Innovation geographies are reshaping life sciences portfolios

The evolution of global innovation geographies is reshaping the life sciences landscape, making location a more critical strategic factor than ever. According to our Innovation Geographies 2024 report, life sciences leaders are navigating a changing landscape of where growth is and will happen, joining tech and other knowledge-intensive sectors in the hunt for prime space in markets teeming with talent and resources. The prize: to target a precise mix of locations that support cutting-edge research and efficient production with direct access to the right talent, infrastructure and opportunities for collaboration.

Where to locate has long been a strategic consideration for forward-thinking life sciences leaders. But with rapid advances in fields like genomics, drug development, and medical devices, it’s gotten a lot more complex than setting up shop in a hot market. For both biopharma and medtech organizations, finding the right markets and submarkets has become critical for driving research and accelerating time-to-market innovations.

To stay ahead of fast-moving research and production needs, today’s real estate decisions must be more agile and informed than ever.

Knowledge workers are on the move, propelled in part by post-COVID sensibilities about work-life balance. With many migrating to more affordable, lifestyle-centric cities, today’s big thinkers are effectively redrawing the map of where life sciences and other innovation-oriented work takes place.

For both biopharma and medtech organizations, this reshuffling is a challenge—and an opportunity. While established hubs like the San Francisco Bay Area, Boston, and Tokyo continue to dominate with venture capital, R&D investment, and productivity, they’re no longer the only darlings of life sciences portfolio strategies. Emerging cities like Austin, Brisbane, and Manchester are rapidly gaining ground, offering life sciences talent the lifestyle amenities they crave, along with competitive advantages in the form of lower costs and access to other innovators.

Biopharma companies looking for strong R&D ecosystems might prioritize proximity to academic institutions and healthcare providers in long-time hubs like Boston, for example, while medtech firms—seeking efficient production space—may be drawn to emerging hubs like Hangzhou. This new geography offers unique synergies between research, production and market readiness.

Science-driven manufacturing needs are also fueling momentum in lower-cost cities that attract talent. Consider precincts like Tech Central in Sydney, the Jurong Innovation District in Singapore and Schuylkill Yards in Philadelphia, which all exemplify the ability of innovation to catalyze multi-faceted innovation, with cross-sector investment in housing, office, lab space, research incubators, medical and diagnostic facilities and manufacturing and production hubs.

Pinpointing innovation hotspots is only the starting point. From there, life sciences companies—whether biopharma or medtech—should consider the following factors on the path to portfolio optimization:

1. Talent availability in emerging hubs: Winning the talent competition is synonymous with success in life sciences—and that takes access to specialized talent pools. Since knowledge workers are being drawn from outside the top clusters, companies are taking the cue and looking to emerging hubs in the Sun Belt in the United States, Southern Europe and secondary Chinese cities. For medtech, access to engineers and production specialists in these hubs can be as important as research talent is for biopharma.

2. Proximity to other innovators: From Boston and San Francisco to Toronto and Munich, close proximity to academic, biotech, and healthcare players creates a stimulating ecosystem and fertile ground for cross-sector knowledge exchange. In a typical innovation hub, life sciences companies harness collaboration with other research organizations, access to talent, and proximity to cutting-edge technologies. Biopharma companies benefit from proximity to academic research, while medtech firms thrive near institutions offering trial environments and production resources. And any life sciences company can benefit from shared resources and comprehensive infrastructure, including green spaces and modern amenities, while addressing sustainability and regulatory demands.

3. Sustainability and regulatory compliance: As companies expand into new markets, local regulations and sustainability requirements become strategic mandates. For example, in cities like Copenhagen and Singapore, which are setting new standards for green building practices and regulatory compliance, life sciences companies need to be able to achieve compliance. Biopharma firms must focus on sustainable lab practices, while medtech companies ensure manufacturing facilities meet local environmental standards.

4. Innovation-anchored regeneration: As cities face shifting occupier needs and new sustainability demands, innovation hubs are proving central to urban regeneration plans. They not only help cities modernize the built environment but also provide critical infrastructure for companies that help spark vibrant economies. For biopharma and medtech alike, these hubs offer an environment where innovation and infrastructure grow in tandem.

5. Portfolio diversification: Balancing investments between established hubs and emerging innovation centers helps mitigate risk and capitalize on growth opportunities. Biopharma organizations can use this strategy to tap into both established R&D centers and new production hubs, while medtech firms might leverage it to balance research with cost-effective manufacturing.

6. Submarket and micro market performance: Within a city like San Francisco, different neighborhoods offer varying degrees of accessibility, infrastructure and proximity to institutions. For both sectors, identifying which submarkets align with either R&D or production needs is vital to long-term growth.

7. Adapting to fast-changing real estate dynamics: As innovation hubs evolve, companies must be agile, too, nimbly responding to market conditions and the needs of innovation-focused users. Biopharma firms may need more lab space to support clinical trials, while medtech companies might require adaptable production facilities.

As innovation hubs reshape life sciences real estate, biopharma and medtech organizations alike must double down on portfolio innovation. With support from an expert global real estate partner, life sciences leaders can approach game-changing portfolio decisions with confidence—whether it’s expanding into new markets or optimizing existing spaces in the changing geography of innovation.