New Mexico Among States Having Effective Programs Aimed at Creating Biotech Companies and Jobs
Albuquerque, NM, August 29, 2017. The world’s largest trade association for biotechnology companies and academic institutions developing innovative products from medical devices and lifesaving drugs to green technologies for the environment and food production has issued a report on state programs aimed at creating good-paying biotechnology jobs across a broad range of occupations. In 2016, the average U.S. bioscience worker earned nearly $95,000 per year, a figure that is 85 percent greater than the private sector average. Total 2016 employment in the industry topped out at approximately 1.7 million people working in 77,000 U.S. businesses.
Biotechnology Innovation Organization (BIO) recently published Bioscience Innovation in the States: Legislation and Job Creation Through Public-Private Partnerships, a best practices guide on state legislation that supports creating biotech companies and developing biotech industries at the state and regional level. Small and emerging biotechnology companies face unique challenges such as high cost and long development time in bringing new products to the marketplace.
“These reports are highly anticipated and closely monitored by BIO’s state affiliated associations as well as the nation’s leading site location consultants and commercial brokerages,” said Greg Byrnes, executive director of the New Mexico Biotechnology and Biomedical Association, which serves as an advocate and catalyst for the acceleration of the state’s bioscience sector. “Bottom line, these findings are report cards for the state economic development organizations and the state associations. They measure best practices. Clearly, NM is showing dramatic improvement. We’re making exceptional progress and improving our competitive position not only in the Southwest, but across the country.”
The report, published every two years, focuses on programs enacted through state legislation that help universities and entrepreneurs as they work together to create new bioscience technologies and companies. The study examines five key economic development incentives that support new and emerging biotech companies:
- State matching grants for Phase I and Phase II Small Business Innovation Research (SBIR) grants for early stage companies
- state tax credits to angel investors who invest in early-stage technology companies
- state sales tax exemptions on equipment used for research and development (R&D) and manufacturing to support the growth of bioscience companies
- state “fund of funds” programs to increase the availability of venture capital to bioscience companies
- state R&D tax credits for early stage bioscience research that is critical in moving the technology to the commercialization stage.
New Mexico and Wisconsin are the only states that provide tax credits in all categories of investors (angel investors, bioscience angel investors, investors in early-stage venture funds, and investors in bioscience early-stage venture funds).
New Mexico is among only ten states that provide sales tax exemptions in all categories (equipment used in R&D, equipment used for biomanufacturing, and exemptions specifically targeted to bioscience companies). New Mexico also provides R&D tax credits if the research is conducted by an in-state university.
The state is among six states that have created a “fund-of-funds” investment vehicle for directly investing in bioscience companies and investing in privately managed funds that invest in state companies.
Additionally, New Mexico is recognized for innovation partnerships among industry, academia, and state government for the passage of the New Mexico Bioscience Development Act in 2017. The Act creates a Bioscience Authority comprised of university, government and private sector appointees who will focus on growing the industry in New Mexico.
The report also looked at state-level trends that are fueling new company formation and supporting emerging bioscience companies. Smaller metropolitan areas are gaining ground over larger metro areas because they offer lower business costs, proximity to outstanding academic research and substantial educated work forces. Of particular note, are research universities in states and regions across the country that are creating physical environments, such as innovation districts/zones, offering incubators and multi-tenant space to support and attract bioscience companies