Biotech 2003

Fusing Science, Technology, and Business Leadership

Governor Easley's Speech

It is a privilege to speak to you today. I may not know all the details of what you do, but I understand enough to know that I do not know it all.

Biotechnology is a fascinating subject. The possibilities are endless as to what it can do for our state, our economy, our people.

If you go up to ten different politicians and ask them to explain biotechnology, you’ll get ten different answers.

None will be correct.

One might be close.

Two will probably tell you it involves life sciences.

Three will strongly suspect it has something to do with getting reelected.

And the other four?

Well, let’s just say there are some really good reasons why human beings shouldn’t be cloned.

But I do know the essence of what you do. The industry creates jobs and saves lives. And on behalf of the State of North Carolina, I want to thank you for what you do and I hope that together we can do more.

Three core beliefs have guided our economic development here in North Carolina. These are a belief in progress, a belief in education, and a belief in innovation.

Our commitment to these basic beliefs has enabled us to create the top business climate in the nation. And that is not just my opinion. It is the conclusion of the nationally recognized and respected Site Selection magazine and the national experts that comprise the Development Counselors International group.

And since we are here in Research Triangle Park, it is very appropriate to note that we have united the strengths of business, government, and higher education in a way that is the envy of every other state and many other countries.

In fact, I was invited by the Prime Minister to Japan last November to speak on that very topic.

I believe that biotechnology will lead our next wave of progress, education, and innovation in North Carolina. All the other states and the rest of the world will have a whole new reason to envy us. And I was to work as hard as I can to make certain that occurs.

It is amazing what your industry has already been able to accomplish here in North Carolina:

• In 1987 only half a dozen companies were doing biotechnology or biopharmaceutical work in North Carolina.
• Today, we have 150.
• Total North Carolina biotechnology sales were about $250,000.
• Today, that figure is $3 billion.
• Total employment, including industry, university scientists, government laboratories, and institutions was between three and four thousand.
• Today, employment has reached 18,000 in biotech companies, with an additional 16,000 in support and service companies.

Today, North Carolina clearly ranks among the top handful of biotechnology centers in the United States and in the world.

But while North Carolina is strong in biotechnology, we're not number one yet and we are in a very competitive field. We know that California as well as Massachusetts have major biotechnology clusters, while Maryland is coming on strong.

But in today’s difficult economic and budgetary climate, biotechnology efforts in other states across the nation are breaking down:

• Michigan is now radically scaling back its commitment to biotechnology.
• New Jersey is planning to eliminate its $14 million-a-year science and technology-funding program.
• Wisconsin will cut funding for research and development at the University of Wisconsin in Madison by $38 million over the next two years.
• California and Massachusetts are also grappling with fiscal problems of a magnitude that we have not allowed to happen here and one that, quite frankly, I'm not sure how you work your way out of.
• And as recently as March of this year, the Boyd Company, which specializes in helping companies find new business locations, released figures showing that biomedical research and product development costs in North Carolina are 20% to 25% lower than in areas in the nation.

All these states worry that North Carolina is poised to run far ahead of them and become our nation’s premier center for biotechnology research and manufacturing. Their fears are justified because we are committed to doing it.

North Carolina will continue to channel a steady and growing stream of smart investments into this industry.

For example, we will continue to support North Carolina’s unique Biotechnology Center. The Center provides crucial core services supporting education, training, and economic development throughout the biotechnology industry. In addition -- thanks to some creative work by its leadership -- the Center will also be expanding its geographic footprint this year to include a new regional office in the Piedmont Triad.

We are going to continue to invest in our world-class research university system. Innovation is essential for economic growth. And research is essential for innovation.

We know that we're in tough economic times, but when your dealing with biotechnology and life sciences, things move very rapidly. They don't move at the convenience of the economy. Our budget will have to reflect that.

In recent years, North Carolina has redoubled its commitment to innovation by allowing our universities to reinvest overhead receipts from federal research grants into new research programs. Other states are taking those overhead receipts. They were not in my budget and we're going to try to keep them out.

Thanks to this and other policies, universities, federal laboratories and non-profit research centers in North Carolina now conduct more than $1 billion a year in sponsored life science research. That places North Carolina number five in the nation in this vital measure of research activity.

For years, our state including many of you in the room today have nurtured biotechnology through its infancy and adolescence. You have set up biotechnology business incubators to nurture these companies. You have formed and recruited venture capital companies.

All of these efforts have been and continue to be essential to North Carolina’s continued success as a world-class biotechnology center. You have given North Carolina a tremendous advantage.

Yet today, North Carolina’s biotechnology development effort faces its greatest challenge and maybe its greatest opportunity. For biotechnology is coming of age. It is becoming more than a cluster of researchers and small companies. It is also becoming a manufacturing industry – an industry that is producing good, every day jobs for thousands of good, every day North Carolinians.

Experts estimate that the biotechnology industry will have to double -- and possibly quadruple -- total manufacturing capacity for drugs and vaccines during the next four years. A doubling of existing capacity alone would mean more than $3.3 billion worth of new biomanufacturing facilities in the next four years.

North Carolina is well positioned to capture a disproportionate share of this investment. According to the North Carolina Biotechnology Center, our biomanufacturing and related industries will create more than 3,000 new jobs a year. And that does not include new companies that will choose to locate in our state. We expect to attract a significant number.

But as this industry moves beyond just research and development to product manufacturing, so will its job base.

If history is any guide, many new biomanufacturing jobs will be outside our state’s urban areas. Back in the 1980s, North Carolina had experienced a similar boom in the growth of pharmaceutical companies. Where did those companies go? Baxter Laboratories went to Marion. Burroughs Wellcome went to Greenville. Abbott went to Rocky Mount and Laurinburg. Merck went to Wilson. Praxis went to Sanford.

Industry observers predict a similar pattern for biomanufacturing. Indeed, Wyeth recently announced plans to hire 350 new workers for its biomanufacturing operations in Sanford. Bayer is opening similar facilities at its existing plant in Clayton. In Lenoir, Greer Laboratories is taking on new high-skill contract manufacturing work for a biotechnology company in Research Triangle. We are also seeing new biotechnology communities spring up in the Triad and around East Carolina University at Greenville.

But North Carolina’s biotechnology future is not a sure thing. We have built a strong platform for success. Yet we must stay focused and disciplined every day of every week. We must continue to make the targeted investments necessary for biotechnology to succeed here.

The Golden LEAF Foundation took an important step in this direction last year, when it announced its commitment to invest up to $40 million in venture capital companies targeting investments in the life sciences. That investment, when matched by the private sector, will produce as much as $150 million for biotechnology companies including an all-important pool of funds for companies approaching the manufacturing stage of their development.

In short, the Golden LEAF gets it. They see the potential for tobacco dependent communities to grow and prosper in biomanufacturing. The Golden LEAF is engaged and they have money.

Yet there is more to be done. We must make sure that North Carolina provides the basic resources that biotechnology companies need to succeed. Last year I met with leaders of North Carolina’s biotechnology industry to discuss this challenge. I asked President Molly Broad and President Martin Lancaster to work with the state and industry to develop a plan that will build on our existing strengths in the Triangle to spread the biotechnology sector throughout our state. We can and will train workers in every corner of North Carolina.

That effort is now bearing fruit. Following North Carolina’s strong tradition of cooperation between government, industry, and education, President Lancaster and President Broad recently proposed an industry-led blueprint for training, education and continued research that will position North Carolina as our nation’s leading state in biomanufacturing.

The first element in this blueprint recognizes the biomanufacturing industry’s enormous need for skilled workers. Across the nation, demand for trained biomanufacturing workers exceeds supply. Our existing North Carolina biomanufacturers are clamoring for trained workers. And companies considering new plants here want assurances that we can supply their labor needs. Today, we will guarantee that workforce.

We are committed to locating and developing a manufacturing training program that serves the needs of our biomanufacturing firms. To meet their training needs, North Carolina will build on its existing community college biotechnology programs to establish a world-class biomanufacturing training network. The new program will include a comprehensive curriculum together with mechanisms for providing essential equipment and facilities to teach biomanufacturing skills at our community colleges in our rural areas and small towns as well as our metropolitan areas.

The training program will also offer students who complete local training courses an opportunity for real-life biomanufacturing experience at a new central biomanufacturing training facility. The central facility will provide crucial hands-on experience.

The Golden LEAF is involved this. Sen. Basnight, Majority Leader Sen. Rand, and the Speakers of the House are also committed to this.

We already have impressive programs on several college campuses in biotechnology research including N.C. State and the Julius Chambers Biomedical/Biotechnology Research Institute at North Carolina Central University.

As Governor, I am very excited about the potential of these research, education and training programs. As always in these tight fiscal times, finding money for these efforts will be a challenge. I don't know whether we're going to do it though Golden LEAF, through bonds, through the Legislature or whether I'm just going to go down to the bank and steal it. But I promise you we will find the money this year in North Carolina.

North Carolina has a long history of meeting tough challenges posed by economic change and adversity. Today’s challenges are going to be no different. We can and will continue to move North Carolina forward economically. We will do so by assuring the availability of strong public schools across the state. We will do so by continuing to invest in university research. And we will do so by providing our people the training they need to work in the industries of the future. As other states make cuts in these areas, we will invest more.

Biotechnology is a perfect example of such an industry. But in order to become the number one center for biotechnology in the nation we are going to build on existing advantages 50 years of the Research Triangle Park, 40 years of the finest community college system in the nation, and over 200 years of the best system of public university education in the nation. Other states cannot compete on this level. And we will add a biomanufacturing training program that no other state has, which will enable us to offer the most highly skilled biotechnology workforce in the nation.

I am pleased to have addressed you on this topic today. I'm very excited about where we're headed in this state and I'm excited about the pressure that you continue to put on us to do the right thing.

Together, we can build One North Carolina - the one that we all want, know, and love to give everybody a chance to play in the winner's circle of our economy. Biotechnology can be a very big part of giving a higher and better quality of life to all our citizens.

And although politicians never will be, maybe North Carolina will be a state worthy of being cloned.

God bless you and thank you for what you are doing.

CED Conferences: