The biotech sector, barely three decades old, now boasts about 5,000 companies and is principally driven by its healthcare focus. While the U.S. industry has pockets in many states, it remains anchored in California and Massachusetts. Steven Burrill, a San Francisco-based venture capitalist described by Scientific American as a biotech investment visionary, says the bi-coastal biotech bastions of the San Francisco Bay area and Boston will continue to lead the way, but many other significant centers will develop. Burrill is CEO of Burrill & Co., a merchant bank focused exclusively on life sciences.
      "Seattle, largely with the intersection of the powerful cancer technologies at Fred Hutchinson and the info technology coming out of the region, is being helped by the Microsoft millionaires who are providing quite a bit of seed capital," Burrill tells Site Selection in a recent interview. He also points to the broader Midwest in states like Indiana, Wisconsin and Michigan, where the Big Ten universities offer powerful science programs and there are a lot of state initiatives to do things.

Steven Burrill, a noted life sciences venture capitalist, believes preventive treatment will fuel future biotech growth.

      "If you look around, every city, state and country has a spare parking lot that they would like to turn into a biotech park," Burrill says. "There's a lot of hype and excitement around taking all of this technology and creating a new economy."
      Biotech emergence correlated directly to where the academics are superior, Burrill says. While healthcare has been the dominant focus of biotech to date, he believes other areas will grow.
      "If you go out 100 years, the contribution by non-healthcare sectors will be as great as healthcare," Burrill says. "Right now, we're in love with healthcare applications, but as we look at using technology to protect the environment or to enhance nutrition, you will see a massive deployment."
      Burrill says there has been a chicken and egg question about biotech as to whether venture capitalists attract companies or entrepreneurs draw the venture capitalists. He says there's no question that it's the latter.
      "If you have a guy standing on every corner in Atlanta with a great business plan, the venture capitalists will get tired of flying here and will eventually settle here. The spawning of entrepreneurs causes capital to move to where they are, not the other way around. States have begun to move in a major way, recognizing that there's an enormous gap in the very thing that needs to happen at the early stage. A lot of state programs have taken tobacco settlement money and state initiative money to create pools of capital."
      Burrill says states have used other means of leverage at their disposal, such as expediting planning approval or regulatory mechanisms to help the industry along. But for many jurisdictions, the hype probably exceeds the reality, Burrill says.
      "The expectations that you will be able to create massive new economies around this industry are probably overstated. But, we will create large numbers of new companies and we will create large numbers of opportunities. There are still thousands of diseases in the world that are poorly treated. Markets are expanding tremendously. We are just beginning to move to the point where we can treat wellness, not just sickness. That's where the real opportunity for this technology is."
      Another key to successful biotech development is having a good role model. Regions where companies have succeeded give burgeoning companies "permission," or a belief that they can do the same.
      "I happen to have been involved in the growth of Silicon Valley. If you look at the Apples and the Intels of the world, there were a lot of people that said, 'Hell, I'm as smart as those guys and I can do that, too.' But if the early players fail, it's a lot more problematic."
      Burrill says North Carolina has done a great job of marketing itself as a biotech center. And he says after 20 years, the reality is catching up with the marketing.
      States that successfully bring the scientific and business communities together will have the most success, Burrill says. Facilitating technology transfer and providing early stage capital will speed the success.
      "A lot of state initiatives can yield positive results. Some are more hype and some are quieter, but they're putting in meaningful levels of seed capital."
      Burrill believes personalized medicine and predictive, preventive care will be the future drivers in healthcare.
      "The technologies we have will enable us to attach a smart card to babies and be predictive and say you're going to get breast cancer at 52 or your are going to get osteoporosis at 48. But, if you do certain things, we can prevent that. Today, 80 percent of healthcare costs are for chronic care. We can eliminate enormous costs if we can begin to treat predictively. We will treat cancer as a chronic event and manage it. We are beginning to make that transition.
      "At the risk of being controversial, I will argue that the pharmaceutical companies as we know them today are dinosaurs. They're heading toward extinction on the blockbuster drug model. The big pharma companies will morph to become the global distribution arm of an innovative industry, and the innovative industry will largely be powered by small companies."
      Burrill says four large countries may one day become biotech forces.
      "I will be very interested in what I call the BRIC economies (Brazil, Russia, India and China). These four countries will represent 50 percent of the world's economy in 25 to 30 years. These happen to be economies that aren't respectful of the world's patent system and intellectual properties. They are countries with enormous populations and tremendous wealth that will need to spend money to treat their rapidly growing populations."