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Regional Report: Bioscience and Energy-Efficiency Repair Automotive's Crash in Midwest

The automotive sector's crash brought hard times for some Midwestern states, but the region sees new life in the biosciences and energy-efficient vehicles.

June/July 10
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Alternative energy is a strong vehicle for Midwest economic developers. According to Greg Main, CEO of MEDC, six battery cell manufacturing plants are under development in Michigan: Johnson Controls-Saft in Holland, LG Chem's Compact Power in Holland, Dow Kokam in Midland, A123Systems in Livonia, Xtreme Power in Wixom, and fortu PowerCell in Muskegon. A five-year, 75.26-acre Renaissance Zone in Romulus, Michigan will house A123 Systems' lithium-ion battery manufacturing facility, expected to employ 370 people. MEDC awarded the firm $25.2 million and $100 million in battery cell state tax credits. A123 chose Michigan for its cooperative and supportive business climate, labor and engineering capabilities, and access for facilitating projects, said David Vieau, president and CEO of the Massachusetts-based company.

"Our nation is coming out of what has been the worst economic time since the Great Depression," says John Dipko, communications director for the Wisconsin Department of Workforce Development. Wisconsin added 16,400 jobs in April, the largest one-month jump in more than 14 years. Governor Jim Doyle's economy-building and job-creating incentives include the CORE Jobs Act to strengthen successful programs for manufacturing, research and development, and worker training; expansion of the Enterprise Zone program; and creation of the Wisconsin Green to Gold Fund to help manufacturers reduce energy costs and create and retain jobs. Wisconsin has a lower unemployment rate than all other manufacturing-intensive Midwest states, Dipko says. In 2009 Wisconsin had the highest national percentage of its job base in manufacturing, followed by Indiana.

Biotech's Surge
Besides manufacturing and alternative energy, biotechnology is also growing. Ohio has more than 775 bioscience-related companies, including the headquarters of Fortune 500 companies Cardinal Health and Procter & Gamble, and Battelle Memorial Institute, an international nonprofit global science and technology group. More than 140 new bioscience companies developing innovations such as chemotherapy drugs, DNA analysis, and orthopedic screws, have been operating in Ohio since 2003.

"Northeast Ohio has a burgeoning collection of bioscience companies that influences the regional economic development planning focus," says Steve Norton, director of corporate communications and government affairs for the Steris Corporation. "Northeast Ohio is benefited by the area's educational institutions, research-oriented institutions that produce a high quality work force, and healthcare-oriented research partners. Our customers can see our technologies in use." Other projects continue the trend. US Endoscopy will add 150 positions over the next two years and the Cleveland Medical Mart & Convention Center project is growing in downtown Cleveland.

Steris will invest $11 million in its Mentor, Ohio campus and add 30 positions within three years. "A key consideration in selecting Ohio was the location of our research and development staff and customer access to company leadership," Norton says. "As a result of this investment, we will be able to bring customers to a central location, enabling them to engage directly with leadership, as well as the research and development."

Biotechnology is Wisconsin's fastest growing sector - an $8.7 billion industry with 400 companies, 34,000 employees, and an annualized growth rate of nearly 7 percent. Wisconsin welcomed eight companies last year: RJA Dispersions LLC, a custom manufacturer of nano-particle and pigment dispersions for digital imaging and ultraviolet curable ink jet inks; Rapid Diagnostek, a developer of portable, rapid diagnostic devices that analyze bodily fluids; Aldevron, a provider of plasmid DNA for research, diagnostic, and clinical applications; Flex Biomedical, Inc., a producer of treatments for musculoskeletal injuries and diseases; Inviragen, Inc., a manufacturer of emerging infectious disease vaccines; Exact Sciences Corporation, a molecular diagnostics company specializing in colorectal cancer; and NanoMedex, a producer of a nanotechnology formula for generic drugs.

"The biosciences industry has been growing in Wisconsin for over 30 years, during which people have been trained in and become aware of the commercialization opportunities of biosciences resulting in the creation of entrepreneurs and formation of companies," says Ralph Kauten, CEO of Quintessence Biosciences in Madison, Wisconsin. The sector has grown from local discoveries, the support of universities and licensing offices, and state tax credits.

Illinois' biopharmaceutical industry employs more than 40,000 people. Astellas Pharma US, Inc. will establish its new corporate headquarters for the Americas in Glenview, creating 150 new jobs and slated for completion in spring 2012.

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