Arizona has outgrown the country in bioscience research and jobs since 2002, and the sector shows no signs of slowing down.
The key to the state’s success in bioscience has been its consistent growth, year after year. Last year showed a 29 percent growth in the non-hospital sector, and a 22 percent growth overall. In some areas, bioscience outpaces the state’s economic growth as a whole.
“We’re looking at one of the most dynamic sectors that’s a really homegrown sector for Arizona,” Principal and Managing Director of TECompany Partners Mitch Horowitz says. “It’s something that has taken a lot of imagination and something that started about 20 years ago. Arizona has been working on it in a steady way that captured a lot of activity. It’s quite a success story and one that Arizona should be really proud of.”
Horowitz says that bioscience has brought high quality wage jobs to the state, and those jobs aren’t just for those who have PhDs. There are job opportunities in engineering, nursing and a number of other areas. He says they are jobs that will “bring new wealth into the economy” to help it grow.
The numerous bioscience organizations and research labs in the state work closely with Arizona’s top three universities. Horowitz says the universities have made a significant rebound during the last couple of years.
“That really shows that universities aren’t doing research for research’s sake, but they’re thinking about how can we make a difference in society,” Horowitz says. “They’re taking that technology and working with other companies and entrepreneurs.”
Where the state lags is in venture capital. Horowitz says venture capital has taken its foot off the acceleration a little bit just when research programs need them. He says venture capital provide a strong base that allows companies to rise.
“There’s a lot of activity that can go forward if we have venture capital,” Horowitz says. “We have really high growth potential coming from our research base. They’re ready to grow further, but then they have to wait to get funding. We need more lead investors and make sure there is no stop to their growth.”
Bioscience is a sector that every state has its eyes on because some of the most promising technology is found in this area. With the right support, Horowitz says Arizona’s bioscience could go further than it’s ever been.
TED SIMONS: ARIZONA'S BIOSCIENCE SECTOR IS ADDING JOBS AT A RATE HIGHER THAN THE NATIONAL AVERAGE, THAT'S DESPITE A SHARP DECLINE IN BIO-SCIENCE VENTURE CAPITAL FUNDING. WE SPOKE WITH MITCH HOROWITZ OF TECONOMY PARTNERS ABOUT A NEW FLINN-FOUNDATION REPORT ON ARIZONA'S BIO-SCIENCE ROADMAP.
TED SIMONS: THANKS FOR JOINING US ON "ARIZONA HORIZON."
MITCH HOROWITZ: GREAT TO BE HERE.
TED SIMONS: THE STATE OF THE BIOSCIENCE SECTOR. WHAT ARE WE LOOKING AT?
MITCH HOROWITZ: WE ARE LOOKING AT ONE OF THE MOST DYNAMIC HOME GROWN SECTORS FOR ARIZONA, SOMETHING THAT HAS TAKEN IMAGINATION, STARTED 20 YEARS AGO. ARIZONA HAS BEEN WORKING AT IT, ADVANCING BIOSCIENCES IN A STEADY WAY, IN A WAY THAT CAPTURED ACTIVITY, BIOMEDICAL CAMPUS, AND A LOT OF ACTIVITIES AROUND, VALLEY, UNIVERSITY, AND FLAGSTAFF. IT'S QUITE A SUCCESS STORY AND ONE THAT ARIZONA SHOULD BE PROUD OF.
TED SIMONS: 6,000 JOBS SINCE 2014. WHAT KIND OF JOBS ARE WE TALKING ABOUT?
MITCH HOROWITZ: WE ARE TALKING ABOUT HIGH QUALITY WAGE JOBS. IT'S NOT JUST PHD AND MD. IT'S PRODUCTION, CLINICAL RESEARCH, and NURSING. IT'S A WIDE VARIETY OF ACTIVITIES THAT PAY WELL AND HELP GROW THE ECONOMY, BRING NEW WEALTH INTO THE ECONOMY.
TED SIMONS: YOU MENTIONED PAYING WELL. IT LOOKS LIKE THE AVERAGE WAGE, 33% HIGHER THAN THE AVERAGE PRIVATE SECTOR WAGE?
MITCH HOROWITZ: ABSOLUTELY AND GROWING. ACROSS THE COUNTRY, IT'S A SECTOR EVERYONE WANTS TO COMPETE FOR. ARIZONA HAS BEEN OUT PERFORMING THE COUNTRY YEAR BY YEAR SINCE 2002.
TED SIMONS: IS THAT BECAUSE THINGS ARE GUNG HO OR BECAUSE WHEN YOU START FROM THE BOTTOM, EVERY STEP YOU TAKE IS EXPEDIENTIAL?
MITCH HOROWITZ: IT'S ABOUT EARNING IT AND STARTING FROM THE BEGINNING. I THINK ACTUALLY NOW THAT WE HAVE SO MANY YEARS OF CONSISTENT GROWTH, STARTING FROM 2002, EVERY YEAR GROWING IN THE RECESSION GROWING HERE IN ARIZONA, IN THE MOST RECENT PERIOD THROUGH THE ECONOMIC RECOVERY, 29% IN THE NONHOSPITAL SECTOR, 22% GROWTH OVER ALL, THAT'S OUT PACING THE STATE'S OVERALL ECONOMY.
TED SIMONS: UNIVERSITIES, RESEARCH FUNDING, THESE SORT OF THINGS, WHAT ARE YOU LOOKING AT?
MITCH HOROWITZ: THE UNIVERSITIES HAVE BEEN WORKING HARD AND WITH THE TRIP FUNDING THAT PROP 301 HAS PROVIDED IN TERMS OF ADDITIONAL RESEARCH FUNDING. THEY HAVE BEEN MAKING THE MOST OF IT. THEY HIT A DIP IN RECENT YEARS. THEY REBOUNDED LAST TWO YEARS SIGNIFICANTLY.
TED SIMONS: IT SOUNDS LIKE SPINOUTS, COMPANIES FROM UNIVERSITIES, THEY ARE ON THE INCREASE.
MITCH HOROWITZ: THAT SHOWS THEY ARE NOT JUST THINKING ABOUT DOING RESEARCH FOR RESEARCH SAKE, THEY ARE THINKING ABOUT MAKING A DIFFERENCE IN SOCIETY, MAKING A DIFFERENCE IN PEOPLE'S HEALTH AND WELL BEING, TAKING THE TECHNOLOGIES AND TRANSLATING THEM, WORKING WITH ANGEL INVESTORS AND PROPELLING THINGS FORWARD.
TED SIMONS: IS THAT WHAT TECH TRANSFER MEANS?
MITCH HOROWITZ: YES.
TED SIMONS: YOU MENTIONED ANGEL INVESTORS. WE TALKED ABOUT GOOD THINGS. LET'S TALK ABOUT NOT SO GOOD THINGS.
MITCH HOROWITZ: THERE ARE ALWAYS CHALLENGES.
TED SIMONS: DOWN FROM WHERE THEY WERE A COUPLE OF YEARS AGO. WHAT'S GOING ON HERE?
MITCH HOROWITZ: YEAH, SURE. VENTURE CAPITAL TOOK THEIR FOOT OFF THE ACCELERATOR. IT WAS A COUPLE OF YEARS WHERE ANGEL INVESTORS DIDN'T HAVE THE FUNDING. THAT'S BEEN PUT BACK IN PLACE FOR ANOTHER FOUR YEARS OF FUNDING. THAT GETS THE PROCESS GOING. WHAT YOU NEED IS A LOT OF SHOTS ON GOAL SO YOU CAN IN FACT HAVE A STRONG BASE OF COMPANIES THAT POTENTIALLY RISE. IN THIS STATE, SOME OF THE BIG SUCCESS STORIES IS LIKE A PINNACLE OR -- WHICH IS HERE IN TERMS OF HELPING OUT IN TERMS OF SURGERY STUFF. MORE IMPORTANTLY, DOWN IN TUCSON THEY HAVE HAD FAN-TANA, NOW A CORE COMPANY GROWING.
TED SIMONS: THE LACK OF VENTURE CAPITAL IS THAT A CANARY IN THE COAL MINE TYPE OF THING?
MITCH HOROWITZ: IT SAYS WE ARE NOT REACHING OUR FULL POTENTIAL. THERE IS A LOT OF GOING FORWARD IF WE HAD VENTURE CAPITAL AT A LEVEL WHERE THERE WERE NOT STOPS AND STARTS. WE HAVE HIGH GROWTH POTENTIAL FROM THE RESEARCH BASE MOVING INTO NEW COMPANIES. THEY GET ANGEL FUNDING, AND GOING AND BUILDING MANAGEMENT TEAMS, AND THEY ARE READY TO GROW FURTHER, AND THEY HAVE TO WAIT TO RAISE MONEY. WHAT WE NEED HERE IN ARIZONA IS LEAD INVESTORS TO WORK WITH THE COMPANIES TO HELP THEM MAKE SURE THERE IS NO STOP TO THEIR GROWTH.
TED SIMONS: ACCORDING TO THE NUMBERS HERE. LESS THAN A QUARTER OF U.S. VENTURE CAPITAL FROM ARIZONA.
MITCH HOROWITZ: THAT'S EVERYTHING. THE KEY CONCERN IS THAT THIS IS A SECTOR THAT THE REST OF THE COUNTRY RECOGNIZED. OVERALL GROWTH FOR BIOSCIENCE IS GROWING. IT'S BECAUSE SOME OF THE MOST EXCITING PROMISING TECHNOLOGIES ARE FOUND IN THE BIOSCIENCES. THE QUESTION FOR US IN ARIZONA RIGHT NOW, HOW DO WE ADD THAT ON? THINK ABOUT THIS FOR A SECOND. WE HAVE HAD STEADY GROWTH WHERE WE OUT PERFORM YEAR AFTER YEAR SINCE 2002. IMAGINE IF WE HAD A VENTURE CAPITALIST INDUSTRY AND A BASE OF SUPPORT TO GO WITH THAT. YOU WERE SAYING BEFORE WE COULD GO FURTHER THAN WE HAVE EVER BEEN.
TED SIMONS: SAME WITH THE GRANTS FROM THE NATIONAL INSTITUTION OF HEALTH. THEY ARE UP A BIT, BUT FOR TEN YEARS, NOTHING SUBSTANTIAL.
MITCH HOROWITZ: IT'S HALF FULL, HALF EMPTY. THERE IS A LOT OF GREAT RESEARCH GOING ON, ALZHEIMER'S IN THE STATE, IT'S ONE OF THE ONLY ALZHEIMER'S CENTERS. IT'S BEEN AROUND FOR A WHILE. BANNER IS THE LEAD BUT MANY PLAYOFF OF IT. ONE OF THE LARGEST GRANTS EVER IN THE STATE HAPPENED A YEAR AND A HALF AGO. THERE ARE REALLY GOOD THINGS. THERE ARE NEW VACCINES FOR EMERGING DISEASES THAT A-S-U IS PICKING UP ON. ONE OF THE FIRST EFFORTS THAT TOOK PLACE WAS T-GEN.
TED SIMONS: WHEN IT STARTED ONE OF MY QUESTIONS WAS, THIS SOUNDS GREAT, BUT YOU HAVE SAN FRANCISCO, SAN DIEGO, AND MARKETS OUT THERE THAT HAVE BEEN DOING THIS FOR A LONG TIME. WILL WE ALWAYS BE PLAYING CATCH UP?
MITCH HOROWITZ: NO, WHAT HAPPENS IS WE ARE GETTING TO A POINT WHERE GROWTH IN MARKET SHARE, WE ARE GETTING TO THE POINT WHERE WE ARE EQUAL IN THE INDUSTRY. I'M TALKING ABOUT A MATURING CLUSTER. I AM TALKING ABOUT MATURING ECONOMY.
TED SIMONS: MITCH HOROWITZ, TACONOMY PARTNERS.
Mitch Horowitz: Principal & Managing Director, TECompany Partners