Medical Device & Diagnostic Industry
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An MD&DI December 1999 Column
Amid economic resurgence, rival cities in the Golden State are competingsometimes in odd waysto attract healthcare technology companies.
According to a recent analysis, California is home to the highest concentration of biomedical companies in the world. A study this past summer by the California Healthcare Institute (La Jolla, CA) reported that biotechnology, medical device, and diagnostics companies in the state now employ more than 200,000 workers, trailing only electronic equipment manufacturers as a source of jobs and surpassing iconic industries such as aerospace and the movie business. Fully one-third of the country's biotechnology companies and 28% of medical device and diagnostics firms, said the institute, are located in California.
You might think that such spectacular economic bounty within the borders of one state could be divvied up without much contention. In fact, a fierce struggle for regional dominance is transpiring among three metropolitan areas, each eager to stake the biggest claim in the biotech gold rush. The cities in questionSan Diego, San Francisco, and Los Angeles (with Orange County)may take their names from two saints and the Queen of the Angels, but the competition is far from beatific.
The latest move was on the part of San Francisco, as the city broke ground on a massive new project along its eastern waterfront that is intended both to foster academic research and to attract biomedical companies. At the heart of the development is a $1.4 billion satellite campus for the University of California-San Francisco, which will ultimately contain approximately 3 million square feet of labs and other facilities dedicated to bioscience research. Adjacent to the new campus will be nearly six million square feet of research, office, and manufacturing facilities. City, university, and economic development officials have promised to sweeten the pot for future tenants by providing a range of incentives, including tax credits, access to research equipment, expedited city permitting, and negligible EIR requirements.
One reason San Francisco is willing to undertake such commitments is that, in the eyes of some biomedical industry executives, it has fallen behind San Diego as a desirable place to conduct business. An industry survey conducted by A.T. Kearney Inc. found that San Diego is seen as extending a fuller, more balanced spectrum of benefits to both early-stage and mature companies. That is, it has the world-class research institutions, venture-capital resources, and infrastructure critical to start-ups and developing firms while also offering the land availability, tax profile, regulatory climate, and labor and operating costs conducive to manufacturers. (Los Angeles/Orange County is ranked a distant third, despite boasting a greater number of total companies than either rival.) San Diego also comes out ahead for relative ease of transportation and more affordable housingmotivating the San Francisco developers to include more than 6000 housing units, of which nearly one-third will be sold below market rate.
However, in their zeal to match the perceived advantages of San Diego, the organizers of the San Francisco project have done a very strange thing: they've named the enterprise "Mission Bay." When I heard the name I had an odd feeling of displacement, accompanied by the image of a leaping killer whale. Sure enough, the first dozen items called up by a Web search for the term all identified Mission Bay as part of San Diegoor more precisely, according to one source, as "a coastal embayment approximately five miles north of downtown San Diego" (and next to Sea World). As a matter of fact, the current Mission Bay is actually owned by the City of San Diego!
The idea here seems to be a modified field-of-dreams strategy: if you name it the same, they will come. Can San Diego's own "Golden Gate medical enterprise zone" be far behind?
Jon Katz