BIOTECH ALLEY? High-tech hopes for Maryland's economic future


Maryland's visionaries have seen the future, and it's not us.

The sons of steelworkers and daughters of dockworkers may find themselves in sterilized plants packaging the latest medical wizardry. Coveralls will give way to lab coats, and business suits to protective breathing apparatus.

Toiling in offices, labs and on high-tech assembly lines, future workers here will breed pollution-eating microbes, mass-produce antibodies that destroy tumors, and sell super-sophisticated communications equipment to customers around the globe.

After years of scattered economic development efforts, leaders of government and business have focused on this ambitious, high-tech vision for what they want Maryland's economy to look like. The General Assembly approved this year millions of dollars worth of initiatives to make Maryland a center for two industries of the future: biotechnology and information technology.

The boosters for high-tech hope it can replace jobs lost in the industries now waning in the state, such as heavy manufacturing and defense contracting. Maryland's job-making machine began to sputter last year, and economists say the long run of double-digit growth that dominated the 1980s is out of gas.

Some involved in the project dream that the Baltimore-Washington corridor could come to be known as the nation's "Biotech Alley," joining California's Silicon Valley and Boston's Route 128 in the annals of job-rich business centers. Others are skeptical.

The plan builds on existing strengths. Maryland is home to large numbers of engineers and scientists. Internationally acclaimed research institutions such as Johns Hopkins University and the University of Maryland are augmented by no fewer than 42 federal laboratories researching everything from AIDs to the design of warships.

Lavish defense spending during the 1980s left Maryland with hundreds of companies specializing in electronics, computer science, and aviation. In a major investment in information technology, Bell Atlantic built a $20 million "switching center" -- a collection of sophisticated microprocessors and circuit boards -- Silver Spring.

Statistics show a massive employment shift over the past 10 years, away from textiles, steel and other "basic industries" to such things as computer software design, chemicals and electronics.

State leaders want to build on this base with a combination of public and private inducements. They hope to, in the questionable grammar of modern business, "grow" those vocations into a dominant economic force here.

In concert with the effort, the Greater Baltimore Committee is expected to announce this week a new "vision" for Baltimore's economic future. The business group wants to establish the region as a headquarters for the "life sciences," including biotechnology and medicine.

There are problems with the ambitious shift to technology. It will require a renaissance in education, to train the workers to fill the new jobs. And it exposes the state to some potentially hazardous substances.

And it can fail.


Just about every state has, at one time or other over the past 10 years, tried to take the reins of its economy and guide it toward a finish line established by economists and planners. It rarely works. Like a headstrong pony, the economy goes its own way. Successes such as Silicon Valley and Route 128 occur spontaneously, not because they were planned.

"It's hard to create something out of nothing. States are not strong enough to create trends," said Doug Ross, president of the Corporation for Enterprise Development, an economic-development consulting group based in Washington.

The key is finding a strength and developing it with just the right amount of government aid, he said. Too much interference by the state, and private enterprise will become squeamish. Not enough nurturing, and the business will go elsewhere.

"It's not a question of dreaming up your future. It's getting behind market forces," Ross said.

The high-tech clusters around Boston and San Francisco developed because of the strong universities there. Frequently, the upstart, go-for-broke companies that made those areas were founded by professors from the nearby schools. But state and local governments soon recognized the bonanza and encouraged it, he said.

"You never know in retrospect. If Massachusetts had been indifferent to Route 128, would they have been successful? I doubt it. But it's difficult to prove," said Ross, who believes that Maryland's approach could become a model for other states.


Del. Howard P. Rawlings, D-City, said past criticism of Maryland's "shotgun" economic development efforts led to a special committee and an exhaustive study. The result is a coordinated approach, he said.

"We've identified biotech and information technology as the areas that hold the greatest promise for economic growth in the state," said Rawlings who, as vice chairman of the House Appropriations Committee, is in a strong position to maintain the legislature's interest in the new initiatives.

There's little question the state has picked some of the fastest-growing industries.

A series of biotechnology breakthroughs over the past few years created new drugs and better ways of making old ones. These inventions are just beginning to yield highly profitable commercial products.

The potential for medicine is staggering; for the industry, sales are expected to double in two years and increase 20-fold by the end of the century. Ernst & Young, a consulting and

business-services company, calls biotechnology "America's most promising industry."

"The number of products, the impact on medicine, the impact on the economy are only beginning to be felt," said David S. Weber, an analyst following the biotechnology industry from Wall Street for Alex. Brown & Sons.


Among states, Maryland ranks third in the number of biotechnology companies, behind California and Massachusetts. They have more companies closer to having commercially viable products than does Maryland, Weber said. Maryland's entries are still small and focused on early research, he said.

By revenues, Maryland ranks fifth. By employees, it ranks fourth, with about 4,000 jobs, according to state officials.

But Maryland has the sort of impressive research universities that could serve as a foundation for a strong biotechnology industry, said Jared L. Cohen, vice provost for research at Hopkins.

He thinks estimates of 40,000 to 60,000 biotechnology jobs by the end of the decade are "conservative."

"A large, thriving biotech industry would have a substantial spin-off for the entire state," said Cohen, who chaired a committee that drew up plans to boost biotechnology in the state.

"I'd like to see it up there someday with defense and electronics in terms of its economic impact on the state," he said.

The key will be for Maryland to move beyond its current status as a research center and capture the biotech manufacturing now being lost to other states. Typically, a company discovering a new drug has to strike a deal with an out-of-state drug company to conduct the expensive, federally mandated tests and to mass produce it.

To encourage commercialization here, the General Assembly approved preliminary funding to build a $22 million "bioprocessing" facility. Suites and specialized equipment in the square-foot center would be leased to a company that would learn how to mass-produce organisms developed in labs. Products could be tested under federal supervision.

The Maryland bioprocessing facility would most likely be built near the Bayview industrial park developed by Dome Corp., an arm of Hopkins, or near the University of Maryland at Baltimore County.

The idea is that the companies would return the favor. After a discovery was tested, the company would be encouraged to set up drug manufacturing nearby. More companies would also be drawn to the area because competing firms tend to congregate where they can share services and suppliers.

"It's not a simple, competitive situation where you duke it out to sell your corn flakes. There needs to be a critical mass of suppliers and companies," said Christopher H. Price, vice president of business development for Nova Pharmaceutical Corp., a Bayview tenant.


With state funding in place, Maryland is at the forefront for building a bioprocessing facility. Massachusetts and Arkansas have made similar proposals, and the Canadian city of Montreal has converted a government lab to commercial uses.

The Maryland General Assembly also approved more money for the Christopher Columbus Center for Marine Research and Discovery, slated for Piers 5 and 6 at the Inner Harbor. At its heart would be the Maryland Center of Marine Biotechnology, housed at the New Community College of Baltimore since 1985.

Concentrating biotechnology firms in one area increases the risks a dangerous organism will escape, but the chances are slim, said Steven C. Witt, president of the Center for Science Information in San Francisco.

"What comes from this technology in the future only God knows. We cannot say what risks biotechnology presents," Witt said.

The industry has a good record of preventing accidents, with the only significant release on record coming from a Soviet biological weapons plant, he said.

"In general, biotechnology presents no greater risk than any hospital in the area. I would much rather be next to a biotechnology facility than a nuclear plant, or a hospital or a sewage plant or even a gas station," Witt said.

For information technology, the General Assembly this year approved $1 million for the design of the $18 million Maryland Information Technologies Center. The one-of-a-kind facility would study and test digital communications technology, a process whereby data is encoded and transmitted rapidly by satellite or fiber optic cable.

VTC Eventually, such technology should allow for the combined transmission of sound, pictures, facsimiles, and other data. Supporters consider it the future of global communication, something that will prove a vast improvement over traditional cables and copper wires.

"There's no center in the country to take advantage of the [digital] revolution. There's much more being done in the Far East and Europe," said Walt Plosila, president of the Montgomery County High Technology Council, which has been active in planning the center.

The center would probably be located in the Washington suburbs, taking advantage of the Bell Atlantic switching facility. It will serve as a focus for the development of software and hardware, application of technology, and market research, he said.

Plosila's group estimates that the state now supports about 125,000 jobs in "information technologies." Maintaining the current market share, something the technologies center is designed to help accomplish, would see that grow to 250,000 jobs over the next decade.

"I think what the legislature did this year was to take some giant steps forward in laying the foundation of the future," said Tom Chmura, deputy director of the Greater Baltimore Committee.

Focusing on advanced technology, especially the feast-and-famine biotechnology business, involves some risk, but it is a calculated risk with potentially huge payoffs, Chmura said.

"All it takes is one or two big discoveries and you go from a company with two people to one with 200," he said.

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