The Rise of Secondary Life Sciences Markets: Why Companies Are Looking Beyond Boston and San Diego

Secondary Life Sciences Markets Reshape Site Selection

Secondary life sciences markets are reshaping how pharmaceutical, biotechnology, medical device, and bio-manufacturing companies choose where to grow. For decades, location decisions were fairly predictable — companies needing world-class scientific talent, venture capital, major research institutions, and an established ecosystem almost always put Boston-Cambridge, the San Francisco Bay Area, and San Diego on the shortlist.

Today, that equation is changing. The shift is not being driven by incentives alone. It is being driven by talent availability, operating costs, speed-to-market considerations, facility availability, and shareholder expectations. [savills.com], [cushmanwakefield.com]

For life sciences executives, the question is no longer whether secondary markets can compete. The question is whether traditional markets will continue to justify their premium costs.

Why the Industry Is Expanding Beyond Traditional Clusters

Traditional life sciences hubs remain the industry’s innovation leaders. Boston-Cambridge, the Bay Area, and San Diego continue to dominate venture capital investment, research activity, and scientific talent concentrations. However, those advantages come with increasing challenges including higher occupancy costs, labor competition, congestion, and facility constraints. [cbre.com], [savills.com]

As companies seek to improve capital efficiency, many are finding that emerging markets offer a compelling combination of:

• Lower operating costs
• Strong university partnerships
• Expanding talent pipelines
• Available land for growth
• Reduced labor competition
• Faster development opportunities
• Significant biomanufacturing capacity

At the same time, life sciences companies are under pressure to improve productivity and capital deployment while maintaining innovation. As a result, executives are increasingly willing to separate manufacturing, research, and administrative functions across multiple markets rather than concentrating everything in a single high-cost location. [gbreports.com], [savills.com]

The New Model: Innovation in Primary Markets, Growth in Secondary Markets

Many life sciences organizations are adopting a hub-and-spoke approach. Under this model:

• Core research may remain in Boston or San Francisco.
• Manufacturing may locate in North Carolina, Indiana, or Texas.
• Clinical operations may be placed near major healthcare systems.
• Back-office functions may be distributed to lower-cost markets.

This strategy allows companies to maintain access to premier research ecosystems while significantly reducing operational costs. [lifesciencewa.org], [jll.com]

For executives under pressure to increase returns on invested capital, the strategy is increasingly attractive.

Raleigh-Durham: The Poster Child for Secondary Market Success

No emerging life sciences market has attracted more attention than Raleigh-Durham. The Research Triangle combines several characteristics executives seek:

• Duke University
• University of North Carolina-Chapel Hill
• North Carolina State University
• Research Triangle Park
• Deep pharmaceutical manufacturing expertise
• Competitive operating costs compared to Boston and California

According to CBRE, more than 40,000 people work in the region’s life sciences industry, including more than 13,000 life sciences research and development professionals. Between 2019 and 2024, Raleigh-Durham companies secured approximately $4.4 billion in venture capital funding, while organizations in the region received nearly $1.6 billion in NIH funding during fiscal year 2024. [cbre.com]

The region has also become a national leader in bio-manufacturing investment, attracting major projects from companies including Eli Lilly, Amgen, FUJIFILM Diosynth, Biogen, Novo Nordisk, and Novartis. [cbre.com], [capitalana…ciates.com]

The lesson for executives is clear: an established ecosystem no longer requires a Boston zip code.

Indianapolis Is Quietly Becoming a Life Sciences Contender

Many executives are surprised to learn that Indianapolis is increasingly recognized as an emerging life sciences market. Cushman & Wakefield now includes Indianapolis among its emerging life sciences markets, alongside cities such as Atlanta, Austin, Dallas-Fort Worth, Phoenix, and Salt Lake City. [cushmanwakefield.com]

Indianapolis benefits from:

• Eli Lilly’s historic presence
• Strong pharmaceutical manufacturing expertise
• Competitive labor and operating costs
• Central U.S. logistics advantages
• Significant advanced manufacturing capabilities

For companies focused on pharmaceutical production, biologics, medical devices, and supply chain optimization, Indianapolis offers many of the characteristics found in larger markets but often at a significantly lower cost structure. [cushmanwakefield.com]

Nashville, Atlanta and Dallas Are Attracting Growing Attention

Several southern markets are building momentum due to workforce growth and university-based research assets. CBRE identified Nashville, Atlanta, and Dallas-Fort Worth as standout emerging life sciences markets because of their talent growth, NIH funding levels, and expanding research ecosystems. [cbre.com]

Atlanta offers:

• One of America’s fastest-growing life sciences labor pools
• Significant NIH funding
• Emory University
• Georgia Tech
• Strong research employment growth

Nashville benefits from:

• Vanderbilt University
• Strong NIH funding levels
• Rapid life sciences R&D employment growth

Dallas-Fort Worth combines:

• Large and growing workforce
• Expanding venture capital investment
• Major medical research institutions
• Strong transportation infrastructure

These markets appeal to companies seeking growth opportunities without the cost burdens associated with more mature coastal clusters. [cbre.com]

Talent Is the Real Driver

Many executives assume incentives are the primary reason companies choose emerging markets. In reality, talent availability is often the deciding factor.

CBRE’s Life Sciences Talent Trends analysis found that numerous smaller university-anchored clusters now support significant life sciences activity beyond traditional hubs. Markets such as Columbus, Madison, Pittsburgh, Salt Lake City, and Greenville offer specialized talent pools that are becoming increasingly attractive to employers. [cbre.com]

Executives are increasingly asking:

• Can we hire 300 people in three years?
• Can we recruit scientists who can actually afford housing?
• Can we retain employees long term?
• Can local universities supply future talent?

Those questions often point toward secondary markets. [cbre.com].

Cost Is Becoming a Strategic Advantage

The economics are difficult to ignore. Savills notes that high rents in traditional hubs such as Boston-Cambridge, the Bay Area, and San Diego are pushing companies toward lower-cost markets that still offer strong talent, university partnerships, and expansion opportunities. [savills.com]

Meanwhile, JLL reports that many companies are increasingly selective regarding where they invest capital, particularly given current funding pressures and heightened scrutiny of facility investments. [lifesciencewa.org], [jll.com]

For public companies, private equity-backed firms, and venture-funded organizations alike, lower operating costs can directly improve project economics and enterprise value.

What This Means for Site Selection Strategy

The rise of secondary markets does not signal the decline of Boston, San Francisco, or San Diego. Instead, it reflects a more sophisticated approach to growth. The companies winning in today’s environment are evaluating locations based on:

• Talent availability
• Workforce scalability
• University partnerships
• Biomanufacturing readiness
• Utility infrastructure
• Speed to occupancy
• Supply chain access
• Total operating costs
• Long-term expansion potential

Only after those factors are understood should incentives enter the discussion.

The Bottom Line

The rise of secondary life sciences markets represents one of the most significant location strategy shifts of the past decade. Companies are discovering they can achieve many of the advantages historically associated with major clusters while reducing costs, expanding talent access, and increasing operational flexibility. [cushmanwakefield.com], [savills.com], [cbre.com]

For life sciences executors — for life sciences executives, the most important question may no longer be “Should we be in Boston?” Instead, it may be: Which emerging market gives us the best combination of talent, speed, scalability, and long-term value?

As this article demonstrates, the shift toward secondary life sciences markets is about much more than cost savings. It is about gaining access to talent, expanding manufacturing capacity, improving speed-to-market, reducing operational risk, and creating long-term enterprise value.

The companies that benefit most from this shift are those that combine data-driven site selection with a competitive incentives strategy before narrowing their list of locations.

If your organization is evaluating a capital investment, facility expansion, manufacturing operation, R&D center, or corporate relocation, don’t assume the market receiving the most headlines is the market that will deliver the best outcome.

Connect with us to discuss your project. We help life sciences companies identify optimal locations, benchmark competing markets, and negotiate incentive packages that often exceed initial offers while supporting long-term business objectives.

The next breakthrough for your company may not come from the lab. It may come from the location strategy behind it.