PARTICIPANTS

Moderator: Karen E Thuermer, contributing editor, fDi

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Participants:

  • Saundra Johnson, executive vice-president, Flinn Foundation
  • Dr Nina Ossanna, director of business development, BIO5, University of Arizona
  • Jan Lesher, director, Arizona Department of Commerce
  • Alex Smith, PhD, technology development specialist, Community Development, City of Tempe

 

 

Karen E Thuermer: Since strategically targeting the biosciences as a way to diversify the state’s economy, Arizona has made tremendous strides in achieving its goals. Collaboration on Arizona’s Bioscience Roadmap has already resulted in significant gains for the state. Between 2001 and 2005, the number of Arizona bioscience firms increased 8%, the number of Arizona bioscience employees increased 16%, and inflation-adjusted wages for bioscience workers jumped 13%. In what other ways does bioscience contribute to the state?

Jan Lesher: The biosciences represent a significant piece of the puzzle critical to Arizona’s global competitiveness. The state’s capacity for developing ideas, commercialising discoveries, and stimulating long-term investment is represented in the biosciences. It is one of the ‘big waves’ that will create new products, services, companies and high-wage jobs.

Further, bioscience will lead to availability of new medical treatments for Arizona residents.

 

Nina Ossanna: Bioscience is an important component of the diversified, knowledge-based economy we seek in Arizona. Enhancing this sector of our economy allows us to provide employment to retain our many Arizona-educated residents in higher-paying jobs. With the top life-science university programmes that exist in Arizona, we are able to provide a highly educated workforce for bioscience companies.

KT: What strategy is Arizona using to attract bioscience industries?

JL: By initiating bold action, Arizona is fast becoming a biosciences leader. This is accomplished through its focus on public-private partnership. Key players in the biosciences throughout the state are involved in Arizona’s Bioscience Roadmap.

Most encouraging is the growth rate of National Institutes of Health grants received. Arizona now exceeds the annual growth rate of the top 10 states, a goal reached two years earlier than its 2007 benchmark.

Focusing on core strengths in research and development, Arizona has been able to attract companies that want to be close to the latest discoveries.

 

Saundra Johnson:

Arizona is late to the bioscience game, so it’s unrealistic to expect that we can compete with deeply established bioscience hotspots, such as San Diego or Boston. Rather, Arizona is focusing its efforts and resources on specific niches where it already has world-class programmes and talent, including cancer research, neuroscience and bioengineering. This is achievable due to the strong technology presence already in existence in Arizona, especially in the fields of advanced communications, information technology, electronics and optics.

 

KT: What attributes make Arizona attractive to bioscience firms?

JL: Beyond the year-round incredible weather and the diversity of landscapes, Arizona is focused on constantly improving an innovative, sustainable and globally competitive economy. The attitude of collaboration found in Arizona is unprecedented, due to the involvement in both the public and private sectors, and access to political, academic and private sector leaders is unrivalled.

Arizona residents also have a positive attitude toward science and technology. Based on a recent study by the Morrison Institute for Public Policy, 90% of Arizonans say it is important for Arizona to develop national and international leadership in science and technology.

Further, there is a quality workforce that exists for companies to draw upon, and there is a focus to ensure the ‘workforce of tomorrow’ is better trained and more skilled to meet the demands of an innovative, global economy. That’s why our governor, Janet Napolitano, established a P-20 council, which is focused on quality life-long learning from pre-school to post-graduate.

SJ:

Arizona offers a strong package: a solid state-wide research infrastructure, fast-growing industry base, large and diverse population base and desirable quality of life.

But the asset that we hear about most from out-of-state observers is our ability to collaborate. Officials across the public and private sectors are accustomed to partnering. Our academic and research institutions work openly with one another.

For example, last autumn our two major research universities, Arizona State University (ASU) and University of Arizona (UA), celebrated the opening of a collaborative medical school campus in downtown Phoenix. From our understanding, two universities joining forces on a new medical school programme is a unique endeavour. That’s indicative of the openness and co-operation that exists in Arizona.

NO:

Our universities provide intellectually stimulating opportunities for new technology, skilled employees, workforce development and research support for companies.

Our greater community supports the industry through the existence of other high-tech company access, other non-profit research organisations, supporting organisations such as Flinn Foundation and Science Foundation Arizona, government support through many agencies, such as Arizona Department of Commerce, cluster organisations and tech councils.

There is a great sense of co-operation among all of these groups to work together to build this sector of our economy. It is a fun time to be in Arizona. In addition, it is hard to discount the lure of Arizona’s natural beauty, good climate and recreational opportunities to those who seek a greater quality of life.

Alex Smith:

Having a relatively young bioscience sector, Arizona is in a position to grow with start-up and mid-sized biotechnology firms. And with an accelerated workforce development strategy that includes high school, community college and university level bioscience training, the state is prepared to meet the workforce needs of any biotechnology company.

KT: What areas of bioscience is Arizona most likely to attract?

JL:

There are two focuses. First is building its world-class research base with an emphasis on neurological sciences, cancer therapeutics and bioengineering. Second is a focus on infectious diseases, asthma, diabetes, and agriculture biotechnology.

SJ:

Judging from recent data, the state’s fastest growth in bioscience jobs is occurring in the area of research, testing and labs. Jobs in this sub-sector have grown 32% in four years. Medical devices are notable as well, given large employers such as Medtronic and WL Gore. These jobs have increased by 12% during a period of national decline.

Hospitals are also an important component of Arizona’s bioscience industry, given their central role in translational research – getting discoveries from the bench to the bedside quickly and effectively. Growth in hospitals tends to follow growth in population, and Arizona has the fastest-growing population in the nation.

NO:

Because of our educational diversity we have numerous opportunities. However, Arizona has strengths in optics and electronics that allow a unique opportunity for multidisciplinary expertise applicable to life sciences. For example, Ventana Medical Systems, a spin-out of the University of Arizona, has grown into a publicly traded company combining advanced robotics with disease markers for automated diagnostic instrumentation that is now used in clinical laboratories worldwide.

KT: How does Arizona compare with other states vying for the same industry?

 

 

JL: Arizona is making significant progress in competing with states that have a 15-year lead. Arizona has only been in the game for five years, and its growth rate of NIH grants received now exceeds the rate of the top 10 states.

 

SJ: Arizona is not a major player in the biosciences, but is fast-emerging. Five years ago we didn’t merit consideration; today we’re on most lists of up-and-comers. Our strengths: solid research credentials in specific fields, fast-growing industry, active collaboration, high quality of life. Areas that are being worked on: generating early-stage capital and building commercial wet-lab space.

 

KT: What kind of support system will these industries require, and how prepared is Arizona to provide this support?

 

JL: There is incredible support from the existing R&D in Arizona. Arizona’s research anchors: TGen in Phoenix, C-Path in Tucson, Molecular Profiling Institute, BIO5 at the University of Arizona, SABRE at Northern Arizona University, and the Biodesign Institute at Arizona State University. The state made a $440m investment in building necessary research facilities.

 

AS:

Arizona’s universities are generating an unprecedented amount of intellectual property and all levels of the educational system have increased their focus on the mathematics and science curriculum.

And regarding capital, the amount and frequency of venture-backed deals is increasing.

KT: How have state and local governments helped to seed and feed the bioscience industry in Arizona? How have the universities and medical institutions contributed?

JL: There already is vigorous support of the biosciences through Arizona’s focus on public-private partnerships. This year, Governor Napolitano has recommended, in her budget for 2008, more than $3.8m in funding for strengthening global business attraction efforts targeting industries of opportunity for Arizona, including biotechnology. Also included in those dollars are business development and technical assistance programmes for businesses in Arizona and the restoration of the Commerce and Economic Development Fund.

As the National Governors Association chair, Governor Napolitano’s national agenda includes promoting and enhancing mathematics and science education under her Innovation America plan.

NO:

The University of Arizona offers the BIO5 Institute, a medical school that has recently opened a new facility in Phoenix, a top-rated pharmacy school, an NCI-designated cancer centre and a land grant agricultural college, which are all well-funded by federal competitive grant awards to perform cutting-edge research.

UA also has one of the top entrepreneurship programmes in the country. One of the strengths is the cross-fertilisation between various disciplines to approach difficult problems in new ways and also to move them into the private sector. For example, BIO5 works very closely with the university’s Office of Technology Transfer and the McGuire programme for developing private sector business opportunities.

Arizona State University and Northern Arizona University also have strong programmes and commitments to contribute to the state economy. In addition to providing highly skilled workers, the universities are a source of robust technologies for new ventures. They work closely with various entities within the state to help spin out technology into the local area as licences to existing companies or starting new companies.

AS:

Both the state and local governments have done a tremendous job of connecting companies, research institutions and universities. The amount and frequency of collaboration is what distinguishes Arizona from other states, much of it facilitated by state and local government. The partnerships between the state’s universities and medical institutions turn individual institutions/investigators into highly competitive interdisciplinary teams.

 

SJ:

The building of Arizona’s bioscience sector has been a public-private partnership. On the public side, cities and the state have stepped up and played a critical role. For instance, the City of Phoenix provided the land and incentives for TGen’s headquarters and the Phoenix Biomedical Campus.

Other cities – Chandler, Flagstaff, Scottsdale, Tucson – have taken similar paths. The state government committed to funding a dozen new university research facilities over the past few years that have accelerated research successes and our ability to compete for federal research grants.

In addition, the state’s universities, hospitals and research institutes are increasingly partnering with one another and industry on research projects.

They’re also placing greater emphasis on commercialising discoveries.

KT: What incentives exist to encourage the growth and development of existing in-state firms and the attraction of out-of-state firms?

JL: The strongest incentive Arizona offers bioscience companies is access to a large pool of well trained, highly motivated employees. The state’s ability to graduate and attract bright individuals with strong science backgrounds is unrivalled.

Arizona has incentives to benefit new, expanding and start-up companies. It offers job training grants that fund training to increase the skills of the workforce, paying up to 75% of training costs for new employees. It offers tax incentives for companies locating to Enterprise Zones and huge benefits for companies locating in and qualifying for Foreign Trade Zone benefits. Arizona also offers an aggressive R&D tax credit programme.

Access to capital is improving, and received an incredible boost when the new $20m state tax credit for angel investors began last year. It’s less than a year into the programme and 26 small businesses have been certified and authorisations for tax credits have been issued to 25 investors. More than 100 applications from businesses and investors are being processed now.

 

KT: If Arizona’s goals of attracting a large amount of bioscience industry to the state are met, what can be anticipated with regard to job growth, economic impact, housing costs, and so on?

 

JL: For the past six decades, Arizona has been a leader in population and job growth. However, the goals in the bioscience industry mean more high-value jobs for Arizona. These are high-wage jobs that will expand the tax base, increase per capita income, and promote a globally competitive business environment. It will help build a sustainable economy that meets the competitiveness needs of the global economy.

It also means Arizonans will have access to cutting-edge, world-class healthcare and an improved quality of life.

 

SJ:

If Arizona’s Bioscience Roadmap is implemented fully over its 10-year term, it is expected that the state will realise up to 32,000 new, well-paying jobs and a return on investment of more than six to one. We’re already seeing this, given 10,000 new bioscience-related jobs over a four-year period. In addition, specific institutions are reporting ROI similar to these eye-opening ratios.

 

KT: What is the climate for venture capital like in Arizona?

 

SJ: Generating venture capital and other forms of early-stage capital is at the top of Arizona’s to-do list. While the state is exceeding interim goals in generating venture capital (VC) for bio firms, it continues to lag many states in total dollars. Efforts are ongoing to engage local VCs and to inform out-of-state investors of the outstanding opportunities that are emerging in Arizona. The word we’ve received is that they are aware and watching, waiting for the right time to jump in.

 

NO: We have a very active group of angel investors in Tucson, known as the Desert Angels. In fact, the Desert Angels, the UA’s Office of Technology Transfer and the Kaufmann Foundation of Entrepreneurship have just launched a new programme for funding early-stage ventures call DesTech, which will help move university technology into the private sector.

KT: Anything else?

JL: Now is the opportune time to be a bioscience company in Arizona. Machine Solutions and InNexus recently located to the state. WL Gore and Sanofi-Aventis are expanding their operations.

Start-up companies find Arizona appealing due in part to limited government, access to facilities and equipment, and funding opportunities. The industry is excelling.

In association with Arizona Department of Commerce.