Friday, July 11, 2008

Tech talent makes Massachusetts a second home for European firms

By Bridget Botelho, Special to Mass High Tech

Faced with a choice of California, Minneapolis or Massachusetts as the home for its first U.S. location, Creganna Medical Devices opted for ready access to the Boston area’s tech talent base and relative proximity to Creganna’s headquarters in Galway, Ireland. Since settling in Marlborough in March, the company has recognized the additional benefit of growth because of the soft U.S. economy, allowing Creganna to boost its planned hiring for 2008.

“Our main reasons for choosing Boston were proximity to our clients and because it is an easy flight from Ireland, and because of the access to local talent,” said Randall Sword, commercial director, contract design services at Creganna.

More and more foreign firms whose homeland currency outweighs the U.S. dollar have been setting up in Massachusetts, particularly in the life sciences sector.

The Massachusetts Office of International Trade and Investment, which provides a point of entry for international companies interested in doing business in the state, has seen a significant increase in foreign direct investment (FDI) over the past 18 months, said Christa Bleyleben, executive director of MOITI.

“Our pipeline of foreign business here is growing, and it is due in part to the weakness of (the U.S.) dollar,” Bleyleben said. “If you are a company using the British pound or Euro, your currency is worth more here in the U.S., so from an international business perspective, this is a good time for them to locate here.”

Evidence of this can be seen through the new groups and partnerships that have formed recently to strengthen international business relationships. For instance, a group of major players in the state’s life sciences sector formed in June to collaborate on research and develop international partnerships. The new Clinical Research Consortium of Massachusetts is made up of Tufts Medical Center’s Institute for Clinical Research & Health Policy Studies; Phase Forward Inc. (Nasdaq: PFWD) , a clinical trial and drug safety software company; BBK Worldwide, a clinical trials enrollment management company; and consulting firm Court Square Data Group.

Also, Massachusetts and French officials recently announced a biotechnology research and development partnership. The agreement, according to officials at the Consulate General of France in Boston, involves the private sector,  financial and venture-capital groups and universities such as MIT, Boston University and the University of Massachusetts.

French companies now located in Cambridge include Sanofi-aventis, BioMerieux and Genfit. Bay State biotechnology companies with French ties include Genzyme Corp. (Nasdaq: GENZ) and Millipore Corp. (NYSE: MIL), according to French officials.

In addition, Soadco SL, an Andorran company which specializes in dental implants, recently announced plans to locate its U.S. headquarters and manufacturing in either Cambridge or Waltham. Once the manufacturing plant is complete, the company plans to add as many as 100 jobs, Soadco reported.

So, why are all of these international companies landing in Massachusetts?

Perhaps the strongest reason is the talent pool from the nearby universities, like MIT. “One of the most important factors to a company is the labor pool in the area and how easy will it be to build a strong team,” Bleyleben said.

“International firms want to be in an environment that creates research opportunities and where there is a vibrant life science community. Being in (Boston or Cambridge) provides them with opportunity,” she added.

Thomas J. Sommer, president of the Massachusetts Medical Device Industry Council (MassMEDIC), said international medical device companies want to set up camp in Massachusetts to be among influential peers in the industry. “They realize there is a medical device cluster here that they can draw on for research and capital,” Sommer said.

The aforementioned Creganna is just such company. So far, Massachusetts has been the right choice for Creganna — the company originally hoped to support 30 employees in its Marlborough manufacturing facility by the end of this year, but is on pace to have at least 50, Sword said. Part of the reason for the growth is that Creganna has increased shipments from the Massachusetts facility to overseas clients.

“The soft U.S. economy has definitely been part of the reason we have grown quickly here,” Sword said.

 Another foreign company, Spanish biotech Progenika BioPharma SA, which develops and manufactures novel DNAchips, opened its U.S. base in Cambridge in April, Progenika Inc., which will seek approval from the U.S. Food and Drug Administration to commercialize its diagnostic and prognostic products in the U.S.

Like Creganna, the main reasons Progenika chose Cambridge were its proximity to Europe and to nearby universities.

“We chose the East Coast for travel purposes, because it is easy to get back and forth from Europe, and there is a nice talent pool in the area. The company historically has worked with academic thought leaders in Europe, and there is a large number of key opinion leaders to draw upon in the Boston area,” said Joyce Samet, COO of Progenika’s Massachusetts base.

While foreign companies like Progenika have reasons to add a Boston-area location, the state also reaps some major benefits like job creation, revenue and diversification, Bleyleben said.

“The economy in the U.S. is softening, so diversifying our market is important. There are a lot of markets — China, India, and Latin America — that are seeing very attractive growth rates, so diversifying with companies based there will counteract issues (with U.S. companies).”

The state also adds to its stature in the life science community by building its network with international companies, Sommer said.

“We benefit by growing our cluster of medical device companies here, and by having international companies who can send word back to their countries about our well-developed medical device cluster,” Sommer said. “It creates opportunities on both ends.”


 

Bridget Botelho is a freelance writer in North Providence, R.I.