VideoIn the late 1970s, still the early years for Sophia Antipolis — France's first "technopolis," located near Nice on the Côte d'Azur — the science park's founder, Pierre Laffitte, asked a top official of Chase Manhattan Bank in Chicago if he knew of any companies that might be interested in setting up their research and development centers there. The banker directed Laffitte to a pharmaceuticals company called GD Searle.
Laffitte, a senator for the Alpes-Maritimes region since 1985, managed to persuade its then CEO, former U.S. defense secretary Donald Rumsfeld, who already had a hardnut reputation, that Sophia Antipolis was a cost-effective and strategically attractive place for Searle's R&D, which had achieved fame for developing the first oral contraceptive, Dramamine for motion sickness and NutraSweet, the controversial artificial sweetener. Searle was sold in 1985 to Monsanto, earning Rumsfeld a personal fortune reported to be $12 million, while the firm's Sophia Antipolis facility helped build a reputation for the fledgling science park as a world-class centre of research in life sciences.
Thirty years on, Sophia Antipolis vies with Cambridge Science Park, which was developed on land owned by the U.K.'s Cambridge University, as Europe's answer to California's Silicon Valley, the technology world's Mecca.
Laffitte says the initial dream was audacious. "We had this idea of creating a Silicon Valley, though we only had sun and an international airport," he recalls.
But just as Silicon Valley's self-nurturing culture was built on early successes like Hewlett-Packard, early winners at Sophia Antipolis have had a snowball effect. "It's become easier now to win R&D business for Sophia Antipolis," as the international scientific culture has become entrenched, Laffitte says. "Already there are 30,000 people from 60 countries with some kind of scientific or management capabilities, and in the bars and bistros you mostly hear people speaking English." In a reversal of the Silicon Valley phenomenon, the industrial research that has built up in Sophia Antipolis has filtered through to the University of Nice to make it a world leader in areas such as WiFi technology.
Like a Moth
One company drawn to Sophia Antipolis in the 1980s because of this culture was Amadeus, a €3 billion internet-based travel company that is now its sector's top R&D spender in Europe, according to the European Commission's annual scorecard.
"The decision where to locate was driven more by cultural factors and the kind of company we wanted to create than by financials," says Philippe Chérèque, senior vice president of corporate strategy at Amadeus, which was bought in 2005 by private equity firms Cinven and BC Partners for €4.3 billion.
"Originally, when Amadeus was set up [in 1987, as the global distribution system for Air France, Lufthansa, Iberia and SAS], there was a clear intention that the company should be truly multinational," he says. "This was hard-wired into the original structure by having the operational headquarters in Spain, the development centre in France and the data centre in Germany. Once we had decided to spread the main locations over three countries, France's strong technical educational system made it a good candidate for the development centre [and] Sophia Antipolis — France's Silicon Valley — was the obvious choice because it offered the right infrastructure, environment and a pool of highly skilled potential employees working in the area."
Amadeus employs more than 2,500 people in Sophia Antipolis and spends nearly €300m annually on R&D, which rose by almost 20 percent in 2005. Apart from its direct spending, it also attracts firms that work in related technologies and want to be close to large customers.
The economic contribution per head of R&D centers such as Sophia Antipolis is vastly disproportionate to that of manufacturing or service centers. So it's no wonder that competition has grown exponentially, within countries as well as between them, to win R&D-focused business. In France, for example, the number of local authorities marketing themselves as "technology clusters" has mushroomed over the past two years to nearly 70.
Similarly, in the U.K., the traditional rivalries between the regional development authorities of the constituent nations — England, Scotland, Wales and Northern Ireland — now also include nine regional-development authorities within England itself.
Meanwhile, countries that used to be fairly sleepy about attracting R&D investment from multinationals have become more aggressive, says Roel Spee, co-head of IBM's Plant Location International (PLI), which advises IBM and other companies on where to set up shop and monitors R&D and manufacturing FDI projects. Local German governments, for example, traditionally paid very little attention to this type of investment, largely because the country's domestic firms were already so strong in R&D. But this is changing, partly because the economically struggling former east German states have been marketing themselves more aggressively. And while the U.K. and France have the lion's share of R&D inward investment in Europe, former Soviet-bloc east European countries have been growing more quickly.
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