Economic development incentives as well as research and development partnerships drive substantial life sciences economic development growth. Success in retaining, attracting and growing the life sciences industry centers on four critical strategies:
- Build career pathways for future Biosciences talent,
- Develop a predictable and stable regulatory climate for life science firms,
- Utilize of technology-based economic development tax strategies, and
- Capitalize on strong university research partnerships.
Talent will always be a major issue for the Science, Technology, Engineering and Math (STEM) heavy life sciences industry. States and regions that can attract and retain a continuing flow of educated (Ph.D., MS, BS, AA) and technically-proficient workers is essential to grow a region or state’s share of life sciences companies. However, having talent is not enough to succeed in the life science industry. States and regions need to provide a predictable and stable regulatory environment for life science firms designed specifically for this industry that may be a bundle of very small companies who might not be a good fit for “cookie cutter” incentive policies only searching for major job producing projects. States allowing companies to monetize earned R&D and net operating loss tax credits, sales tax exemptions for the purchase of R&D equipment, and investment tax credits to drive angel capital investment in the life sciences will prove attractive to this growing industry. States also using technology-based economic development (TBED) strategies such as promoting entrepreneurism, certifying sites for life science firms, promoting the development of early stage capital and seed funds focused on life science start-ups all will prove attractive to the life sciences industry. Finally, universities and research centers continue to be strong partners in pre-commercialization research and technology transfer for the life sciences industry. States funding university research, development of efficient tech-transfer programs at university and promotion of company creation among university faculty prove attractive to the life sciences industry.
The Midwest is full of success stories for successful public policy initiatives producing life science industry wins.
- The Illinois Angel Investment Tax Credit Program encourages investment in innovative, early-stage companies to help obtain the working capital needed to further the growth of their company in Illinois. Investors in companies that are certified as Qualified New Business Ventures (QNBVs) can receive a state tax credit equal to 25% of their investment (up to $2 million). A total of $10 million in Angel Investment tax credits a year are allocated with set-asides for minority-owned, women-owned person with a disability owned, and rural businesses. Credits will be released by quarter, on a first-come first served basis.
- Wisconsin’s Refundable Research Tax Credit was increased in 2022 from 10% to 20% with any unused research credit that is not refundable and may be able to be carried forward.
- BioNexus KC of Kansas City, Kansas is co-leading the development of a statewide workforce training initiative to help area life sciences employees fill in-demand jobs. The initiative also plays into a national challenge to rely less on overseas pharmaceutical manufacturing and bring more manufacturing capabilities stateside. The $2 million workforce training effort award has established the “Bioscience Industry Occupational Training and Equity Collaborative Hub for Missouri” or BIOTECH for MO.
- The University of Minnesota’s Bio-Technology Institute (BTI) received a grant awarded by the State of Minnesota Job Skills Partnership (MJSP) Board to kick start their training efforts. Over the next three years, BTI will provide advanced biopharmaceutical training for up to 125 Takeda employees working at its biologics manufacturing facility in Brooklyn Park, Minnesota. The training program will consist of six courses focused on a range of topics based on current Good Manufacturing Practices (cGMP), technical writing, facility operations and the product life cycle of biologics.
- BioSTL has been awarded a $2 million grant from the Missouri Department of Economic Development to create the Bioscience Industry Occupational Training and Equity Collaborative Hub for Missouri, which will help train underrepresented communities for quality employment in the Biosciences industry.
- The Nebraska Legislature approved the creation of the Nebraska Innovation Hub Act to serve as a resource for stimulating and supporting entrepreneurship and technology based small businesses in Nebraska. The Nebraska Department of Economic Development designates innovation hubs within iHub areas to stimulate partnerships economic development and job creation by leveraging iHub partner assets to provide an innovation platform for startup businesses, economic development organizations, business groups, and venture capitalists.
Success in developing, attracting and retaining the life sciences industry does not happen by accident but is part of a thoughtful regional and state economic development strategy.
