Courting the Biosciences Industry
One of Minnesota’s shining economic stars is feeling a little neglected these days. The life sciences industry, a swath of the economy dedicated to the health and well-being of people, animals, plants and the environment, may have brought great riches to the state, but questions remain whether companies will continue to grow and locate here in the future.
Other Midwest states have begun aggressively pursuing life sciences companies, says Don Gerhardt, CEO of Life Science Alley, a 570-member trade association located in St. Louis Park. As the largest trade association serving the life sciences in the upper Midwest, Life Science Alley works to move life sciences forward through education, collaboration and advocacy. It is the central resource for fostering innovation, creating consensus and advocating for the industry.
Minnesota’s life sciences industry employs more than 50,000 people at average annual salaries between $65,000 and $70,000 and grows at a rate of 7 percent to 9 percent a year, he points out. While Gerhardt doesn’t want to sound like a whiner, he does want to beat the drum for more focus on the biosciences to produce tomorrow’s Medtronic, Boston Scientific, Possis Medical and others in agriculture, pharmaceuticals, medical devices and agri-bio-industrial technology.
“Our competitors—Ohio,Wisconsin, Indiana and Michigan—have been very aggressive in initiating state participation in angel investing and early-stage funding for life sciences,” he says. “Minnesota has been very, very, very far behind in doing that, and it shows.”
For example, the Wisconsin Alumni Research Foundation in Madison, Wis., helped pay for construction of a large bioscience park near the University of Wisconsin and provided funding to more than 30 different startups in return for equity.
Though lagging,Minnesota has not been standing still. The $24 million University Enterprise Laboratories opened in 2003 and is currently fully occupied. Incubators such as Menlo Park on University Avenue in St. Paul and Elliot Park Life Sciences Institute near downtown Minneapolis have been going strong, he says. And a collaboration between the University of Minnesota, Mayo Clinic and IBM dealing with genomics has attracted national attention.
The problem is the dearth of money for early-stage companies. Many well-heeled retirees who once served as a font of capital for startups have reduced their investments, says Gerhardt, and the number of boutique investment banks handling bioscience has plummeted to just two or three from a high of a dozen a few years ago.
The Life Science Alley 2008 legislative agenda calls for establishment of an investment tax credit and for the state to offer matching grants to businesses receiving money from federal startup business programs. The organization, which is working toward policy changes, has also teamed with St. Louis Park-based Bio Business Alliance of Minnesota to craft a policy and a plan for growing bioscience in the state, he adds.
“We need a plan and a policy for biosciences in the state,” Gerhardt says. “And we need early-stage capital available for startup companies. That, along with continuing to create a well-educated work force through a good K-12 and college system, will certainly help us compete.”
— Frank Jossi