Chapel Hill is home to one of the nation’s leading research universities. One might think that it would also be home to a covey of high- technology companies that either “spin out” from the university or simply want to be near an academic center. Alas that is not the case.
So why is it that there are so few biotechnology, information technology, or other high-tech businesses in our town? It’s not because of a lack of possibilities. UNC has spun out approximately 300 start-up companies over the last couple of decades. However, once these companies begin to be successful and emerge from on-campus or downtown UNC “incubators” they are forced to leave town because no suitable facilities are available.
Many of the spin-out companies are quite small, but others are very substantial. An early UNC start up was Quintiles; it now has thousands of employees and is worth billions. A much more recent example is Bamboo Therapeutics, a UNC spin out that was just bought by Pfizer pharmaceuticals for about $150 million. High-tech companies like these provide good jobs. They also really help the tax base since they pay far more in taxes than they consume in services. But Chapel Hill has not seen fit to pursue these sorts of businesses.
Other towns have taken a different approach. Boulder, Colorado, and Ann Arbor, Michigan, are two university towns somewhat comparable to Chapel Hill. Except that they have done a much better job of attracting and retaining high-tech business and now have dozens of companies and thousands of jobs in that sector.
On a much larger scale Cambridge, Massachusetts, has built on the intellectual horsepower of Harvard and MIT. Its Kendall Square area is now home to approximately 600 small high-tech companies, as well as several major IT and “big Pharma” companies, with total investment reaching many billions of dollars.
However, you don’t need to travel to Boulder or Boston to see successful examples of high technology development. Next door in Durham the American Underground is doing a pretty good job with that. Even more impressive is the Wake Forest Innovation Quarter that has converted the old tobacco factories in Winston-Salem into a gleaming new high-tech center.
How do these high-tech clusters come about? The answer is that it takes a lot of foresight, planning and effort. At first glance you might think that if you just build a few labs and offices things would take care of themselves. Not so. Developing a modern innovation district is more than just labs. It also involves housing, amenities such as restaurants, entertainment and retail, and even the arts, all planned in an integrated manner. Clearly this requires vision, leadership and close cooperation between the university, the municipality, and developers. Apparently that commodity is sadly lacking in Chapel Hill.
To be sure, over the last few years UNC has placed a premium on entrepreneurship and many services are available to assist faculty and students who seek to engage with the commercial sector. But that ends at the “incubator” stage. Until very recently there has been little coordination between the university, developers, and the local government on this matter. Thus there is a dire need for commercial space, particularly “wet-lab” space, suitable for high-tech companies to pursue their research and development strategies.
In the absence of such facilities within town, growing high-tech companies are forced to re-locate to Wake or Durham counties or even out of state. This is really sad because Chapel Hill already has many of the features needed for a contemporary high-tech focus, while places like Winston-Salem had to build from scratch. Chapel Hill has the amenities that would be attractive to high-technology businesses and their sophisticated employees. We just need the physical space.
The vision of the real estate development community in Chapel Hill seems to extend no further than the next high-end condo or apartment development. Perhaps on their recent visit to Boulder local business and civic leaders developed a greater appreciation of the value of commercial research and development facilities to the health of a university city.
Today, instead of being a dynamic high-tech center, Chapel Hill is in danger of becoming a bedroom community. The owners and employees of the multiple companies that spin out of UNC work, shop and pay their business taxes elsewhere, to the benefit of other communities, and then commute home to Chapel Hill and complain about the high residential property taxes. This has got to change.