Despite Odds, Cities Race to Bet on Biotech

New York Times ^ | June 11, 2009 | Shaila Dewan

[reaganaut1]

KANNAPOLIS, N.C. — Where a textile mill once drove the economy of this blue-collar town northeast of Charlotte, an imposing neoclassical complex is rising, filled with fine art, Italian marble and multimillion-dollar laboratory equipment. Three buildings, one topped by a giant dome, form the beginnings of what has been nicknamed the Biopolis, a research campus dedicated to biotechnology.

At $500 million and counting, the Biopolis, officially called the North Carolina Research Campus, is a product of a national race to attract the biotechnology industry, a current grail of economic development.

Cities like Shreveport, La., and Huntsville, Ala., are also gambling millions in taxpayer dollars on if-we-build-it-they-will-come research parks and wet laboratories, which hold the promise of low-pollution workplaces and high salaries.

At a recent global biotech convention in Atlanta, 27 states, including Hawaii and Oklahoma, paid as much as $100,000 each to entice companies on the exhibition floor. All this for a highly risky industry that has turned a profit only one year in the past four decades.

Skeptics cite two major problems with the race for biotech. First, the industry is highly concentrated in established epicenters like Boston, San Diego and San Francisco, which offer not just scientific talent but also executives who know how to steer drugs through the arduous approval process.

“Most of these states probably don’t stand much of a chance to develop a viable biotech industry,” said Gary P. Pisano, a Harvard Business School professor and the author of “Science Business: The Promise, the Reality and the Future of Biotech.”

“You can always get a few top people,” Mr. Pisano said, “but you need a lot of critical mass.”

Second, biotech is a relatively tiny industry with a lengthy product-development process, and [...] offers only a fraction of the jobs of traditional manufacturing.

[reaganaut1]

State governments should provide a good regulatory and tax climate for businesses in general, and then let the chips fall where they may. Professional politicians tend not to think like that.

[Leisler]

What, you think hacks, lawyers can not pick economic winners better than the high failure rate of the free(ier) market?

Don’t you think it is just grand of them to KNOW, absolutely KNOW which will be the winner and use our money? Heck they could of kept this information to themselves, bet their whole wealth and kept all the profits. But no! Being the all seeing, knowledgeable types they are, they forgoed investing their money....and used ours! How charitable, how noble. We, are truly blessed.

[allmendream]

Disclaimer: I work in biotech.

Sometimes targeted incentives or tax breaks can really start the ball rolling. As the article notes, biotech needs a bit of infrastructure established before an area becomes an attractive location for a biotech company.

How is this fundamentally different than a city building a stadium to attract a sports team?

How is it fundamentally different than lowering taxes/fees regulations on movie making companies to make your city an attractive location to shoot movies?

Fundamentally however I am generally inclined to agree with you. Make your state an attractive place to do business for ANY and ALL companies, and the businesses will beat a path to your door.