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Sunday, September 29, 2002 - Page updated at 12:00 AM

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Guest columnist

Biotech has been good to Washington; now state needs to be good to it

Special to The Seattle Times

As state leaders search for ways to reinvigorate a sagging economy while plugging a $2-billion budget hole, a few stars shine in the gloom. One of them is Washington's rising prominence in biotechnology and life sciences, which has helped propel the state's economy for years. But this star could dim without the proper attention, taking other pieces of the economy down with it.

Washington's biotech sector has weathered the current economic storm in a stronger position than most other leading industries. Recent studies place the state's biotech industry in the top echelon in the nation in terms of company creation and venture-capital investments. Our state's biosciences research institutions attract millions of dollars of federal funding annually, generating discoveries that helped create more than half the state's 170 biotech and medical-device firms.

Biotechnology jobs represent an economic development gold mine for Washington. Wage statistics show that life-sciences professionals in our state are paid an average of 42 percent more than the average wage for Washington workers overall. These talented specialists are pursuing initiatives in genomics, informatics and proteomics that will revolutionize medical diagnostics and therapeutics, agriculture and industrial processes.

But this rosy picture of economic health hides a looming threat. Other states are aggressively jumping on the biotech bandwagon as a way to prop up their sagging economies. They are investing hundreds of millions to build top-notch biotech programs while eyeing established biosciences centers — including ours — for the resources to fuel them. Meanwhile, Washington's regulations and tax burdens threaten to discourage entrepreneurialism, making it easier for innovators and institutions to go elsewhere — taking their brainpower and grant funding with them.

The fact is, it's alarmingly easy to let our advantage in biosciences slip away. But though the threat is real, it's not crippling. With vigilance and proper care, our state's research organization directors, business leaders and legislators — working with our Northwest partners — can keep this sector thriving.

According to a recent report by the Biotechnology Industry Organization, 10 states have developed long-range plans to infuse their economies with life sciences. California, Illinois, Pennsylvania, Michigan and Georgia are among those setting aside funds from $90 million up to $1 billion to fund biomedical-research initiatives and establish biotech corridors.

Our state's direct investment in science initiatives suffers in comparison. The National Science Foundation ranked Washington a dismal 35th in state funding for university research in 2000.

Washington's current budget allots $56 million, spread over two years among the six four-year public universities and colleges, to support research and development. The state invests another $4.4 million per year to commercialize research discoveries through the Washington Technology Center and Spokane Intercollegiate Research and Technology Institute.

Meanwhile, other states are luring some of our best people to lead their better-funded life-sciences initiatives. The University of Washington and Washington State University, for example, saw three of their top biosciences-research faculty leave for other states in recent years, taking more than $5 million in federal grants with them.

Other states are snagging some of our best technologies as well. WSU pumps more than half its research budget into biotechnology, most of it focused on agriculture. Yet, companies headquartered outside our state continue to license the rights to many of WSU's agricultural technologies, depriving Washington of the resulting jobs and economic benefits. Despite Washington's prominence in medical biosciences, we lack the heavy hitters in ag biotech — DuPont and Monsanto, for example — that gobble up ownership of the most promising agricultural innovations.

Research organizations are the most influential factor in creating and sustaining regional high-tech economies, according to a national study by the Milken Institute, a Santa Monica, Calif., economic think tank. The major research organizations in Washington — including the UW, WSU, Fred Hutchinson Cancer Research Center, Pacific Northwest National Laboratory and Virginia Mason Research Center — brought in more than $1.5 billion of federal research funds last year.

But the National Science Foundation and other agencies increasingly are requiring recipients to contribute up to 30-percent matching funding as a condition of receiving federal project dollars.

Legislators ignored the UW's request in 2001 for $3 million in matching grant funds. Without those funds, cash-strapped universities must cut back existing programs to come up with the required matching dollars from their own budgets.

There aren't many places to cut. Washington higher education is already bursting at the seams. For the first time in history, every public college and university in Washington is enrolled over the amount for which the state has provided money. This translates into more students denied admission or put on waiting lists for courses, larger classes and shrunken financial-aid packages. In fact, the UW budget for the next two years calls for no enrollment increases unless the state boosts funding for core education.

In addition to a competitive research sector, Washington needs a healthier entrepreneurial climate to build and retain biotech industry clusters. Fledgling biotech startups can falter financially before their commercial discoveries reach the marketplace. State venture-capital funds could help fill this early-stage gap until firms are robust enough to attract other investments.

In fact, 28 states have publicly supported venture funds, with five investing exclusively in bioscience companies. Washington, unfortunately, is not among them. Outdated parts of our state constitution keep us from establishing such funds. The state also could choose to manage a private business-development fund, as recommended by Gov. Gary Locke's Economic Development Task Force in June.

A majority of states use their tax structures to ease the financial burdens on private biotech firms. Yet, Washington businesses pay the second-highest share of statewide taxes among the 11 Western states. We also rank 45th in business permitting — number of permits required and time to process them — for new and expanded facilities.

When attacking some of the world's most complex medical, agricultural and environmental challenges, it doesn't pay to be provincial. The state's research institutions must do a better job of partnering with our Northwest neighbors. Through collaboration, we can share staff and equipment, create stronger joint funding proposals and accelerate major scientific breakthroughs.

Bringing multiple state assets together can create powerful alliances and outcomes. For example, four research organizations in Washington and Idaho recently formed the Northwest Bioproducts Research Institute to work on ways of transforming agricultural waste into commercially valuable products. In another multistate project, institutions are planning a research program to counteract future bioterrorist threats. Joint initiatives such as these hold much more promise than each entity could accomplish individually.

Washington has earned an impressive reputation in biosciences, but complacency will surely erode our prominence. Let's step up our commitment to keep this job-producing sector thriving into the next decade. The state must increase its support for university research. Legislators must revise regulations and tax structures to reduce commercialization barriers and encourage entrepreneurialism. And finally, our research institutions must improve multistate collaboration. Working together, we can help keep the biotech "star" shining brightly in our state's economy

Lura Powell holds a Ph.D. in analytical chemistry from the University of Maryland. Powell is leaving Pacific Northwest National Laboratory in December but plans to remain in the Northwest and continue to contribute to regional science and business growth.

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