A decade ago, many states and metropolitan areas saw bio as their tickets to the future. The gambit didn’t work out for most of them (for my assessment of Phoenix’s effort, you can read here and here). Seattle was fortunate to have an established cluster, which was ranked No. 5 nationally in an influential 2004 report by the Milken Institute. How are we doing now? Hanging on, barely. A new report by Jones Lang LaSalle has Seattle as the nation’s tenth largest “established” bio cluster. The leaders: Boston, San Diego, the Bay Area, Raleigh-Durham, Philadelphia, D.C, New York, Los Angeles and — a newcomer to the list — Minneapolis. Among the “emerging” clusters are Westchester/New Haven, Conn., Chicago, Denver, Cleveland-Columbis-Cincinnati and Salt Lake City.
The report states:
Seattle has one of the fastest growing life sciences markets in the nation and has become one of the core cancer research markets in the nation. Puget Sound’s life sciences is comprised of nearly 1,000 firms employing more than 22,000 directly in the industry, with an additional 191,000 people employed in the hospitals and the medical field. One of the distinguishing features of the Seattle-area life sciences market is that very little manufacturing is done in the region. Nearly all Puget Sound-area life sciences industry activities are based on research and development. Unlike areas with a strong concentration of life sciences manufacturing jobs, when a growing Puget Sound company is purchased by a larger company, the frequent trend has been the employees and the companies to remain intact and local to Seattle. This is the case with many companies like Zymogenetics, which was acquired by Bristol-Myers Squibb in 2010; Blue Heron, which was acquired by OriGene Technologies in 2010; and Sonosite, which is being acquired by Fujifilm.
At 4.6 million square feet the Seattle life sciences market is a smaller market with a high density of companies situated in its two core markets of South Lake Union and Bothell. Seattle has a dynamic mix of life sciences companies both private and public who serve a vast array of activities from cancer research to drug research. The University of Washington Medicine, Fred Hutchinson Cancer Research, Seattle Cancer Care Alliance, Seattle Genetics, Amgen and Bristol-Myers Squibb all are staples of excellence in the market and have seen significant growth over the last decade. A major contributor to Seattle’s life sciences growth can be attributed to industry leading research coupled with generous funding by some of the world’s largest philanthropic organizations, like the Bill & Melinda Gates Foundation.
That said, Seattle hasn’t developed another Immunex, a major player that was bought by Amgen in 2001. The competitive arena has changed drastically, with funding harder to come by, investors less patient, established clusters hanging onto their assets and benefiting from consolidation, and new clusters emerging in developing nations which promise greater growth than mature markets in North America and Europe.
The competition is hungry. New Gov. Jay Inslee has promised to focus on retaining existing clusters and building new ones. It’s important that bio and life sciences not be forgotten. Seattle and the Puget Sound Region retain a robust position. But without some new strategies, we can’t assume a report ten years from now will show us still among the top 10.
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Today’s Econ Haiku:
Retail bankers get the axe
Jamie saves the whales