As the face of New Haven’s downtown makes drastic strides toward improvement, so does the city’s historically blighted economy.

A city whose primary industry was once weapons manufacturing has now transformed itself into a bustling center for biotechnology, as New Haven and neighboring towns have become attractive and profitable options for many biotechnology startup firms. Dozens of biotech firms have recently cropped up in areas such as Science Park, located in the Newhallville neighborhood, and at the 500,000 square foot George Street Technology Center. Companies like Genaissance and Achillion top the list of successful firms that have been started in New Haven.

“The city came to understand its role as a potential leader in the biotech industry and has acted on that,” said Henry Fernandez, the city’s economic development administrator.

While Yale had always been a leader in scientific and medical research, it was only in the mid-1990s that the University allowed its research developments to make a profit in public markets, Fernandez said. By doing so, Yale has joined other leading research universities, such as Harvard University and the Massachusetts Institute of Technology, in working with their communities to create an environment conducive to cutting-edge research and entrepreneurship.

“What fuels economic development is research,” said Mike Morand, associate vice president of the Office of New Haven and State Affairs. “Under President Levin, Yale has taken scientific research and transformed it to a private sector to make new innovations and even profit.”

Yale’s recently upgraded commitment to the sciences and entrepreneurship has allowed many startup biotech companies to work in conjunction with the University’s top researchers and take advantage of Yale’s federal research endowment. Receiving approximately $300 million from the government annually, Yale is one of the top ten recipients of federal research funds.

“It all begins with Yale science,” said Bruce Alexander, Yale’s vice president for New Haven and state affairs. “We have preeminent faculty in the sciences and in the medical school who are doing cutting-edge research, and there are important commercial implications coming from this research to cure human diseases and change health care in the country.”

But it is not only Yale and its newfound commitment to science that has been critical in attracting biotech companies. In recent years, both the city and the University have taken steps to foster entrepreneurship.

Under the Office of Cooperative Research, many biotech firms have been created from scientific research done at Yale. Funding for laboratory space has come from the support of Gov. John Rowland, while the support of Mayor John DeStefano Jr. has allowed many companies the necessary city permits.

“The ingredients are all here in New Haven,” Alexander said. “We’ve built a group of city, state and school officials to hopefully create an industry that not only has the promise of transforming health care but also New Haven.”

The primary factors in Achillion’s decision to come to New Haven instead of Princeton, New Jersey were the high concentration of biotech and pharmaceutical companies in the area, as well as the lower cost of living, company spokeswoman Amy Enders said.

“New Haven is a very fertile ground for biotech companies right now, and there’s a huge talent pool and quick access to capital,” Enders said. “We’re getting on the map as a center for biotech expertise.”

Although the University has been successful in starting new biotech firms in the area, the ultimate goal is to keep the companies in New Haven long enough to have an economic impact in the city.

“We work very hard to give professors all the support they need,” Morand said. “And we’re also making every effort to keep the economic activity here in New Haven so the community also benefits from new jobs and more revenue.”

So far, biotechnology has proven to be an economic blessing for New Haven, as the relatively young industry has attracted $1.1 billion worth of private investment and venture capital. Biotech firms also employ approximately 1,300 area residents.

With such an auspicious start, many city officials expect biotechnology to replace manufacturing as New Haven’s primary industry and transform its economy. Some think the city’s downtown area will benefit greatly from the biotech expansion.

“I think it’s one of the things that’s really helping the redevelopment of downtown,” Fernandez said. “It brings in other law firms, architecture firms and banks. And the more people you attract, the more likely new restaurants and clubs will open up; all those things feed off each other.”

While New Haven may not yet rival other startup havens such as Silicon Valley or Cambridge, it appears to be well on its way.