Invest in Biotech, Or Watch the U.S. Health Innovation Edge Slip Away

6/15/10

Not everyone understands the way that new medical treatments, diagnostics, medicines, therapies and the like are created. It’s a long, expensive process, mostly the realm of scientists and engineers. But anyone who’s ever been concerned about a sick family member, or a loved one succumbing to disease, can appreciate what these scientists and their discoveries have done to improve health prospects for all of us.

Insofar as medical innovation is the future of health care, however, we are now seeing that health care plays a central role in the future of our economy. The U.S. Bureau of Labor Statistics estimates that the health care industry has added nearly 700,000 jobs since the start of the recession. Many experts believe that medical innovation is an industry where our country will shine brightest.

But a recently released report by Battelle suggests that American leadership in this area is no longer a sure thing. There are some troubling data points. For the U.S. health innovation industry to remain the global leader, it needs a growing pool of talented scientists. Yet the average science, technology, engineering, and mathematics assessment scores for American eighth-graders is 520, trailing Russia, England and Japan’s rates of 530, 553 and 561 respectively. According to a 2006 Association of American Universities analysis, 15 percent of U.S. undergraduates pursue a degree in natural science or engineering, compared to 50 percent in China.

Battelle found that life sciences leaders around the country are concerned that the United States is losing its edge. Thus, the Council for American Medical Innovation, a national group that commissioned the Battelle study, has been calling for the federal government to do more to foster medical innovation-and fast. It recommends tasking a federal office with maintaining leadership in medical innovation. It also recommends advancing public-private collaboration, strengthening investments in R&D and manufacturing, enhancing regulatory science at the FDA, and providing federal support for the biosciences in K-12 education.

Washington state’s business leaders and policymakers recognize the substantial potential of medical innovation. The Governor and the legislature displayed foresight in 2005 when they created the Life Sciences Discovery Fund to provide grants for research. The goal of this groundbreaking program was to invest in the two major benefits of the biosciences sector: economic growth and improved health care. The fund has since provided more than $50 million to researchers throughout the state.

In 2007, the City of Bothell and the University of Washington brought key public and private sector partners together to obtain a Washington State Innovation Partnership Zone (IPZ) designation from Governor Gregoire. The Bothell Technology Corridor IPZ is a regional center of excellence for medical device manufacturing and ultra sound activities, and provides leadership and a focal point for this growing industry.

As a result of this most recent legislative session, the development, manufacture, and delivery of global health products should become an even more dynamic part of the state’s economy. Tax incentives for contributions to the new global health technology and product development fund established this year will provide a sustainable grant program to ensure Washington remains competitive.

Meanwhile, the South Lake Union district in Seattle (the development of which has been supported by city policy and infrastructure investment) is well on its way to creating a cluster of innovative, high-paying life sciences and global health jobs. In all, biopharmaceutical research companies spend nearly $1 billion in R&D in Washington annually.

According to the most recent figures, more than 20,000 workers in Washington are directly employed in the life sciences sector, contributing more than $10 billion in state economic output. In all, biopharmaceutical companies support more than 76,000 jobs, either directly; indirectly, meaning under contract or in a support role; or via the spending of direct employees.

President Obama recently set a goal of ending cancer in our lifetime. A cure for cancer would change modern life in many profound ways, including estimated economic savings of up to $50 trillion. Medical innovation’s effect on today’s economy can be felt most directly in the job market. The biomedical industry was a bright spot of quality job creation through the recession, growing 1.5 percent in jobs from 2007 to 2008, while the overall economy declined. The health care field is projected to add three million jobs between 2006 and 2016. Life sciences jobs pay far more than average, and they have a multiplier effect. For every one of them, it’s said at least three more support jobs are created around them.

It’s time for a sharper focus on medical innovation, both in our national and state innovation agenda. We should do it to help secure our economic future, as well as for the advancements in care and quality of life that will be captured as a result.

Rogers Weed is the Director of the Washington State Department of Commerce and also co-chairs the Clean Energy Leadership Council and State Energy Strategy initiative. Follow @

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  • http://wellescent.com/health_forum/topics Wellescent Health Forums

    As is the case for many forms of research, companies are choosing to spend less and less on R&D and this in turn limits the number of students who choose to seek employment in the sciences. While governments are definitely important contributors to the promotion of the sciences, the employers also have to stop shifting their R&D efforts offshore in order to show students that jobs exist in the sciences.

  • Bay Area Biotechie

    As a former WA Biotech person I wish you well in your efforts to promote innovation and biotech growth. WA has some great non profit institutes and universities and these are where government is best spent to promote innovation. At least PIs at these institutes can and do hire bright students (really cheap) from around the world to boost innovation. Biotech companies need innovative and disruptive technology to license from acedemia. Rarely is such technology discovered in a company because they have to spend so much time and money, which is very limited, on developing these technologies. This will be even more true in the future. As for training scientists, you mention the large percent of Chinese traingini in science which helps their country gain ground in these areas. What you did not mention is that since the mid 1980s, tens of thousands of these scientists have also immigrated to the US and taken many of the jobs in US biotech. How do you convince a student to pursue a science career in the US education system when they can see that either these jobs will eventually go overseas, or that they will be filled by scientists who are cheaper to hire given the chance to immigrate to the US. These facts along with the obvious, severe pressue on cost containment of health care and the consolidation of big pharmas make it difficult indeed to sell students on the idea of a biotech science career. In the Bay area (at least now) there are many biotech job opportunities and innovation. In WA, I suspect there will be a continued need for state promotional funding and special Governor’s Task groups to promote private biotech growth.