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Cities plunge into biotech

By Shaila Dewan

New York Times

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.

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At a recent global biotech convention in Atlanta, 27 states, including Minnesota, 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.

The Rochester area has also made a serious play for biotech, hoping to capitalize on the brainpower and research muscle at Mayo Clinic, with two developments:

  • Elk Run is a proposed 2,325 acre development along U.S. 52 near Pine Island slated to include a biobusiness park, commercial space, residential housing and a wellness community. Venture capitalist G. Steven Burrill has pledged $1 billion for construction and an equity/venture capital fund designed to draw investment and business to the biobusiness park.
  •  The $34 million, eight-story Minnesota Biobusiness Center has been built in 200 block of First Avenue Southwest and is seeking more tenants.

But 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 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," Pisano said, "but you need a lot of critical mass."

Second, biotech is a relatively tiny industry with a lengthy product-development process, and even in its largest clusters offers only a fraction of the jobs of traditional manufacturing. In the United States, only 43 biotechnology companies employ more than 1,000 people, according to BioAbility, a consulting firm in the Research Triangle Park in North Carolina.

There is no guarantee that if a blockbuster drug materialized, it would be manufactured and marketed in the same place it was developed and tested.

Joseph Cortright, an economist who has studied biotechnology clusters, gave the example of a promising anti-leukemia compound developed at Oregon Health Sciences University in Portland, where Mr. Cortright is based. "The economic impact in the Portland area is zero because the rights to manufacture and market this drug were owned already by Novartis," Cortright said.

But the race continues.

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Cities like Shreveport, where public and private money have built the InterTech Science Park, remain steadfastly optimistic, though a biotechnology manufacturing center at the park was occupied for only six months in 2001 before the tenant went under.

The building remains an asset, said Dennis Lower, the park director. The private sector’s willingness to invest in it helped persuade the state to invest $15 million in a second building. "Right now we have four companies that are interested in that building," Lower said. "Three times in the last three years we have almost had a tenant in that building."

Some economic development officials say the value of a biotech cluster cannot be calculated in dollars alone. Larry Pelton, president of the Economic Development Council of St. Lucie County, Fla., said the millions that the state spent attracting the Scripps Research Institute to Palm Beach County started a chain reaction that brought a branch of the Torrey Pines Institute for Molecular Studies to Port St. Lucie.

The institute received state and local incentives worth $32 million, plus a building and land. That helped St. Lucie County, which has grown quickly and needed more hospital beds, persuade Martin Memorial Health Systems to build a 300-bed hospital, Mr. Pelton said. The county’s research institutes have also enhanced science and math education and spurred creation of a charter school, he said.

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