Letting life sciences bloom
They are key to regional economic development
Last week, the University of Pittsburgh Innovation Institute hosted a week filled with university entrepreneurs promoting their technology, economic development organizations hosting panel discussions, and service organizations providing educational services and events. Chancellor Patrick Gallagher kicked off Life Sciences Week and Rebecca Bagley, vice chancellor for economic partnerships, encouraged all members of the life sciences community to participate.
Why did it matter? Why should we care? Because the life sciences equal economic development: money and jobs. Look at the math.
Our nation’s health care system is projected to be 18 percent of our economy, or $3.2 trillion, by the end of the year. The term “life sciences” can include biotechnology, pharmaceutical, diagnostic, medical devices, and health care IT products — which make up approximately 40 percent of health care spending.
Here’s some more math: 40 percent of $3.2 trillion comes to about $1.3 trillion. The amount of products consumed in foreign markets is roughly the same as those consumed domestically. Doubling this number, the manufacturer's segment has a market opportunity of $2.6 trillion, or roughly 14.5 percent of the entire U.S. economy. In short, success in the life sciences is necessary for prosperity in a region, state or nation.
Our local universities to attract federalstate, the the region. almost funding economicIf $1 we each billion impactwere yearof a of federal Western funding research Pennsylvania’sfor life alonesciences wouldtop 12 rank states us in amongthe country.the it is. That sounds big — and
There is never enough funding for all projects, and a recent article suggested that local foundations have not been participating. The Pittsburgh Life Sciences Greenhouse would not be in existence without foundation support.
The funding from the foundations can be directly linked to an annual increase in life sciences startups from three companies in 2002 to over 12 companies currently. Is it enough to support the innovation coming from our universities and entrepreneurs? No, but the foundations have moved the dial. Research opens the door to commercial success, but it does not guarantee it. It frequently takes many technologies to create a single product. For example, inventing an automotive engine does not itself make a sellable automobile. It takes multiple components — crankshafts, braking systems, and so on. If the problem is getting from point A to point B, creating an engine helps, but it doesn’t solve the problem by itself. Even the invention of an automobile requires supporting infrastructure such as fuel stations, repair shops, etc. Although technology development is critical, it is only the beginning of the process. It can be easy for coverage of this industry to minimize the complexity of the long, challenging, and interdependent parts. For instance, a recent report stated that fewer than six seed-stage life science companies each year receive financial backing regionally. The truth, however, is that since 2002, the PLSG alone has provided services to 468 companies and invested in 79 of them. Thirty-five of these companies spun out of area universities, with 12 of them being university companies from the past three years. Notably 44 of these companies did not begin as part of the university community. Investment of both dollars and time made by PLSG and other organizations, like Innovation Works and Idea Foundry, may not always get proper credit. Since 2009, Western Pennsylvania has ranked among the Top 20 recipients of life sciences venture capital. As exciting as that sounds, however, in any given year the top four states account for more than 55 percent of life sciences venture capital. So we are excited to be in the Top 20, but holding a less than 2 percent share means there is much more work to do. The region can take great pride in promoting its collaborative infrastructure, celebrating its successes and recommitting to higher levels of progress by capturing global dollars to be invested in our local innovators, both within and outside the university community. We do this for economic prosperity, increased jobs and a higher quality of life for our families.