What do you call an industry that generates sales of over $50 billion each year? "Remarkable," "amazing," and "downright incredible" easily work as appropriate adjectives to describe the booming U.S. biotech business.
Ingredients for Biotech Success
So what sets apart those locations with thriving biotech activity from those without it? It's a host of factors working in harmony. Apparently such fortunate communities offer these ingredients for success:
• Universities, research institutions and centers with a life-science focus, and possibly a national or global reputation for innovation;
• Incubators, business assistance, and lots of capital to help players grow in every stage of the business cycle;
• A well-educated, abundant pool of scientists and others possessing skill sets and knowledge geared toward life sciences;
• Direct, generous funding for basic academic research and ground-breaking R&D efforts;
• A smooth technology-transfer system from the lab to commercialization;
• Excellent networking and collaborative opportunities within the biotech sector and with other allied sectors;
• Access to state-of-the art equipment and facilities; and
• Full and long-term community support in the areas of regulatory issues and taxes, and a general pro-industry environment.
With all that said, every successful biotech community is unique, using its individualized strengths to build something special no place else in the world can duplicate.
"King Kong" Biotech States
Information about how, why, and where biotech is being cultivated is becoming more abundant and focused. The reason is three-fold: First, as the industry ages, there are naturally more companies and data to analyze and track over time. Secondly, states are backing biotech big-time. At least 40 states have identified biotechnology as a target industry, 33 states have established bioscience associations, and 37 states support bioscience incubators (according to BIO). Thirdly, more monies are now invested to pay credible research groups to study the industry in a methodical fashion.
For example, the Milken Institute, a globally renowned think tank, provides an insightful state-by-state look at the biotech and pharma industries in "Biopharmaceutical Industry Contributions to State and U.S. Economies." The study, published October 2004, shows the industry has impacted all sectors of the economy with "more than 2.7 million jobs and $172 billion in real output in 2003." It's obvious why so many states want a piece of the bio pie, which is filled with dream-like levels of potential new income streams and jobs.
Specifically, the Milken report examines the biopharmaceutical industry's economic impact in four areas:
1. Industry Geographic Location and Performance: The report reveals the industry's economic importance in each state by measuring its concentration and growth of employment and output. According to these measures, the top states are New Jersey, Indiana, Massachusetts, North Carolina, and Pennsylvania.
While it's true New Jersey and Pennsylvania are two states that capture the bulk of employment in the pharmaceutical industry, big pharma companies are "now trying to mitigate costs by learning to outsource," explains Perry Wong, a senior research economist for The Milken Institute and one of the report's authors. "In headquarter regions, employment gains aren't as robust." Employment growth of a sort is happening, however, in the form of pharmas making big investments in small and medium-sized biotechs, many of which are located in other states.
Wong calls North Carolina "a very interesting state...25 years ago it had no biopharma activity, but [its leaders] did the right thing by lobbying for biosciences to be a primary piece of the economy. Now it has the Research Triangle, a major biosciences center. Today, the state continues to leverage that growth rather rapidly."
Specifically, the University of North Carolina's decision to invest in building major computing sites beginning in the 1980s "has proven to be a very wise choice," Wong says, adding that these centers are renowned for their state-of-the-art modeling programs supporting many amazing biotech initiatives. For example, this computing power is often tapped to simulate growth patterns of certain biocompounds so scientists can find out (without the cost/time of using human subjects) how they will impact human tissue.
2. Innovation Pipeline: The report measures a state's assets needed to produce a "strong and viable" biopharmaceutical industry, including the skills of its work force and how much R&D monies it gets. Top states are Massachusetts, Maryland, Connecticut, New Jersey, and Pennsylvania, according to this measure.
"Innovation is the key driver for biotech success," asserts Wong. "It'll be like that for as long as we use bioproducts. Both biotechs and pharmas live or die according to how many products are in their pipelines. Innovation is definitely the most critical aspect of the industry." He singled out Massachusetts (notably Boston) for its "almost boutique R&D environment that most states can't duplicate. It has great quality research and a high level of commitment to supporting the industry."
Wong also is very impressed by Maryland's high-end, theoretical research and patent-creating track record. "Maryland is one unique location due to Washington, D.C., and Johns Hopkins University, which produces the most papers in terms of research," says Wong. And even though it may not have the infrastructure [necessary] to produce a large number of products, "many important trials originate in that state. It's good at developing 'frontier' ideas." He cites Maryland's "very good corporate and financial structures" as being pillars for the region's biotech firms.
3. Multiplier and Tax Impact: This is a measurement of how much additional economic activity is created by the industry (including additional jobs and output created in other sectors, as well as tax revenues). States showing the most impressive activity in this respect are California, New Jersey, Pennsylvania, North Carolina, and Illinois.
4. 10-year Industry Projections: The report predicts likely growth of the industry in each state by employment and output. States with the biggest gains in absolute numbers in the next decade include California, Massachusetts, Pennsylvania, New York, and Maryland.
Biogen Establishes Research Triangle Park, North Carolina, Gene Therapy Production Campus
2020 Top States for Doing Business Showcase Their Pro-Business Environments
34th Annual Corporate Survey & the 16th Annual Consultants Survey
“Made in America” Executive Order to Affect International Companies and FDI
2020 Gold & Silver Shovel Awards Recognize State and Local Economic Development Efforts
Pandemic Fuels Data Center Growth
2019 Leading Metro Locations: Pacific and South-Atlantic Metros Dominate the List