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Weekly Column: Ohio Leading on Bioscience Innovation By Robert Portman


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Ohio has always been a leader in manufacturing and innovation. From steel in Cleveland to machine tools in Cincinnati, from tires in Akron to glass in Toledo, Ohio innovators and visionaries made Ohio a manufacturing powerhouse.

The latest chapter of this storied history of innovation and success is being written not only on factory floors in traditional industrial centers, but also in laboratories and hospitals throughout the state.

Over the past couple of decades, Ohio has become the home of a thriving bioscience community, made up of universities, hospitals, health systems, and private companies.

I have seen firsthand many of these bioscience and biotechnology success stories across the state. A recent study confirms that these companies and health research and treatment centers are an engine of job growth.

BioOhio, a nonprofit trade and advocacy organization for biological sciences in Ohio, commissioned a study from Cleveland State University that found there are currently over 1,200 bioscience-related organizations in Ohio, a number that will continue to grow.

In just the five-year period from 2007 to 2011, 380 new bioscience-related firms began operations in the state. These organizations have provided a tremendous boost to Ohio's economy. Bioscience-related companies currently employ over 60,000 Ohioans, a number that reflects a 16.5 percent increase since 2000. These statistics provide just a snapshot of the growing and thriving biotech industry in Ohio.

The industry constantly innovates by generating new technologies and breaking scientific barriers. This is demonstrated by the number of patents awarded to Ohio innovators. In 2011, Ohio innovators were issued over 3,000 patents -- and almost 700 of these were bioscience-related. That is nearly double the current national average per state of 370, and enough to rank Ohio eighth in the nation.

This remarkable growth has not been isolated to one or two particular regions in our state. The BioOhio study found some bioscience industry presence in 73 of Ohio's 88 counties. The true impact of the growth of the bioscience sector is far greater than the tens of thousands of direct jobs and the payroll the sector represents. The greater effect is the billions of dollars from private and public funding sources, creating economic ripple effects throughout the state.

The 2012 Midwest Healthcare Venture Investment report, a report compiled annually by Cleveland-based health care business accelerator BioEnterprise, found that the greater Cleveland area garnered more private investment than any other city in the Midwest. Combined with a strong showing throughout the state, these investments have ranked Ohio first among Midwestern states.

Despite these overwhelmingly positive indicators, there is concern among those in Ohio's bioscience and biotechnology community that taxes designed to pay for President Obama's health care spending law will slow and potentially stifle future growth. For instance, the law created a 2.3 percent excise tax on the revenues of medical device companies that took effect on January 1, 2013.

This component of the law is particularly damaging because it levies a tax on these companies regardless of whether they make a profit or not. Many start-up companies fail to turn a profit for their first few years, and the extra burden of this tax will be particularly punitive and potentially devastating.

Clearly, this is not the best way to foster innovation and the good jobs it brings. And concern about this new tax is bipartisan: seventeen members of the President's own party sent a letter to Senate Majority Leader Harry Reid (D-NV), urging him to take up legislation that would repeal the tax.

The medical device tax is just one example of how over-taxation and over-regulation can stifle private sector growth.

There's an alternative. I know that if Washington provides a pro-growth environment with tax reform, regulatory relief, access to foreign markets and better workforce development, Ohio's new innovators will continue doing what they do best, and our state and our country will maintain its position as a leader in bioscience. This will not only create more jobs in Ohio, but it will also lead to the diffusion of life-improving and lifesaving technologies throughout America and the world.

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