Life Sciences Industry is an Emerging Powerhouse in Pennsylvania

By Daniel R. Matlis

According to a recent study by the Milken Institute the life sciences industry is an emerging powerhouse for U.S. global economic competitiveness in the 21st century. In the study, Philadelphia ranked as the 3rd most vibrant biosciences cluster in the nation.
Pennsylvania’s $2 billion Biosciences Enterprise commitment, coupled with Governor Edward G. Rendell’s $2.3 billion Economic Stimulus Package is fueling research and development, attracting venture capital, and supporting early-stage investment.

Recently, I had the opportunity to speak with Rebecca Bagley, Deputy Secretary for the Technology Investment Office of the Pennsylvania Department of Community and Economic Development (DCED), to learn about what the Commonwealth is doing to attract and retain life science companies.

What is PA’s vision around life sciences?

Life science is a major focus cluster for the Commonwealth since Governor Rendell took office. One of the reasons we focus in that sector is the continuum of assets the Commonwealth has to offer. The spectrum includes world class universities; eight of the United States’ largest pharmaceutical companies are located within a 50-mile radius of Philadelphia; and a strong venture capital climate.

How does the Commonwealth benefit?

We benefit through jobs, research and development expenditures, leveraging of capital into the state, as well as attracting entrepreneurs which benefit the state in the long run. There are more than 125 bio-pharma [biological-pharmaceutical] companies and more than 2,000 biosciences-related companies located in Pennsylvania.

How have trends such as outsourcing and the flat world impacted life science firms in PA?

The Commonwealth has a focus on innovation and early stage companies, funded not only through a venture capital network but also through our Life Science Greenhouses, a network and resource for early stage capital.

We also have the large pharmaceutical companies which provide potential for partnership opportunities.

In life sciences, it is less likely that the manufacturing will go overseas because of Food and Drug Administration (FDA) restrictions and the specialties that are necessary compared to a call center. Biotechnology manufacturing is much more complex and therefore more difficult to relocate overseas; we have not seen this trend with bio-pharma.

We have seen a significant shift to overseas life science manufacturing to countries like Mexico, Brazil and China. How has this impacted PA?

With our focus on innovation and heavy research and development, Pennsylvania offers a great advantage to bio-pharma companies. The Commonwealth is targeting high tech, complex manufacturing.

What initiative does the state have to attract foreign companies to establish headquarters in PA?

Within the Governor Rendell’s budget this year, we have a $ 15 million allocation for World Trade PA, which will help focus our international activities with both recruiting and attracting early stage companies to relocate here. For example, the Science Center in Philadelphia is recruiting early stage Japanese companies. Historically our goal has been to attract established companies to set up their U.S. headquarters in the Commonwealth.

How does your approach differ when dealing with early stage versus established companies?

The Technology Investment Office focuses on early stage innovation and technology.  There are other offices with in the department along with the Governor’s Action Team which focus on attracting or recruiting the established companies to PA.

We have a strong relationship with Pennsylvania Bio. This ensures that companies based in Pennsylvania stay in the state as they grow and require larger facilities. To that end, DCED Secretary Dennis Yablonsky and the president of PA-Bio meet with companies in Pennsylvania to make sure that growing companies are familiar with the range of incentives the state has to offer.

We offer packages that include loans, grants and tax credits that can accommodate relocation of large companies. We also can assist with site selection. The Governor’s Action Team works closely with local entities to ensure the process is smooth.

What is the state doing to attract service organization that support life sciences to ensure there is a complete ecosystem within the state?

That has been our approach from the beginning. We build clusters to include large pharmaceutical companies, service providers and early stage companies together in one area to have a complete market place.

So why should life science companies consider Pennsylvania?

The assets we have in the Commonwealth to develop life science clusters are very attractive to companies. From world class universities, which can provide research at their fingertips, to the supportive venture capital environment, and an extremely supportive and proactive state government, which provides both incentives and focused initiatives for the life science industry, we have created an environment which makes it very encouraging for companies to operate in the Commonwealth. Additionally, we offer great quality of life, great schools, inexpensive housing and thriving communities.

ã 2006 by Axendia

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