Here’s an interesting article that focuses on the influence bio-tech has on Seattle’s economy. It’s tangentially related to real estate, because of the argument we hear so often that oodles of high-tech jobs are just pouring into Seattle.
In recent years, economic development boosters both in Seattle and on the Eastside have increasingly focused their efforts on attracting biotechnology companies, citing their potential for creating high-paying jobs.
But banking on biotechs can be as risky as betting on dot-coms, or, for that matter, betting on racehorses.
One local stock analyst told the Journal recently that he and his colleagues refer to early stage biotechs as “casinos” because of their 90 percent failure rate.
But conversely they are also referred to as “The Promised Land” by analysts like Paul Latta of McAdams Wright Ragen in Seattle. That’s what he calls biotechs that can successfully bring multiple drug products to market because of the profits they generate.
Biotechs that fail to reach the “promised land,” however, are bound to either eventually disappear, along with the jobs they provided, or get sold, which often also results in layoffs.
Despite the long odds facing early stage biotech ventures, industry observers and local economic development boosters say the benefits to the area that those companies provide, even if they are sometimes short-lived, far outweigh any the risks.
“It is worth it,” said Maura O’Neill, the former president of Explore Life, a regional economic development group that teamed up with the city of Renton a few years ago in an effort to establish a “Science City” hub for biotechs on land that Boeing was thinking of selling off.
The good news, O’Neill said, is that many of those soon-to-be-former Icos employees will likely elect to remain in the area and either go to work for other biotech companies, which will strengthen them, or perhaps even start up new biotech ventures.
As long as the Puget Sound region is home to outstanding medical research institutions such as the University of Washington and the Fred Hutchinson Cancer Research Center, it will continue to attract biotech and lifesciences companies, and/or birth new ones, O’Neill said.
I don’t personally think that the presence or absence of bio-tech companies in our area is going to be what makes or breaks the real estate market. This article appears to support that opinion. There are people that like to throw that into the debate though, and I thought this article was worth pointing out.
(Clayton Park, King County Journal, 10.29.2006)