Somewhere along the line local economic leaders decided that throwing themselves at the feet of large corporations was probably not going to attract any big new factories to Northeast Ohio. All those NEO groups and dozens of philanthropies began to coalesce around the idea of growing new companies using the region's inherent talent and resources. One of their goals since the late 1980s has been to build a cluster of bio-medical companies here. The Vice President for Economic Development at Cleveland State is Ned Hill. He says that objective became a lot closer when detente broke out between University Hospitals and the Cleveland Clinic.
Ned Hill: I do think UH and the Clinic collaborate much better than they ever did since the days of the great bio-medical tong wars. But if it's in the institutions' best interest to collaborate, they're doing it in ways that never happened before.
Those hospitals joined Summa in Akron and Case Western Reserve University to form a business accelerator called Bio-Enterprise, headed up Baiju Shah. He admits Northeast Ohio isn't exactly the first place in the country to come up with this Bio-medical cluster idea.
Baiju Shah: No, by no means. There are probably more efforts to create bio-science clusters than there are regions in the country.
But Shah believes this area has some advantages.
Baiju Shah: What's different about our efforts here in the region are, one, the collaboration that exists across our main research universities, the private sector, the state of Ohio , and our philanthropic community. The second is the concentration of resources being put toward achieving that goal.
Shah calls that "nurturing an entrepreneurial eco-system." Bio-Enterprise reports local Bio-med startups have attracted a half a billion dollars in private venture capital in the past two years, putting it behind only Minneapolis in the Midwest.
Don Brown: We've got a hidden gem here.
That's Don Brown, CEO of a startup company called Arteriocyte. He commutes from one of the nation's leading bio-medical centers-Boston because of the research here. He says Cleveland used to be a flyover state for investors.
Don Brown: Now what we are finding is more and more venture capital, life sciences equity partnerships and even venture debt groups are starting to either open offices in Cleveland or to develop an Ohio or Midwestern-based presence.
The state's Third Frontier program granted its first Wright Mega Center of Innovation Award to the Cleveland Clinic. That means $60 million to build a Global Cardiovascular Center. Still every state in the union is trying to grow a bio-med industry and some are spending billions of dollars to grow or attract life science companies. Professor Hill.
Ned Hill: It's the new economic development fad. and whenever you get a fad people jump on it. But again, here's the trick: when everyone know about it's probably too late. Because the people who are doing it that late have 20th mover disadvantage. So you want to be among the earlier movers. The question is: was Cleveland, or was northeast Ohio as a whole, an early enough mover?
Walt Plosilla has some doubts. He works on bio-sciences clusters all over the country for the Battelle Memorial Institute. A recent Battelle study finds Northeast Ohio doesn't even rank in the top 25 for private sector, bio-medical jobs. Plosilla believes the Cleveland area needs to better focus on what areas in medicine it wants to specialize in. Right now, he argues this region is expecting too much to come out of hospital Research & Testing.
Walt Plosilla: The area that it has not been as strong in is what the area it has been traditionally focused on in biotechnology: Research, Testing and medical labs. There's less than 1,000 employees - after 30 years of an effort - to build on Research & Testing in this region. So one of the challenges is to find out what your niches are but build from your strengths.
But there's disagreement over what those are. Chris Coburn helps launch new companies from research done at the Cleveland Clinic. He says research and testing is a local strength.
Chris Coburn: You have fundamental research here and you have end users of the products. So you think about Johnson & Johnson, they're not the end users of their products. People who work at the Cleveland clinic are.
One strength just about everyone agrees on is in medical devices - that is, building instruments like bone screws or simulators or wheel chairs. This area is also skilled at building cars. Could all this effort be better spent attracting Honda or Rolls Royce? Local leaders say chasing smoke stacks is old school thinking and not appropriate for this new century. One of the non-profit organizations trying to boost the local economy is Nortech. Its president, Dorothy Baunach, agrees that Northeast Ohio has to pick its targets.
Dorothy Baunach: You've got to be cautious about what price you're going to pay in your grow-your-own strategy. and I think you've got to be cautious about the way you spend public dollars to put into these companies as well. You don't want to invest and have them moving someplace else.
It's happened before. Most recently, Cleveland Bio-Labs, the first of the Clinic spinoff companies to go public, announced it's shuffling off to Buffalo. That doesn't worry the head of the Clinic's Innovations incubator Chris Coburn.
Chris Coburn: Companies will value the proximity of this institution and others in the community and that will provide them a business reason to stay. But there is nothing chaining a company - you wouldn't want a company to stay if they didn't see it in their best interest.
Coburn argues that the medical research in this area will keep companies and attract others. Cleveland State economist Ned Hill agrees.
Ned Hill: It all comes down to the quality of science. If the quality of science is good people will come here. People come to the Cleveland Orchestra because that's the cutting edge of the music. So people who come to an area that is cutting edge, getting paid competitive wages, and the cost of living is lower than on the coasts - that's a pretty attractive package.
All this is aimed at producing jobs. But Nortech's Dorothy Baunach says the lack of an educated workforce may be the limiting factor in Cleveland's ability to build a major bio-medical cluster. The CEO of Bio-Enterprise Baiju Shah says the openings are here.
Baiju Shah: We just recently released a study of Northeast Ohio that shows there are nearly 5,000 open jobs in the region today. And there our greatest single challenge as a region is no longer the lack of jobs but the lack of sufficient workforce to fill the growing technology and health care jobs that are emerging in the region today.
Shah and the other leaders of the local bio-medical effort will gather tomorrow night for a conference to share their strategic goals over the next five years.