The Biotech Century
The biosciences industries are booming - and more locations than ever are sharing the wealth.
Steve Stackhouse-Kaelble (Apr/May 07)

It's hardly surprising that everyone wants a piece of the biosciences pie. Many economic observers have declared that we are at the beginning of the "Bio Century," an era when prosperity will smile broadly upon the people, companies, communities, and states that embrace the biosciences and bring new technologies and products to market.

What may surprise some, though, is that practically every region already does have a piece of the biosciences pie. The most recent data indicate that some 1.2 million Americans bring home paychecks from biosciences jobs - and they live in all 50 states, the District of Columbia, and Puerto Rico. The pharmaceutical, biotechnology, and medical device industries - and other biosciences variants - are geographically dispersed quite widely, according to Growing the Nation's Biotech Sector, a major study released last year that was prepared for the Biotechnology Industry Organization (BIO) by Battelle Technology Partnership Practice and SSTI.

Needless to say, just because biosciences employment is spread all across the country doesn't mean it is spread equally. As the report observes, significant clusters have developed. Just as with other industries, bioscience clusters tend to form where there are strong research and development operations, where the talent pool is deep, and where development capital is plentiful, according to Erin Jones, director of membership and meetings for the Medical Device Manufacturing Association. Ultimately, she says, established clusters develop into snowballs, growing ever bigger as more wealth seekers hop onboard.

The climate is fiercely competitive, and why wouldn't it be? Industry statistics indicate that the average annual wage for these jobs was $65,775 in 2004, the most recent year for which data is available; that's about $26,000 more than the annual private-sector annual wage. What's more, real wages (after adjusting for inflation) grew 6.4 percent in three years, more than quadrupling the growth of wages on the whole. "There's strong growth projected for at least the next five years," says Jones. "The outlook is very good."

Given that, communities and states everywhere are beefing up their research capabilities, hoping to launch new biosciences firms and attract existing ones. "There's an infinite wellspring of knowledge to be acquired," says James Greenwood, chief executive of BIO. Once communities successfully attract researchers and companies, he says, "you're off to the races. It's just win, win, win."

American Biosciences Clusters
The Battelle study conducted for BIO found that 11 states and Puerto Rico enjoy both large and specialized employment bases in at least one of the four biosciences sectors - drugs and pharmaceuticals; medical devices; agricultural feedstock and chemicals; and research, testing, and medical laboratories. That means their employment in the sector is at least 5 percent of the national total, and they register a high location quotient for that sector.

• California: The report found direct biosciences employment of about 190,000 here, mostly in the medical devices and research and testing sectors. Battelle counted $3.1 billion worth of life sciences research expenditures at California institutions. The state continues to grow new biosciences-related R&D operations; among the latest are the Mission Bay headquarters of the Institute for Quantitative Biomedical Research and a BioScience Center at San Diego State University. And the sector keeps on growing, according to a study by the California Healthcare Institute and PricewaterhouseCoopers. While this study's definitions and criteria differ slightly from the BIO report, it counts biomedical employment of nearly 260,000, making it second only to computer consulting and programming among California industries. California is now home to more than 2,700 biomedical companies and more than 100 universities and private nonprofit research organizations engaged in biomedical research, development, and manufacturing.

• Illinois: Some 57,000 people in Illinois make a living in biosciences jobs, and the state is among the leaders in agricultural feedstock and chemicals as well as drugs and pharmaceuticals. Annual university R&D expenditures linked to life sciences totaled $944 million at last count, and the state is growing its research capacity with new life sciences facilities at the University of Illinois in Urbana-Champaign and Chicago, plus biomedical research facilities at Northwestern and Loyola Universities and the Illinois Institute of Technology. On the way is the University of Chicago's Howard T. Ricketts Regional Biocontainment Laboratory at the Argonne National Laboratory.

• Indiana: Biosciences payrolls support 48,000 Hoosiers, according to BIO. The state is a leader in drugs and pharmaceuticals, among other sectors. Biosciences research totaled $378 million. Among other developments, significant investments are being made into university-based life sciences research facilities in Indianapolis, Bloomington, and West Lafayette; and Indiana's Certified Technology Park program is creating new business incubator space across the state.

• Iowa: This state's biosciences industries employ about 12,000, with a particularly solid position in agricultural feedstock and chemicals. Some two-thirds of its university research expenditures, or about $335 million, are in the life sciences. The University of Iowa is involved in a growing number of life sciences initiatives, including its Center for Biocatalysis and Bioprocessing, human nutrition studies and proteomics research. Iowa State University also has many irons in the fire, from the Plant Sciences Institute to the Iowa Biologics Facility, along with solid commercialization programs.

• Massachusetts: Strong in both medical devices and research and testing, Massachusetts has biosciences employment totaling about 53,000 and university life sciences R&D expenditures approaching $1 billion. The state's highly regarded research universities are extensively involved in development and are solidly committed to commercialization, with major tech transfer operations at University of Massachusetts, Massachusetts Institute of Technology, and Boston University, among others. Notable facilities include the Massachusetts Biotechnology Research Park, adjacent to the UMass Medical Center. New developments include a $100 million investment at AstraZeneca's R&D center near Boston, to boost work in infection and continue the company's growth in cancer research. Life sciences developments continue to sprout along a corridor that is creeping westward from the Boston area toward the central part of the state. In the past five years, half of the 100 largest biotech firms in Massachusetts have located between Route 128 and Worcester.

• Minnesota: This state has long been known for top-flight medical care, courtesy of the Mayo Clinic in Rochester. Its biosciences employment of 33,000 is dominated by the medical devices sector, in which it ranks second only to California. About $375 million is spent on R&D at the state's universities annually, and the Bioscience Zone Program aims to spur R&D activity near the University of Minnesota's Minneapolis and St. Paul campuses, within a life sciences corridor in southern Minneapolis and near the Mayo Clinic.

• New Jersey: Eager to lead the way toward lucrative human stem-cell research, New Jersey was first to make state grants in this area and arranged an agreement between Rutgers University and the University of Medicine and Dentistry in New Jersey to create the New Jersey Stem Cell Institute. Some $367 million of life sciences research has been tallied at New Jersey institutions. The biosciences industry supports more than 82,000 jobs, half in New Jersey's top-ranking drug and pharmaceutical sector, and many more in research, testing, and medical laboratories.

• North Carolina: Talk about cutting-edge research and the conversation will invariably include activities at Research Triangle Park, which has helped the state become a leading employer in drugs and pharmaceuticals. Biosciences employment in North Carolina totaled 48,000 at last count, and life sciences research was just over $1 billion. The state was an early leader in biosciences, launching the North Carolina Biotechnology Center in the 1980s, and significant investments continue today in such places as Charlotte, Chapel Hill, Greenville, Raleigh, and Winston-Salem. Opting for a location in Research Triangle Park last year was Stiefel Laboratories, a pharmaceutical company specializing in dermatology that picked the area for its global R&D headquarters. Also on the way is The Hamner Institutes for Health Sciences, an independent life sciences campus.

• Ohio: Agricultural feedstock and chemicals lands Ohio on BIO's list of biosciences hot spots, accounting for about a fifth of the state's 32,000 biosciences workers. Ohio is a hotbed for life sciences research, tallying $736 million in university life sciences R&D at last count. Ohio's Third Frontier project aims to fuel innovation and power the economy, and bioscience is one of five focus areas. Several programs provide support and incubator space, and research parks can be found in Columbus, Cincinnati, and Cleveland.

• Pennsylvania: The Keystone State has long worked to boost innovation and bring it to market, through such efforts as the Keystone Innovation Zone program and the Ben Franklin Technology Development Authority. Pennsylvania is busy developing more capacity across the state, including at the University of Pittsburgh, the University of Pennsylvania, and Penn State. Combined, the biosciences sectors employ some 73,000 Pennsylvanians, ranking the state high in both the drugs and pharmaceuticals and research, testing, and medical laboratories sectors. Life sciences R&D totaling $1.2 billion makes up more than half of the state's university R&D expenditures.

• Puerto Rico: This commonwealth has a 40-year track record for pharmaceutical manufacturing, and in that sector its employment is second only to Pennsylvania. Total biosciences employment was 45,000 last time BIO compiled statistics, and nearly half of those jobs were in drugs and pharmaceuticals. Yet while it got its start as a manufacturing outpost, Puerto Rico is building its credentials for R&D as well, with activities including a new Molecular Sciences Complex with connections to the University of Puerto Rico. A nearby development is the Biotechnology Center for Research and Training in BioProcesses. Among many headlines is the recent announcement that filtration and purification manufacturer Pall Corporation is investing $50 million in Puerto Rican facilities and equipment.

• Texas: The Lone Star State is the leader in the agricultural feedstock and chemicals sector, and its strong presence in other biosciences sectors puts overall employment at about 56,000. Expect plenty of growth in the future, as the state is in the midst of significant efforts to build the industry further. Bioscience is one of six clusters targeted in Texas economic development efforts, and the Texas Life Science Center of Innovation and Commercialization will help bring products to market. Biosciences research facilities have been added or expanded across the University of Texas system, at Texas A&M, and elsewhere. The hope is to capitalize upon and grow the state's life sciences R&D, which already totaled $1.9 billion annually at last tally.

Don't expect an industry this hot to stand still for long. Intense efforts are being made to create new hot spots, and many regions are real up-and-comers. In medical devices, for example, keep a close eye on such places as Tennessee and Texas, says Jones, along with Georgia, North Carolina, and the Seattle area.

Here is a small sampling of the activity under way designed to affect the biosciences landscape:
• The Memphis Bioworks Foundation is building the University of Tennessee-Baptist Research Park. Its first new building is a regional biocontainment facility.
• The Georgia Research Alliance has created 18 centers of research excellence, intended to attract world-class researchers, outside investment and industry involvement. An Ernst & Young study ranked Georgia seventh in the number of biotechnology companies either relocating to or starting in the state.
• In Colorado, the Fitzsimons Redevelopment Authority is turning an old military base into what's being called "a square mile of life sciences." The Colorado Bioscience Park Aurora is adjacent to the University of Colorado Health Sciences Center and Hospital Complex. Colorado research institutions also have begun reaping the rewards of recent legislation allocating additional state funds for bioscience research.

Global Opportunities
The life sciences hold just as much appeal outside the United States as within, and activity is just as feverish. To the north, it's huge business in Canada. For example, Ontario boasts the continent's third-largest concentration of biotechnology firms, along with operations for many of the world's biggest manufacturers of pharmaceuticals and medical devices. Pharmaceutical employment tops 16,000, while the medical device workforce is more than 22,000.

The life sciences are not immune to the market forces that drive other kinds of manufacturing to markets less costly than America, according to Jones. Some manufacturing has migrated to Mexico, along with such places as Singapore and China. One study suggests that China's $20 billion pharmaceutical business will enjoy double-digit growth at least through 2010.

The Indian pharmaceutical industry is reported to be growing at a rate of nearly 9 percent annually. Low costs and impressive infrastructure are attracting development there, according to Barath Shankar Subramanian, a research analyst with Frost & Sullivan.

In Europe, Italy has a long history of both research and manufacturing in life sciences. Most of the world's biggest pharmaceutical names are among the 400 drug and biotech companies operating there and spending more than €1 billion on R&D. Germany, France, the Netherlands, Sweden, and Denmark are also biotech leaders. Among the many other European examples, North England has also emerged as a significant cluster of biotechnology/pharmaceutical/medical device development.

Also, says Subramanian, Eastern Europe appears to be on the way up. "It's still at an early stage, but it may emerge as one of the hot spots," he says. Pharmaceutical companies from elsewhere are eyeing acquisitions in such places as Romania, and Asian firms see Eastern Europe as a gateway through which they might gain access to the bigger Western European market, he says.

Subramanian sounds one cautionary note, though: Many blockbuster drugs will be coming off patent and may be hard for pharmaceutical giants to replace. That means manufacturers of generics stand to enjoy significant gains at Big Pharma's expense. On the other hand, there appear to be strong opportunities for smaller, specialty pharmaceutical companies with more focused therapeutic niches.

That said, biosciences opportunity as a whole appears to be sky-high. It's not all that surprising, really, given that people typically value good health above just about everything else, BIO chief Greenwood told those at a recent industry gathering: "There is nothing that we, as people, care about that's more important to us than our health and the health of our loved ones. We will pay to avoid that pain and suffering."

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