Link back to:
Information Technology Landscape in Nations

Location Issues of Technology Parks: Location can be a significant factor in a technology park’s success. We look at the typical factors related to location and what factors a company is looking for when making a decision. A list of criteria is presented in order of preference.

By our definition of a technology park, a site must first be located near a university center engaged in research activities, which ensures an active research and development component to the park.  The university presence results in a quality workforce that is engaged in cross-learning via proximity to others with similar interests, which is critical to any research and development activity.

The myriad of factors that are considered when locating a technology park include:

Government Policies Intellectual Property Labor Force Price Availability Quality Infrastructure Telecommunications Transportation/roads Public works Energy Incentives Resources for production Tax and other incentives Education Quality of schools Availability of higher education Programs/degrees offered by schools Community - Where would employees like to live? Affordable housing Public transportation Proximity to higher education, other people in field Diversity Amount of crime Quality of health services Cost of living

One location cannot offer the optimum situation in all of the factors, so clearly the goal should  be to locate a technology park in an area that can offer as many of the factors as possible or a pre-determined strategic mix. 

For example, a technology park may be strong in infrastructure and labor force, but it could also be located in an area that is costly to live in.  This is the current case of Silicon Valley.  The San Francisco - San Jose region of California has become one of the most cost inflated regions in the U.S.  Land is at a premium and the cost of living is very high.  However, Silicon Valley continues to benefit from the quality of higher education in the area and the synergies that are created by proximity among the high-tech industries already located there.

Owners of a technology park can influence factors to encourage a company to locate in a technology park.  These include government policies for intellectual property, quality of education, well-developed infrastructure, and significant incentives. However, the labor pool and the community are much more difficult to change and take time to develop. More often, a park is developed where the labor pool and quality education are already present.  This is evident in the United States by the two largest (and arguably most successful technology parks) of Stanford Research Park and Research Triangle Park. Another example is Bangalore’s (India) development as a software export region as a result of a trained, talented, and cheap(er) labor force.

Finding a Site
Having too many factors create a difficult task for finding a right site for a technology park, but the most important question to ask is: What are companies looking for when they make a location decision?

A recent article by Chen May Yee in the Wall Street Journal suggests the critical factors that are considered by businesses (in order of importance):

Essential Criteria

1. Access to a skilled and qualified workforce
2. Proximity to world-class research institutions
3. An attractive quality of life
4. Access to venture capital

Important Criteria

5. Reasonable cost of doing business
6. An established technology presence
7. Available bandwidth and adequate infrastructure
8. Favorable business climate and regulatory environment

Desirable Criteria

9. Presence of suppliers and partners
10. Availability of community incentives

The author also suggests that the most successful countries in the high-tech industry already have an educated workforce, at least some existing high-tech industry, and a low-corporate income tax rate.