With a $2.5 million check from the state, Chicago is looking to put a stake in the ground of an increasingly important global industry: biotech and medical innovation.
In his State of the State address Wednesday, Gov. Pat Quinn announced funding to help open a center for medical technology startups in downtown Chicago. The project, modeled after the city’s successful 1871 hub for digital startups, is designed to be a place for entrepreneurs and prospective investors in medical technology to seed new companies.
The new venture is also expected to receive a $1 million loan from either the Department of Commerce and Economic Opportunity or the Illinois Finance Authority.
By jumping into the biotech game, Chicago is looking to become a player in a fiercely competitive yet potentially lucrative industry that has become increasingly important to cities around the world.
Throughout Asia, for example, cities such as Singapore, Beijing and Kuala Lumpur have all invested heavily in the academic, business and technological infrastructure necessary to foster new biotech and pharma products.
Here at home, cities such as Boston, Raleigh, N.C. and even Philadelphia in recent years have all yoked part of their economic base to medical innovation. Like other industries, providing the necessary infrastructure and start-up capital can create a virtuous circle for cities like Chicago—increasingly, biotech innovation flows to places like Boston and Raleigh that can foster new ideas and new products.
For a city to prove successful in becoming an incubator for the industry, it must have a number of factors upon which to build, including a network of hospitals, academic institutions and already existing pharmaceutical companies, all of which Chicago has.
The U.S. biotechnology industry includes around 1,800 companies with a combined annual revenue of approximately $90 billion. Nevertheless, biotech and pharma innovation is becoming increasingly expensive: it’s been estimated the cost of bringing a new drug to market is $1.3 billion from start to finish.
Chicago’s new center is expected to focus as well on medical technology, such as medical devices and medicine-related information technology, in addition to biotech and pharma.