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OpEd: Sustaining Biotech's Growth

By E. Norris Tolson
1 June 2010
The News & Observer

This year, of all years, North Carolina needs to hold fast to its commitment to bioscience as a jobs-growth engine.

Even through the economic crisis, North Carolina's bioscience sector maintained a respectable 1 percent growth in employment. That's a stark contrast to the double-digit unemployment figures elsewhere. State support of the bioscience sector and of the business-building programs of the Biotechnology Center creates jobs. Excellent clean, dignified, $30-an-hour jobs.

North Carolina remains the third-largest bioscience state, behind only California and Massachusetts. If we fail to keep fueling this reliable jobs-growth engine, however, we could be overtaken by Maryland, Texas and other states that are growing their bioscience industries by making billion-dollar investments. They want our jobs.

Here are some relevant North Carolina bioscience facts:

We have 530 bioscience companies statewide, employing 57,000 people. Nearly 250,000 more people work in jobs serving the bioscience sector.

The state's bioscience companies pay average salaries of $74,650 (2008), or about $4.3 billion in payroll.

They produce $1.4 billion in state and local taxes, and bioscience employment brings $176 million annually in personal state income taxes.

The sector grew 18 percent statewide from 2001 to 2006, the fastest of the top 10 biotech states (though others are now surpassing our growth rate). At least 75 of the state's bioscience firms are based on "homegrown" North Carolina university technologies.

For every $1 flowing through the Biotechnology Center to start-up companies for loans, North Carolina reaps $103.

Our steady bioscience growth includes awesome installations such as the U.S. headquarters of GlaxoSmithKline and the new vaccine plants by Merck in Durham and Novartis in Holly Springs, employing thousands of well-prepared North Carolinians. When fully operational, the Novartis plant alone will be capable of producing half the nation's flu vaccine needs.

Our hundreds of small startup companies spinning out of our universities and other labs, however, are also a hallmark of our success. Establishing nimble new companies is the best way to create new jobs, according to a recent study from the widely respected Kauffman Foundation. The study found that young companies three to five years old make up a small percentage of all businesses, yet they account for the vast majority of new jobs in any given year.

These are the very companies routinely bootstrapped and nurtured by the N.C. Biotechnology Center. The high-paying jobs they create are the reason it's so important for our policymakers to properly fund Biotechnology Center programming in this difficult budget year and for years to come.

Consider the Kauffman Foundation's key recommendations for creating jobs:
Create more companies, because based on simple math, this will mean more high-growth companies and hence more job growth.

Remove barriers, including difficulty accessing financing, excessive regulation and excessive taxation - things that keep existing companies from becoming high-growth companies.

Support universities, which have the potential to produce high-growth firms. The report recommends removing barriers to commercialization of university research.

I fully recognize the difficult budget decisions that Gov. Bev Perdue and the General Assembly are facing. I say this as a North Carolinian who has worked in industry and served as an elected state representative and Cabinet secretary. As president and CEO of the Biotechnology Center, I routinely confront the significance of the state's track record of support for bioscience research, education and business development and growth.

Budget problems and double-digit unemployment were squeezing North Carolina some 26 years ago when bold, creative, forward-thinking state leaders established the center. Like other state-funded organizations, we've taken on serious belt-tightening measures, from unfilled positions to furloughs for all employees, travel restrictions to pay freezes. Yet our staff - and the programs they oversee - continue to bring immense benefit to the state.

It is precisely because of these difficult economic times that the General Assembly needs to properly fund the Biotechnology Center and its jobs-generating programs. It's a great opportunity, for now and for our future.