Battling other states for biotech companies

We have the brains and desire. But not the money or history.

Bottom line: Georgia is second-tier when it comes to attracting biotech firms – and our image is lower than that.

Mike Cassidy

Mike Cassidy

The straight-forward assessment comes from none other than Mike Cassidy, president and CEO of the Georgia Research Alliance, who is charged with turning around the situation – despite heavyweight competition from states like California, Massachusetts and North Carolina.

“We need to get our image consistent with reality. We are scientifically sophisticated,” Cassidy, 56, said during a recent interview. “But when I say Silicon Valley or Route 128 [outside Boston], you know what I’m talking about. If I say Georgia, the man on the street doesn’t associate it with a high-tech economy.”

That’s partly because of the decades of head start those other areas received during World War II, when the federal government tapped top research universities like Stanford and MIT, Cassidy said. That fueled continued research after the war, along with collaboration with companies that developed cutting-edge technologies.

Over the past 20 years, Georgia has made considerable strides, helped by GRA, a nonprofit that ties universities like Tech, UGA and Emory with entrepreneurs hoping to turn promising research into new-wave companies.

GRA helps to bridge that transition with capital – not easy to come by during the critically early stage between initial research and forming a going concern.

Before private investors fork over money, Cassidy said, “they want to see a business plan, not a science project.” Without GRA money, many promising ideas end up in the “valley of death,” he said.

In total, GRA has leveraged $525 million from the state government into additional investments of $2.6 billion from federal and private sources, he said. About 70 companies have been created with GRA’s help.

Still, there’s a long way to go. And competition among the states for this important sector of the economy is mounting.

One way to compete against the big boys, Cassidy said, is to focus the state’s recruiting efforts on a local strength, namely the Centers for Disease Control. That could play well in some of the fast-growing fields within the biosciences, including immunology and infectious diseases, he said.

Cassidy salivates over luring R&D from some drug companies, hoping to develop a critical mass over time.

“Recruiting industry is the litmus test of an economic development strategy,” he said.

Another key is to try to beef up what’s available for venture capital in the state. Georgia only ranks No. 14 when it comes to venture capital investment in biotech.

“We’d like to bump ourselves up a couple of places, but that will take additional capital investment,” Cassidy said.

One potential source of money is the state pension funds. Cassidy said Georgia remains the only state that prohibits a portion of those funds to be used as venture capital.

If the legislature allowed it, he said, “it would change the equation. It could mean … hundreds of millions more to the region’s venture capital community.”

Are you listening, state legislators?

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5 comments Add your comment

TnGelding

September 28th, 2010
6:36 am

Not a good idea in this age of dwindling pension reserves. There’s plenty of private money available safely invested in tax-free munies.

Jason

September 28th, 2010
8:07 am

I hope the Fort McPherson Redevelopment Authority has been talking to the GRA. Their master plan for developing the base as an internationally renowned life sciences campus would seem to fit well with the GRA’s aspirations.

shadow7071

September 28th, 2010
8:13 am

Mike Cassidy let’s get real. Yes, some of what you say about post WWII MIT and Stanford but the main problem with ATL and Georgia is (or has been) this boom town mentality. Sexy, lucrative real estate deals far outshine basic and applied R&D. For years the work over at Tech, Emory and CDC has been just icing on the cake that real estate and business leaders have used to entice folks to come to ATL. Part of the ATL booster message like the Braves, Hawks, and Falcons. Now we need the cake and to your point other states are well ahead us. In my opinion the major challenge for ATL and Ga is how to overcome this boom town past and re-define ourselves for sustainable growth and prosperity.

Brett Grayson

September 28th, 2010
12:58 pm

There are seveal reasons why a technology focused business might not want to establish or expand business operations in Georgia. One of the reasons is that it is very difficult for companies in Georgia to prevent executives from walking out the door with valuable, insider business information and taking it to a competitor. Amendment 1, on the ballot this November, would clarify existing employment law, bring it in line with that of those states against whom we are competing for tomorrow’s technology jobs, and allow business owners to protect the fruits of their labor within very reasonable limits.

Standing still means falling behind in today’s competition for economic growth. Vote Yes on Amendment 1 to help Georgia stay ahead of the curve.

Brett Grayson
Executive Director
Jobs of Tomorrow

http://www.jobsoftomorrow.org

dale durrance

September 29th, 2010
2:21 pm

Oh no -don,t allow retirement money to be tapped . That fund is probably guaranteed. If the state fails to meet the amount required; guess who will make it right. GA> is not very smart(in my opinion) when it comes to luring business. Remember RINCON, GA back a few years ago.The state readied land for a supposed deal with Diamler/Chrysler? 1 mil or 2? but no deal….I wonder what that land is returning to us now!