Minnesota Initiative Designed to Beef Up State’s Biobusiness

Between 1997 and 2002, Minnesota’s strength in biobusiness slipped when compared to key competitor states, according to recent research findings released by the BioBusiness Alliance of Minnesota. With this underlying knowledge, the nonprofit group—in conjunction with industry, academic, and governmental partners across the state—is heading up an initiative to ensure the long-term growth and competitiveness of Minnesota’s biobusiness sector, which is dominated by medical device operations.

Wahlstrom: Reversing trends, promoting growth.

“Minnesota remains a leader in certain biobusiness subsectors,” says Dale Wahlstrom, chairman of the BioBusiness Alliance of Minnesota and vice president of cardiac rhythm management for Medtronic (Minneapolis). “The 1997–2002 trends identified in the studies must not only be turned around, but growth must be accelerated in order for Minnesota to remain competitive.”

The BioBusiness Alliance of Minnesota is the second generation of a bioscience council created by the governor of Minnesota in 2003 to provide recommendations on how the state can better support the bioscience industry. In 2005, the council was dissolved and reestablished privately as the BioBusiness Alliance. The group, which is not a membership organization, consists of leaders representing Minnesota companies, colleges and universities, state government, and healthcare institutions.

The alliance’s recent research into the state’s biobusiness sector included two components: a competitive assessment using data collected by the U.S. Census Bureau and a grassroots survey of the state’s biobusiness enterprises.

According to federal data, employment in Minnesota’s biobusiness sector—defined as economic activity related to the development or commercialization of bioscience or bioscience-related technologies, products, or services—fell from 31,094 to 28,267 between 1997 and 2002. During that period, biobusiness employment was on the rise in 10 key competitive states analyzed in the study: California, Iowa, Massachusetts, New Jersey, New York, North Carolina, Ohio, Utah, Washington, and Wisconsin.

The assessment of each state’s biobusiness employment was broken down into five sectors: medical devices, pharmaceuticals, research and development in the life sciences, agribio and bioindustrial technology, and medical and diagnostics laboratories.

The bulk of Minnesota’s biobusiness jobs are in medical device companies. Between 1997 and 2002, the state’s employment in this sector slipped from 23,380 to 21,966. New York and Wisconsin also experienced medical device job losses during that period, while all other states included in the study saw increases.

“About 77% of bioscience jobs in Minnesota are in medical devices,” Wahlstrom says. “It’s the heaviest concentration of device jobs in the United States. States like California might have more medical device jobs than we do, but they’re not as dependent on devices as we are.”

Since 2002, biobusiness job losses in Minnesota have stopped, and between 2002 and 2005 the state added about 4000 jobs to its biobusiness sector, according to an assessment of state records. “In the past three years, employment in Minnesota’s biobusiness sector has grown,” says Kelvin Willoughby, a program director at the Center for the Development of Technological Leadership at the University of Minnesota and author of one of the studies. “However, we cannot be sure exactly how our recent job growth compares to that of key competitor states because the federal economic census will not be updated until 2008. It is important to remember that key competitor states are also adding jobs throughout the bioscience industry.”

“We are not discouraged or surprised by the data,” Wahlstrom says. “The negative trend we saw has already turned around, and our line of growth will continue to improve. We are not concerned about losing our dominant place in the medical device industry.”

The recently released research findings represent the first in a series of three steps designed to strengthen the state’s biobusiness position. With the economic data under its belt, the alliance is now developing a collaborative initiative called Destination 2025. The initiative will include 5-, 10-, and 20-year plans for preserving and growing the state’s biobusiness competitiveness. The third step will be to put a resource network in place to assist companies looking to start or expand their bioscience-related businesses in Minnesota.

According to Wahlstrom, the alliance’s research has revealed two main areas in which improvement is needed if the state’s biobusiness sector is to excel. “First, we’ve become more dependent on big companies to keep this state’s industry alive,” he says. “Small companies and start-ups are not doing as well as they used to. That will be an area of focus for us.”

Another focus will be to position the Minnesota biobusiness sector to better address the increasing convergence of medical devices and biotechnology. “States that fared well in our competitive assessment have much stronger life sciences sectors than we do,” Wahlstrom says. “We know we need to beef up that life sciences area to sustain our growth long term.”

The BioBusiness Alliance hopes to have a white paper on its current research findings available by mid-July and to have a draft of its five-year plan available by the end of the year.

© 2006 Canon Communications LLC

Return to MX: Issues Update.