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Milken Ranks Regional Biotech, Life Science Clusters

June 07, 2004

Only a handful of metropolitan areas have the critical mass necessary to ensure sustainability of their local biotech communities, according to America’s Biotech and Life Science Clusters, a new study from the Milken Institute. At the top of the list is San Diego, followed closely by Boston and the Raleigh-Durham-Chapel Hill metro area. Only another nine are in the running, the report contends.

According to the Institute’s 2004 Biotech Index, the top 12 metros (and their composite scores) are:

1. San Diego (100)

2. Boston (95.1)

3. Raleigh-Durham-Chapel Hill (92.5)

4. San Jose (87.8)

5. Seattle-Bellevue-Everett (83.8)

6. Washington, D.C. (79.4)

7. Philadelphia (76.5)

8. San Francisco (75.8)

9. Oakland (74.3)

10. Los Angeles-Long Beach (66.5)

11. Orange County, CA (54.1)

12. Austin-San Marcos (47.8)

If life sciences (which includes pharmaceuticals and medical devices) is included in the measurements, Boston would rank first, followed by: San Diego (2), San Jose (3), Raleigh-Durham-Chapel Hill (4), Philadelphia (5), Seattle-Bellevue-Everett (6), San Francisco (7), Washington, D.C. (8), Oakland (9), Los Angeles (10), Orange County (11) and Austin-San Marcos (12).

The rankings are based on two broad factors:

  • Biotechnology innovation pipeline. This includes infrastructure that allows a metro to capitalize on its biotech knowledge and creativity, such as the quality of its workforce and amount of research and development dollars it receives. And,
  • Current impact assessment – an area’s success in bringing ideas to the marketplace and creating companies, jobs and products.

Overall, researchers used 44 different measurements, from biotech venture-capital funding to the number of biotech scientists working in the region. It is the most comprehensive measurement of regional biotech centers ever conducted. Among the study’s firsts: use of data from smaller, better-defined Metropolitan Statistical Areas (MSAs) instead of Consolidated Metropolitan Statistical Areas (CMSAs); more sophisticated weighting by population, employment or gross metro product, rather than using absolute numbers; and a unique biotechnology and life sciences data set providing detailed employment estimates through 2002 for recent growth comparisons.

The study measures each metro’s strength in five categories: R&D inputs, risk capital, human capital, biotech workforce and current impact. San Diego places first in R&D inputs and current impact. San Jose is first in the risk capital category, while Raleigh-Durham-Chapel Hill is first in the human capital and biotech workforce categories.

America’s Biotech and Life Science Clusters, prepared in cooperation with Deloitte & Touche LLP, focuses closely on the index’s top metro, San Diego, whose life sciences industry is directly and indirectly responsible for 55,600 jobs and $5.8 billion in income – 5.3 percent of output – in the metro. It offers a case study of what it takes to form and nurture a biotech cluster.

The 107-page report is available at: http://www.milkeninstitute.org/pdf/biotech_clusters.pdf