• SSTI poll shows overwhelming support for innovation platform

    More than 90 percent of the electorate support expanded efforts to strengthen the key elements of a knowledge-driven economy. Members can sign up for a webinar on how the poll can inform your communications.

  • Become an SSTI Member

    As the most comprehensive resource available for those involved in technology-based economic development, SSTI offers the services that are needed to help build tech-based economies.  Learn more about membership...

  • A directory of responses to the coronavirus pandemic.

    SSTI is cultivating this directory of federal, private and state actions and resources broadly affecting tech-based economic development efforts.

  • Subscribe to the SSTI Weekly Digest

    Each week, the SSTI Weekly Digest delivers the latest breaking news and expert analysis of critical issues affecting the tech-based economic development community. Subscribe today!

Arizona Maps Out Strategy for Next Decade of Bioscience Growth

May 15, 2014

Arizona is in a better position to emerge as a global player in biosciences that it was a decade ago, according to a new roadmap from the Flinn Foundation. Building on an initial strategic document released in 2002, the updated strategy offers 77 potential actions the state could pursue to support bioscience entrepreneurship, research translation, talent development, institutional connectivity and collaborations. Risk capital plays a key role in the updated strategy, which challenges Arizona to attract an annual share of national venture capital investment equal to its share of population by 2025.

The Flinn Foundation, an Arizona-focused, philanthropic organization, collaborated with Battelle to produce the first roadmap in 2002. At that time, the authors focused on the need to build a stronger research base in the state through its universities, hospitals and private research institutions. Arizona also lacked a critical mass of non-hospital bioscience firms of sufficient size to catalyze a vibrant life sciences industry. Secondarily, the Flinn Foundation suggested that the state would need to secure public and private investments in bioscience businesses.

A review of the roadmap’s 19 original goals found that the state has made progress on all 19, including substantial progress on 10. Academic research expenditures in the biosciences more than doubled by 2011, funding from the National Institutes of Health grew faster than the national average and the state’s number of bioscience firms increased by more than 30 percent.

Venture capital, and other risk capital investment, however, did not grow at the same pace. As private equity investment collapsed in the 2008-10 period, Arizona’s investment activity followed suit. In 2002, an extremely good year for Arizona venture capital, businesses secured $111 million in funding. In 2012, that number had fallen to $22 million.

Meanwhile, the global bioscience industry was changing, and some of the metrics in the original roadmap became less relevant. Part of this change was the rise of bioscience-related distribution, including drugs and sundries; medical, dental and hospital equipment; and, farm supplies. The growth of this sub-sector was not captured within the scope of the state’s strategy.

The Flinn Foundation has included distribution activities in its new strategy for the biosciences sector, a sector it estimates employs more than 100,000 people in 2014. About 1,382 establishments currently are active, paying an average of $62,775 per employee each year. The inclusion of distribution represents a major change, since that sub-sector offers more establishments and jobs than any other bioscience category – more than research, testing and medical labs, hospitals, medical devices and equipment; drugs, pharmaceuticals and diagnosis; and, agricultural feedstock and chemicals. Biosciences-related distribution also appears to offer higher wages and represents an area in which Arizona is outperforming much of the nation.

Because of the state’s struggle with attracting private equity capital, many of the roadmap’s recommendations involve the promotion of investment. The authors call for a state Bioscience Portfolio Advisor to help firms locate financing, along with a new Bioscience Catalytic Capital network to keep entrepreneurs connected and informed. The strategy also includes a new fund-of-funds, matching Phase II SBIR grants and new seed and pre-seed capital initiatives. The rest of the list of 77 potential actions covers a wide variety of recommendations, including an independent review of the state’s Technology and Research Initiative Fund, mentoring programs and removal of institutional barriers.

Goals set for 2025 by the roadmap include:

  • Increasing venture capital activity so that the state’s market share of national investment meets it share of population;
  • Generating $785 million in support for intuitional research and reaching the national performance level in academic revenue from all sources;
  • Investing $500-$750 million in state-of-the-art research infrastructure;
  • Attracting 5-7 additional bioscience anchor institutions; and,
  • Leveraging significant partnerships with neighboring states, Canada and Mexico in at least two of its biosciences sub-sectors.

Download the roadmap report…

Arizonastrategic plan, policy recommendations, bio, foundations