New York State, particularly in and around New York City, possesses an extraordinary concentration of world-class biomedical research and financial institutions, assets that ought to place the state among the very top locations for a thriving biotechnology industry. But, New York today finds itself with some real issues – the lack of specialized laboratory space, for example – that impede the growth of its native biotech industry. More importantly, New York suffers from a widespread perception among investors, real estate developers, and biotech entrepreneurs that its environment is not conducive to the growth of a vibrant biotech industry. The result is a classic "Catch-22" in which biotech decision-makers don't invest within the state, inhibiting the growth of a critical mass of companies that would itself encourage such investment.
TAX CREDIT PROGRAMS
Both the state and the city have provided a variety of programs designed to encourage investment in...
ACADEMIC CENTERS BENEFIT
In fact, the bulk of New York's funding initiatives, totaling several hundred million dollars, has targeted academia. NYSTAR, the New York State Office of Science, Technology, and Academic Research has implemented funding programs such as Gen*NY*sis (Generating Employment through New York State Science) to encourage the development of technologies and tech transfer within New York's extensive network of academic research centers. These programs are helpful in growing New York's world-leading base of academic research but, unhappily, most of the resultant biotechnology patents are transferred to out of state companies or to those that soon move out of state.
The reason for this is at least partly because other states and countries offer models that have attracted biotech investors and entrepreneurs. Several US states, such as Maryland and New Jersey, co-invest state funds in companies alongside venture capitalists, and have implemented programs of tradable net operating losses and subsidized laboratory build-outs. The state of Florida has announced that it will spend $500 million of tobacco settlement money to build a biotechnology center in Palm Beach. Germany matches equity investments in biotech companies with loans that are amortized over time if the company stays in the country. Canada offers credits in which the government refunds to biotechnology companies up to 50% of the dollars they invest in R&D.
A think tank convened at the New York Biotechnology Association this year, consisting of biotech CEOs and venture capitalists, concluded that New York needs to take bold initiatives to attract investment in its biotech industry, including leveraged direct investment. They also suggested that New York embark on an active campaign to market itself as a biotech mecca, taking a cue from the famous "I Love New York" campaign, which transformed general attitudes about New York as a tourist destination. State and local government leaders should make regular appearances at national biotech functions and should feature biotech in their speeches about the future of the city and state.
Clearly, more has to be done. The creative strokes of states like Maryland, New Jersey, and Florida contrast sharply with New York's heretofore marginal biotech programs. Absent similarly bold, visionary actions, New York is likely to continue to see its biotech future siphoned away by otherwise far less competitively advantaged locations.