27 Oct Furious pace of Midwest biotech events marks progress
As 2004 is rapidly coming to a close, the fourth quarter represents a fast and furious pace of Midwest biotech activities across the eight states. Witness the more important of these events:
Eleven events in less than two months is a lot of biotech activities! This is a good sign and bodes well for the momentum that’s building up to the BIO 2006 annual meeting in Chicago. It’s also an indicator that biotech is alive, prospering and growing in the Midwest.
Obviously the Midwest is only one geographic area of the U.S. trying to build a local biotech industry. According to the latest Milken Institute report on the economic impact of the biopharmaceutical industry in 2003 (the Milken Institute’s definition includes not only biotech but also Big Pharma), there were 2.7 million jobs and $173 billion in real output.
This number is expected to grow over the next 10 years (through 2014) to 3.6 million jobs and real output of $350 billion (or growth of 33 percent and 103 percent respectively). To be more precise with this analysis, the actual number of jobs produced by the biopharmaceutical industry in the U.S. in 2003 was 406,700.
It’s estimated that each job in this industry creates 5.7 jobs elsewhere in the economy (via the multiplier effect). Likewise, the real direct output by the biopharmaceutical industry was about $68 billion in 2003. One dollar in this industry produces an additional $1.70 in other sectors of the economy attributable to this industry (hence a multiplier effect of 2.7).
Before we get overly excited about these numbers, let’s put them into perspective with leading states for the biopharmaceutical industry.
As we can see in this analysis, the Midwest comes out pretty well with three states in the top 10 biopharmaceutical states.
Another part of this report analyzes the total tax receipts by the biopharmaceutical industry generated in each state. This includes state and local taxes as well as federal taxes. This is another indicator of the overall potential impact of the industry for the state.
Once again, the Midwest has placed fairly well in this analysis with three states in the top 10 and one state in the top five. It can be argued that this analysis doesn’t really reflect the biotech industry per se. Illinois and New Jersey are both heavily skewed by the local Big Pharma industry and Indiana is skewed by the medical and orthopedic device industry as well as Big Pharma. California and Boston are basically pure biotech (with a little medical device thrown in).
While this is technically correct, the larger companies often spin off companies and people and heavily invest in the activities of the smaller companies.
To be equally fair, the Milken Institute report went on to look at a number of other factors. I have only cherry picked what I thought was interesting for this column. The fact you can’t ignore is that the Midwest is right up there in life science activities whether measured by jobs, taxes or real economic output.
This has got to have a beneficial effect on our growing biotech community. Many of the 11 meetings in October through December 2004 couldn’t be held without active support of the larger companies (whether financial or via participation of key management or both).
Depending on where you live in the Midwest, you almost have no excuse not to attend one of these events (if you have any interest in the biotech industry) and find out what is happening in your backyard. I know I’m going to attend at least three of the upcoming events.
Michael S. Rosen is president and CEO of Barbeau Pharma and a founder and board member of the Illinois Biotechnology Industry Organization (IBIO). He can be reached at firstname.lastname@example.org. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters. They can be found at www.eprairie.com.
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