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State betting on research universities to lure companies
By Dan McCue
Staff Writer
In a competitive environment where some states are investing hundreds of millions of dollars to lure a share of the nation’s growing life sciences industry to their communities, South Carolina is betting on the appeal of its university research infrastructure to secure a foothold in the industry.
Over the past seven years, a period during which, for instance, Kansas invested $500 million in public money in the pursuit of biotech companies, South Carolina has allocated only $3.5 million to support the state’s Biotechnology Incubation Program, also known as SC BIO.
The only other revenue the initiative currently receives is through consulting contracts with private companies in the field.
“The good news is that we have a great depth of research in South Carolina, and we have the intellectual resources we need to be very successful in bringing more biotech companies to our state,” said Ashley Hannah, the incubation program’s spokeswoman.
The incubator receives roughly $500,000 a year from the state Legislature, she said.
“Right now, we’re looking at trying to find some grants to support our mission,” Hannah said.
While acknowledging that South Carolina may be behind the curve compared to other states when it comes to funding biotech company recruitment, David Ginn, president and CEO of the Charleston Regional Development Alliance, cautioned critics to remember, “this isn’t a sprint but a marathon.
“Granted, when it comes to biotech, we’re in a very competitive situation with every state in the country, but I think we are doing the right things, laying the groundwork and spreading the word that we do have the assets in the state, and especially Charleston, to be a player in bioscience,” he said.
Chartered in 2001, the program’s mission is to commercialize life science research from the state’s educational institutions, support the recruitment of companies in the industry and support life science education throughout the state.
By using a business-consulting model, SC BIO develops companies that emerge from university and research institute technologies.
The appeal is the potential to grow high-paying jobs in the state in an industry that is still experiencing the promise of future growth.
The goal is to create biotech clusters in Charleston, Greenville and Columbia—communities that are already home to thriving research universities—similar to those that have long existed in places like Northern California and Cambridge, Mass.
In addition to the Biotechnology Incubation Program, significant players in the state include the state Department of Commerce, the South Carolina Research Authority, the state’s three research universities—Clemson University, the University of South Carolina and the Medical University of South Carolina—and economic development organizations.
Currently, SC BIO is working with about 15 companies across the state. The nonprofit organization also manages laboratory space for developing companies.
The 22,000-square-foot incubator facility was established in 2002 and is located in Greenwood, adjacent to the Greenwood Genetic Center, Hannah said.
Four companies are currently using the incubator facility, which is made up of wet labs, office space, conference meeting rooms and a library. Four more companies are currently on the incubator’s waiting list.
Forty-four states now have programs to build research facilities in the hopes of seeding new biotech development, up more than 30% in the past two years. South Carolina and most other states offer tax breaks to growing bioscience firms, and several invest money directly to help small ventures get off the ground.
Whether those states are spending their money wisely, however, is an open question. Some economists have questioned how much states should be spending in pursuit of an industry that, while high paying, creates a small number of jobs.
“If your objective is do some health research and stimulate knowledge of health, that’s very generous. But if your objective is to grow your economy, it’s probably not going to have any effect at all,” said Joseph Cortright, an economics consultant who published a national survey of industry growth for the Brookings Institution in 2002.
Ginn said whether biotech is worth the serious attention being paid to it is a matter of perspective.
“Ten years ago, this market, in particular, needed high volumes of jobs to take the place of those lost due to the Navy base closure,” he said. “Today, our unemployment rate here in Charleston is just 5 percent, so we have the luxury of focusing on smaller, good paying, diverse companies for our market.
“That’s why I think it’s important not to just focus on the monetary, and to look at where we really stand and what our circumstances are,” Ginn continued. “The fact is, for the first time, a number of entities have come together to work for a common goal.
“Ten years from now, we very well could be looking back and saying, the mid-2000s were when this state and this region got serious about true collaborative efforts to establish this industry sector here.”
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@charlestonbusiness.com.
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