Research Centers are a Boon to the Bay Area's Sagging Economy

J. Michael Bishop / Commentary / SF Chronicle 19feb02

THE DECLINING economy has not been kind to the Bay Area. Hotel rooms are empty, offices are going begging, the dot-com world has deconstructed. But things are still jumping at research universities and federal laboratories in the Bay Area -- one of the largest concentrations of centers for discovery and education in the nation.

A multitude of economic studies have shown that discovery is a major driver of the nation's economy. A recent analysis, presented at the Bay Area Council Outlook Conference 2002, confirmed that this is particularly true for the Bay Area's knowledge-based, innovation-driven economy.

Thanks to the region's culture of innovation and other factors attributable to research institutions, the analysis forecasts economic growth for the Bay Area of more than 4.2 percent -- and as much as 5.1 percent -- during the next three to five years.

Academic institutions produce precisely the advantages that ensure stability and vitality in the economy during times such as these. Consider these examples of the contributions from just one institution, the University of California at San Francisco (UCSF):

• Previous studies have indicated that UCSF now injects as much as $2 billion into the local economy. Similarly, recent data for UC Berkeley reveal that every dollar spent by that campus generates another 67 cents in local spending, resulting in a total impact on the Bay Area of $1.4 billion.
• UCSF employs more than 17,000 Bay Area residents with an annual payroll of $932 million, making it the second-largest employer in San Francisco. Spending by the employees in turn supports many more jobs in the region.
• UCSF received $340 million in federal grants for biomedical research last year, including nearly half of the $608 million awarded by the National Institutes of Health to all Bay Area institutions. These funds add great leverage to the budget provided by the state of California.
• Since UCSF's co-discovery of genetic engineering more than 25 years ago, the discoveries of UCSF scientists have led to the founding of nearly 70 life sciences companies, including biotechnology leaders Genentech and Chiron. That record expands substantially when all the research universities in the Bay Area are taken into account. These institutions serve as magnets, drawing biotechnology and life sciences companies to the region.
• The Bay Area is now home to 713 biomedical companies employing more than 80, 000 people, according to a study recently released by the California Healthcare Institute.
• UCSF holds more than 500 patents, including five of the University of California system's top 11 revenue producers -- hepatitis B vaccine, human growth hormone, a cochlear implant helping deaf people hear, a technique for delivering medicines into the body's cells and a form of recombinant DNA used for the production of therapeutic agents.
• UCSF's patents generated $434 million in the past five years -- 76 percent of the revenue from all patents in the UC system in the same period.
• During the next three years, UCSF plans to develop 1.3 million square- feet of new research and teaching space at Mission Bay, spending approximately $650 million in construction and other project costs.

Today, if you drive by UCSF Mission Bay at Highway 280 and l6th Street , you will see the new Genentech Hall, a five-story building that will house 80 research teams seeking deeper understanding of the cellular and molecular structure that underlies life, and new strategies for the development of therapeutics. As many as 500 construction workers are on the job every day.

Construction is under way on a second laboratory building where scientists will tease out answers to questions in genetics and neurosciences, and construction soon will start on a third research building; a Campus Community Center designed by world-renowned architect Ricardo Legoretta; housing for more than 700 students; a 600-space parking garage; and the Koret Quad, a green space larger than Union Square. The campus also plans an ambitious public art program, funded in part by the construction budget.

One of UCSF's new neighbors at Mission Bay recently asked us to "make Mission Bay a university town." That is exactly what we plan to do.

Add UCSF's economic impact to that of the other institutions in the Bay Area and the substantial and sustaining effects of academic institutions on employment and benefits to the public become clear. If a highly skilled workforce, jobs that bring cash into the region and a strong culture of innovation provide the economy's foundation, our academic institutions are the masons. They merit and need the broadest possible support.

Dr. J. Michael Bishop is chancellor of the University of California at San Francisco. He received the Nobel Prize in Medicine or Physiology in 1989, along with Harold Varmus, for their discovery of normal cellular genes that can be converted to cancer genes. He participated on a panel of Nobel Laureates at the Bay Area Council Economic Outlook 2002 conference on Jan. 11.