THE BIOSCIENCE CLUSTER IN OHIO
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1 THE BIOSCIENCE CLUSTER IN OHIO PREPA R ED BY: CANDI CLOUSE AND Z IONA AUSTRIAN, PH.D. Levin College Research Conference August 20, 2015
2 1 Motivation for the Research Goals: Develop a common definition of the industry between Bio Enterprise and Jobs Ohio Track the economic performance of the industry Better understand how it helps to revitalize the urban core and the region as a whole. The research is being conducted for BioEnterprise and JobsOhio Research is derived from interviews with industry experts from around the state of Ohio and analysis of data.
3 2 Defining the Industry Bioscience applies knowledge of the way which plants, animals, and humans function with the goal of developing new treatments, therapies, and processes and involves a grouping of diverse industries with a common link the application of biological scientific knowledge. Battelle/BIO, State Bioscience Industry Development, Life Science a diverse and robust industry from pharmaceuticals to medical devices to agricultural biotech, laboratories, and health information technology enterprises. BioCrossroads, 2013 Includes: healthcare delivery, medical manufacturing, and bioscience/biotechnology. ProDev Associates, 2005 Biohealth is a subset of bioscience but is often used synonymously with the term.. a cluster of industries including biotechnology, biopharma, medical devices, healthcare services, health IT, e-health, mobile health, electronic medical records, health informatics, and biohealth cyber security. Economic Alliance of Greater Baltimore, 2013 Agricultural Biology involves bio-based raw material production on farms, in aquaculture and forests, in the conversion of that raw material into useable feedstocks, and feedstock use for food and health goods production, biofuel and energy production, and biomaterials production. Bush Consulting Group, 2013 Not a separate industry, but companies that are focused on life processes. NJ Department of Labor & Workforce Development, 2013
4 3 Bioscience Framework The bioscience cluster is difficult to measure because: It crosses over many different industries and involves many players. Many companies working in bioscience are classified under a broader industry definition due to the primary nature of their work. The Bioscience Framework presented here is based on: Literature review Interviews and meetings with industry experts.
5 4 Supplier industries produce goods and services required for the production undertaken by the core biohealth industries. The Core or Driver Industries represent the companies whose central business is in biohealth. Downstream Industries provide specialized wholesale, distribution, and packaging services. End Users range from health care delivery to retail functions. Specialized Industry Infrastructure supports the industry and is critical to continued advancement in innovation, product commercialization, and business growth.
6 5 Components of the Biohealth Industry Biohealth Supplier Industries Research, Design, and Development Clinical Trials Select Manufacturing Enabling Information Technology Research and Development in Biotechnology Research and Development in the Physical, Engineering, & Life Sciences (except Biotechnology) General Medical and Surgical Hospitals* Manufacturing* Software Publishers* Custom computer programming services* Computer systems design services* Computer facilities management services* Other computer related services* NAICS Code * Only select companies are biohealth, and thus these subcategories cannot be used to track trends in the biohealth industry.
7 6 Components of the Biohealth Industry Biohealth Core/Driver Industries Products Health IT Services Medicinal and Botanical Manufacturing Pharmaceutical Preparation Manufacturing In-Vitro Diagnostic Substance Manufacturing Biological Product (except Diagnostic) Manufacturing Optical Instrument and Lens Manufacturing Electromedical and Electrotherapeutic Apparatus Manufacturing Analytical Laboratory Instrument Manufacturing Irradiation Apparatus Manufacturing Surgical and Medical Instrument Manufacturing Surgical Appliance and Supplies Manufacturing Dental Equipment and Supplies Manufacturing Ophthalmic Goods Manufacturing Dental Laboratories Software Publishers* Custom computer programming services* Computer systems design services* Computer facilities management services* Other computer related services* * Only select companies are biohealth, and thus these subcategories cannot be used to track trends in the biohealth industry Testing Laboratories Medical Laboratories Diagnostic Imaging Centers NAICS Code
8 7 Components of the Biohealth Industry Biohealth Downstream Industries Distribution & Wholesale/Central Pharmacy Packaging Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers Mail-Order Houses* Drugs and Druggists' Sundries Merchant Wholesalers Home Health Equipment Rental Farm Supplies Merchant Wholesalers (not included in original Battelle definition) NAICS Code Ophthalmic Goods Merchant Wholesalers * Only select companies are biohealth, and thus these subcategories cannot be used to track trends in the biohealth industry.
9 9 Universities Components of the Biohealth Industry Legal, Consultants, & Other Professional Services Offices of Lawyers* Colleges and Offices of certified public accountants* universities* Architectural services* Engineering services* Geophysical surveying and mapping services* Industrial design services* Graphic design services* Other specialized design services* Administrative management consulting services* Human resources consulting services* Marketing consulting services* Other management consulting services* Environmental consulting services* Other technical consulting services* Biohealth Specialized Infrastructure Claims Management Claims Adjusting* Third Party Administration of Insurance and Pension Funds* State & Local Government Funding & Regulation Other general government support* Administration of public health programs Air, water, and waste program administration* Administration of general economic programs* Agricultural market and commodity regulation* Licensing and regulating commercial sectors* Venture Capital, Private Equity & Other Funding Sources Miscellaneous Intermediation* NAICS Code Professional Organizations & Societies Professional organizations* Intermediary Organizations Business associations* * Only select companies are biohealth, and thus these subcategories cannot be used to track trends in the biohealth industry.
10 8 Components of the Biohealth Industry Biohealth End Users Health Care Delivery: Hospitals Health Care Delivery: Physicians' Offices Long Term Care Home Health Infusion Centers Retail General medical and surgical hospitals Psychiatric and substance abuse hospitals Other hospitals Outpatient mental health centers HMO medical centers Kidney dialysis centers Freestanding emergency medical centers All other outpatient care centers Blood and organ banks Miscellaneous ambulatory health care services Offices of physicians, except mental health Offices of mental health physicians Offices of dentists Offices of chiropractors Offices of optometrists Offices of mental health practitioners Offices of specialty therapists Offices of podiatrists Offices of miscellaneous health practitioners Family planning centers Nursing care facilities Residential disability facilities Residential mental and substance abuse care Continuing care retirement communities Home health care services Ambulance services NAICS Code All Other Outpatient Care Centers Pharmacies and drug stores* * Only select companies are biohealth, and thus these subcategories cannot be used to track trends in the biohealth industry.
11 10 BioHealth is a Small Industry BioHealth is small industry in the U.S., accounting for 3.5% of total GDP and 1.9% of total employment BioHealth is even smaller in Ohio, accounting for 2.7% of GSP and 1.6% of employment The industry employed a total of 79,000 people in 2014 and accounted for a GSP of $15.1 billion. However, BioHealth grew faster in Ohio Between 2011 and 2014, BioHealth employment grew by 3.8% in Ohio compare to 2.6% in the U.S. Between 2010 and 2013, BioHealth GSP grew by 8.8% in Ohio compare to 5.7% in the U.S. In Ohio, BioHealth GSP (8.8%) grew faster then all industries combined (7.0%), however, BioHealth employment (3.8%) grew slower than all industries combines (4.2%)
12 11 Largest BioHealth Industries Among the biohealth core products, the largest industries are Pharmaceutical Preparation Manufacturing and Surgical Appliance and Supplies Manufacturing, each with about 4,800 employees. The largest biohealth core services include Testing Laboratories (~6,000 jobs) and Medical Laboratories (~5,700 jobs) The largest biohealth supplier industry is R&D with 13,200 employees The largest biohealth downstream industries are Medical, Dental, and Hospital Equipment and Supplies (~8,500 jobs) and Drugs, Druggists Sundries Merchant Wholesalers (~6,650 jobs)
13 12 The Advantages of Ohio Workforce Quality of life in Ohio and ability to hire talent from outside the state Cooperation with colleges and technical schools Finances The Ohio Third Frontier Program Derived from interviews with industry experts from around the state of Ohio Manufacturing Legacy and R&D Capacity Proximity to necessary parts of the supply chain Supporting infrastructure Existence of World-class Hospitals, Notable Companies, and Innovation Districts Cleveland Clinic Invacare and Gojo Cleveland s Health Tech Corridor
14 13 Industry Transitions & the Future of Biosceince Rapid Changes Decreasing work with animals Rising Costs Growing innovation Working across even more disciplines and industries The Role of Wellness & Education Fee-for-service model shifting to a fee-for-value model Gamification of the health industry Improvements in retail healthcare in small settings Shifts in Research from Laboratory to Bedside Working directly with healthcare professionals to look for new ways of delivering care and new technologies to improve treatment Increased use of technology allowing for large datasets to be analyzed for improvements in treatment A surgical simulator at Simbionix, a startup and part of a growing bioscience industry in Cleveland. _to_power_a_g.html#incart_related_stories
15 14 Policy Implications Proximity to large teaching and research hospitals and other research institutions is important to Biohealth companies Creates the foundation for startups Clinical trials Being a small industry, location of companies in close proximity is preferred to being spread out Example, the Health Tech Corridor in the City of Cleveland Incubators for Biotech startups Having state and regional support to help small biohealth companies is critical Public sector Economic development intermediaries Angle funds and venture capital A view of the Euclid Avenue portion of Cleveland's Health-Tech Corridor, looking west toward downtown from the area near the Cleveland Clinic. (Plain Dealer file)
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