Local city officials tout economic development plans, education programs and the will to progress as signs of the potential of the East Valley as a major player on the bioscience sector.
But with only a small pool of funding available, and an uphill climb to encourage students to stay in state after graduation, obstacles are still on the horizon.
“The market signals are pretty clear, you can make a lot of money in business and you can make a lot of money in law. And STEM pursuits like engineering – you make good money, but actually not as much money,” said Dennis Hoffman, economics professor at Arizona State University’s W.P. Carey School of Business.
Arizona’s universities have good science, technology, engineering and math programs, Hoffman said, but the concern sits with how best to attract college-bound students to pursue studies in science, technology, engineering or mathematics degrees with equitable compensation.
Hoffman added that the sector is newer to the region unlike some states in the Midwest, East and West coasts, which have about three decades of experience collaborating with governments and business organizations.
And educating people is one thing; keeping them from moving out of state to Texas, Colorado or California – major states with a larger attraction to bioscience companies – is another rap entirely, he said.
Sean Enright, director of curriculum at the Mesa Unified School District, said the STEM initiative is the keystone to evolving the workforce in Arizona. Numerous companies fund some of the education programs in the East Valley, including The Boeing Company and Freeport-McMoran Copper & Gold. They sponsor elementary school classes such as Engineering is Elementary (EiE) with grant money.
Promoting a new industry initiative
After speaking with community and healthcare leaders, leaders of the Phoenix-based Flinn Foundation believed shifting its grant funding from the larger healthcare industry as a whole, to the more specific bioscience sector would provide for Arizona’s potential as a major player in science and technology, said vice president of communications Bradley Halvorsen.
“So one is for high paying jobs and economic benefits,” Halvorsen said. “The other main benefit of the biosciences is really to have access … to some of the latest medical innovations … and for Arizonans as patients to have access to those innovations.”
Since 2002, the Flinn Foundation has committed itself to bioscience growth, setting aside $50 million in grants for the first 10 years. Funding will continue, he said, but an amount has not been decided.
Funding was initially centered on the healthcare industry, Halvorsen said. In 2002, the Flinn Foundation established the bioscience roadmap, a 10-year strategic and competitive plan compiled by the Battelle Technology Partnership Practice, for the state to follow.
Called "A Bridge Crossed," Battelle's evaluation of the bioscience roadmap was released by the Flinn Foundation in 2012. As part of the evaluation, the research and development consultant tested the strengths, weaknesses and threats in the industry.
The foundation also met with university researchers, government agencies, elected officials, private industries, economic developers, and venture capitalists and others quarterly to collaborate on the sector’s advancement and to promote healthy competition.
The bio roadmap found that Arizona had niches with cancer research, neuroscience and personalized medicine, like that conducted by Translational Genomics Research Institute (TGen), Halvorsen said. The roadmap suggested it would be advantageous to progress in those fields, but the state is certainly not limited to them.
Job attraction and bio-potential
Gilbert Mayor John Lewis said bio-medicine, life sciences and technology companies are interests for the town’s strategic plan.
Gilbert’s economic development department collaborates with about 800 science and technology companies in proximity to Gilbert’s medical centers.
There are many federal and state programs for research and development such as the National Institute of Health, Science Foundation Arizona and the Virginia G. Piper Charitable Trust and also other innovation and small business research grants are up for grabs, he said.
Lewis said a goal for his community is to promote and to educate using the STEM initiative, which was adopted by the state on February 28, 2012. They hope it will improve K-12 students for a workforce in these fields.
According to William Jabjiniak, director of economic development for the City of Mesa, the STEM initiative will secure a new strategy, especially in healthcare, with the local presence of Mountain Vista Medical Center and Banner Desert Medical Center, Banner’s Cardon Children’s Medical Center, and Banner Heart Hospital.
“We’re wrapping up right now a healthcare business recruitment strategy and we’re prioritizing which healthcare and biotech sectors to target,” Jabjiniak said. “And we work with an ongoing basis with companies such as Ulthera Inc., Banner Health, Auer Precision.
“ASU Polytechnic is another great resource that we have here in the city,” he said of Arizona State University’s evolving southeast Mesa campus.
Leaning on numerous areas of the healthcare sector, like bioinformatics or medical devices, instead of just beds and treatment, he said, is one way “to focus on our future growth.”
Mesa also has the Healthcare, Education, Aerospace, Tourism and Technology, or HEAT initiative. With diversity and an increase in job offerings, having high salaries and valued technical skills will attract more housing and retail business, which can stimulate the valley’s economy.
Where STEM education will be in the next 10 years is a quandary for Enright, the Mesa school district’s director of curriculum. Adapting to new technology and implementing the next generation science standards are part of the growing pains but immersion at this moment is a goal of the program, he said.
“For an economic development agenda it has appeal. It’s attractive,” said Hoffman, who is also director at the L. William Seidman Research Institute at ASU’s W.P. Carey School of Business.
One way to get students into STEM fields would be for companies and businesses to offer higher paying salaries, he said.
Research and development tax credits are offered. But without a large amount of educated, skilled or talented people, business attraction and its growth could be hindered. “You can’t have one without the other,” Hoffman said.
Hopefully many students aiming for a STEM education would hunker in, Enright said, enjoy the sunshine and energize the economy after college.
“We’re just a little bit happier if they stay here. So it’s never stated. It’s just a goal because the more educated people, the more college graduated people in your populace, the better your area is,” he said.
In high school curricula, the Mesa district has the Career and Technical Education program; these are elective classes – some in biotechnology and robotics, along with other STEM-based classes.
“It’s something we’re looking to develop. We’re in the infancy as are most school districts, but it’s something that we feel as though we want to put some resources and time behind because of where the job market’s headed,” Enright said.
The monetary shuffle
Federal incentives were given to the state in the form of grant money from the United States Department of Education’s “Race to the Top” program – the initiative spearheaded by President Barack Obama and Secretary of Education Arne Duncan was meant to entice states to strive for specific educational performance metrics or policy implementation – to build and progress STEM programs like Mesa’s.
Within the state of Arizona, tax credits are available for small business and bioscience firms looking to dig in. The Angel Investment is a tax incentive program buttressing existing and new enterprises to receive credit of no more than $250,000 per year, according to the Arizona Commerce Authority’s website.
The credit program was extended when Gov. Jan Brewer signed Arizona’s Competitiveness Package in 2011. The opportunity for companies to increase revenue has a cap of just $20 million through 2016.
Another pitfall of funding in the region is in the private sector.
There is a small arena of venture capitalism willing to roll the dice on research and development, at least in this region, said Dr. David Harris, a professor in the immunobiology department at the University of Arizona.
Angel investors constitute an even smaller portion of private funding.
“The amount of our venture capital in Arizona is traditionally a good deal smaller than for instance in California, Massachusetts, or Texas,” Halvorsen said, “and other areas along those lines that do have more venture capitalists that live in those areas and tend to fund more around the bioscience clusters that they might be close to.”
Harris said funding less trodden avenues is pernicious due to duration and probability of success in clinical trials. If research bellies up, then medical investigators and researchers will venture elsewhere.
STEM education is a positive and must remain a focus for the state. It can provide higher paying technical jobs and generate competition with high-tech firms, he said.
“Those people who are advocates of the sector, they want to fight through that, they want to build that cluster. And I understand that and I love them for their efforts,” said Hoffman, ASU’s professor of economics. “It’s going to be a challenge because it is very competitive.”