Is Massachusetts’ $1 Billion Bet On The Life Sciences Paying Off?Play
The Massachusetts Life Sciences Center was originally conceived with a lofty goal. In 2008, when then-Gov. Deval Patrick called on the Legislature to invest $1 billion in life sciences over the next decade, he said it would help create 250,000 new jobs in the state.
But so far nowhere near that number of jobs has been created, and the center is at a critical moment in its evolution: its founding CEO has left and a new governor with a different vision is now in charge.
'Just A Vision'
"I like to say I began with a piece of paper, the life sciences legislation — no staff, no office, just a vision," said Susan Windham-Bannister, the president and founding CEO of the center, who stepped down last month.
Before the life sciences initiative, Windham-Bannister says the state already had a lot of the right ingredients — strong universities, talented people and innovative companies.
"But they functioned very independently," she said. "Our reputation in Massachusetts was a lot of smart people who don't play very well together. I think the most important thing that we've done is to create an ecosystem."
Throughout her tenure, Windham-Bannister focused on collaboration — through tax breaks, internships, loans and grants.
She was keen to avoid the mistakes she said the state previously made with the tech sector.
"We lost that because we didn't invest in a focused manner," she said. "We saw a lot of great companies catapult right out of our universities, right out of Massachusetts into California, into New York, which had more of the resources and the infrastructure that they needed."
An important focus for the center these days is early-stage companies. The center has doled out hundreds of thousands of dollars in grants to young startups.
Peter Kelley recently received nearly $84,000 for his company InsomniSolv, which is designing a device that helps people fall asleep without taking drugs.
"These are worn on your wrists, and they each contain a small vibration motor," Kelley said, demonstrating his product. "We're stimulating alternate sides of the body, left and then right, at a very slow rate. And it has a very hypnotic effect, it's very much like rocking a baby to sleep."
Kelley is planning a clinical trial at Mass General Hospital with the grant money he received. He says without the investment help, he probably would not be able to conduct any experiments.
"We are in classic death valley of startup land, which means we've got very exciting, new promising technology, but all the investors you talk to want to see proof, they want some data on how effective it is," he said. "But of course we need to raise some money to get that data."
Should The State Be Picking Winners And Losers?
Many folks in the industry say Massachusetts needs to do more to help small, early-stage companies.
But critics say the state should not be in the business of picking winners and losers.
"Does it really make sense to spend a billion dollars targeting life sciences with incentives and ignoring a problem of the loss of research and development jobs statewide?" asked Greg Sullivan, research director at the Pioneer Institute, a free-market think tank based in Boston.
Sullivan says tech and research companies have been kicked to the curb while the state zeroed in on life sciences.
Massachusetts ought to be taking more cues from California, which has broad-based research tax incentives, not just benefits limited to the life sciences, according to Sullivan.
So far, the Life Sciences Center has spent about $590 million out of the $1 billion originally dedicated by the state.
More than half of the money has gone toward capital projects, specifically involving the UMass system. Supporters say the focus on infrastructure at universities is helping build a pipeline of talent and innovation, but Sullivan is skeptical.
"I'm critical of the way in which they've given the money out, with so much of it being dedicated back to the state schools and, relatively speaking, not that much to companies who are being incentivized to come here," he said.
Sullivan's main criticism is that the state's fixation on the life sciences has not translated into concrete jobs.
It's tough to put an exact number on jobs growth. Estimates through 2013 are all over the place, ranging from a low of 571 to a high of 11,000.
Windham-Bannister argues that the goal has always been more than just generating jobs.
"What we've achieved over the last seven years is we are undisputedly the No. 1 life sciences community in the world," she said.
She points to many indicators of such success: including industry rankings, continued buzz in the biotech sphere, the construction cranes around town, and the fact that nearly every large drug company now has a foothold in Massachusetts.
Critics still say the success of any initiative is tough to measure, but the Baker administration at least seems to agree with Windham-Bannister's assessment.
There were talks earlier this year about merging the quasi-public agency and dissolving the center itself as an independent organization.
But now Secretary of Housing and Economic Development Jay Ash insists that won't happen.
"I'm very much a bottom line guy, the bottom line here is that we are No. 1 in the world in life sciences," Ash said. "We are the envy of everybody else in the country and in the world, so I think anything that's happened in order to get us there we need to be supportive of."
Ash acknowledges there's a lot of competition.
The administration, he says, is planning to hire a new CEO soon, though one who comes for a cheaper price. (Windham-Bannister was making $285,000 a year.)
Ash says the Baker team is also looking at ways to streamline the agency and spread the wealth.
"We'd like to figure out a way to help the life sciences industry grow beyond Greater Boston and, in fact, to all of Massachusetts," he said.
The Baker administration appears to be committed to finishing the experiment — the initiative goes through 2018 — albeit tweaking the methodology along the way.
The question is, what happens after?
This segment aired on June 8, 2015.