Report Defines, Identifies Leading U.S. Biotech Centers

Nine metropolitan areas have been identified as the nation's possessing the greatest concentration of the U.S. biotechnology industry in a new Brookings Institution report entitled Signs of Life: The Growth of Biotechnology Centers in the U.S. The report says the nine areas listed below in order account for: more than 60 percent of all spending on research by the National Institutes of Health; slightly less than two-thirds of all biotech-related patents; eight of every nine VC dollars invested in biopharmaceuticals; and, 95 percent of the dollars in research alliances.

• Boston-Worcester-Lawrence, MA-NH-ME-CT Consolidated Metropolitan Statistical Area (CMSA)
• San Francisco-Oakland-San Jose, CA  CMSA
• San Diego, CA Metropolitan Statistical Area (MSA)
• Raleigh-Durham-Chapel Hill, NC MSA
• Seattle-Tacoma-Bremerton, WA CMSA
• New York-Northern New Jersey-Long Island, NY-NY-CT-PA CMSA
• Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA
• Los Angeles-Riverside-Orange County, CA CMSA
• Washington-Baltimore, DC-MA-VA-WV CMSA

The report's authors, Joseph Cortright and Heike Mayer, conclude "by almost all measures, Boston and San Francisco stand out as the strongest biotech regions in the country." They also point out while New York and Philadelphia are the traditional centers of the U.S. pharmaceutical industry, "both regions are relatively stronger" in research than in commercialization and "have actually lost share of commercial biotech activity as measured by new company formation" since the 1980s. Boston and San Francisco, in contrast, "have much higher indices of commercialization than research."

Chicago, Detroit, Houston and St. Louis were identified as Research Centers or important second tier cities in the biotech industry. Looking at 51 metropolitan areas in total, the study concluded 28 others were Median Metropolitan Areas and 10 more were found to have "no significant biotech research or commercialization."

Factors going into the assessment of which metro areas constitute biotechnology centers include: biomedical research infrastructure; NIH funding for medical schools; biotechnology related patents; venture capital for biopharmaceuticals; pharmaceutical/biotechnology alliances; life science and pharmaceutical research employment; number of biotech companies with more than 100 employees; number and share of biotech firms by establishment date; market capitalization of biotech companies; and, memberships in the biotechnology industry association.

Statistical tables present all 51 metro areas' performances for each factor. Five-page statistical characterizations of the nine leading biotech centers are included as separate appendices to the report.

Cortright and Mayer conclude the "availability of venture capital and local entrepreneurship is critical" in specific metropolitan areas emerging as biotechnology centers. A strong biomedical research presence "appears to be a necessary condition for biotechnology commercialization, but it does not seem to be sufficient."

The authors also caution that developing a new biotechnology center presents a challenge. Strategies must look beyond increasing local medical research activity, the authors suggest. "The apparent scale of research funding required for becoming a biotechnology center may be beyond the reach of most metropolitan areas. In fact, none of the 51 metro areas increased its share of NIH medical school research funding by even one percentage point during the past 15 years." Cleveland and Pittsburgh are highlighted as having increased their NIH funding the most (0.9 percent) yet losing their share of biotech commercialization activity.

Conventional industrial recruitment strategies, demonstrated by the number of states with significant marketing efforts at this week's BIO 2002 conference in Toronto, "will be of limited utility," Cortright and Mayer assert.  "There is limited evidence that biotechnology firms move from place to place... Consequently, metro areas interested in biotechnology should focus on indigenous biotech development strategies."

And finally, the authors point out, the long term nature of the biotech industry will require a decade or more before local strategies bear fruit.

Signs of Life: The Growth of Biotechnology Centers in the U.S. is available on the Brookings Institute's Center on Urban and Metropolitan Policy website: http://www.brookings.edu/urban/