Editor’s note: BioWatch is a regular feature on Fridays.

LTW coverage of plan’s announcement: www.localtechwire.com/article.cfm?u=7028 Not everyone thinks the biotech strategic plan delivered to Gov. Mike Easley Wednesday, which recommends spending hundreds of millions of state funds over five years, is full of great ideas.

The plan does have bipartisan support in the state legislature, and the committee that prepared the 100-page plan was co-chaired by popular former Governors Jim Hunt, a Democrat and Jim Martin a Republican.

But, the John Locke Foundation, a conservative think tank based in Raleigh, published a rhetorically scathing attack on the plan the day after it appeared. Penned by the Foundation’s president, John Hood, the column calls the 54 strategies requiring up to $650 million intended to make NC a dominant force in recruiting and developing its biotech industry “a five-year plan.”

Just in case you don’t get the reference, Hood’s column links the term to a criticism of Soviet central planning.

Hood, like other conservative opponents of the plan, tends to couch his arguments in ideological flourishes intended to paint government intervention in the economy as dangerous socialism. One Republican candidate for governor, for instance, refers to the state capital as “the pink palace.”

While the rhetoric may be exaggerated, these opponents express a point of view that helped elect former Sen. Jesse Helms repeatedly against formidable rivals in NC.

But even some of the critics have to note that investing in biotech certainly appears to be a good idea.

Hood writes, accurately, that “North Carolina is hardly alone in riding so hard toward what is assumed to be a biotech bonanza. The trail is well-worn.” Hood notes that more than 40 other states have identified biotechnology of their economic development strategy. Hood doesn’t say it, but so have dozens of other nations, including Ireland, Singapore, Sweden, Japan, and numerous others.

“If everyone is doing it, the idea must make sense, right?” asks Hood. While admitting that, “the promise of biotechnology is obvious, its implications for employment are probably being dramatically oversold.”

Basically, Hood and other opponents argue that once biotech firms get to the production stage, “They will either sell out to larger companies that already have manufacturing capacity–or build plants where production costs are the most competitive regardless of where their original business was based.”

Clusters stay put

Noah Pickus, director of the Institute for Emerging Issues, who led one of the committee work groups that shaped the biotech strategy plan, counters: “Biotech clusters don’t move easily. The research and development cycle is so long, the university and corporate costs are so great, it’s not the type of thing that will go somewhere else quickly.”

Still, Pickus admits, “Those factors hedge the risks, but at the end of the day, it’s still risky.”

Hood tells Local Tech Wire, “The assumptions in this plan rely on experts identifying trends that are inherently speculative. We’re talking about far off in the future. The plan mentions 2023. The whole effort to peg job creation in 2023 is absurd to me.”

Hood adds: “We’ve had a lot of experience over the years with these the-future-is-in (insert industry here) kinds of things, most of which tend not to turn out the way expected.”

Hood cites the rise and fall of the fiber optics for telecom industry, which kept the unemployment rate in the Catawba Valley among the lowest in the nation for years. “It seemed like the future was bright,” he adds.

Since the unexpected crash of the fiber optics industry, which so over-produced optic cable that much already in the ground is dark and unused, the Valley has one of the highest unemployment rates in the nation, Hood notes.

Risky investments?

The basic question that Hood asks is: “Should we take risks on a single industry with public dollars? Betting on a growth stock rather than diversifying your portfolio is questionable.”

Hood says that he doesn’t argue for “doing nothing.” He says it means the state should “do things that have broad applicability” to many industries, such as invest in roads. “That’s a problem with compelling data,” he says. One recent study says the rush hour congestion in the Raleigh-Durham area is the fourth worst in the nation.

Other opponents of the plan include Raleigh Republican activist Tom Vass, who says the employment projections in the biotech strategic plan are “fraudulent.” Vance says the state’s investment in biotech is a result of a national lobbying campaign on the part of the biotech industry organization, BIO, and its state arm, NC BIO, to shift biotech product development risk from companies to taxpayers.

State Sen. Fern Shubert, who is running for governor, says, “Biotech is not a magic word. If you want to help North Carolina, help everyone, not just the ones with the best lobbyists.”

A four-term legislator formerly in the House, Shubert points to the failure of the Technological Development Authority and its life sciences incubator, which could not keep enough tenants to remain viable. She argues that the state would create more jobs by reducing taxes that stifle small businesses and focusing on basic education.

“Basically, you have people in government deciding where to put tax money and the public did not hire these folks as investment advisors. The track record of government making that type of investment is bad,” Shubert says.

Pickus has a counter. “If the alternative point of view is that these are risky investments the government has no business doing, it’s both politically unrealistic and economically incorrect.

“Biotech did not grow here on its own and won’t succeed here on its own.”

But Pickus does think the state would do well to seek “independent outside analysis” of proposals such as the biotech strategy plan.

“This isn’t critical of the report, which does what it is supposed to do,” says Pickus, “but the state board of science and technology would be a logical place to develop a system where you have independent evaluations.”

The question, says Pickus, is: “How do you know to choose this vs. other things? It’s a larger problem. If we had better comparative analysis, I think biotech would come out as a very good investment.”

John Hood’s Column: www.carolinajournal.com/jhdailyjournal/display_jhdailyjournal.html?id=1361

Biotech Strategy Plan: www.ncbiotech.org/strategicplan