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In the 1980s,
when Busch Stadium’s turf was artificial and its fences long, Whitey
Herzog built speed and quickness into his Cardinals. A walk, a steal,
a bunt, a sacrifice fly. A run. Team speed was Whitey’s edge.
On the “playing field of economic development,” several years ago,
the RCGA asked nationally recognized consultants Celeste & Sabety
and Harvard professor Michael Porter to each examine the St. Louis
regional economy and identify its edge.
What they came up with were five distinctive industry clusters:
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plant and life sciences
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information technologies
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advanced manufacturing
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banking and financial services
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transportation, cargo and distribution
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“Focusing our
efforts on industry clusters, where our region has comparative advantages,
is a powerful strategy for creating regional wealth,” noted Chairman
of the Greater St. Louis Economic Development Council Joe Hasten.
To kick off the clusters concept, the RCGA commissioned the Battelle
Memorial Institute, with funding support from the Danforth Foundation
and Civic Progress, to catalog the region’s core competencies and
develop a strategy for prosperity and a plan for implementation,
starting with the impact of plant and life sciences on the region.
In plant science, Battelle determined that with a disciplined effort,
St. Louis could be #1 in the world in plant sciences, and among
the top tier in the life sciences nationwide.
Battelle researchers found the region offers core competencies like
tropical botany, bio-medical engineering, cell biology, cardiology,
neuroscience, genomics and immunology. They found a long heritage
of research and development and a deep reservoir of intellectual
assets at organizations like Mallinckrodt, Monsanto, Sigma-Aldrich.
They found research excellence at Washington University, University
of Missouri–Columbia, Saint Louis University and the Missouri Botanical
Garden. And new players are joining the hall of fame: the Donald
Danforth Plant Science Center; The Solae Company; Wyeth BioPharma;
Pfizer; and the National Corn-to-Ethanol Research Center.
Currently the Coalition for Plant and Life Sciences, jointly established
by the RCGA and Civic Progress and chaired by Dr. William Danforth,
is implementing key recommendations in the Battelle study, including
branding the region worldwide as the BioBelt: the Center of Plant
and Life Sciences.
Even beyond the St. Louis region, the entire State of Missouri stands
to benefit from the life sciences. A companion statewide Battelle
study noted that with its significant life-sciences assets, Missouri
could emerge as a national life-sciences leader by promoting a statewide,
public-private commitment to basic research, business development
and technology commercialization, and workforce development, particularly
in science and math.
Battelle documented the average salary for the nearly 25,000 plant
and life sciences jobs in the 390 existing St. Louis life sciences
companies is nearly $70,000 per year (compared to an average metro
area salary of $36,000). So, the spin off economic development spending
for every life sciences job is significant for the regional community.
Great strides have been made over the past three years to implement
Battelle’s St. Louis plant and life science strategies. The BioBelt
brand name is becoming well known across the country and around
the world. Nearly $300 million has been raised in four locally-managed
venture capital funds dedicated to biotech and medical companies;
the Danforth Foundation earlier this year announced it was devoting
60 percent of its uncommitted assets—some $124 million—to developing
the region’s plant and life sciences cluster. And just this month,
institutional investors have committed nearly $60 million in yet
another new locally-managed life science venture capital fund called
the Vectis Life Science Fund. Boston-based Brooke Private Equity,
headed by international venture capitalist Peter Brooke, is creating
the new fund, which has a goal of raising $100 million and is expected
to begin making investments in early 2004.
In addition, the BioGenerator, a virtual technology transfer and
commercialization Center, is now up and running. Headed by Pat Snider,
president and chief executive, and backed by more than $5 million
in funding, the BioGenerator is designed to provide proof-of-concept
funding and entrepreneurial and pre-seed capital support to help
supply a steady flow of new technology-based companies in the St.
Louis region and deal flow for interested venture capital investors.
Snider works closely with the technology transfer offices at the
region’s major research universities to identify research concepts
with the most commercial potential and which are viable candidates
for venture capital investment.
Plans are also on the drawing board for a 180,000 square-foot suburban
commercial, multi-tenant and wet lab space facility anchored by
the Donald Danforth Plant Science Center, Monsanto and the Nidus
Center. In addition, CORTEX, a non-profit collaboration of Washington
University, Saint Louis University, the Missouri Botanical Garden,
the Center for Emerging Technologies, the BJC Health Care System,
the RCGA, Civic Progress, the city, and the University of Missouri
at St. Louis, are in the process of developing an urban advanced
technology research district located within a 1,000-acre area in
mid-town St. Louis. These two development areas will provide much-needed
multi-tenant wet lab and related life sciences infrastructure in
two key locations in the St. Louis area, immediately adjacent to
well-established, world-class research institutions.
“These research parks, combined with our new sources of investment,
are beneficial to everything from ground-breaking research to promising
commercial applications,” Hasten said. It’s positive proof that
St. Louis developed “innovative ways to turn science into technology,
as well as commercializing technology in both existing and new entrepreneurial-driven
firms,” the study stated.
A separate Battelle cluster strategy noted that critical to the
BioBelt is an emerging information technology industry. While IT
comprised only 4.1 percent of the St. Louis workforce in the late
’90s, and while the average annual salary of those jobs ($54,964)
was slightly below the national average, the growth of employment
in the sector exceeded the national rate by roughly 25 percent.
The Battelle IT study says, “Among the key computer services growth
industries in the St. Louis region [in the ’90s] were computer-integrated
systems design, computer programming services, and other computer—related
services—all key to servicing the integration and application of
software into business operations.”
In other words, even if you aren’t Reuters, tracking the trades
of almost a million financial instruments for investors; even if
you aren’t MasterCard, processing millions of credit card authorizations
a day; chances are, you use technology to solve your business problems.
Amen, says Rich Steinmetz, assistant vice president of IT strategy
at SBC, which has hired an average of 300 computer science and information
workers in the past three years. He says his biggest competitors
for those hires in St. Louis are Anheuser-Busch, Monsanto and A.G.
Edwards.
“I think one of Battelle’s important observations is that in St.
Louis, we tend to think of IT as a cost, rather than as a strategic
investment in our competitiveness and margins,” noted RCGA Senior
Vice President for Economic Development Bob Coy. “But counter-intuitively,
that’s also a cause for optimism, because it’s our own attitude.
And that’s something within our own control.”
In considering the cluster called “advanced manufacturing,” Battelle
bluntly observes that the ’90s were not kind to the manufacturing
base in St. Louis or the nation. Employment shrunk 18 percent compared
to four percent nationally.
Even so, notes Battelle, the sector accounts for 17 percent of the
region’s jobs; each pays an average $51,331, compared to a $36,193
average in the rest of the private sector in St. Louis. “These jobs
are an important source of prosperity for almost 200,000 families
in St. Louis,” said Jerry Daniels, vice chairman and CEO of Engineered
Support Systems. “If we can generate more manufacturing, I have
no doubt we’ll raise the standard of living for the region as a
whole.”
To that end, Daniels teamed up with GM Wentzville Plant Manager
Mike Camp and manufacturing leaders at Boeing, Monsanto, and others
to host a manufacturing symposium earlier this year in the Regional
Collaboration Center at the RCGA. Of the 50 participants, 30 were
CEOs and other senior execs from a broad cross section of manufacturers;
20 were economic development and public policy people.
“We are now creating a scorecard of attributes that a business would
look at if they were deciding to set up their manufacturing plant
in this region,” Daniels said, “15 or 20 admittedly subjective items
that might vary by industry.
“What the dialogue should lead to is as objective of an assessment
as we can make of St. Louis’ attractiveness in the world for manufacturing.
When we know our strengths, we can play off of those and focus our
efforts on them.”
Fenton Mayor Dennis Hancock points to the arrival of Michigan-based
Roush Industries in a 20,000-square-foot facility adjacent to the
Chrysler plant as an ideal demonstration of the benefits of industry
clusters. Beginning in January 2004, Roush employees will detail
trucks: install special decals, stripes, lighting packages.
“First, Chrysler doesn’t have to carry as much inventory,” Hancock
said. “Second, it reduces transportation costs. Third they can make
line changes more quickly and, fourth, Chrysler workers can concentrate
on making trucks, instead of worrying about which one gets which
option.
“That’s where information technology comes in,” he said. “The Roush
people will know what to do with each vehicle they get, probably
in the order it comes in the door.”
And if the other auto manufacturing plants wanted to hire Roush,
Hancock says, “They’re at the corner of 44 and 270. It would be
convenient.”
Joe Hasten says the theme that connects banking and financial services
and the other industry clusters is their capacity to put people
to work.
Aiming at the goal of work force enhancement, the RCGA and its partners
are addressing old problems in new ways: like supporting new information
technology and life sciences high schools that train future workers
early, and promoting programs that make it easier for workers to
find jobs and employers to find workers.
Additionally, the RCGA is a founding member of the St. Louis Business
Diversity Initiative along with Civic Progress, the Regional Business
Council and other civic partners. The Business Diversity Initiative
helps more than 125 regional companies attract and retain a talented,
diverse work force with an emphasis on women—and minority-owned
businesses.
“Clearly we want to pursue development that promotes job growth,
and in this region financial services is a leading industry—not
just in terms of absolute numbers but also because payrolls tend
to be relatively higher,” Hasten says.
And as with plant and life science, financial services in St. Louis
have a history. “In terms of major U.S. cities, St. Louis was headquarters
for a disproportionate number of large banks and financial services
companies. And even with the mergers, employment has been steady
or up.”
Hasten also pointed out that St. Louis has one of the largest employment
bases in financial services outside of New York. We have an abundance
of strong financial services companies here: A.G. Edwards, Edward
Jones, Stifel Financial and Scottrade.
“A virtuous circle connects all these industries, as well as those
that may not fit exactly into one of the distinct clusters,” Coy
added. “As R&D creates high-value products to manufacture, that
requires information solutions and additional cargo and transportation
services. That, in turn, grows the need for information technology
to track and manage inventory and shipments. Growth in these industries
then creates demand for additional financial services.”
RCGA’s Economic Development team has an active program to recruit
and retain new quality jobs and investment in each of the industry
clusters. Between January 2000 and December 2003, the RCGA’s economic
development division and our regional economic development partners
worked on 67 retention, attraction and expansion projects. These
projects helped create and retain 18,700 new jobs and $1.2 billion
in new capital investment. |
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