Q&A: Tony Dennis explains Ohio's rise in biosciences

Ohio is quickly becoming a leader in new economy industries, and there's no better example than what's happening in the biomedical industry. Ohio has emerged as a consensus top ten state for biosciences, with more than 1,141 bio-related entities operating in the state in 2008. Each year, an average of 60 to 70 new firms pop up here, drawn by the state's business climate and entrepreneurial resources. According to BioOhio, a non-profit organization that helps develop and promote the industry, the overall bioscience community now accounts for nearly 1.4 million jobs in Ohio -- about one in every four. We spoke with Tony Dennis, BioOhio's president and chief executive officer, to find out what's behind the growth.

Building Facilities Magazine just ranked Ohio fourth in the country for strength of the environment for biotechnology. What's going on?

It's been a confluence of factors. First, the Ohio Third Frontier has been a substantial driving factor in biosciences growth. Second, the industry is maturing at the same time it has found Ohio's sweet spot. Twenty years ago, biosciences activity was primarily in research and development and the truly strong research centers were on the coasts. Now, the industry has moved from the research phase to the product phase and that is starting to coincide with Ohio's strengths. And a third factor is the change in university participation and number of academic research centers. There is more effort being given to technology exchange than in the past.

You mentioned the maturation of the biosciences industry coinciding with Ohio's strengths. What are those strengths?

Ohio has one of the strongest clinical capabilities in the country -- we have some of the best clinical hospitals in the nation. We have some of the finest tool and die makers in the country. We have a good workforce, and STEM training (the state's educational initiative for science, technology, engineering and mathematics).

Can you quantify the economic impact that the surge in the biosciences industry has had on Ohio?

About $148 billion of Ohio's gross state product -- about 16 percent -- is accountable to the biosciences and health sciences industries. That includes the industrial segment, academic research and healthcare delivery. About $2.5 billion were invested in biosciences in 2007. And federal research funding to universities was about $700 million.

Where are the new jobs in biosciences coming from? For example, are we seeing workers move from older manufacturing industries into the more high tech areas of biosciences?

We did a survey that showed half of all biosciences jobs in Ohio and other places are those who have associates degrees or at least some education beyond a high school degree. The industry needs employees from all walks of life -- there are opportunities for a lot of people to participate. But the challenge is that we don't have sufficient training capabilities right now. BioOhio, in partnership with Ohio community colleges, has applied for a $5 million U.S. Department of Labor grant to do just that.

What are some of the other challenges the industry faces?

Healthcare reform is one. We have the opportunity to do it right or to do it wrong. Everybody in the industry is working hard with the federal government to make sure the United States continues to be the most innovative in the world in healthcare while also keeping costs under control. The ongoing development of talent is a challenge. If you look at emerging countries like China and India, there are a lot of kids that are well trained, and as we look at our own talent pool we have to make sure it continues to grow. Another specific challenge is a bill in the U.S. Senate that would impose a $20-billion to $40-billion tax on the medical devices industry. The federal government is flirting with patent reform (which would shorten the length of time companies would have the rights to their own patents). And the increase in risk aversion by investors is another challenge. Venture capital companies are being very cautious.

Is there a particular segment that seems to be growing more quickly than other areas?

It always depends on what the health issues are at the moment. Right now, any company that has anything to do with Swine Flu is benefiting. Drugs for cancer and obesity treatments are all relatively popular right now. Other things that are getting traction are treatments related to conditions of aging, such as neurological degeneration.

What has to happen to keep our momentum going?

We can't mess up healthcare. We have to look at our talent pool and make sure it continues to grow. And (with regard to federal regulation, such as patent reform) we have to make sure its consistent with innovation.

What can we expect from BioOhio in the next few years?

We're continuing to work with both the state and federal governments to help auto suppliers diversify into the medical device and hospital supply industry. The goal is to help auto suppliers retrain and retool so they can build additional business in a new, more stable industry. We're also working to become a little bit more systematic toward grants -- how can we support industry-specific growth? A third thing we're doing is working with the Ohio Health Information Partnership in collaboration with the Ohio Department of Insurance, the Ohio Hospital Association, the Ohio State Medical Association and the Ohio Osteopathic Association. OHIP has been designated as the health informatics entity for the state of Ohio, meaning that OHIP will eventually become the repository for all patient data in the state and work with all the physicians in Ohio to adopt and apply electronic medical records. Finally, we'll continue to develop more effective tools for outreach, collaboration and partnerships. In many ways, the innovation-based bio-economy in the state is like a complex ecosystem, and BioOhio works hard to provide the optimal conditions for this ecosystem to thrive.