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An Opportunity to Build “One Missouri”

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An Opportunity to Build “One Missouri” LIFE SCIENCES & MISSOURI’S ECONOMIC FUTURE: AN OPPORTUNITY TO BUILD “ONE MISSOURI” PREPARED FOR: The State of Missouri The University of Missouri System The Danforth Foundation The Ewing Marion Kauffman Foundation PREPARED BY: Technology Partnership Practice Battelle Memorial Institute Cleveland, Ohio January 2003 © 2003 Battelle Memorial Institute © 2003 Battelle Memorial Institute (Battelle) does not endorse or recommend particular companies, products, services, or technologies, nor does it endorse or recommend financial investments and/or the purchase or sale of securities. Battelle makes no warranty or guarantee, express or implied, including without limitation, warranties of fitness for a particular purpose or merchantability, for any report, service, data, or other information provided herein. Copyright 2003 Battelle Memorial Institute. Use, duplication, or distribution of this document or any part thereof is prohibited without the written permission of Battelle Memorial Institute. Unauthorized use may violate the copyright laws and result in civil and/or criminal penalties. Final Report Life Sciences & Missouri’s Economic Future: An Opportunity to Build “One Missouri” Prepared for: The State of Missouri The University of Missouri System The Danforth Foundation The Ewing Marion Kauffman Foundation Prepared by: Technology Partnership Practice Battelle Memorial Institute Cleveland, Ohio January 2003 “One Missouri” PREFACE “One Missouri” represents an opportunity for the State of Missouri, in partnership with industry, philanthropic sources, and others, to engage in a multiyear effort to position the state as a major Midwest Center in the life sciences, with world-class research stature translated into wealth creation and well-paying jobs for the state’s current and future generations. But, Missouri is lagging other states, in the Midwest and elsewhere, and the current state budgetary crisis is moving the state backwards. Over the next several years, Missouri must take seriously the challenge to build its life science base, working with and building on the momentum already being generated in both Kansas City and St. Louis around their complementary life science efforts. If Missouri fails to join with private sector partners and others from these and other regions of the state, these regional efforts will not realize their full potential and others may soon eclipse both the state and its regions. This “One Missouri” Life Science Strategy includes a series of important, interrelated programs and investments that must be thought of as an integrated whole. This strategy has identified the key gaps facing the state in becoming a major Midwest Life Science Center and identified the strategies and actions to address these gaps. What faces Missouri today is this simple fact: Missouri is neither a clear leader nor a straggler in today’s life science world. The state has considerable assets—such as its public and private higher education institutions, unique research organizations such as the Stowers Institute and the Danforth Plant Sciences Center—but to achieve their full potential and to address the economic well-being of the state’s citizens will require additional resources and the creation of “connective” infrastructure for research to be turned into firms and jobs in Missouri. Missouri is at a critical “fork in the road”—does it want to rest on its traditional base in bioprocess manufacturing, slowly being eclipsed by other states and regions? Or does it want to take advantage of its existing assets and truly position itself as a leader? It is widely recognized that knowledge, innovation, and intellectual capital determine each state’s economic vitality. The life sciences represent a comparative advantage on which Missouri can build its future as a knowledge state—both in its science and technology research capacity and its talent. While the timing has never been better for all Missourians to come together under a common agenda—life sciences—it remains to be seen if the state government, in partnership with the private and nonprofit sectors, is up to the challenge of being a leader. The life science sector is about cutting-edge, world-class research; building the facilities in which to conduct research; equipping the labs; and attracting star faculty. But, it is more than that—it is also about linking industry with academe to undertake and solve industry needs and problems that result in new products and disease treatment and prevention. Missouri today is not known as a life science state. But, this examination of Missouri has identified many assets and resources around which a fairly strong industry base has emerged over many decades. Excluding hospitals, Missouri’s life science industry base is within 5 percent of the national average in concentration. However, it is dominated by mature industries such as those in food and nutrition and organic and agricultural chemicals subsectors. During the past decade, the state’s strengths in drugs and pharmaceuticals and medical devices and instruments iii “One Missouri” have declined steadily. Indeed, Missouri is not a growth state or a dynamic leader in two of the key drivers of the biorevolution—research and testing and drugs and pharmaceuticals. Extrapolating current trends in Missouri’s life science industry base over the next decade is projected to result in a loss of over 9,000 jobs in drugs and pharmaceuticals and nearly 1,800 jobs in medical devices and instruments, along with very slow growth in the mainstays of Missouri’s economy—food and nutrition and organic and agricultural chemicals—which together are projected to expand by just over 400 jobs. By 2012, drugs and pharmaceuticals in Missouri would shrink to just under 5,400 employees—a 50 percent decline from today—and medical devices employment would shrink 14 percent. Whereas Missouri is 95 percent as concentrated in the drug and pharmaceutical industry today, by the year 2012 under current trends it would be 26 percent as concentrated; similarly, for medical devices, it would move from 76 percent as concentrated to 52 percent. In short, Missouri, if current trends continue, will be eclipsed as a life science-driven economy by other states and regions. Battelle forecasts that, if the state aggressively pursues the life sciences and makes the necessary investments over the next 10 years in the research capacity and technology commercialization areas specified in this report, the state would add more than 21,000 permanent jobs in life science industries, for the most part well-paid, quality employment. Drugs and pharmaceuticals, research and testing, and other parts of the state’s newer emerging industries could expand and grow, helping to diversify the life sciences from Missouri’s traditional bioprocessing manufacturing base, while protecting employment in these traditional sectors. The life sciences represent an opportunity for Missouri to diversify its economy, moving from durable manufacturing to value-added agriculture, manufacturing, and product development. Building a strong life science industry will provide disposable income that also will enable services and other industries to grow in the state. It will mean keeping scientific and technological talent in Missouri and leveraging significant federal, industry, and other funds, many fold what the state government itself invests. The strategy, Life Sciences & Missouri’s Economic Future: An Opportunity to Build “One Missouri,” is a three-prong approach to promote technology-based development in the state through increasing research capacity, aggressively implementing economic development initiatives, and striving to improve the technical aptitude of the state’s workforce. The report proposes four strategies and 20 actions. Realistically, all 20 actions cannot be taken at once. Consequently, a set of priorities identifies those actions that can begin now and others that can begin in two, three, or four years. These actions are intertwined and connected, but they are also phased in a time sequence for consideration and implementation. The state and its private and nonprofit partners will need to “ramp up” this strategy dependent on resources available. Keys to the success of strategy implementation are sufficient resources to invest and the ability to invest them on a timely basis. While recent actions of the Missouri state government are not favorable, it should be noted that the two- to three-year window for action is still open. If Missouri does not choose its “fork in the road” consciously, deliberately, and with full knowledge of the consequences, it may take a fork that neither it nor its citizenry chooses. This strategy specifies that one fork may take Missouri to 21,000 additional well-paying jobs, $7.2 billion in additional gross regional product, and more than $3.9 billion in real disposable income over the next decade. The other fork may not only cost the state these jobs, but, if the state and the private iv “One Missouri” sector simply continue existing trends, it may also mean further significant job and economic losses in key life science industries such as drugs and pharmaceuticals and medical devices. v “One Missouri” vi “One Missouri” Table of Contents Page Preface ............................................................................................................................................iii Abbreviations and Acronyms......................................................................................................... xi Executive
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