Because government agencies, educational institutions, and pharmaceutical companies are becoming increasingly aware of the benefits that attracting biomedical companies to their area represents, a geographic shift is occurring that could alter the landscape when it comes to biomedical “clustering.”

 

Critical to the success of any biomedical cluster are basic essential support systems including a history of successful commercialization of technologies, an understanding of the unique needs of the biomedical industry, the availability of venture capital for startup and established companies, as well as strong support from the government. Additional key ingredients include access to leading research universities and pharmaceutical companies, an abundance of skilled workers, a growing community of organizations involved in pre-commercial medical research, and the availability of affordable housing to support the organization’s workforce.

 

In the U.S., where 41 out of 50 states have formal economic initiatives in place that are specifically intended to attract players in the biotech sector or larger biomedical industry, there are only these nine areas which are considered major biomedical clusters today:

· San Diego

· San Francisco

· Seattle

· Los Angeles

· Washington D.C./Baltimore

· Philadelphia

· New York/New Jersey/Connecticut

· Boston

· Raleigh/Durham

 

However, as economic conditions change, population shifts continue to occur, and these 41 states continue to advance their biomedical initiatives, new economic and lifestyle forces are driving the formation and growth of biomedical clusters. And those drivers are expected to result in new clusters forming in areas not previously under consideration by the industry.

 

Abgenics technicianThe biomedical industry is historically known for bringing clean, non-polluting firms that deliver a large quantity of high-paying technical jobs, as well as a number of clerical and administrative jobs, to the communities that are fortunate enough to attract them. It is well known that jobs, especially high paying ones, create a multiplier effect in terms of economic activity for an area. This explains why attracting biomedical firms to a region has become so popular among economic development groups.

In an effort to bring about a change in the current clustering patterns, government agencies, educational institutions, and the private sector are banding together to create and manage biomedical ‘recruitment’ programs that are designed to accentuate the positive features of their geographic area for biomedical companies and compensate for the negative ones.

 

A case in point is the recent decision made by Karin Eastham, COO of the Burnham Institute for Medical Research, who relocated her company to Florida after being offered $350 million dollars in medical research funding by Florida’s BioFlorida, an independent association that focuses on recruiting life sciences organizations.[1] In a move designed to leverage the Burnham deal, the University of Florida announced their intention to build a research facility adjacent to the Burnham facility – just like that it appears another biomedical cluster is being born.

 

Other areas in the U.S. such as Houston, Chicago, Indianapolis, Memphis, St. Louis and Phoenix are making similar efforts to create new biomedical clusters. For example, the State of Arizona has authorized the expenditure of nearly $440 million dollars in grant money to help fund the Biodesign Institute and University of Arizona research facilities.[2]

 

Part of that funding goes toward the Technology and Research Initiative Fund (TRIF), which is to be split between the three universities in the state. According to Barry Broome, CEO of the Greater Phoenix Economic Council, the goal of this fund is to support university science and technology research that will benefit and grow a knowledge industry in the state.

 

Chicago has also been making a strong bid to develop its reputation as a research-friendly community thanks to the billions of dollars that have been made available to research organizations by government and private agencies.
Chicago’s Abbott Laboratories, which employs over 72,000 people globally and nearly 2,000 in the city itself, spends nearly $2 billion dollars annually on research.[3] Nearby Baxter International, Inc., which employs close to 52,000 employees globally and 1,000 locally, spends almost $600 million dollars on research,[4] but being research-friendly is not the only attraction for Chicago. In fact, when you compare the overall demographics of Chicago with the requirements necessary to support a life science cluster, you see a very close match.

Downtown Chicago is the host to the Chicago Technology Institute, a 56 acre facility located within the Illinois Medical District. The facility provides complete incubator support to medical research companies including complete infrastructure services, access to nearby university resources, and customized business development services based upon each tenant’s needs. So far, the Institute has helped 25 firms move through the incubator phase and out into the general economy.

 

Houston is seen as another candidate to become a thriving technology cluster. The Texas Medical Center, a consortium of 42 non–profit and government institutions, has received $2.2 billion in grants in just the past 5 years.[5]

 

These investments have resulted in the successful creation of over 100 start-up research companies which continue to stimulate Houston’s research economy. If fueled by easier access to venture capital these numerous new companies should virtually guarantee the city’s future as an emerging life science cluster.

 

Other regions, including Indianapolis, Kansas City, Memphis, Minneapolis/St. Paul, St. Louis, and Madison all possess the resources and demographics necessary to support cluster development, and putting aside the economic offerings being used to attract the biomedical industry, some industry analysts believe that the emerging interest in Embryonic Stem Cell Research, as well as counter bioterrorism research may be the next big drivers that will help form other new biomedical clusters is regions that are not currently considered to be major players.

 

Outside the U.S., similar efforts are being made to create new, emerging biomedical clusters. The Doors of Perception Blog,[6] a design and architectural publication, reports on “plans in China for the world’s first urban biomedical hub,” to be located in the crowded Xuhui district of Shanghai. This urban cluster, called the Fenglin Biomedical Centre, intends to bring together life science, medical care services, medical education, business incubation, and medical exhibitions.[7]

 

In Canada, three of its major cities – Toronto, Vancouver and Montreal – have all made terrific progress in the formation of new biotechnology companies, and the major cities in Europe, which produces 40% of the world’s pharmaceuticals[8], and Japan, which is the 2nd largest health care economy in the world[9], are other key areas to watch.

 

There is no question that the landscape of biomedical clusters is changing rapidly. No longer is biomedical an industry who’s participants will locate almost exclusively on the east and west coasts of the United States. As more and more regions work to create environments where essential support systems are in place (i.e. availability of venture capital, strong governmental support, successful tech transfer, access to academic centers of excellence and big pharma companies, an abundant skilled workforce, and a growing community of organizations involved in pre-commercial medical research) and where these key ingredients all come together, new biomedical clusters will continue to form and flourish. Is your community one of these emerging biomedical clusters?

 


[1] St. Petersburg Times: State Builds on Biotech Success, 11/15/06

[2] The Arizona Republic: Funding Arizona Industry is an Ongoing Challenge, 11/17/06

[3] Abbott Labs 2005 Annual Report

[4]www.baxter.com Corporate Overview