Originally created 10/03/04

Georgia looks to the biotech industry for its economic growth



ATLANTA - Dot-coms are so last decade.

After the demise of the Internet start-up craze, the big thing now for Georgia's technological future lies in the human body, according to state and local economic developers.

Life science, biomedical, biotech - these are now the buzzwords officials are throwing attention and money toward as they turn to medical research to pump new products, investment and jobs into the economy.

Atlanta is trying to compete with other major cities, and Augusta and Athens have their own efforts gearing up to tap into the industry.

There are enticing numbers propelling the efforts: Jobs pay between $45,000 and $50,000 a year in the state, compared with the average wage of $29,000. Industry revenues have grown by 16 percent when compounded annually since 1990. The value of publicly traded U.S. biotech companies stands at $311 billion.

Georgia is not the only state that wants to capitalize.

"The competition is fierce among states to attract companies," said Russell Medford, the vice chairman of the Georgia Biomedical Partnership, a network group to promote life-sciences development in the state. "Virtually, every state in the U.S. has an economic development program aimed at supporting biotechnology and the life-science industry."

In recent years, states have poured money into biotech efforts as a way to boost their position in the arena.

Virginia has approved a loan fund that will help finance moving biotech research into commercial activity. The funding pot, which could reach up to $3 million, is intended to be supplied by state money.

Michigan has earmarked $1 billion in tobacco settlement money for the next 20 years of the state's life sciences industry and research.

With 60 biotech companies operating in the state, Georgia ranks among the top 10 states with the largest presence. Add into that mix the pharmaceuticals and agribusiness, and state officials say the bioscience industry in Georgia includes 120 research and development companies and more than 13,000 workers.

The state has invested $375 million to attract leading scientists to the universities, many of which have built incubator spaces to nurture starting companies.

One industry tracker says the efforts might be not be enough to take on other parts of the country where biotech already is a built-up force.

"With the states' development efforts, they're ignoring the fact that the critical time for determining this industry was probably about 25 years ago, and it's simply too late today," said Joseph Cortright, an economist for the consulting firm Impresa in Portland, Ore.

He said there are nine cities, including San Francisco and Boston, known as centers for biotech activity, and those areas are gaining more of the growing industry's share. The only one in the Southeast that Mr. Cortright includes on the list is the Raleigh/Durham, N.C., area where the Research Triangle Park formed in 1959 to foster cooperation between nearby universities and has grown to include high-tech and biotech companies.

"I think a lot of people have this naive idea that biotechnology will be like Krispy Kreme Doughnuts," he said. "It started in one part of the country and sooner or later, it will be everywhere. But in fact, the opposite is true that as this industry grows, it grows fastest where it's firmly established."

E.H. Culpepper is optimistic about Georgia's chances.

"I think the New Economy's going to be biosciences," said the chairman of the newly formed Georgia Bioscience Joint Development Authority.

The authority, which represents Athens-Clarke, Barrow, Oconee and Gwinnett counties, is seeking to develop a research park corridor along state Highway 316 that, if successful, could provide much-needed lab space for prospective companies, Mr. Culpepper said.

"It would be the state's only university-affiliated research park," he said. "You start with the quality of research that is going on in our universities, and when you couple that with the physical connectivity, you just provide a natural economic development stimulus."

Athens, which already has about a dozen life-science companies, also benefits from the University of Georgia's research in agriculture science.

Construction also is under way on campus to build a $40 million Biomedical and Health Sciences building that will house research in biomedicine and agriculture.

Clifton Baile, an eminent scholar in agriculture biotechnology at UGA, said it will take effort to make sure start-up companies have long-term support.

"I think we're pretty good at starting things. I think it's tough to really keep them going," he said last week during a life-sciences summit in Atlanta. "I think we need to figure out ways as a state to really build this critical mass of the middle stage."

One of the challenges in establishing new companies has been a lack of private investment in the state, especially outside Atlanta.

That's one reason Augusta officials say the creation of two venture capital funds should help propel the city's fledgling efforts into building up its life science companies.

Built around the Medical College of Georgia's research and existing industrial plants, such as Monsanto Co., Augusta also is home to about seven start-up life science companies.

Local promoters for growing those numbers say that next year could see the MCG life-sciences business incubator full, another incubator under renovation, a recruited biotech company come to the area and the two venture funds up and running.

"Our feeling is that then it becomes a little bit easier for us," said Lenie Roos-Gabridge, the executive director for the Georgia Medical Authority, which formed in 2000 to attract companies. "Right now, we're still in our branding phase."

The medical school's incubator opened earlier this year with space for five entrepreneurs. And while it currently does not house any tenants, officials said there will be significant activity next month.

Ms. Gabridge said the city is still in the beginning stages of growing the industry but that significant strides have been made in the last couple of years.

"We could never directly compete with Boston or San Diego or the N.C. Triangle Park," she said. "But in my mind, the industry has a breadth of opportunity, and if you just figure out as a community what your niche is and go after that, then I think we have the opportunity."

Reach Vicky Eckenrode at (404) 589-8424 or vicky.eckenrode@morris.com.