Life sciences industry growing in Midwest, Philadelphia
The Midwest and the Greater Philadelphia region have found pathways to build strong life sciences industries and create environments that provide the necessary risk capital for healthcare startups. These life sciences clusters are driven by leading healthcare companies, high quality health systems, and top notch research institutions as well as strong entrepreneurial support ecosystems. The region’s startup ecosystem saw 375 life startups attract over $1.7 billion in investments in 2016, according to the Midwest Healthcare Growth Capital Report from BioEnterprise, a Cleveland-based biomedical accelerator.
Indiana – home to several global healthcare corporations – has benefited greatly from its more than $63 billion life sciences industry. In 2016, the state’s life sciences cluster employed more than 56,000 people at 1,687 companies, according to the most recent data provided to BioCrossroads by the Indiana Business Research Center at Indiana University. The average wage for the life sciences sector was $98,934 per worker – up from $ 96,803 in 2014 (2.2 percent increase). The state’s life sciences industry exported nearly $10 billion in products (approximately 28 percent of Indiana’s total manufactured exports) making it the second largest exporter of life sciences products in the U.S. (behind California).
In addition to contributing to the direct economic prosperity of the state, Indiana life sciences companies and institutions of higher education also create building blocks for future prosperity with nearly 1,089 patents for life sciences-related innovations and 77 products gaining approval from the U.S. Food and Drug Administration.
Beyond the success of Indiana’s life sciences industry, in recent years several other Midwest states have been able to build investment capital in life sciences startups to historic levels in 2016, according to BioEnterprise’s Midwest Healthcare Growth Capital Report. In 2016, Midwest life science startups raised over $1.7 billion in total investments led by startups in Minnesota ($424 million attracted), Illinois ($327 million), and Ohio ($291 million). (See above table; source: Midwest Healthcare Growth Capital Report.)
The Midwest Healthcare Growth Capital Report also provides insight into three sectors that comprise the $1.7 billion invested in the Midwest’s life sciences industry:
- Medical device companies: $696 million (40.3 percent of total capital raised in 2016);
- Healthcare IT and software and services companies: $679 million (39.3 percent); and,
- Biotech and pharmaceutical companies: $353 million (20.4 percent).
Since 2011, Midwest states have more than doubled the number of startups receiving capital from 177 in 2011 to 375 in 2016. They also have doubled the total dollars invested from $809.7 million to $1,727 million in 2016.
While the Midwest continues to emerge as a thriving area for life sciences, the greater Philadelphia region also reports a growing life sciences industry cluster. The authors of a recent joint study, the Greater Philadelphia Life Sciences Report, found several economic development highlights from the metro region including:
- 1,200 life sciences companies in 2016;
- 48,900 direct jobs in 2016;
- More than 5,400 life sciences-related patents since 2010;
- $6.3 billion in investment in regional companies since 2011; and,
- $24.6 billion in real output in 2016 (constant 2010 dollars) by those companies – approximately 4 percent of the region’s gross product total.
Similar to the Midwest states and metros, the 11-county Philadelphia region benefits from being in close proximity to leading life sciences companies, high quality health systems, and top notch research institutions including six medical schools, four NCI-designated cancer centers and 10 medical centers. The region also has a strong entrepreneurial ecosystem supported by several tech-based economic development organizations.Indiana, Pennsylvaniabio