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Recommended Reading: Understanding and Building Bioregions

May 02, 2003

Perhaps in no other sector are efforts to grow an industry so dependent on a strong public-private partnership as they are for biotech and the life sciences. Most of the research funding for the field flows from the government to universities and research institutions. Industry then steps up for clinical studies and commercialization.

While much that has been covered in the SSTI Weekly Digest on building bio-based economies has focused on local strategic plans and numerous state initiatives, a new paper by Anders Osthol and Johan Lembke for the Regional Innovation and Partnership Project takes a broader look at the role and construct of public-private collaborative relationships for economic development founded on life science growth. With detailed case studies of two North Carolina regions – the well established Research Triangle Park and the nascent efforts of the Piedmont Triad Region – Strategies and Partnerships for Biotech Regions offers recommendations for Sweden that are applicable throughout the Western world.

The findings include:

  • Biotech economic development is concentrated in specific geographical areas. Regions are aggressively investing in the biotech sector and are competing for capital, companies, talent and tax revenues. The result is intense competition between regions that adds an important level of competition to that between companies and institutions.
  • The regional level and regional partnerships – and the aggregation of biotech assets at the regional level – are gaining increasing legitimacy as true references for economic development and support for the biotech sector, partly as a result of limited pools of available resources and capital.
  • The biotech sector realizes the need for concerted state and regional efforts and strong public commitment in biotech economic development. The private sector is working in tandem with various public-private partnerships to mobilize resources.
  • Responsibility for developing strategies for the biotech sector is based on and implemented through decentralized and flexible institutional arrangements of cluster enhancement and market-oriented incentive structures.
  • Emerging biotech regions are striving to leverage the proximity to more established biotech regions and to develop niche capabilities that complement existing strengths. There is a need to recognize the distinct features of each region and to play to their particular strengths by tailoring approaches to maximize impact.
  • The importance of nurturing smaller, high-growth businesses is recognized as a crucial strategy for technology-based economic development in combination with recruiting external investments, companies, and talent from outside the region that complement the existing cluster throughout the value chain.
  • Competitiveness and regional advantages are reflected in the innovative capacity to attract venture capital to the region, to mobilize business angels through various types of network organizations, and identify complementarities between venture capital, private equity investment and public investment, all of which are important for early-stage technology-based economic development.
  • Governmental agencies fulfill a role in the diffusion of knowledge and technology transfer. Such efforts counterbalance the high degree of concentration in the biotech area, but only to a limited extent. The forces of concentration are strong in terms of capital endowment and start-up capability. Regional strategies are in the process of becoming increasingly important for further dispersion.

In developing their findings and recommendations, Osthol and Lembke also look at the relative advantages of California, Massachusetts and North Carolina, outline challenges for several specific elements of a bio-based economic development strategy, and present arguments for and against state and local government involvement.

The paper is available at the website of the Institutet för Tillväxtpolitiska Studier in Stockholm: http://www.itps.se/pdf/A2003_005.pdf