Tuesday, July 11, 2006

Research and Development Centers as the Catalyst for Economic Development

San Diego is one of the top biotech regions in the U.S. How did it achieve that? Through a concentration of biomedical research at private R&D facilities and the University of California at San Diego.

It started 50 years ago with the founding of the Scripps Clinic and Research Foundation in 1955 (which in turn evolved from the Scripps Metabolic Clinic founded in 1924). In 1961, Scripps recruited pioneering immunologist Frank Dixon and four of his colleagues from the University of Pittsburgh. The name was changed to the Scripps Research Institute in the 1990s, and today it is the world’s largest private non-profit biomedical research facility, employing nearly 3,000 people.

The concentration of research in San Diego at Scripps and the University of California at San Diego attracted Jonas Salk to leave Pittsburgh in 1959 to form the Salk Institute for Biological Studies. Twenty years later, William Fishman left Boston to join the biomedical research community in San Diego by forming the La Jolla Cancer Research Foundation, now known as the Burnham Institute for Medical Research.

The R&D facilities and the university in San Diego have created thousands of high-paying jobs, as well as pioneering medical breakthroughs in a number of areas.

But they also sparked the creation of nearly 500 biotech companies, which started up and grew around the three Institutes and the University, creating thousands more high-paying jobs.

Can this same formula – start with a university, attract R&D centers to join it, and help the technology spin out into companies – work in other regions?

Florida thinks so.

Two years ago, it made a major investment to encourage the Scripps Institute to create Scripps Florida – a state-of-the-art biomedical research institute on the campus of Florida Atlantic University in Palm Beach County. Over 170 researchers are currently working at Scripps Florida, with significant expansion of facilities and jobs expected over the next three years.

Now, Florida is working to attract an East Coast campus of another of San Diego’s R&D anchors, the Burnham Institute. Several communities across Florida are competing to attract the facility. Burnham has indicated that it won’t move to Florida unless a major research university is a partner.

Florida is paying a huge amount – hundreds of millions of dollars – to attract these facilities. They are willing to pay that much because of the tremendous economic development value they see in creating a concentration of research. They need to pay that much because they are starting with such a weak base of R&D in the life sciences. In 2003, the University of Florida ranked 42nd in the country in federally financed R&D in life sciences, with $119 million in R&D. By comparison, the University of California at San Diego ranked 21st with $204 million in R&D, twice as much as the University of Florida. The University of Pittsburgh ranked 7th, with $300 million in federal life sciences R&D – 3 times as much as the University of Florida. In fact, Pitt has more federally-funded R&D in life sciences than all of the universities in Florida combined.

Attracting more R&D facilities (and retaining the ones already here) needs to be a more central part of the Pittsburgh Region’s economic development strategy. Not just in life sciences, but in all of the areas where Pittsburgh has research strength – information technology, robotics, metals, chemicals, nanotechnology, etc. It was talent exported from Pittsburgh that was the catalyst for San Diego's growth -- it's time to reverse the process and focus on attracting R&D talent here to grow our economy.

There is no question that the Pittsburgh Region is highly competitive in attracting R&D facilities – the recent successes in attracting RAND, Google, Seagate, Phillips, and others prove that. The high quality of life here, the low cost of living, the strong base of existing university and corporate research, and the easy transportation access to other regions makes it an ideal location for top researchers.

What’s missing? Two things: (1) An aggressive marketing effort to attract more R&D facilities to the region and to retain the facilities we have, and (2) The kinds of sites, buildings, and transportation needed to enable R&D facilities to locate near the universities in Oakland (and also to enable the universities and medical center to expand).


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