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2005 Rankings Report

Top States for Biotech Growth

Illinois, New York, and Massachusetts top the list of states that are good prospects for growing biotech firms.

If the recent BIO 2005 Annual International Convention at the Philadelphia Convention Center is any indication of how much attention the biotechnology industry is garnering these days, the industry certainly is rapidly growing in popularity. The convention set new records for attendance and international representation—total registration was 18,730, with representatives from 56 countries and all 50 U.S. states. More than 500 journalists from 36 countries covered BIO 2005.

Economic developers’ interest in attracting biotechnology companies has been growing steadily in the past four years. According to a recent BIO study, in 2001 only 14 states targeted the bioscience sector but by 2004, 40 states specifically included biosciences on their lists of development prospects. The booths at BIO 2005 were further proof of this trend, and illustrated clearly that interest is not just growing in the U.S.: Walking the aisles of the exhibit hall you could find economic developers from Oklahoma City to Singapore trying to attract the attention of growing biotech companies.

This growing interest in attracting biotech companies is one reason why we compile a ranking of the best states for biotechnology companies. We selected a variety of factors that we feel contribute to creating the most fertile soil in which to grow a biotechnology company. The eight factors we measured for each state are:

• Number of establishments in 2002 in the four major biotech subsectors—agricultural feedstocks and chemicals, drugs and pharmaceuticals, medical devices and equipment, and research and testing;
• Average percent change in number of establishments among the four major biotech subsectors from 2001-2002;
• Years since a biotech strategy was adopted (the longer, the better);
• Number of biotech research parks in the state (including those under development);
• Number of biotech incubators;
• Whether bioscience facilities financing is available;
• Life sciences R&D expenditures for FY 2002; and
• Average number of biological scientists in the workforce during FY 2000-2002.

Taking those factors into consideration, Illinois, New York, and Massachusetts topped our list. Here’s a closer look at the biotech leaders:

ILLINOIS

What makes Illinois a strong choice for biotech companies? Its strength lies in its consistency. While Illinois ranks first in only one category (number of biotech research parks, tied with Massachusetts with four), it landed in the top 10 in all but one of the other categories. It is home to a large number of bioscience facilities, 776 (ranking it fourth in that category) and experienced positive growth of nearly 4% in the number of bioscience establishments. Illinois also offers five biotech incubators, offers bioscience facilities financing, and the state ranks seventh overall in life sciences R&D expenditures. It ranks sixth for the number of biological scientists in the workforce.

In April, Governor Rod Blagojevich announced a $1 million investment in the Illinois Technology Innovation Campus, a planned development intended to help transform the state from a scientific research hub to a launching pad for bioscience technologies. The facility is expected to create 3,250 new jobs on site, and more than 10,000 ripple-effect jobs. Upon completion, the campus will generate $1.8 billion annually in statewide economic activity, according to a study conducted by Applied Real Estate Analysis, Inc.

“As the global economy continues to evolve, we must invest in the technologies of today and tomorrow,” says Gov. Blagojevich. “The Technology Innovation Campus is a tremendous opportunity to take the scientific research that is being produced throughout Illinois from concept to commercialization. Illinois has all the necessary ingredients to become the bio and nanotech capital of the world, and this public-private partnership involving our universities, national laboratories, industry leaders, and our fine state and local elected officials is a giant leap in helping us achieve this attainable goal. Even during these challenging fiscal times, we must have a capital budget to continue supporting vital projects like this that are moving our economy into the 21st century and beyond.”

NEW YORK

Within this ranking, New York fared well when it came to number of biotech incubators (six, ranking it second); second overall in life sciences R&D expenditures with $1,887,079; and second in number of biological scientists in the workforce with 33,347. New York also got points for offering bioscience facilities financing. The state ranks third in number of biotech research parks, and is home to 749 bioscience facilities, ranking it fifth. However, the state experienced negative growth (-2.7%) in its number of bioscience establishments. Among New York’s greatest strengths is its Centers of Excellence program, financed by the Empire State Development Corp.

MASSACHUSETTS

Our ranking reflects Massachusetts’ long history as a hotbed for the life sciences. It ranks first in the number of biotech research parks, tied with Illinois with four. It is home to 749 bioscience facilities, ranking it fifth. It experienced a slight increase (0.4%) in the number of bioscience establishments. Massachusetts offers three biotech incubators, ranking it 10th; it ranks eighth overall in life sciences R&D expenditures with $805,513; and seventh for the number of biological scientists in the workforce at 18,147. Massachusetts recently invested $90 million in a Biomedical Research Institute, a joint project of UMass Amherst and Bay State Medical Center.