I recently had the chance to examine the success factors for tech parks and research parks, including the role incentives can play. Here are some of the findings, drawing on Battelle’s 2012 Survey of North American University Research Parks and my own work:
- Building quality, image, flexibility in leasing and cost remain top reasons tenants choose to locate in a park.
- Research parks that offer tenants access to university resources – faculty, facilities and students – are more desirable in today’s market than tech parks that do not.
- A standalone park setting is not as valuable as one perceived to be part of an industry cluster or regional innovation initiative.
- Research and tech parks are both evolving from corporate campus settings to include more mixed-use environments. They are also increasingly likely to be developed in urban areas considered desirable to younger entrepreneurs and workers.
- Incentives to entice tenants include specialized business and workforce services, in addition to traditional tax breaks.
- A variety of free or low-cost specialized services are being offered to tenants, such as business planning, market assessments, assistance accessing capital, and technology commercialization services.
- Typical financial incentives include property tax breaks, sales and use tax exemptions, assistance accessing state incentives, fast track permitting and special utility rates
- Sector- and company-specific workforce initiatives at local universities and tied to tenant needs and funded by state or local government are becoming more common.
- Free land and/or cash grants are not unheard of.
As we are seeing in the broader world of economic development incentives, tax breaks are no longer enough. Cost factors remain very important, but companies also seek a partnership with government and academia to address strategic factors such as workforce talent and innovation that drive long-term success.