Pharmaceutical company Pfizer left a big gap when it decided to move out of Ann Arbor, Michigan, with the loss of hundreds of jobs. But the town responded by setting up a science incubator and planning to diversify.

Local economic development organization SPARK and the University of Michigan, Ann Arbor — with $1 million from the state — have assumed Pfizer's lease on 3,150 square metres of lab space and are turning it into a science and technology incubator. SPARK is renting a third of the space to biotech firms, with OncoImmune of Ohio, SensiGen of Ann Arbor and German company Genomatix Software as the first three tenants. University of Michigan researchers working on spin-off companies will occupy the remainder of the space.

“We are not here crying into our beer because of this,” says Mike Finney, president and chief executive of SPARK. Instead, he wants to use Pfizer's move out of Michigan — caused partly by restructuring after buying Pharmacia — as a way to diversify the state's economy. Rather than rely on biopharmaceuticals, SPARK has courted high-tech companies in other sectors. Google will eventually hire 1,000 people for its Ann Arbor area operation. Spanish aerospace company Aeronova plans to hire 600 engineers at an Ann Arbor site. And Toyota and Hyundai are developing technical centres.

Another 186,000 square metres of former Pfizer lab space will be empty by next August, and another 2,000 jobs lost. According to SPARK officials, some are relocating to other facilities, some are retiring, and about 600 hope to stay and find work.

The loss of Pfizer and the shrinking of the Detroit automobile industry have been hard for Michigan, which has the highest unemployment in the United States. Finding tenants to fill 186,000 square metres will be a big challenge. “That's a lot of space,” says Steve Forrest, University of Michigan vice-president for research.

SPARK is working with 19 groups of Pfizer employees who want to launch their own companies, and Michigan has put up $8.5 million in start-up funds. Forrest says that some University of Michigan start-ups have hired former Pfizer employees and expects that more companies will emerge once Pfizer has left. The incubator will allow university companies and private biotechs to interact and share resources.

“We're very strongly in favour of not just funding our own companies, but building up infrastructure for others,” Forrest says.