Does the Cambridge Innovation Center provide a glimpse into R.I.’s future?

INFORMATION EXCHANGE: Clients are seen at LabCentral. Young companies pay a reasonable, all-inclusive monthly fee to share common facilities and equipment – and often, ideas. / COURTESY LABCENTRAL, PAUL AVIS/AVIS STUDIO
INFORMATION EXCHANGE: Clients are seen at LabCentral. Young companies pay a reasonable, all-inclusive monthly fee to share common facilities and equipment – and often, ideas. / COURTESY LABCENTRAL, PAUL AVIS/AVIS STUDIO

In one room at the Cambridge Innovation Center in Massachusetts, a large table is shared by a half-dozen people, plugged into laptops and oblivious to passing visitors. In a connecting hallway, overstuffed couches attract workers who would rather sit in comfort.

Glass walls found in some areas allow people to see each other, even in suites with doors.

A shared kitchen (found on each of the six floors) is fully stocked with snacks, fresh fruit and coffee, and people chat casually. Like the kitchen of many homes, this is where most of the daily interactions among approximately 3,000 people begin, the nucleus of a bustling, tech-based innovation center that has attracted international attention.

Gov. Gina M. Raimondo, who visited the center last year and is trying to attract it, or one like it, to the Ocean State, remembers the energy. “It was a vibrant, bustling place where there was a job for everyone,” she said. “The biggest problem in Rhode Island is we’ve let our advanced industries decline. We need to bring them back. That’s what’s going on up there.”

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Raimondo, like other Rhode Island business and government leaders, wants to see an innovation center in the Interstate 195 redevelopment district. If it can work in and around Boston, the thinking goes, it can work locally with our own niche industries, such as brain science, medical technology and oceanography.

‘EXACTLY WHAT WE NEED’

Sixteen years ago, the innovation-based economy that Rhode Island hopes to replicate was a new concept in shared workspace. The idea that collaboration could lead to innovation, and empower young biomedical and tech companies, was the thinking that went into the privately held Cambridge Innovation Center.

The center started on a single floor of the 16-story building in Kendall Square it still occupies, beside the Massachusetts Institute of Technology, which owns the building. Young companies paid a reasonable, all-inclusive monthly fee to share common facilities and equipment. But more importantly, they came to share ideas and connections.

Since then, more than 2,000 companies have used the shared spaces. The facilities have expanded as well, fostering what its founders and staff refer to as an ecosystem of entrepreneurship.

The center is home to more than 750 client-companies this year, most of them with just two to three employees.

It has grown to include several affiliated sites, including a gathering hall in Boston’s Seaport District located among a swath of real estate along the waterfront that didn’t exist 20 years ago and now commands some of the highest commercial lease rates in the country.

And it has branched out across the country, opening in St. Louis, and potentially, Providence.

An initial $250 million bioscience development, jointly proposed by CV Properties LLC and Wexford Science & Technology, is being advanced for two parcels of the I-195 Redevelopment District, and will include an innovation center as part of its layout. The developers hope to attract the Cambridge Innovation Center. Wexford, which has a partnership with the center in St. Louis, approached CIC about entering the Providence district, according to CIC expansion lead Samantha Joseph.

By Providence standards, the Wexford-CV Properties project is massive. The first phase will include a research and development lab and office facilities, an innovation center, and restaurant and meeting facilities, as well as a hotel and housing. The initial phase would include 500,000 square feet, according to a purchase and sale agreement. Brown University has expressed interest in being a tenant. The developers are now in the midst of the standard, 90-day due diligence period.

Raimondo visited the CIC as governor, and has had follow-up conversations with its executives. If not the CIC specifically, she says, Rhode Island needs an innovation center. “That’s exactly what we need. The reason that’s there and is thriving is because it’s right near MIT and Harvard and Tufts and BU.”

Providence has its own strengths in potential partners, including Rhode Island School of Design – the top industrial design school in the country – and Johnson & Wales University, renowned for culinary and food-science innovation.

“They’re interested. We’re very interested,” Raimondo said, of the CIC. “This is what we have to do.”

For the Cambridge Innovation Center, a decision on whether to expand to the Providence site is in the early exploration stage, according to Joseph, given the status of the development. “The project needs to be further along before CIC would become deeply involved,” she said.

But the bioscience project, and surrounding city, have qualities that are attractive, she said.

“For us, the plus factors are great institutions that are investing a lot of money in research,” she said.

The CIC, which is expanding into what it calls “forward-thinking cities,” wants sites that provide at least 125,000 square feet, large enough to create the kind of environment that allows entrepreneurs to work and interact with each other.

Its locations in Greater Boston have grown over time, expanding with demand as the city’s bioscience and technology economy took off.

“We’re excited about the [Interstate] 195 commission [land] because it gives us an opportunity to build an ecosystem on one campus,” Joseph said. “Because Boston developed organically over several years, our shared office space, shared labs and civic innovation center are in different parts of the city. We do think there’s a lot of value in having them side by side.”

FOSTERING COLLABORATION

The CIC started across the street from MIT, in a traditional office space that was remade to accommodate startups. Founded in 1999 by entrepreneur and MIT lecturer Tim Rowe, who remains CEO, the innovation center is always dense with activity.

The leases are flexible, by the month, geared to young companies that have trouble predicting future needs. The menu of options includes different tiers for different needs. The entry-level point, a single place at an unassigned desk, costs $425 a month. Although the leases vary in terms of price, typically companies can pay up to $1,250.

Businesses can also choose a reserved space at an open desk, with secure storage, or among individual offices at the center, in varying sizes and configurations.

All of the clients have access to the same shared amenities, including fast wireless, secure deliveries, shower facilities, bike storage and a fully stocked kitchen. The building is always open to tenants, and they gain access with their own keycards. If people get worn out they can schedule a sleep break. Each floor has a dedicated nap room, complete with a couch and subdued lighting.

Anyone can eat from any kitchen among the floors. Special offerings on various floors – on a recent afternoon one was offering peppermint-flavored candies – tend to lure people from their home base onto other floors.

Just as they do at house parties, people tend to congregate in the kitchen. “We see the kitchen as the heart of the building,” Joseph said.

Collaboration is at the heart of the design. Office doors can be removed, as needed. Once a week, the nonprofit programming arm of the innovation center – Venture Café – hosts popular social events, including ones with speakers. Shared bulletin boards on a recent afternoon included invitations for women programmer get-togethers and other activities. Not all of the introductions are happenstance. As part of the lease, each client has a staff representative who can make introductions.

Networking within the building is substantial, Joseph said. Although the CIC does not release company names to the media, its promotional materials indicate that 28 percent of its tenants have been software, Web or mobile companies, another 15 percent in the life sciences and health fields, and 10 percent in financial services.

And the convergence of all those new ideas has attracted established companies as well.

Apple, Google, Facebook and Amazon, among the largest of the West Coast-based tech firms, are now all located in Cambridge, but initially had their offices at the Cambridge Innovation Center.

“When smart, talented people with great ideas come together in one space and collaborate, it allows them to build those companies, generally, faster and better,” Joseph said. “They have the opportunity to meet new potential co-founders. Perhaps they’ve been trying to solve a problem, and they run into somebody who has expertise in that area. They may be directed to find investment faster than they would otherwise.”

LABCENTRAL

A 15-minute walk away in Cambridge is the science-lab offshoot of the shared office space. LabCentral, a biological laboratory building, was founded in 2013 by Rowe, as well as Johannes Fruehauf and Peter Parker, who established their pharmaceutical startup at the CIC.

The idea came about after Fruehauf and Parker spent six months getting their own working lab in operating order, including appropriate permitting, a time frame and expense that could have been spent on research and development.

The basic idea was, there has to be a better way. “This shared environment has worked very successfully in a tech environment. Everyone thought it could not be done [in labs],” said spokeswoman Caroline Grossman.

Unlike CIC, LabCentral is operated as a nonprofit, a recognition that the expense of the equipment would never be recouped through rent, and a decision that opened up the operation to gifts and grants from sponsors that include major instrument and pharmaceutical companies, she said.

Here, the concept includes a competitive application process. The facility accepts only those companies that have raised less than $7.5 million in capital, or with 12-month earnings of less than $3 million. They cannot be direct competitors working on similar projects. Complementary research is fine.

Despite initial skepticism that scientists wouldn’t want to collaborate, or share information, the lab model has been successful in attracting companies, and in graduating them at much higher, more successful levels, according to Grossman.

Eight companies are named on its “alumni” wall, among them Unum Therapeutics, a biotech company developing a universal, antibody-directed cellular immunotherapy that in June 2015 raised $65 million in an early round of financing.

Another, NantKwest, is a cancer-drug manufacturer that raised $207 million in its initial public offering, according to Bloomberg News.

Less than three years after it opened, 28 bioscience startups are now housed in the facility, which received $5 million in state funds to cover startup costs.

LabCentral, like CIC, is densely populated. The success of the endeavor surprised even its founders, who initially expected it would take three years to fill. Instead, the labs were fully occupied within 10 months. It now has a waiting list.

Christiana Stamoulis, chief financial officer and head of corporate development for Unum Therapeutics, said the company moved to LabCentral when it had two employees, and stayed until it had about 15. It recently relocated to its own facility in Cambridge, and now employs 35 people.

The shared incubator space allowed the young company to spend most of its time and money on research and development, rather than equipment acquisition.

“Setting up a lab space, buying the equipment, making a capital investment, requires a certain size and it requires certain financial strength,” she said. “That’s not necessarily something that an early-stage biotech, when it starts, has. It enabled us to get access to a lab and equipment at a point when we could not afford to do it on our own.”

The work space, labs and state-of-the-art equipment, much of it donated by sponsor corporations, are made available at a fraction of the cost of a private lab. Companies housed at LabCentral pay $9,000 a month to start, according to Megan Keegan, a purchasing associate. Just as at CIC, all of the associated materials, lab equipment and services are included.

Why does it work? In science, sharing and collaboration happen too.

“Nobody thought this could happen in the life sciences,” Grossman said. “The first question I always got, from everyone, was … what about [intellectual property]?”

As it turned out, just as in shared office space, a laboratory designed to force people to bump into each other has resulted in more collaborations.

Stamoulis, whose company initially shared a lab space, recalls the atmosphere as collegial. “Interaction is great,” she said. “You are part of a community of early-stage companies. You have the same issues. And it’s a great, very dynamic environment.”

Like CIC, LabCentral provides opportunities for startups to grow into larger spaces. Unum Therapeutics eventually moved from its shared space to a dedicated lab within LabCentral as it grew.

INNOVATION ECONOMY

How does innovation happen? In some cases, it’s as simple as people with common interests eating lunch together, or working together on a solution to a problem.

Those kinds of interactions are more common when companies coexist in a single building, or in a specific section of a city.

Providence, in particular, already has innovative startups and shared work spaces. But the sites are scattered around the city, lacking the density of activity in either Cambridge or Boston’s Seaport District, or in other cities that have created what are sometimes referred to as “innovation centers.”

Following a six-month effort to research the state’s economy and potential clusters for economic development, The Brookings Institution recently determined that biomedical innovation, IT software and other Web-based analytics, as well as defense shipbuilding, could be significant drivers. All are part of the innovation economy, Brookings reported, and Rhode Island has a capacity for it through the investment of universities.

But the innovation community in the state is “atomized,” Brookings found, “and lacks the focal points, collaboration spaces and state-of-the-art innovation districts and neighborhoods that are needed to retain and attract talent.”

In a budget proposal for fiscal 2017 that followed the release of the report, Raimondo framed several requests around the Brookings recommendations.

Among other things, she is proposing $20 million in bond financing to support creation of one or more innovation districts in the state. The bond financing request would come in November.

This could carry the creation of an innovation district well beyond the Providence I-195 land, depending on what applications are made.

The purpose of an innovation district is to create a physical location where innovative companies can interact, according to Rhode Island Commerce Secretary Stefan Pryor. “Even in this age of social media and virtual communication, human beings like to congregate and collide, and communicate in person. The idea of a collision and collaboration space is one that has proven successful in other places. There is something about the ability to run into colleagues and talk about new notions. It generates intellectual energy.”

The competition for state seed money would open the entire state to hosting an innovation center, Pryor said, including the I-195 land.

The state will try to capitalize on investments being made by institutions, including a wave of innovation-related expansions by universities, including Brown, Johnson & Wales and the University of Rhode Island, which are all building new engineering schools.

“If we do it right, the $20 million in state money would turn into $100 million, because there would be lots of private investment,” Raimondo said. “We would set the broad parameters. This many jobs. This much private capital. This many corporate partners. Then they would get creative and put forward a proposal.”

The Cambridge Innovation Center offers a good example of what can be done, she said.

“We need to get our economy on this path. You go up there and it’s fantastic. It’s vibrant. It’s bustling,” she said. “It’s bursting at the seams with good jobs for all kinds of people. That’s what Rhode Islanders need.” •

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