I was in Austin last week for a business meeting (spot the snow around the State Capitol) and was interested to learn that Austin, TX is an emerging and growing biotechnology cluster.
Michael Porter in the Harvard Business Review has written about the importance of clusters of interconnected companies, universities, suppliers and service providers and how these drive increased productivity, innovation and stimulate further new businesses. An important contributor of growth and economic development is the pool of talented workers that develops and is attracted to the local area around the cluster.
Despite being better known for its high tech companies such as Dell, and as the “live music capital of the world”, there is an emerging biotech cluster around Austin. Austin boasts warm winter weather (most of the time), proximity to the flagship University of Texas at Austin, and the incentives of a tax friendly, State of Texas (no personal or corporate taxation).
According to the Austin Chamber of Commerce, there are now more than 100 companies in the areas of research, diagnostics, pharmaceuticals and medical devices. These include Abbott Spine, Arthrocare Corp, Agilent, Alk-Abello, Asuragen, Luminex, Viagen and Zimmer Biologics. Although the University of Texas at Austin lacks a medical school, MD Anderson established a Science Park for basic and translational cancer research in the area. This reminds me of similar facilities in La Jolla.
The University of Texas at Austin also provides a growing pool of educated workers, and I see the convergence of information technology in drug discovery, as where the many IT graduates with an interest in life sciences, can have an important role to play. Bioinformatics and computational biology is becoming increasing important in cancer research, for example.
The University, like many others, provides an incubator for technology start-ups that has raised over $725M in funding. You can read about the important role incubators have to play in the development of biotechnology companies in Christopher Pirie’s interesting article in the MIT Entrepreneurship Review).
However, what cements my view that Austin is an emerging cluster, is the fact that growing start-up companies are now choosing to relocate to Austin, rather than move to more established biotech areas such as Boston or Seattle. Pain Therapeutics Inc. a San Mateo, CA company announced in October last year they would be moving to Austin by the end of 2011 and planned to hire 50-100 employees in Research & Development. As more companies move to the Austin area, this trend is likely to continue.
If you are a growing, biotech start-up company, Austin should be on your radar of potential areas to build your business.