Lasting economic impact, the kind that spans generations and creates jobs today and in the future depends on a series of strategic investments and commitments made by both the public sector and the private sectors.
We’ve seen how strategic investment can yield lasting results through the growth of Arizona’s Life Science and Healthcare sector.
In 2003, a $500M strategic investment by the State of Arizona into university infrastructure began an era of industry growth that has reported resulted in a 7:1 return on investment or $3.5B.
Since the creation of these facilities, Arizona’s Bioscience Industry has grown. Jobs in bioscience related fields have increased by 45 percent, nearly four times greater than the nation.[i] While not every one of these jobs is directly related to our university research infrastructure, all of them depend on both it and the credibility is gives to our growing bioscience sector which in 2014 again moved up in the national rankings.
Just one of the facilities that was a result of that investment, Arizona State University’s Biodesign Institute, has made an economic impact of $1.5 billion in its first decade of operation, according to a study by the Seidman Research Institute at ASU’s W. P. Carey School of Business.[ii]
The economic impact of the overall biomedical campus in downtown Phoenix in 2013 was nearly $1.3 billion, of which $961 million is attributed to the UA College of Medicine – Phoenix presence. In 2013, the academic medical center accounted for 9,355 direct and indirect jobs.[iii]
In 2015, a proposal at the Arizona Legislature by Speaker Pro Tem Bob Robson and Senator Jeff Dial would double down on that investment by authorizing one billion dollars in lease-purchase financing for new research infrastructure at Arizona’s three public universities. It is projected that the short term return over the constriction phase in the first three years would yield $2.7B in economic impact and a 5:1 return in the first 5-7 years following construction. Adding it up, that’s $7.7B in of economic impact the first 10 years. Long term the investment would enable the universities to achieve an increase in extramural research funding (that’s federal and private sector research investment) of an additional one billion dollars each year by 2020.
ABOR’s 2020 Plan targets growth of extra-mural research funding at ASU, NAU and UA from $1B per year today to $2B per year by 2020. This funding comes into the universities from grant writing institutions, the federal government and industry.[iv]
Initiatives like these are not unique to Arizona. Other states are making similar investments. Massachusetts made theirs in 2008 with a billion dollar life science initiative. North Carolina has similarly invested $1.2B over the last decade. Not surprisingly, both states rank in the top five for both company growth and employment in the national life science rankings.
States are not the only players on the field in the game of life science R&D investment. According to PhRMA, biopharmaceutical companies invested over $51B in R&D in 2013 alone[v] and close to a half a trillion dollars since the year 2000. Medical technology companies add to that number. MedTech Global R&D spend was $22.9B in 2013 and is expected to grow by 4.2% (CAGR) to $30.5 billion by 2020[vi]
Industry partners with top tier universities to discover and develop new innovations. This combines with research funding from the federal government. According to the Association of American Universities, “Because there is broad consensus that university research is a long-term national investment in the future, the federal government supports about 60 percent of the research performed at universities. In 2009, that amounted to the federal government supporting about $33 billion of universities’ total annual R&D spending of $55 billion. Along with creating new knowledge and the foundation for new products and processes, U.S. universities use their research activities to educate students who will become the next generation’s scientists and engineers, teachers, and leaders in government and industry.”[vii]
Making strategic investments in our university research infrastructure is more than just about money and the economy. The long term impact will be a combination of innovations that will allow us to take offensive positions in diagnosing and curing disease, defensive positions in controlling healthcare costs, and get us to the goal in creating high paying jobs today and tomorrow.
Arizona has an opportunity to now take its place as a player globally and super charge our economy.
Let’s do it.