Industry spending on research and development should reach almost $195 billion this year, a 3.2 percent increase over 2001 estimates, reports the 2002 R&D Magazine/Battelle forecast. In spite of a slowing economy, there's a slew of blue-chip firms and startups alike that plan to boost their spending on R&D and R&D facilities this year.

Building and renovating research labs are big parts of the R&D budget, according to the report. About $8.5 billion will be spent this year on lab construction. One recent survey of research and development department heads shows more than half will either build or renovate their firm's facilities within the next two years.

One expert who sees R&D construction opportunities unfolding throughout many of the 50 states is Stanley Stark, a managing partner at HLW International (New York, N.Y.), an architectural, engineering, planning, interior design and consulting firm.

"Up until about 10 years ago, R&D facilities spending was concentrated in just a couple of places, like the Northeast, the Bay area in California, and a few isolated locations in the Midwest," said Stark, who heads HLW's practice in research & lab construction. "Now, there's been a tremendous amount of interest in many localities to capitalize on their medical schools and universities to try and replicate Silicon Valley, and make their own locations into research and technology hubs."

Stark sees more R&D lab construction on the horizon.

"In the biopharmaceutical marketplace, the hunger and need for research facilities has continued and endured," said Stark. "There's a groundswell of real estate professionals -- developers and brokers -- who have never really dealt with custom-built research facilities, who are trying to capitalize on that market."

The cost of living in a given area and the quality of labor supply are both important in selecting an R&D facility site, says Dr. Larry Mitchell, a senior program manager at NineSigma (Cleveland, Ohio), a provider of software and technology solutions to the R&D community.

Mitchell, who was recently a vice president & general manager at Avery Dennison, believes it's also important to match up with area universities.

"Finding and attracting R&D professionals may require locating your facility near a major university that has expertise in your organization's particular area of technology," says Mitchell.

What else should site selection executives think about when planning an R&D facility?

"Research operations are very dynamic enterprises, generally, so building in expansion opportunities is a critically important planning consideration," says HLW International's Stark.

Michael Keating is the Research Editor for Expansion Management. You can contact him at mkeating@penton.com.