIT University’s Sir Lawrence Wackett Aerospace Centre has established R&D
partnerships with several companies. The centre is a major partner in three Cooperative
Research Centres (CRC).
These and other academic-industry partnerships are supported by DBI’s strategy to develop and
invest in thematic sector capabilities and precincts. Recent public sector investments in research
infrastructure include:

Australian Synchrotron – AU$ 220 million

Victorian Life Sciences Computation Initiative – one of the world’s most powerful
supercomputers at the University of Melbourne – AU$ 100 million
52

Melbourne Centre for Nanofabrication (MCN) provides state-of-the-art capability in
advanced materials and biotechnology

Victorian Centre for Advanced Material Manufacturing (VCAMM) links Victoria’s research
sector and leading manufacturers to support the development and commercialisation of
innovative products and manufacturing advances
Details of the full range of biotechnology-related infrastructure available in Victoria can be found at
the Victorian BioPortal at www.vicbioportal.org.
DBI’s cluster strategy aligns with focus of public sector research institutes and infrastructure
DBI’s cluster strategy is well documented in sector specific reports. The focus is on developing
thematic innovation precincts rather than technology parks. The primary target sectors include:

Advanced manufacturing (aerospace, automotive, marine, defence, high-precision sheet
metal work. The advanced manufacturing sector is concentrated in the south-western part
of Melbourne. The sector includes around 80 companies employing around 10,000 people.
Large international companies include Boeing, GKN Aerospace, General Motors, Toyota.

Life sciences/biotechnology. The industry includes 140 companies with over 30,000
employees. World renowned biomedical research centres and hospitals are at heart of a
strong thematic precinct around University of Melbourne and Monash University.

Medical devices and diagnostics is a growing industry attracting international companies
including (corporate headquarters in brackets):
-

Coloplast (Denmark)
Dentsply (USA)
Draeger Medical (Germany)
Illumina (USA)
J&J Ortho-Clinical Diagnostics (USA)
Leica BioSystems (Germany)
Life Technologies (USA)
Olympus (Japan)
SDI (USA)
Smith & Nephew Healthcare Division (UK)
Thermo Fisher Scientific (USA)
ICT. This sector includes around 800 companies and employs over 50,000 people in
Melbourne. International companies include (corporate headquarters in brackets):
-
NEC (USA)
Pacific Internet (Singapore)
Hewlett Packard (USA)
Fineos (Ireland)
Infosys (India)
Agilent (USA)
Ericcson (Sweden)
53
Support and incentives






R&D tax credit 45%
Corporate tax 30%
Business establishment and development grants
Grants up to AU$ 250,000 to assist manufacturers to purchase and integrate new
technologies (matching funding AU$ 1 for every AU$ 3 invested by company)
Sector specific grants
DBI and Enterprise Melbourne assist with business location in synergistic precincts. There is
no formal rent relief scheme
Conclusions
Melbourne’s international company attraction strategy focuses primarily on increasing R&D and
high-tech manufacturing activities in the region. The strategy in underpinned by the State of
Victoria’s major investment in innovation infrastructure, and the willingness of research institutes
and universities to collaborate with the industry. The 45% R&D tax credit is strongly promoted
internationally and cited as a major attraction for international companies.
Acknowledgments

Matt Carrick, Director Technology Industries, Department of Business and Innovation,
Government of Victoria. Email: [email protected]