R&D Plus Manufacturing Spells Bottom-line Benefit for Regional Companies
Research Triangle Region, N.C. – The Research Triangle Region of North Carolina is known worldwide for its knowledge-based economy that drives innovation and profits for some of the world’s most successful companies. Lesser known but equally powerful is the region’s strong manufacturing sector, which represents nearly one in 10 of all jobs in the region.
Companies that choose to locate both R&D and manufacturing in the region find significant competitive advantage doing so.
“It’s all about the bottom line,” says Lee Anne Nance, senior vice president of strategic initiatives for the Research Triangle Regional Partnership (RTRP), which directs economic development for the 13-county Research Triangle Region.
“It’s more economical to do R&D and manufacturing in the same region because a company can better manage its resources and operations when its facilities are in close proximity,” Nance says. “And it’s a huge advantage to be able to have access to the scientists who develop your products while you are manufacturing them.”
Boosting innovation and the bottom line
The competitive advantage of locating manufacturing facilities near research and development was recognized more than a decade ago by the region’s economic development leaders as they forged marketing strategies to create jobs in the region.
A Precision Marketing initiative launched in early 2000 engaged university researchers in both translating their work into commercial products that could be manufactured in the region as well as encouraging their corporate clients to do so. That initiative became a key component of the first regional economic development strategy, called “Staying on Top: Winning the Job Wars of the Future,” that RTRP developed and launched in 2004 in collaboration with business, government, academic and nonprofit support organizations.
“It was a well-embedded concept when we developed that plan that we would leverage the resources of the region’s higher education community to help commercialize intellectual property,” says Tom White, director of economic development partnership at North Carolina State University. “Turning research into valuable, viable products is what creates jobs. The universities, economic development agencies and companies working together enable that to happen.”
Most areas can’t offer both R&D and quality manufacturing affordably, says Jennifer Bosser, assistant executive director for the Greater Raleigh Chamber of Commerce.
“This region has a strong mix of skilled workers, from advanced manufacturing talent coming out of the universities to custom-trained workers coming from the community college system, which is one of the strongest in the country,” Bosser says. “North Carolina is also a right-to-work state, which makes our labor costs even more competitive.”
Operating R&D and manufacturing in close proximity enhances innovation by streamlining the design and development process, she says. “Ideas don’t always come from the lab, and when researchers can be part of the manufacturing process, they see more quickly what does and doesn’t work. It speeds things up.”
The region’s East Coast location also offers advantage for manufacturers, Bosser says. “We are located within two days’ drive of 60 percent of the U.S. population and have the second-largest highway system in the nation. Plus, we have an exceptional logistics infrastructure in place for moving products.”
Excellent mobility within and across the region is another asset for manufacturers, says Joe Milazzo II, executive director for the Regional Transportation Alliance.
“With relatively low levels of traffic congestion compared to other metropolitan areas and appropriate speed limits to expedite commerce, travel across the region is a competitive advantage rather than a daily burden,” Milazzo says.
Companies take advantage of region’s assets for manufacturing
Semprius, a leading innovator in high concentration photovoltaic modules with headquarters in Durham, recently announced plans to locate a manufacturing facility in nearby Vance County.
“A combination of factors convinced Semprius to choose Vance County,” says Stuart Litvin, director of the Henderson-Vance County Economic Development Commission.
“We had a building ready and available located right off Interstate 85 and next to Vance-Granville Community College, which will work with them to meet their training needs,” he says. “The community and government response was tremendous, giving them the largest incentives package ever offered by Vance County. They were impressed with the quality of the workforce and its work ethic. The cost of the property and labor were competitive. And being within one hour of their corporate headquarters was a huge advantage, since that proximity eliminates the need for air travel between facilities.”
Ronnie Goswick, director of the Franklin County Economic Development Commission, credits the region’s strength in workforce development for attracting manufacturers.
“This region has one of the most competitive and innovative workforce development programs in the country, making it an ideal location for manufacturing,” Goswick says. “There is an active workforce development board that works continuously with the universities, community colleges and high schools to create cutting-edge training that meets the needs of the local business community. And local business leaders serve as advisors to keep the board apprised of the ongoing needs of local manufacturers.”
Novozymes, for instance, one of the world’s leading producers of enzymes, operates its North American headquarters, R&D and manufacturing operations in the region, in Franklin County.
“Through development of a relationship with Novozymes, biotech production is now taught throughout the community college system, which produces readily trained graduates,” Goswick says. “Novozymes recently worked with Franklin County to introduce new training programs into its high schools.”
The company is a poster child for co-locating its operations. In a recent expansion, the company designed a new building specifically to allow the R&D team and laboratories to be located in the same areas, separated only by glass walls. This allows the R&D team to test ideas in a working environment, creating a more efficient process, Goswick says. It also helps employees on both sides better under the complexities of each process.
BD Biosciences (formerly Becton Dickinson), maker of innovative diagnostic and research tools, is another company that benefits from having both R&D and manufacturing in the same region, says White. BD Biosciences first opened an R&D facility in The Research Triangle Park (RTP) in the 1970s. In 1990, it located a medical device and laboratory apparatus production facility in Treyburn Corporate Park in Durham County and, recently, opened a massive distribution and logistics facility in Four Oaks in Johnston County.
“BD recognized the economic advantage of integrating its companies within the region,” White says. “And it has found talent recruitment to be a major asset offered by the region. The company has sustained its amazing growth even in the midst of a severe national and global economic downturn.”
Pharmaceutical giant GlaxoSmithKline operates both R&D and manufacturing facilities in the region – R&D in RTP and manufacturing in Wake County.
Caterpillar recently announced a $33 million expansion of its manufacturing plant in Johnston County. Engineering and design work will be performed at a new engineering and testing facility located nearby.
Unique model spells competitive advantage
“This region is unique in the operating model it offers companies,” Nance says. “We shine because of our leading research universities that support innovation and provide highly skilled and educated workers. But we also have proven manufacturing successes.”
The Research Triangle Region offers a unique and powerful combination of assets for manufacturers, she says. Among them:
- World-leading life sciences, technology, green and defense clusters that yield innovative products, services and processes that both require and support manufacturing.
- Research-and-development support from major research universities as well as many federal and private labs.
- Affordable, abundant land for building major manufacturing facilities.
- Business-friendly environment with competitive tax rates and financial incentives for manufacturers.
- Qualified, motivated workforce with a wide range of education, skills and competitive labor costs.
- Customized workforce training through a top-ranked community college system.
- Transportation networks connecting the region with major U.S. markets.
- Enviable quality of life with mild climate, year-round recreation options and mix of communities and lifestyles.
For more information on what the region offers manufacturers, visit www.researchtriangle.org or call (919) 840-7372 .
The Research Triangle Regional Partnership leads economic development for the Research Triangle Region of North Carolina, home of The Research Triangle Park (RTP) and the 13 north-central N.C. counties of Chatham, Durham, Franklin, Granville, Harnett, Johnston, Lee, Moore, Orange, Person, Vance, Wake and Warren.