MACKINAC ISLAND – Michigan has the infrastructure to see major progress in attracting biotechnology businesses, but the state is hurting itself by failing to develop and stick to a plan to promote the industry, top biotechnology executives said.

As a result, Michigan is losing out compared to states like Ohio and Indiana, which in some cases didn’t even begin to pursue biotech companies until well after Michigan, said Stephen Rapundalo of MichBio and Peter Pellerito of the national Biotechnology Industry Organization.

“The state needs to get its act together,” said Rapundalo to help build the biotech industry in the state.

Part of that includes developing a tax system that is helpful to businesses, and some specific to the industry – such as a specific sales tax break for the biotech industry. At least 40 states provide such a sales tax exemption, but Michigan does not, Pellerito said.

But as much a part of the problem is having a clear showing by the state that it is committed and interested in the biotechnology industry, the two men said.

A big problem the state has faced is the constant change in the state’s expression and focus of commitment with each gubernatorial change. The policies that former Governor James Blanchard had towards biotechnology were altered with the development of the life sciences corridor that had consistent funding under former Governor John Engler that was changed again when Governor Jennifer Granholm announced a focus on advanced manufacturing and homeland defense industries in addition to bio-sciences.

But especially since the end of the life sciences corridor, the industry has had a sense that it is out of sight, out of mind, Rapundalo said. He complained that in Ohio the governor’s office works with his counterpart to help attract biotechnology companies, but despite offers to the state, Granholm’s office has not asked for help.

Voter approval of the embryonic stem cell proposal in 2008 was extremely important to the industry, he said. The world’s industry began to pay attention to the state then, he said, but recently passed legislation by the Senate that could impose new controls on the proposal could end all of that interest.

Given the structure the state has, there is no reason Michigan could not be a major player in the biotechnology industry, Pellerito said. Over five years, from 2004-09, the state’s three largest universities garnered more than $3.78 billion in federal research funding. That put the state in the top five nationally in that category.

In the same five years, there were 1,871 patents coming from those universities and the state’s biotechnology companies, he said. While that meant the state was in the teens among all the states in terms of patents, it still was an impressive number, Pellerito said.

Rapundalo said there are some 540 biotechnology companies in the state, employing nearly 100,000 people, generating some $9.5 billion in gross domestic product and some $500 million in income tax to the state.

Pellerito also said while the industry has typically been associated with medical application, biotechnology deals with agriculture, alternative energy, and other applications.

Pfizer and Western Michigan University are some of the world leaders in the development of veterinary medicine applications, for example, he said.

But both said the message of success and potential in the state are not being communicated to the industry generally.

“The state has great opportunities, but no game plan,” Rapundalo said, as it seems to shift from one strategy to another to build business.

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