Location decisions of high-technology firms: A case study

Forty-six firms in the Ann Arbor, Michigan area were surveyed to determine factors affecting their location decisions. These firms spanned the range of “high-technology,” including biomedical, computers, integrated manufacturing, optics, remote sensing, and others. The firms were generally small, rapidly growing, new companies with a large percentage of their personnel devoted to research and development activities. The majority of the firms were founded in the area, rather than attracted from the outside; most did not consider sites outside of the Ann Arbor area when choosing their current site. According to the survey, the perceived strengths of the Ann Arbor area are its universities, quality of life, transportation networks, and work force. On the negative side, state and local taxes are seen as the area's greatest weaknesses. The area's lack of venture capital, certain local government regulations, and the perceived unavailability of certain support services and facilities are also troublesome. This set of positive and negative factors demonstrates how high-technology firms are different from traditional manufacturing firms in their location decisions. Consequently, any economic development strategies generated with the goal of developing high-technology firms in mind must be carefully tailored to the specific characteristics and needs of those firms.