Puget Sound must close invention-to-jobs gap

THE late Sen. Warren Magnuson, our state's powerful advocate in the other Washington for more than three decades, had a vision of our state as a national leader in medical research. Today, the federal government channels more than a billion dollars a year into world-class health-science research institutions in Washington. Through their research, discoveries are made that radically improve understanding of disease and how to cure it.

But would it be looking a gift horse in the mouth to ask, "Is this as good as it gets?"

In fact, this is exactly the question Seattle's life-science sector is asking. With this research horsepower, does Washington generate the number of new companies and commercial-sector jobs that it should?

We think we need to do a lot better.

A team of experienced life-science entrepreneurs has been investigating the problem and wants to fix it. The five members of our team each have started at least one life-science company and we are determined to start many more. We researched more-successful life-science business clusters, such as the powerhouse in the San Francisco Bay Area. We met with more than 50 local investors, business leaders and health-care experts to ask how successful research could be turned into new companies and jobs. We found three surprising facts.

• The first finding is disappointing: The gap between successful research and new enterprises is huge. Only three new local companies are getting started and venture-funded each year, but even fewer are actually based on inventions or discoveries from federally funded research. If taxpayers expected more biotech jobs to grow out of their investments in research, they cannot possibly be satisfied.

• The second finding is alarming: Our region is losing the entrepreneurial talent it takes to build new companies. For example, of the first outstanding seven employees that helped start one of our companies in 2001, only two are still in the local industry. Our research confirmed the reason: Keeping leaders as businesses evolve requires a strong cluster that produces new jobs and opportunities. The Bay Area, for example, has 10 times more life-science companies, making it an obvious place to look for work. Our region has not yet developed that kind of critical mass.

• The third finding is encouraging: Both the state and federal governments are actively looking for solutions. The U.S. Department of Commerce, with former Gov. Gary Locke in charge, wants to create new jobs. They would like to see the federal money spent on research result also in more companies and lifesaving products. And in Olympia, the Legislature has passed laws to address the same issue.

We have a recommendation.

We propose the creation of a brand new public-private approach to address the "valley of death" between research and a company qualified for funding — a new kind of entity that would invest in the creation of new products while they are still in late-stage research.

This public-private organization would work with inventors to turn their ideas into early stage products that would then become attractive for private investors. It would support projects that can be finished quickly with focused funding. It would provide a clearinghouse approach to bring together inventors and entrepreneurs.

This new entity should be a private, for-profit enterprise. It should be solely incented to make the best business decisions possible to create sustainable companies, jobs and products. It should not have its focus diluted by dependence on a single research institution. It should be financed once and mandated to sustain itself.

Consider how this might work:

A researcher at the University of Washington invents a device that might help critically ill heart patients. This new organization assists by financing the creation of the first prototype of that invention, developing a business plan and making the introductions to investors and entrepreneurs. It introduces the culture of commerce.

These efforts lead to the creation of a company that develops a lifesaving device and gets it to the patients who need it. While today these are not impossible tasks, they are too lengthy and difficult.

We see this entity becoming self-sustaining, but the initial funding should come from the federal government.

The biotech "valley of death" is simply too early a stage to be a reasonable business investment. Since the federal government funds most life-science research in our research institutions, it would take a tiny fraction of that amount to produce many more lasting jobs and lifesaving products.

We believe that this partnership could help create three new companies each year. If they are successful, within five years they could generate 1,000 local jobs in startup companies and the businesses that support them.

While the current gap between biotech research and real products is daunting, the solution to fix it is straightforward. Taxpayers should expect a better return, patients throughout the world should be getting better care faster, and the Puget Sound region should have a much more robust health-sciences industry.

For a small amount of federal support and some leadership from this region, this idea could build on Sen. Magnuson's dream for Washington state and help us create a vibrant cluster of health-care companies. The long-term impact on our economy could be enormous.

Tom Ranken, left, has spent 20 years in life sciences and started or ran three organizations in the field. Bob Wilcox founded a medical-device company and has led technology development at large and small organizations for 22 years.