Print“This is happening in a very distributed fashion.”
Economic developers have long sought to court biotech companies for the promise of good-paying jobs and high growth that they bring. But as companies seek ways to build leaner and more productive operations, their regional benefit could be diminished, panelists at a recent Xconomy forum held at the University of California, San Francisco suggested.
“I think the employment structure is going to change.” says Plexxikon CEO Peter Hirth. “I see this already happening.”
He noted many talented people have been laid of from biopharmaceutical companies during the last five years. Though companies like his employ talented people laid off from other companies, increasingly they are doing so on a project by project basis and not necessarily at a local level.
“This is happening in a very distributed fashion,” he says. “They don’t need to be here.”
Plexxikon’s approach is mirrored in regions across the United States where the industry has taken root. Companies are increasingly building small teams to handle executive functions in biotech hubs while outsourcing clinical development and manufacturing to low-cost centers in Asia and beyond.
The educational system that serves as a critical driver of life sciences innovation faces challenges too, says Jeff Bluestone, UCSF executive vice chancellor and provost of the university.
“I think it’s at risk. It’s at risk in California in the Bay Area. It’s at risk in the country,” says Bluestone, who’s worried about the high cost of educating new researchers and retaining them in the area. “I think a lot of energy we’re spending in terms of maintaining what we’ve got is making us more conservative at times and less innovative.”
As biotechnology companies increasingly rely on outsourcing, it may minimize the economic punch they provide regions that invested in courting these companies. Strategies to find low-cost way to research, develop, and manufacture drugs will likely mean employment and economic benefits these companies create will be smaller and more geographically distributed than they would have been in a less globalized economy.
March 18, 2011
http://www.burrillreport.com/article-limiting_payoffs.html
.gif)
