World battles over biotech firms in S.F.

By Mike Lee -- Bee Staff Writer

Published Tuesday, June 8, 2004

SAN FRANCISCO - Delegates from 60 counties have descended on California this week to dig for gold, the kind of treasure promised by the Golden State's biotechnology industry.

Foreign dignitaries come waving tax breaks, research partnerships and incubator space in front of anyone with a biology-based business plan. They offer slick handouts, door prizes and catered parties in futuristic trade show pavilions designed to set them apart in an increasingly crowded field.

They mean business even at the expense of California, which suffers from marketing budget cuts and from uncertainty about whether the state's leading pitchman - Gov. Arnold Schwarzenegger - will show.

"The impression is that the state doesn't really care," lamented Michael R. Palombo, economic development manager for Vacaville, in town to recruit new bio-business.

Roughly one-third of the 16,000 participants at the Biotechnology Industry Organization's annual conference come from abroad. Foreign legions have swelled in the last five years as the rest of the world angles for the next big break in biotech. Among the largest foreign delegations: Australia, Canada, Belgium and France.

"It's like the Olympic Games - all the players ... are in one place," said Tzach Segal, director of business development for the Israeli consulate in San Francisco.

He imported Eli Opper, Israel's director of industrial research and development, to share the country's biotech vision with Silicon Valley venture capitalists. "Biotechnology is the future," Opper said. "It's becoming more and more obvious."

Several floors above Opper in the Marriott, the premier of the Australian state of Victoria launched an aggressive plan to boost biotech business: more patents, more R&D spending and more research on marsupial genomics.

"These sorts of jobs will be high-skilled, high-wage jobs," said Premier Steve Bracks. He added, "We want to be part of the breakthrough in finding opportunities to cure diseases."

At least six U.S. governors have made reservations to compete handshake-to-handshake with foreign politicians. Massachusetts Gov. Mitt Romney, for one, made it clear that he was coming to entice California companies. His counterparts from Florida, Iowa and Missouri also are expected.

What does it all mean for California, the birthplace of biotechnology?

The state's biotech leaders are soaking up the international exposure - for instance, a study released Monday that shows six of the top 10 U.S. biotech clusters in California. They also applauded Monday's announcement of more biotech work-force training grants for San Diego and the Bay Area from the U.S. Department of Labor, part of a presidential jobs initiative.

But Californians are nervous, too. The state's Trade, Technology and Commerce Agency folded in 2003, the victim of budget cuts. That leaves cities such as Sacramento and development agencies under the banner of Team California to come up with their own promotional money for this year's conference. The group's 10-foot-by-30-foot trade show footprint cost $30,000, none of which was paid by the state.

The California pavilion is a modest affair compared to the sprawling, flag-ringed Canada business hub or the space-age glass and steel structure erected by Japan. Perhaps more telling: Team California still is handing out literature published before the state's trade agency collapsed. In it, the agency's former leader boasts that California "has it all."

"It's the best we could do," said Keith Sutton of Oakland, chairman of Team California.

He checked out the competition Monday morning, when more than 1,300 trade show booths opened, and worried about the home state being shown up. "If we are not seen to be competing for (companies') business, it sends a message," he said.

Joe Panetta, CEO of the San Diego biotech trade group BIOCOM, was less concerned about appearances given the state's track record of scientific breakthroughs and the impressive turnout of bio-businesses. "We are not here to impress people with the food we have," he said. "We are out here to impress people with the biotechnology innovation that can happen in California."

The holdout hope in the California pavilion is that Schwarzenegger will lend his charisma to the underfunded effort. "The governor could just walk through and create a sensation," said Vacaville's Palombo.

Sutton agreed. "It would be a big boost."

Schwarzenegger spokesman Vince Sollitto did not rule out the possibility that the governor would make an appearance before the conference ends Wednesday, but he said the governor's focus is passing a balanced and timely state budget. "(That) is integral to improving the business climate for all industry sectors in California," Sollitto said.

About the Writer The Bee's Mike Lee can be reached at (916) 321-1102 or