States like Pennsylvania and Arizona are using money culled from the massive tobacco settlement to fund biotech initiatives.
Connecticut is using business development credits—(tax breaks, to you and me)—to spur bioscience research. Florida has linked
$30 million in funding to three of its state universities, creating Centers of Excellence geared towards attracting biotech
firms to its college campuses. Of course, sunny weather and the absence of a state tax isn't a bad incentive either.
But even colder climate states are doing a good job in attracting biopharm talent. New Jersey was one of a handful of states
tapped by the life sciences web site Fierce Biotech as among the top five biotech-friendly locales around the world.
The organization also notes that the number of New Jersey biotechnology companies grew from 80 in 1998 to 124 when last officially
measured in 2003. That number should grow even higher after a 2006 study on states and biotech firms is completed by Ernst
& Young. The state has more than 200,000 biopharm employees and is home to 15 of the world's top 20 biggest biopharm firms.
Number of States Involved in Biotech Initiatives
PUTTING MECHANISMS INTO PLACE
So why do some states do well when it comes to biotech resources when others do not? As I've pointed out, having a solid economic
base, with plenty of highly accredited colleges and universities, a commitment to tax incentives and budgetary outlays for
biotech firms, and some old-fashioned creative thinking are high on the list of things states should have in their arsenal
if they are to attract life sciences companies.
One other common denominator among states where biotech initiatives are working and working well, are combined public-private
partnerships where private sector companies work in conjunction with government officials to create initiatives like Economic
Development Councils (EDCS). Over 15,000 such councils are up and running across the US (although not all are geared towards
life sciences efforts), according to the Washington-based International Economic Development Council.
EDCs can be a de facto headquarters for biotech firms looking for help, financial and otherwise, from state and local governments.
Companies can obtain information and guidance on buying real estate, marketing their products, and where to go for public
funding sources. In most cases, EDCs are funded via tax dollars, usually through state-sponsored grants, although some private
funding, through non-profit groups, colleges, and charitable foundations are also available.
EDCs are growing especially proficient at providing biosciences firms exactly what they need to set up shop in states
like New York and Massachusetts (both of which have substantial biotech EDC efforts). Life sciences companies use EDCs to
attract scientists and researchers, help build biotech incubators and, in states like New York, Florida, and North Carolina,
build campus-like biotech "parks."
It's high time that states become involved with biotech company recruitment efforts, through EDC's and otherwise. According
to BIO, more than 60% of biotech firms are non-US based. Locales like Singapore have proven particularly adept at using tax
reform, grants, and a highly knowledgable, but inexpensive work force to lure top life sciences companies.
By taking a decidedly Wall Street approach to life sciences industry efforts, and using creative financing and economic incentives
to attract biotech companies to set up shop in their cities and towns, state governments are finally figuring out that to
get a lot, you have to give a little.
Celebrity author and business/finance commentator for CNN and Fox News, Brian O'Connell has written for The Wall Street Journal and Newsweek, 79 Radcliffe Drive, Doylestown, PA 18901, 267.880.3144, fax 267.880.1939, email@example.com