Banking on biotech: Solano in a healthy place

Banking on biotech: Solano in a healthy place
Published in the Reporter
Posted: 03/06/2009

Biotechnology is thriving in Solano County, a consultant hired to advise local business and government leaders about the area's economic prospects said last week.

One can only imagine how that news was received by the 140 workers who two days earlier were laid off from their jobs at Vacaville's ALZA Corp.

So which is it? Boom times or layoffs in the life sciences field?

The answer is ... both.

Consultant Doug Henton, chairman and CEO of Collaborative Economics, based his assessment on information collected between 2000 and 2006. It showed healthy growth in Solano County among the companies that make drugs, biotech products and medical devices.

Such companies were growing at a rate of 35 percent a year, while other counties in the Bay Area were reporting biotech losses of 3 percent. The number of Solano biotech jobs grew from 385 to 2,310 -- most of them filled by local residents who saw their wages rise noticeably in the process.

Yet even the best biotech labs haven't found a vaccine to inoculate the industry from the economic virus that has infected the nation and the world in more recent months. Hence last week's second round of layoffs at ALZA, this time affecting 18 percent of the local work force. Companywide, ALZA has let go of 25 percent of its work force in the last six months.

As the economy continues to spiral downward, ALZA may not be the only biotech company to face cuts.

Still there is reason for hope in the long term. There are around 40 life science companies in the Solano area. As the population ages, as it is doing in the United States and much of Europe, a growing number of people will face the kinds of diseases and conditions that the biotech products made here are meant to treat. Demand will go up, which should mean a need for increased production. Local companies that remain poised to pounce could be among the first industries to come out of this slump.

That's where local governments can help. As Mr. Henton pointed out, cities and the county should act to ensure there are places for these companies to grow, and water available for their use, when the time comes. State representatives can help by making sure tax policies encourage these businesses to stay, rather than expand outside California. Schools must ensure there is an educated work force ready to be hired -- a difficult task made harder by the state's cuts to the education budget.

Past performance is no guarantee of future returns, as the stock brokers say. Yet there's every reason to believe the life sciences industry will continue to thrive in Solano County, especially if community leaders do their part to encourage growth.