In a recent biotechnology seminar I made the following case about overly enthusiastic biotechnology economic development initiatives, but it bears repeating. Officials insist on chasing madly after biotechnology companies, throwing money at the industry in hopes of getting companies and researchers to relocate there.
Why? They seemingly think that botech is the next information technology, an industry that can transform itself and the economy, while adding jobs left, right, and center.
Is it true? Well ….
That’s a “seductive analogy,” says Joseph Cortright, a Portland, Ore., economist who tracks the biotech industry. But it’s off the mark, he says.
Unlike information technology … biotech advances “are not systematically cheaper than the things they replace,” he says. New drugs, for example, tend to be expensive. Biotech also won’t produce economywide productivity improvements like computers have.
In addition, Cortright says, controversies over stem cell research, therapeutic cloning and bioengineered foods could hamper biotech just like environmental concerns stymied nuclear power.
… Biotech “brings more prestige than payroll,” [another analysts] says.
As of last year, there were only 1,444 biotech companies in the United States, according to Ernst & Young. These companies employed just 200,000 people.
The 330 publicly traded biotech companies in America lost a net $4.3 billion last year. The number of profitable biotech companies can be counted “on a partially severed hand,” …