First and foremost is intensively skilled labor.

Almost synonymous with this is a relationship with local research universities and institutions. For smaller or start-up companies, add to this the need for venture capital, affordable real estate -- possibly incubator space.

New legislation in support of the industry around the world has given biotech an incredible boost.

For example, after witnessing scores of biotech companies locating elsewhere in Europe and the United States, the German government harmonized its laws towards genetic engineering in 1996 and put together funding for research and development.

European biotech discoveries were just given legal patent protection throughout the European Union. Now patents on biotechnical processes involving humans, animals, and plants, and on products that result from genetic engineering can be obtained.

In 1997, in the United States, the Food and Drug Administration Modernization Act was signed into law, reducing drug review times and enabling new technologies to reach the market faster.

U.S. biotech centers
California remains the undisputed center for biotechnology in the United States, if not the world. The San Francisco Bay area employs roughly 19,300 people in the industry. The Los Angeles-Orange County area employs approximately 16,000, and San Diego County over 4,600.

According to Gordon Pattison, senior vice president of Investors' Property Services, California accounted for 55 percent of those employed in the U.S. biotech industry in 1997. He says 63 percent of U.S. biotech revenue comes from California, and 56 percent of all R&D takes place there.

"There is no question that our universities play a role in the development of high tech," says Pattison. "They provide the trained personnel and the new concepts which keep the industry's growth strong and healthy."

Scores of other U.S. locations are also attractive to biotech companies and start-ups.

New England, with its center in Massachusetts, comes in second to California, with the Mid-Atlantic States third, according to Ernst & Young's Biotech '97 study.

Pennsylvania has pegged biotechnology as one of its up-and-coming industries. According to the U.S. Bureau of Labor Statistics, Pennsylvania had the second largest increase in drug-industry jobs between 1986 and 1996.

Merck & Co., which operates a facility in Upper Gwynedd outside of Philadelphia, spent $1.7 billion in 1997 on expanding its facilities there, as well as its research facility in New Jersey.

"No one ever thought we'd get as big as we have," says Joseph Salvia, Merck's director of facilities.

The South has its biotech hot spots. GlaxoWellcome helped put North Carolina's Research Triangle Park on the map.

The company is now expanding additional plants outside of the Triangle. In October of 1998, it announced plans to expand its manufacturing and packaging facility in Zebulon by 220,000 square feet.

Biogen dedicated its new $60 million, 100,000 square foot Research Triangle facility in May. The company chose North Carolina over Cambridge, Mass., where it has other facilities.

"The Research Triangle Park is the premiere location for R&D companies on the East Coast and in the United States," says Jim Vincent, Biogen chairman.

San Antonio's biotech community is anchored by its Cancer Therapy and Research Center, the only research program in the world to discover, synthesize, evaluate and test new anti-cancer agents within the same organization.

Also in the Alamo City is the University of Texas Health Science Center and the Southwest Foundation for Biomedical Research.

Other communities are emphasizing their advanced research institutions and centers. Nashville, Tenn., for example, is promoting its Vanderbilt Medical Center and Meharry Medical College.

Florida has also targeted biotechnology as an area for growth. Representatives from state government, education and private business have formed a strategic plan for attracting investment.

European biotech locations
Europe is the world's second largest biotechnology market. Today over 700 European bioscience companies invest nearly $2 billion in R&D there, and employ some 27,500 people.

Belgium ranks favorably with its larger European neighbors in biotechnology. Thirty-eight biotech companies called Belgium home in 1996, compared to Germany's 110 and the United Kingdom's 184.

"There has been an increasing trend toward establishing biotech operations in eastern Germany," says Dr. Hans Christoph von Rohr, chairman of the New German Lander Industrial Investment Council. "The New German states represent some of the most modern biotech centers in Europe, offering competitive advantages, in addition to synergistic opportunities between university clinics, research institutes and biotech companies."

Ribozyme Pharmaceuticals, Inc. recently acquired Transgenics Berlin-Buch GmbH and is expected to establish a new Berlin based facility, Atugen en Biotechnology GmbH.

France is at the forefront of modern biomedicine.

Among France's many research agencies are the National Center for Scientific Research, National Institute of Health and Medical Research and Institut Pasteur.

American biotech firms are increasingly collaborating with European biotech companies. They are also making strategic alliances with Europe's wealth of expertise at the university level.

As a result, many U.S. biotech companies either set up shop in Europe or merge with their European biotech and biopharmaceutical counterparts to take advantage of Europe's faster lead times for getting new drugs to market.