Monitor Los Angeles Life Sciences

TAKING
ACTION FOR
TOMORROW
Los Angeles Region Life Sciences
Strategic Action Plan
OFFICE OF THE GOVERNOR
MONITOR GROUP
Copyright © May 2004
Office of the Governor of the State of California
Monitor Company Group, L.P.
TAKING
ACTION FOR
TOMORROW
Los Angeles Region
Life Sciences
Strategic Action Plan
OFFICE OF THE
GOVERNOR
MONITOR GROUP
ii LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
The Los Angeles region has yielded some of biotechnology’s first commercial successes, some of
the core technologies that enabled gene sequencing, and generations of successful medical-device
enterprises.
For all of our region’s leading companies and world-class

research, the most prominent feature in our local landscape
may be its wealth of untapped Life Sciences opportunities.
To capitalize on these opportunities, groups such as the Southern California Biomedical Council
already are working to systematically address the challenges to our success. But more can and should
be done and, in a region of this size, no single group can succeed alone. This plan – and the initia-
tives that it proposes – will guide the broader efforts to continue developing an industry that has
strong foundations in Los Angeles and promises to improve the health and well being of people every-
where.
Specifically, we endorse this plan’s intentions to improve the transfer of ideas from academic and
other researchers to new ventures; to address the challenges to doing business in the region; to build
and retain a competitive workforce; and to continue to strengthen the vital Life Sciences community
that has begun to come together in recent years. This plan grew out of the Life Sciences Summit in
June and echoes the voices of more than 200 attendees. The energy of those participants testifies to
an eagerness to work together to do more to address the challenges and to create actionable goals to
ensure that, in the Life Sciences industry, Los Angeles is the place to be.
The Blue Ribbon Steering Committee believes our region is equal to the task and that the rewards
are worth the effort to continue to spark the economic growth that can benefit the Life Sciences
industry, the region and the entire state of California.
Sincerely,
ALFRED MANN
CHAIR, BLUE RIBBON STEERING COMMITTEE
CHAIR, SOUTHERN CALIFORNIA BIOMEDICAL COUNCIL
CHAIR, ADVANCED BIONICS CORPORATION
iv LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
MONITOR GROUP
100 WILSHIRE BOULEVARD SUITE 1100
SANTA MONICA, CALIFORNIA 90401
In today's global economy, no geographic region can by accident achieve, let alone sustain, competitive
success in a cluster of related industries. Mere fortuity—the existence here, say, of some rich deposit of raw
materials or there of pleasant weather or good schools—is not enough. Competitiveness at the cluster level
is the systemic result of an integrated discipline of public policy and private initiative. This is especially true
of so attractive a cluster as the Life Sciences. The knowledge on which the Life Sciences rest, the skilled
professionals they attract, the human welfare they promote, and the economic returns they generate—
together, these factors virtually guarantee that regions everywhere will seek to participate in an area that is
sure to be at the core of the 21st century economy. To survive in the face of such competition is no mean
feat. To thrive takes clear vision and coordinated action.
For more than two decades, Monitor Group has specialized in helping our clients analyze, understand,
and achieve competitive success at the company, industry, and cluster levels. It is what we know best. It is
what we care about most. Modest performance improvements, temporary gains, easily-copied strategies—
these have no place in our aspirations. Our focus is on winning, and winning entails original insight, inno-
vative solutions, and lasting change. We do not believe there is—or can be—a “one size fits all” answer to
the riddle of competitiveness. But there is relevant experience that can be brought to bear and a replicable
discipline that can be applied.
That is why we and our Monitor colleagues are so very pleased to have been asked to coordinate the
framing and synthesis of an integrated action agenda for the Life Sciences in the Los Angeles Region. We
share with the more than 200 institutions that have participated in this effort a personal, as well as profes-
sional, interest in the economic health of the Los Angeles Region and of California as a whole. We also share
a genuine commitment to help lay the groundwork for even greater success in the future. To both interest
and commitment we bring the unmatched expertise on competitiveness-related issues of our colleagues
throughout Monitor Group. We bring the insight that comes from serving clients in all parts of the Life
Sciences cluster in all parts of the world. And we bring the rich understanding of California's competitive
strengths and weaknesses developed from serving clients across the state and, in particular, from shepherd-
ing, with the help of the Bay Area Council and BayBio, the recent Life Sciences action plan for the San
Francisco Bay Area.
The action agenda laid out in the pages that follow represent the culmination of a focused effort that
began at a June 2003 summit, convened by the Governor of California, for leaders of the Los Angeles
MONITOR COMPANY GROUP, L.P.

Telephone 310-566-4400 Facsimile 310-566-4477
Region Life Sciences cluster. This summit was a culmination of efforts by IEtechSOURCE, Monitor
Group and the Office of the Governor. It reflects our best judgment, drawn from extensive analysis and
discussion, not of the expansive laundry list of nice things that some of us might do to support the clus-
ter but, rather, of the few critical things that we must all do - and do together in an integrated fashion.
The economic opportunities are tantalizingly clear. But so, too, are the actions need to seize them and
hold them. Both merit your close attention and, we hope, your commitment. They certainly have ours.
Sincerely,
Joan Chu Matthew Le Merle
vi LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
ACKNOWLEDGEMENTS
Taking Action for Tomorrow: The Los Angeles Region Life Sciences Strategic Action Plan is an effort
on behalf of the Office of the Governor of the State of California with full-time support from the Monitor
Group.
A team led by Tal Finney, which included Greg Davis, Chris Campaña, Dr. Woody Clark and Todd
Feinberg, brought together industry leaders and partners to coordinate their participation in the research,
analysis and development of the plan, provided policy perspective on the State’s Life Sciences Initiative and
editorial support to the drafting of this plan.
Anna Olvera and Mark Vargas led a working team that planned and coordinated the Los Angeles Region
Life Sciences Summit on June 19, 2003. Members of this working team included Rohit Shukla, Victor
Hwang, Stephanie Chao, and Carlos Gutierrez of Larta and Brian Underhill and Dianne Evans of
IEtechSOURCE.
A Monitor Group team led by Joan Chu and Matthew Le Merle conducted the research and analysis,
coordinated the interviews, and captured the ideas and recommendations presented in this Strategic Action
Plan. Ms. Chu and Mr. Le Merle are Partners in the firm’s Los Angeles and San Francisco offices, respec-
tively. Monitor consultants Jennifer Cohen, Carl Engle, Steve Szaraz were members of the day-to-day
team working actively on this project. Lily Rappoli and the Design Studio at the Monitor Group illus-
trated, designed, and created the layout of this action plan.
In addition, several industry and academic leaders contributed written sections to the strategic plan.
Alfred E. Mann, Chair, Advanced Bionics and of the Southern California Biomedical Council, President
Steven B. Sample of the University of Southern California, Chancellor Ralph J. Cicerone of the
University of California, Irvine, Robert A. Koch of CSUPERB, Stephen Dahms of the SCBC, Rohit
Shukla of Larta, and Agenor Mafra-Neto of ISCA Technologies authored the sidebars displayed through-
out the text. Ahmed Enany, Stephen Dahms, and James Lucas of SCBC and Rohit Shukla of Larta also
provided input to versions of the draft.
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow vii
THE BLUE RIBBON STEERING COMMITTEE
The Blue Ribbon Steering Committee was an invaluable resource to the creation of the Los Angeles
Region Life Sciences Summit and Strategic Plan. Each of the steering committee members was inter-
viewed in detail in an effort to garner their insights and perspectives in order to identify the issues and
potential action items in the report. The overwhelming support of this influential group of industry
and academic leaders is a testament to the desire to proactively promote the growth of the Life Sciences
industry in the Los Angeles Region.
David Baltimore Jeffrey D. Linton

President President
California Institute of Technology Chemicon International, Inc.
Gordon Binder Barbara N. Lubash
Managing Director Managing Director
Coastview Capital, LLC Versant Ventures
Rob Burgess Agenor Mafra-Neto
President President & CEO
Genome BioSciences, Inc. ISCA Technologies, Inc.
Albert Carnesale Alfred E. Mann
Chancellor Chair, Advanced Bionics
University of California, Los Angeles Chair, Southern California Biomedical Council
Ralph J. Cicerone David E.I. Pyot
Chancellor Chairman, President & CEO
University of California, Irvine Allergan, Inc.
France A. Córdova J. David Rozzell
Chancellor President & CEO
University of California, Riverside BioCatalytics, Inc.
David L. Gollaher Steven B. Sample
President & CEO President
California Healthcare Institute University of Southern California
Lawrence P. Guiheen Kevin W. Sharer
President, BioPharmaceuticals Chairman & CEO
Baxter BioScience Amgen, Inc.
Robert C. Haddon Henry T. Yang
Director, Center for Nanoscale Science & Engineering, Chancellor
University of California, Riverside University of California, Santa Barbara
Gary S. Lazar
Managing Director
California Technology Ventures, LLC
viii LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
CONTRIBUTORS AND PARTICIPANTS
Over 200 academic, industry and government leaders have contributed to the creation of this 10-year
strategic plan for the Life Sciences in the Los Angeles Region. They have shared their insights and rec-
ommendations through participating in interviews, attending the Los Angeles Region Life Sciences
Summit, completing surveys and reviewing drafts of this plan. Without their input this strategic plan
would not be possible. Below is a selected list of contributors whose help was invaluable.
David Baltimore* Michael A. Friedman

California Institute of Technology City of Hope
Annette M. Bianchi Fariba Ghodsian
Managing Director Managing Member
Pacific Venture Group Castle Creek Lifescience Partners, LLC
Gordon Binder* Lawrence Gilbert
Managing Director Director, Office of Technology Transfer
Coastview Capital, LLC California Institute of Technology
Rob Burgess* David L. Gollaher*
Genome BioSciences, Inc. California Healthcare Institute
Albert Carnesale* Lawrence P. Guiheen*
Chancellor President, BioPharmaceuticals
University of California, Los Angeles Baxter BioScience
Ralph J. Cicerone* Robert C. Haddon*
Chancellor Director, Center for Nanoscale Science & Engineering
University of California, Irvine University of California, Riverside
Lawrence B. Coleman James Harber
Vice Provost for Research Director
University of California, Office of the President Central Coast Biotechnology Center
France A. Córdova* Wendie Johnston
Chancellor Director
University of California, Riverside Los Angeles/Orange County Ed>Net Biotech Center
A. Stephen Dahms Hans S. Keirstead
Executive Director Anatomy & Neurobiology
CSUPERB University of California, Irvine
Ahmed A. Enany
President & CEO
Southern California Biomedical Council
John D. Ferrera
* member of the Blue Ribbon Committee
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow ix
CONTRIBUTORS (CONT.)
Robert A. Koch William J. Rich

Chair of Strategic Planning Council Senior Director, Project Management & Strategic Planning
CSUPERB Amgen, Inc.
Marsha H. Kwalwasser Henry E. Riggs
Chairperson President
California Employment Training Panel Keck Graduate Institute of Applied Life Sciences
Gary S. Lazar* J. David Rozzell*
Managing Director President & CEO
California Technology Ventures, LLC BioCatalytics, Inc.
Jeffrey D. Linton* Steven B. Sample*
President President
Chemicon International, Inc. University of Southern California
Barbara N. Lubash* Kevin W. Sharer*
Managing Director Chairman & CEO
Versant Ventures Amgen, Inc.
James B. Lucas Rohit Shukla
Managing Director President & CEO
The Abernathy MacGregor Group, Los Angeles Larta
Agenor Mafra-Neto* Carlyn Solomon
President & CEO Vice President of Global Operations
ISCA Technologies, Inc. Baxter BioScience
Alfred E. Mann* Alexander B. Suh
Chair, Advanced Bionics Managing Director
Chair, Southern California Biomedical Council California Technology Ventures, LLC
Andrew Neighbor Henry T. Yang*
Executive Director, Office of Intellectual Property Chancellor
Univesity of California, Los Angeles University of California, Santa Barbara
Stephen D. O'Connor
CEO
Nanostream, Inc.
Joseph D. Panetta
President & CEO
BIOCOM
David E.I. Pyott*
Chairman, President & CEO
Allergan, Inc.
* member of the Blue Ribbon Committee
x LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
ORGANIZATIONS PARTICIPATING IN THE SUMMIT
Agensys California State University, San EpiGenX Pharmaceuticals

Bernardino
Allergan Ernst & Young
California Technology Ventures
Allvivo Fulbright & Jaworski
California Technology, Trade & Commerce
Amgen GBN
Agency
ATR GeneFluidics
CalPERS
Aviva Antibody Corporation Genome Biosciences
Castle Creek Life Science Partners
Baxter BioScience Gilead Sciences
Center for Nanoscale Science &
Bear Creek Medical Systems Engineering Gold Coast Innovation Center
Beckman Coulter Center for Neuromorphic Systems Hanson Research Corporation
BioCatalytics Engineering Hardy Diagnostics
BioDiscovery Central Coast Biotechnology Center I/O Software
Bio-Financial Consulting cFour Partners IEtechSOURCE
Bio-Safe America Chemicon International Inland Empire Economic Partnership
Biotech-Pharma Advisory Chula Vista High School Institute for Brain Aging and Dementia
BioZak City of Hope InTouch Health
Birch, Stewart, Kolasch & Birch CMTC IntraTherapies
Bird Shield Repellent Corporation Coachella Valley Economic Partnership Ionian Technologies
Boone Fetter Coastview Capital, LLC ISCA Technologies
British Consulate General Cognisys Keck Graduate Institute
CA Employment Training Panel College of Natural and Agricultural Keck School of Medicine of USC
Sciences
Cal Poly Pomona Keston Infrastructure Institute, USC
Consulate General of Finland
California Capital Partners LAEDC
Consulate General of Sweden
California Council on Science & LA Housing and Business Team
Technology Crossbow Consulting
LA/Orange County Biotechnology Center
California Healthcare Institute CSUPERB
Larta
California Institute of Technology Diagnostic Products Corporation
LifePoint
California Manufacturing Technology Economic Alliance
Life Science Industry Council
Center Economic and Workforce Development
LifeSci Technologies
California State Polytechnic University, Eidogen
Pomona Los Angeles Community Development
Employment Development Department Department
California State University, Fullerton
Encore Pharmaceuticals Los Angeles Valley College
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow xi
ORGANIZATIONS PARTICIPATING IN THE SUMMIT (CONT.)
Macropore Biosurgery Regenesis Bioremediation Products
MannKind Corporation Santarus
Materia Second Sight
Maven Technologies Senator Jack Scott
MaXim Biosystems Silicon Valley Bank
Miravant Medical Technologies Skymetrics
Monitor Group Southern California Biomedical Council
Monitor Ventures State of California, Employment Training Panel
Morrison & Foerster Symbion Research International
Nanostream Technolink Association
NASA Commercialization Center TechTran
National Childhood Cancer Foundation Telemeducation
NeoStem The Bellwether Group
Newport Medical Instruments The Regulatory Consultants
Office of the Governor of the State of California The UC Discovery Grant--UC Office of the President
Orange County Business Council Tinnitus Mitigation Systems
Pacific Venture Group TKB International
Pasadena Area Community College District UC Davis CONNECT
Pasadena Bioscience Center University of California
Pasadena Entretec University of California, Irvine
Pathway Diagnostics University of California, Los Angeles
Perkins & Will University of California, Riverside
Pierce College University of California, Santa Barbara
Preston Gates & Ellis University of Southern California
PricewaterhouseCoopers Vasgene Therapeutics
ProLacta BioScience Veeco Instruments
Proneuron Biotechnologies Venture Coast Biotechnology Institute (VCBio)
Protein Pathways Versant Ventures
Public Policy Institute of California ViaLogy
Pyro Pharmaceuticals William Sproule & Associates
QuantumCorp Workforce Strategy Center
Ramus Medical Technologies Xencor
xii LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
CONTENTS
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Introduction: A Life Sciences Strategic Action Plan . . . . . . . . . . . . . . 1
1. Enhancing Technology Commercialization . . . . . . . . . . . . . . . . . . . 9
2. Lowering the Cost and Difficulty of Doing Business . . . . . . . . . . . . 19
3. Developing and Improving Workforce Efficiency . . . . . . . . . . . . . . 25
4. Strengthening the Regional Life Sciences Community . . . . . . . . . . 31
APPENDICES
A. The Strategic Planning Process . . . . . . . . . . . . . . . . . . . . . . . . . . 37
B. Selected Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
C. Clusters of Innovation Theory . . . . . . . . . . . . . . . . . . . . . . . . . . 39
D. Clusters of Innovation Survey: Selected Results . . . . . . . . . . . . . 41
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow xiii
xiv LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
EXECUTIVE SUMMARY
The six-county Los Angeles Region (Los Angeles, Orange, San Bernardino, Santa Barbara, Riverside
and Ventura) has world-class research facilities, the basic component for any powerful technology-based
industry, strong anchor companies in both biotechnology and medical devices, world-renowned scientists
and executives, and a deep and talented labor pool contained within its colleges and universities. Despite
these powerful competitive advantages, the region has yet to tap its true potential in the Life Sciences
through a coordinated, well-resourced and strategic effort to synchronize these ingredients into a true
industry cluster. Even though there are individual initiatives throughout the region, to date the widely dis-
persed geography and diverse industry segments have proven a formidable barrier for such an overarching
strategic plan, which has now emerged to advance this important industry cluster.
This environment of powerful, yet untapped resources, results in an unparalleled opportunity for sig-
nificant additional growth for the Los Angeles Region’s Life Science industry. The potential for new eco-
nomic growth in this region is arguably the largest of any Life Science cluster in the world.
This ten year strategic plan is a living document that represents the insights and opinions of industry,
academic and government leaders and should serve as a catalyst for action that will harness this vast
untapped potential. The strategic plan’s guiding principles and specific recommendations are centered on
four critical initiatives that are most important to the success of the Life Sciences in the Los Angeles Region
as it increasingly becomes a focal point of international academic and business interests:
• Enhancing Technology Commercialization
While having a strong well-funded research infrastructure, the region significantly lags other
leading regions in terms of commercializing technologies. The region must create an efficient
technology transfer management process and build common physical space for
academic/industry partnerships in order to stimulate the entrepreneurial environment.
• Lowering the Cost and Difficulty of Doing Business
Many regions across the world are competing for private investment in the Life Sciences.
Therefore, the Los Angeles Region, in collaboration with other regions and the state, must
become a more business friendly environment by creating targeted tax incentives and simplify-
ing the regulatory regime that hinders the ability of companies to effectively compete and col-
laborate on the global stage.
• Developing and Improving Workforce Efficiency
Human resources are a critical component of a region’s sustainable competitive advantage,

especially in the Life Sciences. Industry, academia, and government must work more closely
together to ensure that appropriate training opportunities align with industry needs and future
societal demands.
• Strengthening the Regional Life Sciences Community
Sub-regional industry groups are important to strengthening local networks and services.
However, a broadly supported non-governmental agency that spans the entire geographic and
industry spectrum can enrich the infrastructure to support larger scale business networking and
public policy initiatives, thus creating the synergistic benefits of a Life Science cluster built on
the region’s financial, human and knowledge assets.
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow xv
As industry, academia and government continue to collaborate in their efforts to achieve the vision out-
lined in this ten year strategic plan, the Los Angeles Region will undoubtedly become a widely recognized
global leader in the Life Sciences. Consequently, this effort will continue to bring both wealth and eco-
nomic development to the entire community.
xvi LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
INTRODUCTION
A LIFE SCIENCES STRATEGIC ACTION PLAN
This chapter lays out a working definition of the Life Sciences cluster, touches upon the importance of
Life Sciences to the Los Angeles Region and the State of California, discusses future trends in the indus-
try, emphasizes the need to plan strategically, and outlines the purpose of this action plan.
THE LIFE SCIENCES CLUSTER

A cluster, as defined by Harvard University Professor Michael Porter, is “a geographically proximate
group of interconnected companies and associated institutions in a particular field, linked by customer,
supplier, or other relationships.” This definition cuts across traditional industry classifications and recog-
nizes the importance of cross-industry linkages to an innovative and competitive environment.
Considered as a cluster, Life Sciences recognizes and affirms the relationship among closely related
“core” industry segments (such as pharmaceuticals, medical devices, and agricultural biotechnology). But
it also includes those additional industries—among them specialized professional service firms (law firms,
real estate developers), specialized capital providers (biotechnology venture capital), research institutions,
and industry associations—that regularly interact with core organizations. Further, it acknowledges con-
nections with related industries and disciplines that are expected to further converge with Life Sciences,
such as information technology and nanotechnology (Exhibit 1).
Exhibit 1: The Life Sciences Cluster Definition
INTRODUCTION: A LIFE SCIENCES STRATEGIC ACTION PLAN 1

The theory underlying this notion of a “cluster of innovation” derives from an examination of the crit-
ical factors necessary for fostering innovation, competition, and growth in a wide variety of regions and
industries. It provides the starting point and general framework for analysis in this Strategic Action Plan.
The theory is described more fully in Appendix C.
Yet cluster theory tells only part of the Los Angeles Region’s Life Sciences story. Respondents, partici-
pants and experts continue to emphasize that the region is heterogeneous and geographically dispersed.
Ahmed Enany, President and CEO of the Southern California Biomedical Council, notes that the Los
Angeles Region is in fact three distinctive and separate geographic areas, all with their own unique char-
acteristics, issues and solutions. These sub-regions are tied together, much like the “hub and spoke” model
for many industries, and they play off one another while not directly competing.
Another unique characteristic of the region is its truly international stature. As University of Southern
California President Steven B. Sample observed, "Los Angeles is the new world industrial center" - not just
for the Pacific Rim, but for the world. Another unique characteristic of the region is its truly internation-
al stature. Recent efforts by the state to build bridges with Scandinavia, Korea, and the People's Republic
of China, particularly in the Life Sciences, mark a course toward global partnerships that solidify the state's
reputation and bring benefits to its economy. For example, the California+Sweden Partners in
Biotechnology Program, sponsored by the Governor and by the Counsel General of Sweden in Los
Angeles, has lined up leaders in the academic, business and venture capital arenas to foster cooperation
among these groups and between Sweden and California. The program has sponsored seminars on top-
ics in the field, has established a Scandinavia-California investment fund, has hosted a California Nobel
dinner and organized technical exchange programs, all in the service of creating ongoing community for
and collaboration between scholars and business executives.1 Efforts like these will maintain momentum
toward an enduring global role for the region's Life Sciences cluster by providing programmatic and insti-
tutional mechanisms for international collaboration and establishing international business finance pro-
grams and mechanisms for the commercialization of technologies.
Finally, although the region is a vast one, people within it are strongly interconnected. Most scholars
and business people know one another. Many research and demonstration collaborations occur in some
form of a partnership or joint venture. The presence of these interpersonal interactions and networks
offers an enormous opportunity, particularly in the Life Sciences.
In furthering the goals of this plan, state and local governments play supporting roles for the needs,
demands and future plans of the Life Sciences industry. In that context, government is a partner and,
where needed, a facilitator for this industry. The passage and enactment of Senate Bills 253, 322 and 771
have made California the first state to: allow stem cell research from any source, including human embryo
stem cells (SB 253); require the development of the first guidelines in America for ethical research using
embryonic stem cells (SB 322); create the first registry in the United States of embryos available for
research (SB 771), allowing researchers to find the stem cells they need to speed the discovery of treat-
ments and cures for disease.
A direct result of government’s role, as noted by Joe Penatta, President of Biocom, and Professor Hans
Keirstead from the University of California, Irvine, is in setting various scientific goals that may later be
developed into standards, codes and protocols. California has already benefited from such legislative
2 LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow
action, with over $12 million contributed to academic research in stem cells at Stanford University and in
the migration to California of several notable scholars to pursue such research. Positive and supportive
action by the state will continue to have a beneficial impact on the Life Sciences in California.
IMPORTANCE OF LIFE SCIENCES

The Los Angeles Region referred to throughout this action plan consists of six counties: Los Angeles,
Orange, Riverside, San Bernardino, Santa Barbara, and Ventura. The contribution of the Life Sciences to
the Los Angeles Region’s well being can be measured in numerous ways.
First and foremost, the Life Sciences industry has taken on the mission of developing ideas and prod-
ucts that will improve the health and well-being of people everywhere—this is an industry that, almost by
design, aims to create widespread public benefits.
Second, and also of great importance to public policy, the Life Sciences industry is a growing source of
upwardly mobile and high paying jobs. In 2002, the Life Sciences industry employed more than 80,000
people in the region at an average wage of $67,000, an 80% premium over the average wage across all other
industries in the region ($37,000). Over the past five years, employment growth in the Life Sciences
industry in the region has been 17% in comparison to the average regional employment growth rate of only
7%.2 Also, it is a widely accepted theory that the Life Sciences industry is converging with other high tech
industries such as information technology, communications, defense, and energy. Thus, the Life Sciences
industry creates spillover benefits to the region in two distinct ways. First, gaining a stronghold in Life
Sciences will strongly position the region to take a lead in other highly technological industries. Second,
training people to develop skills applicable to the Life Sciences will create increased employment oppor-
tunities in other industries, as these skills are often transferable.
Another benefit of a strong Life Sciences industry is the creation of prestige for the region as a whole.
Innovative capacity is a key metric for comparing regions in today’s economy. The Life Sciences attract
the capital, cutting-edge research at all stages (i.e. basic, applied, translational, and development), and tal-
ent necessary to spur innovation and growth. The Life Sciences industry is also viewed in a positive pub-
lic light because of its focus on improving people’s health and quality of life. For all of the aforementioned
reasons, the Life Sciences industry is a very attractive one, and many other regions are proactively seeking
ways to attract Life Science companies. Among these regions, however, the Los Angeles Region draws
competitive advantages from its great strength in research and development capacity and its ability to
attract creative entrepreneurs who can facilitate the growth in this region of this highly attractive industry.
LIFE SCIENCES IN CALIFORNIA

California has four significant Life Sciences clusters: the greater Los Angeles Region, the Bay Area, San
Diego, and the Central Valley. Not surprisingly, these California-based clusters play a substantial role in
the overall U.S. and global Life Sciences industry. Almost 90% of California’s Life Sciences businesses are
concentrated in these first three regions, with the Los Angeles Region having one of the largest and most
diverse Life Sciences clusters. This diversity includes activity in virtually all product types and all stages of

the value chain, from medical devices to biotechnology, and from early research to manufacturing, sales
and marketing (Exhibit 2).
In January 2003, the Office of the Governor announced the Life Sciences Initiative (LSI) with the goal
of making California’s Life Sciences more competitive on a national and global level. The LSI calls for
greater cooperation among research, government and private sector biotech leaders to develop strategies to
grow the cluster, and its ultimate goal is to create jobs in California as a result of this growth.
The Office of the Governor has initiated the LSI by hosting regional summits gathering industry, aca-
demic, and government leaders in each of the four Life Sciences clusters in California. The output from
these summits, along with extensive interviews and regional surveys, will be incorporated into individual
Life Sciences strategic plans for each of the four clusters. The first of these plans, Taking Action for
Tomorrow: Bay Area Life Sciences Strategic Action Plan, was published in May of 2003, as a joint effort
between Monitor Group, the Office of the Governor, and the Bay Area Council. By integrating this action
plan for the Los Angeles Region with the Bay Area action plan and forthcoming San Diego and Central
Valley action plans, the Office of the Governor will create a comprehensive statewide strategic plan for
strengthening and growing Life Sciences in California.
Exhibit 2: Ranking Life Sciences Clusters by Employment
LOOKING FORWARD: KEY TRENDS AND CHALLENGES

During the next ten years, the Los Angeles Region Life Sciences cluster will continue to be shaped by
dynamic financial, scientific, and social influences. In many ways, it is still in its infancy. Results from the
Human Genome Project are, for example, just beginning to bear fruit in the industry, and powerful new
therapeutics are reaching the marketplace in greater numbers each year. Exhibit 3 outlines the nine trends
of greatest importance to the continued evolution of the Life Sciences during the next ten years.
These trends will have a significant impact on the Life Science industry in the region over the next
decade. As the industry matures, many developing biotechnology and medical device companies will shift
beyond their core research capabilities into downstream activities such as clinical development, manufac-
turing, and sales / marketing. Amgen and Allergan provide clear examples of companies that have adjust-
ed to and benefited from this shift.
There are several other trends shaping the Life Sciences industry. As technology convergence occurs
more rapidly, Los Angeles Region Life Sciences companies will need to form stronger linkages with com-
panies in other high technology sectors such as information technology and nanotechnology. Being a
leader in the Life Sciences will create a strong and competitive advantage for the region in other technol-
ogy fields as convergence becomes increasingly relevant. As the cost of healthcare rises, public interest in
industry behavior increases, and the regulatory environment changes, regional Life Sciences companies
will need to communicate even more effectively with both the government and the public in order to
ensure continued support for the industry. Most significantly, these trends imply a much more complex
competitive environment in the future, which will require more capabilities within each company and
integrated and strategic planning on the part of the Los Angeles Region in order to secure and maintain
global Life Sciences leadership.
Exhibit 3: Key Life Sciences Trends and Cluster Implications

THE CASE FOR ACTION
To frame a strategy for bolstering the region’s competitiveness in the Life Sciences, the Monitor Group
elected, first, to build a clear understanding of the Los Angeles Region’s current strengths and weakness-
es as an industry cluster in the Life Sciences. Then, the Monitor Group interviewed 40 senior executives
in biotechnology companies, universities, industry organizations, service providers, and government, in
order to identify and analyze the most important issues facing the Life Sciences industry in the Los Angeles
Region. The Monitor Group also circulated a web-based survey, which had been proven useful in other
parts of the country, to industry executives in the Los Angeles Region. On June 19, 2003 the Governor
of California hosted a summit at the California Science Center for Life Sciences leaders in the Los
Angeles Region to discuss the need for planning and collaboration at the regional level. Collectively, more
than 200 institutions have participated in this effort and provided many of the insights described in the
following pages.
This research revealed an awareness of what needs to be done and eagerness to begin to work together.
For example, while survey respondents perceived a lack of a coordinated effort to strengthen the Life
Sciences cluster in the Los Angeles Region, they also expressed willingness to participate in the formation
of such a strategy (Exhibit 4). So, too, while the survey respondents felt that local business and govern-
ment leaders had not articulated a clear strategy for promoting the Life Sciences economic development
in the Los Angeles Region, many respondents also stated that their organization could contribute signifi-
cant value to the shaping of such a strategy.
Exhibit 4: Willingness of Local Organizations to Contribute to a Regional Development Strategy
STRENGTHS AND WEAKNESSES OF THE LOS ANGELES REGION
The summit and the follow-on survey highlighted several important regional strengths and weakness-
es. First and foremost among the region’s strengths is its intellectual infrastructure. When asked which
attribute had the most positive impact on the region’s business success, 68% of respondents noted the
“Availability of qualified scientists and engineers,” and the third most common response (39%) was
“Specialized facilities for research.”
Most notable among the region’s weaknesses was the “Cost of doing business,” which 64% of the sur-
vey respondents named as one of the five most important future threats to their businesses. 61% of
respondents expressed concern about “Access to capital,” and 46% cited the “Government’s responsiveness
to the needs of business” as future threats. For additional survey results, see Appendix D.
The commercialization of the region’s intellectual property surfaced as an additional theme at the sum-
mit and in the interviews and survey. Los Angeles leaders strongly emphasized the need to improve tech-
nology transfer policies in order to capitalize upon the region’s intellectual strength, as well as establish a
critical mass of ideas, human assets and financial assets to stimulate Life Sciences entrepreneurs. Crucial
to establishing this critical mass are the policies and practices of the research institutions to enable the
intellectual property to pass into the hands of the entrepreneurs. In addition, availability of affordable land
around research institutions for the construction of collaborative space for academia and business is cur-
rently a major challenge facing the region. Another concern expressed at the Life Sciences Summit was
the ability to train and mobilize a skilled workforce quickly and effectively. Finally, the geographic sprawl
of the region makes synergy difficult, and a clear need was expressed for a non-governmental organization
to unite disparate entities and speak on behalf of the industry.
In the face of these challenges, there is a clear and unequivocal case for strong, integrated action. The
balance of this Strategic Action Plan lays out that case in action-focused detail.
LOS ANGELES REGION LIFE SCIENCES STRATEGIC ACTION PLAN

This report is a ten-year strategic action plan. The Office of the Governor, in collaboration with the var-
ious academic and industry constituencies, intends to use this plan as a roadmap for change over the next
decade. This action plan includes extensive input from the industry players; sidebars and quotes from key
members of the Life Sciences community are interspersed throughout to give specific examples of indus-
try perspectives. The action plan also lays out guiding principles that highlight the direction the Los
Angeles Region may move in order to secure and then to maintain its position as a leading player in the
global Life Sciences industry. Following the guiding principles are specific examples of action recom-
mendations that are in line with the direction of the guiding principles.
Because the mission of this action plan is to serve as a high-level blueprint for the upcoming decade, it
is not an exhaustive list of every challenge facing the region or every recommendation made to date. For
example, issues like the transportation congestion, the quality of the public schools, the cost of housing,
and cost of utilities clearly affect all industries in the region, not just the Life Sciences, but are not detailed
in this action plan because they extend well beyond the Life Sciences cluster and require broader attention.

Nor is this a public policy report with positioning on specific legislation. Rather, this action plan focuses
on the key overarching issues facing the Life Sciences cluster in the region, provides directional guidelines
for strengthening the cluster given current and future challenges, and provides specific examples to begin
this process.
Given the strengths and weaknesses of the Los Angeles Region, the action plan is divided into the fol-
lowing four topic areas:
• Enhancing Technology Commercialization

• Lowering the Cost and Difficulty of Doing Business
• Developing and Improving Workforce Efficiency
• Strengthening the Regional Life Sciences Community
ENHANCING TECHNOLOGY COMMERCIALIZATION
1
Successful competitive regional clusters depend upon an environment that nurtures cooperation and
rewards innovation. Cutting-edge research plays an important role in this success, but unless new intel-
lectual property can move from research and development to the marketplace the benefit to the regional
economy is limited. Regions need to foster a process that finds, generates, and leverages—whether
through licensing or the creation of new products—intellectual property that has potential commercial
application. Such applications are the fruits of research conducted within a variety of public and private
spheres, including research universities, research institutions, and established commercial companies.
Effective technology commercialization rests upon highly personal and relationship-driven links
between these spheres, on ready access to capital and the confidence to move ideas through the stages of
the process, and on constructive partnerships between the generators of ideas and the businesses that bring
them to market. A sustainable knowledge-intensive regional cluster thus requires a coordinated and ongo-
ing effort by all of its members to facilitate the movement of ideas to new and existing businesses that are,
in turn, attracted to the region by the economic opportunities such new products offer (Exhibit 5).
Exhibit 5: Model Technology Commercialization Process
CHAPTER 1: ENHANCING TECHNOLOGY COMMERCIALIZATION 9

IMPORTANCE TO THE LIFE SCIENCES
Life Sciences clusters draw heavily from public and private research institutions, which themselves must
manage the complex transfer of ideas from the lab to private businesses. Established Life Sciences com-
panies generally follow the clearest processes for transferring technology to the marketplace, as this an
explicit mission of these organizations. They have a strong commercial focus and design their research
processes to maximize IP creation with commercial value.
By contrast, research universities present a hybrid model. The Life Sciences research conducted at uni-
versities in the Los Angeles Region mainly focuses on the basic understanding of complex processes and
systems. Nonetheless, many of these institutions’ research applications—particularly in the field of
biotechnology and medical devices— lie in areas of substantial commercial relevance. Because the explic-
it mission of these universities is generally not to focus on the commercialization of IP, licensing activities
are often not a top priority and potentially valuable IP may never make its way out of the laboratory and
into the commercial marketplace.
In fact, while the Los Angeles Region has a research infrastructure to rival any of the top Life Sciences
clusters in the world, the region significantly lags others with regards to its ability to transfer research into
the marketplace. With over a dozen public and private universities and four major medical schools, the
Los Angeles Region is certainly rich in research activity. California is the leading recipient of NIH fund-
ing, receiving $2.5 billion in 2001 (Exhibit 6), a large portion of which was concentrated in the Los Angeles
Region. Yet when compared with other regions, the inability to turn these ideas to economic benefit
becomes clear. For example, the number of Life Sciences spinout companies per research dollar in the Los
Exhibit 6: National Institute of Health Funding by State and University
Exhibit 7: University R&D Expenditures in Biological Sciences (1999) vs
Cumulative Number of University Biomedical Spin-Outs
Angeles Region is significantly lower than that of the Bay Area or San Diego (Exhibit 7). Also, while hav-
ing substantial Life Sciences firms located in the region, these “anchor tenants” do not encourage spinout
companies like their counterparts in the Bay Area (e.g. Genentech and Chiron) or San Diego (e.g.
Hybritech). Indeed, some of the Life Science industry’s most significant technologies have had their ori-
gins in the Los Angeles Region but were commercialized elsewhere. Two noteworthy examples are the
gene sequencing technology that was developed at CalTech, but which found its initial commercial sup-
port with a Bay Area firm that, today, has transitioned into Applera Corporation; and the biotech protein
drug that was developed at the City of Hope and became one of Genentech’s and the biotech industry’s
first major revenue-generating products.
After consulting entrepreneurs, industry leaders, academics, and other key players in the region, two
major issues stand out as barriers to the conversion of research into commercially viable products: the
uneven efficiency of the technology transfer process at the region’s leading research institutions; obstacles
to collaboration between academia and industry. Strategic steps must be taken to remove existing barriers
and to foster a climate favorable to the transfer of ideas from academia to the private sector in order to pro-
mote and to sustain future growth of the Life Sciences industry in the Los Angeles Region.

PRIORITY ISSUES AND ACTION RECOMMENDATIONS FOR IMPROVING THE
TECHNOLOGY TRANSFER PROCESS
There are opportunities in the Los Angeles Region for improving the rate and efficiency of technology
transfer within the Life Sciences cluster. Maximizing technology transfer by research institutions will cre-
ate opportunities for new start-ups, create additional revenue streams for these institutions, transfer new
technology into the marketplace, and benefit the regional economy as a whole.
The ability to manage the commercialization of intellectual property varies greatly across the public and
private institutions in the Los Angeles Region. For example, the University of California system as a whole
has only begun to redesign its Office of Technology Licensing (OTL) to decentralize decision-making and
to empower local OTL offices to play a more constructive role in facilitating commercialization opportu-
nities. Other institutions—the California Institute of Technology and the University of Southern
California, for example—have much greater success in managing this process. Building a more evenly
efficient technology commercialization environment across the region’s institutions will strengthen the
region’s overall attractiveness to Life Sciences companies and to prospective Life Sciences investors.
Because of their size and stature in the research community, the University of California institutions in
the region—UCLA, UC Riverside, UC Irvine and UC Santa Barbara—need to set the tone and the pace
of cluster-wide reform in this area.
Ralph J. Cicerone, Chancellor, University of California, Irvine
For the United States to remain competitive and for individual citizens to have opportunities for productive employment, the benefits of
American research universities must flow more quickly and broadly to the communities that surround them. Nowhere is this need and
the corresponding opportunity more clearly evident than in Southern California. The Life Sciences are front and center in our universities
and in the region’s industries. The University of California campuses are increasing their output of talented Life Science graduates yet
there is much more for us to do. We must use our convening power to help new, small companies and large companies alike to show-
case investment opportunities, to discuss how to improve business conditions and to provide networking toward the creation of new
businesses. UC faculty members must engage with regional leaders to exchange views and to converge upon specific action plans.
Enough talented people both in the UC and in surrounding communities are aware of the need and the opportunity for amazing progress
to occur, and we are committed to such goals.
Starting with the University of California institutions, the research institutions in the Los
Angeles Region need to work together to create a more efficient technology transfer manage-
ment process in the technology licensing offices across the region.
If the University of California system were to improve its technology transfer policies, for example, the
effects would be felt far beyond the limits of the UC campuses in the region. Generating investor inter-
est in University of California-generated technologies would surely result in spillover benefits (including
high revenue) to private institutions like the California Institute of Technology, the University of Southern
California, City of Hope, Loma Linda University and Cal Poly Pomona, especially if cross-institutional
collaboration in the region was strong. Empowering individual University of California OTL offices to
consider each opportunity on its own merits (and in the context of the region as a whole) will better
accommodate opportunities with companies of different sizes and needs. In addition, this decentraliza-
tion will remove the additional time required for approval of all deals by the Central Office of Technology
Transfer, reduce legal fees, and improve communication, which will better accommodate the compressed
development timelines of Life Sciences companies.
Because OTLs maintain highly personalized relationships with their faculties, on one side, and with the
business community on the other, they need the appropriate levels of staff and legal counsel to earn the
trust and to respond to the needs of both groups as they craft licensing agreements. This greater local
responsibility may require a redistribution of staff and legal counsel by public and private institutions in
order to build technology transfer offices in the Los Angeles Region that are competitive with those in
clusters in other regional clusters. For example, the sheer volume of potential opportunities exceeds the
number of people assigned to intellectual property management. While UCLA’s technology transfer staff
has grown from five to seventeen people over the past five years, that number still falls far short of the
twenty-five staff members in Stanford’s OTL and the forty-five members of MIT’s OTL. A recent
whitepaper prepared for the University of California system has recommended the creation of a task force
that would focus on possible resource and policy changes to improve the effectiveness of the technology
transfer process.
Encourage the different Technology Licensing Offices to meet on a regular basis in order to
share best practices.
Given the diversity of public, private and academic research institutions in the Los Angeles Region, the
Technology Licensing Offices of each of these institutions should create and regularly participate in a
mechanism to discuss and share procedures in dealing with problematic intellectual property issues.
Because the strengths and experiences of each of these offices are different, there is considerable value in
providing a way for one institution to leverage the expertise of another. A number of research institutions
have expressed interest in forming a permanent working group of technology licensing directors in the Los
Angeles Region, but the University of California institutions will need to provide leadership and credibil-
ity to this effort, given the number of institutions involved and the portfolio of their intellectual property.
Furthermore, this working group would also allow the different research institutions to be open to joint
or complementary research efforts that could potentially lead to a research consortium with an enhanced
ability to obtain federal or private sector funding.
Empower Directors of Technology Licensing Offices to be facilitators for new

business development.
Public and private research institutions need to attract, to empower and to retain technology transfer
officers that can creatively facilitate successful commercialization of Life Sciences technologies. The direc-
tors of the technology transfer offices stand at the center of a complex relationship between inventors, uni-
versity technology transfer offices, and the entrepreneurs and established companies that want to bring
products to market. To be effective these directors need a unique blend of abilities: to have a general
understanding of the science involved, and more specifically, its commercial implications; to appreciate the
way licensing companies operate and what they can and cannot do; and they must be able to work effi-
ciently with inventors, patent lawyers, and company licensing executives. Most importantly, it is impera-

Exhibit 8: tive that the director and staff of the offices of technology
Number of Bioscience PhDs Granted 1999 licensing gain the trust and confidence of their faculty and
scientists. David Baltimore, President of the California
Institute of Technology, observed, “Our faculty is the
lifeblood of this industry. The Office of Technology
Transfer’s mission is to encourage the transfer of their
ideas to the marketplace. You can only do this by making
the process as smooth and helpful as possible for all parties
involved: faculty, companies, investors and entrepre-
neurs.”
Exhibit 9:
California Research Institution Spinout Companies
PRIORITY ISSUES AND ACTION

RECOMMENDATIONS FOR
FOSTERING INCREASED
COLLABORATION BETWEEN
ACADEMIA AND INDUSTRY
Another metric for studying a region’s
intellectual capacity is the number of scien-
tists the region produces. The Los Angeles
Region is a top producer of Biological
Science PhD graduates, rivaling other
regions such as the Bay Area and San Diego
(Exhibit 8).3 However, far fewer scientists
from Los Angeles research institutions
transfer their inventions into start-up com-
panies than do in the Bay Area or San
Diego (Exhibit 9). According to the aca-
demic administrators consulted for this
action plan, many scientists in the Los
Angeles Region that want to become entre-
preneurs move to the Bay Area or San
Diego because there is no critical mass for
Life Sciences entrepreneurial activity in the
Los Angeles Region.
Provide support for initiatives to build bioresearch parks in Los Angeles and / or throughout
other parts of the region.
Cross-pollination between business and research is essential to the success of the Los Angeles Life
Sciences cluster. Dedicated physical space where such an exchange can take place provides the opportu-
nity for the formation of a critical mass of business and new product ideas and activity, which in turn will
attract new research and investment to the region.
According to the academic leaders consulted, the lack of affordable and available land around the uni-
versities is the number one barrier to expanding the Life Sciences industry in the Los Angeles Region.
Successful Life Sciences clusters, like San Diego, have created a sustainable environment for entrepreneurs
by having physical space for start-up companies to locate around their top research institutions. This idea-
rich environment has led to increased transfer of research to the marketplace, increased investment activ-
ity, the strengthening of the overall cluster, and economic benefits for the entire region. These incubators
also provide assistance and options for companies to expand their operations in close proximity to the
region’s resources. They also provide pre-established spaces that mitigate the need to navigate often time
consuming and complex permitting and zoning processes.
The institutions in the Los Angeles Region, unlike some of their competitors in the Research Triangle
in North Carolina and elsewhere, occupy sites in densely populated and highly expensive urban areas
where available space in proximity to research is at a premium. Long-term success will require cooper-
ation among the research institutions, local communities, developers and state government to identify
areas where facilities can be located, to secure those areas, to provide incentives for development and for
companies to locate there, and, most importantly, to maintain a level of ongoing support to keep these
areas vital.
While some initiatives are underway at the University of Southern California, the California Institute of
Technology, the University of California, Irvine, and the University of California, Riverside, continued
and increased support from the relevant stakeholders to identify, set aside and establish a bioresearch park
are important first steps.
Efforts to build a critical mass of research and business activity require capital investment matched to
the needs of the industry. In particular, investment has to occur at all phases of the commercialization
process. While the Los Angeles Region is quite successful in obtaining funding for basic research, it nev-
ertheless significantly lags other regions in obtaining funding for the commercialization of research
(Exhibit 10).

Steven B. Sample, President, University of Southern California
The University of Southern California is in the forefront of an important project that has the potential to transform the econom-
ic, scientific, and health-care landscape of Los Angeles. Representing the shared vision of USC, of civic leaders, of elected offi-
cials and of the presidents of sister research universities in Los Angeles County, plans are underway for a large and vibrant
biomedical research park that will arc around USC’s Health Sciences campus in East Los Angeles. This park should prove very
attractive to entrepreneurial start-up companies, as well as more-established biomedical firms. It has the potential to create
8,500 high-tech jobs, with average annual salaries of $60,000, in a neighborhood where the median salary is now $30,000. USC
and its partners – including the County of Los Angeles and Supervisor Gloria Molina, who is a leading force behind this project
– have identified 30 acres for phase I of the BioMedical Park. We are anticipating opportunities to expand the park to 110
acres over the next decade--without condemning or destroying any homes or apartments.
The Los Angeles BioMedical Park promises to be an economic catalyst for Los Angeles County, with an estimated $1.3 billion a
year generated in economic activity. Additional revenues will include $55 million in annual state tax, $10 million in annual prop-
erty tax, and $10 million in local business, sales, and utility taxes.
The epicenter of the burgeoning biomedical revolution is in Southern California. With these plans, we will capitalize on a golden
opportunity to create a large biomedical research park in East Los Angeles which would be immediately adjacent to billions of
dollars worth of clinical and research infrastructure. Los Angeles has the medical schools, research institutes, and hospitals to
support a healthy biotech community. As the only county in the nation to boast three top academic research universities –
USC,UCLA, and Caltech – we enjoy something of an embarrassment of riches when it comes to vanguard research in biomed-
icaldevices and the life sciences. The proposed Los Angeles BioMedical Park will not only help Los Angeles realize its potential in
this golden age of the Life Sciences, it will facilitate the movement of biomedical advances from lab to marketplace.
Foster an investment environment that will attract Life Sciences companies to the Los
Angeles Region.
Unlike the Bay Area, San Diego, and Massachusetts’ Route 128, there are few resources for Life Science
entrepreneurs in the Los Angeles Region to find funding and make the contacts they need to get their busi-
nesses off the ground. Strong VC networks in these other regions often promote the commercialization
of technology through frequent forums and networking events where scientists and investors meet and
exchange ideas. According to the president of a prominent Los Angeles Region biomedical trade organi-
zation, the lack of VC funding for the Life Sciences in the Los Angeles Region is due to a combination of
three factors: the failure of the Los Angeles Region (and in particular, the city of Los Angeles) to develop
its own strong VC community; the unwillingness of Life Science VC investors in other parts of the state
and country to fund companies in the Los Angeles Region; and the choice by a large number of investors
that do focus on the Los Angeles Region not to invest in the Life Sciences and have not developed the
expertise necessary for investment in these technologies.
VC interest is essential for consistent entrepreneurial success. By improving technology transfer poli-
cies and taking steps to increase research institution-industry collaboration (for example, by building ded-
icated physical space for these partnerships), the leaders of the Los Angeles Region can create a more attrac-
tive environment for capital investment.
Exhibit 10: Funding at Research, Commercialization, and Growth Phases
Encourage the state to ensure ample opportunities for funding Life Sciences commercializa-
tion, not just research and development
As previously mentioned, the Los Angeles Region’s research institutions are quite successful at attract-
ing start-up funding for basic research. However, funding needs to exist across all phases of the process
(including trials, test markets, and final market roll-out), and especially for small businesses and start-ups.
Until a budget cut in 2002 eliminated funding for the program, the state matched funds for commercial-
ization through the California Technology Investment Partnership program (CalTIP). This program pro-
vided early-stage capital to biotechnology, information technology and telecommunications companies
through a blend of state and federal matching funds. From 1997-1998 through 2001-2002, $25 million
from the General Fund has supported 145 CalTIP projects, with an average grant of $200,000.4 Many
summit participants observed that the CalTIP program was on the right track because it provided assis-
tance at the commercialization stage and not at the far more expensive R&D stage of the process, and
because the returns to the local economy were more immediate and obvious. Another good example of
the support of cooperative commercializable research is the UC Discovery Grant program, which distrib-
utes up to $60 million a year in state, industry and university funds to teams made up of principal inves-
tigators and industry sponsors.
An assessment of the allocation of state and federally supported research funding is strongly recom-
mended. In the absence of CalTIP, the state needs to do everything it can to assist companies in transi-
tioning from R&D into the commercialization phase. Also, it is important to note that review boards for
the allocation of such funds should be comprised not only of academics and members of government
agencies, but also of representatives from industry.

Agenor Mafra-Neto, President and CEO, ISCA Technologies, Inc.
A rapid technology transfer cycle is pivotal to the creation and maintenance of growing and dynamic economies. New tech-
nologies address and create new market needs, thereby generating new revenue, new jobs, better quality of life — and more
tax revenues. But there are enormous gaps and barriers in this cycle. While some federally sponsored programs target small
businesses and foster research and development of promising technologies with good commercial prospects, virtually no gov-
ernment sponsored program tackles the funding gap between the developed product and the target customer. As a conse-
quence, only a small portion of new technologies arrive at the market in a timely way.
In general, the more technologically innovative the product, the higher the barriers to adoption, and the more drastic the
required change in behavior of the target customer. At the same time, the faster a new technology reaches the market, the
greater the potential benefits for both the consumer and the business commercializing it. To successfully launch a new prod-
uct, businesses need to address target customers’ concerns with programs that create awareness about the new technology
and its benefits.
The government should direct its efforts to help small businesses obtain the capital, the expertise and the right connections
to manage this critical step in the commercialization process. For example, the former CalTIP program provided matching
funds of up to $250,000 to selected companies for the commercialization of products generated through federally funded
research and development. The state should reinstitute initiatives like these and create regionally targeted pools of capital to
fill this specific commercialization gap. Additionally, it should create marketing programs that would publicize and lend credi-
bility to R&D achievements of high tech companies through the state's already established marketing channels.
ANTICIPATED BENEFITS
The Los Angeles Region possesses the necessary ingredients to create a highly successful Life Sciences
cluster that can become a global leader. If over the next ten years private businesses, investors, the admin-
istrations of research institutions and the researchers themselves focus on a short list of achievable goals
they can create a self-sustaining community that will attract ideas, capital, and people to the region and
keep them here. Landmarks against which to check the progress of these efforts are the creation and main-
tenance of capable technology transfer offices and officers at the region’s research institutions, cooperation
among the cluster stakeholders to create opportunities and physical space for business and research to
come together, and a commitment by investors and by state government to provide opportunities to sup-
port the commercialization of Life Sciences technology at all stages of the commercialization process. The
likely result of these actions will be an increase in the number of spinout companies from both the research
institutions and established Life Sciences companies and the growth of the cluster as a whole.
LOWERING THE COST AND DIFFICULTY
OF DOING BUSINESS
2
The cost of doing business is an issue that affects all of the Los Angeles Region’s industries. Whether
the industry is retail or the Life Sciences, the attending and often invisible costs that accompany taxes,
regulations and permitting processes can make it more difficult for companies to do business. While gov-
ernment levies and other direct economic costs like utilities and worker’s compensation may clearly
dampen the demand for additional investment by industries and venture capitalists in a region, the ongo-
ing costs that accompany permitting, regulations and administrative requirements not only add to these
financial burdens but also may keep companies from competing effectively in a rapidly evolving global
marketplace. Companies have come to accept that as good corporate citizens they must submit to a cer-
tain amount of government oversight (to protect the Los Angeles Region’s environment, for example). Yet
many well-intentioned but ill-drawn rules and procedures are confusing and restrictive: the legal and
administrative costs of monitoring and compliance—borne by Government and by industry—can actual-
ly stifle business activity. Therefore, lessening the cost and difficulty of doing business means more than
just lowering the tax bills of Life Sciences companies; it means making it easier to do business in the Los
Angeles Region. Thus government, both state and local, has to take a three-pronged approach to the
problem: reduce direct costs in a targeted way in order to maximize additional investment; consider the
business context of Life Sciences companies when implementing regulations; and partner with the pri-
vate sector to ensure that these companies can efficiently deal with reasonable government oversight
without compromising their ability to compete effectively.

Lowering the cost and difficulty of doing business in the Los Angeles Region is particularly important
for the Life Sciences industry. The region’s commercial leaders rank issues related to the cost and diffi-
culty of doing business as some of the industry’s greatest future threats (Exhibit 11).
The unique life cycle of companies in this industry make the need for targeted tax incentives particu-
larly important. For instance, in the biotechnology and pharmaceutical sector companies typically spend
hundreds of millions of dollars on research and development for several years before ever having a com-
mercially viable product. This lag makes incentives like tax loss carry forwards and R&D tax credits par-
ticularly important to these companies. Designing targeted tax incentives for the financial issues unique
to the Life Sciences industry would maximize the commercial benefit of government tax incentives.
State and local regulations, including permitting, also affect the Life Sciences in a disproportionate way.
For example, Life Sciences research and manufacturing facilities often use materials that are closely regu-
CHAPTER 2: LOWERING THE COST AND DIFFICULTY OF DOING BUSINESS 19

Exhibit 11: Importance of the Cost and Difficulty of Doing Business Issues
lated out of concern for the integrity of their products and for the preservation of the surrounding envi-
ronment. While imposed for socially beneficial reasons, these rules can sometimes seriously encumber
Life Sciences firms. Poorly considered regulations can be confusingly bureaucratic and costly to adminis-
ter. They can also hinder innovation and production, actually threatening Life Sciences firms’ abilities to
compete in a field where only the most nimble survive. A good comparative example of the potential mag-
nitude of this impact comes from the experience of a California firm that opened a factory in the Czech
Republic. This biotechnology company, with the help of the local government, was able to convert an
empty building into a working plant in 1 year. To open a similar facility in California, they estimate, would
have taken close to 3 years because of regulatory and administrative issues. The difference in time would
not only have denied drugs to people in need, it would also have cost the company over $140 million dol-
lars in lost revenue.
Certainly, many regulations bring significant benefits (e.g., a healthy natural environment that also
draws people to move the region) and the point is not simply to remove all regulations in the service
of industry. Rather, a better understanding of the impact of inefficient regulations by state and local
governments and efforts to reduce these inefficiencies can do much to attract and to retain Life
Sciences companies.
National and international competition to attract Life Sciences companies only magnifies the impor-
tance of these issues. Several regions across the United States and the globe have targeted programs to
attract Life Sciences companies that will reduce their tax burden, offer generous real estate incentives, and
expedite and simplify applicable regulatory processes (Exhibit 12). The perceived relative cost and diffi-
culty of doing business in the Los Angeles Region appears all the more a barrier to increased commercial
activity as we consider these incentive packages.
Exhibit 12: Examples of Efforts by Other Regions to Attract Life Science Companies
PRIORITY ISSUES AND RECOMMENDATIONS FOR LOWERING THE COST OF

DOING BUSINESS
While market forces primarily set labor and land costs, taxes and fees levied by the government are con-
trollable. According to a recent study by ACCRA, Los Angeles is above average in state and local tax rates
among major metropolitan areas competing for Life Sciences companies (Exhibit 13). State and local gov-
ernments need to find creative ways to make the cost of doing business in the Los Angeles Region more
competitive.

Exhibit 13: State and Local Tax Index, by Metropolitan Area, 2000
Develop targeted tax incentives aimed at the Life Sciences industry to encourage additional
research and investment.
Given the unique nature of Life Sciences companies, governments can design tax policy that will not
only target Life Sciences companies but also encourage investment and strategic choices that will benefit
the community. For instance, since the research and development cycle is very long for these companies,
research and development tax credits will disproportionately help the industry. Similarly, extending the
life of net operating loss carry forwards will help fledgling biotechnology companies survive the long peri-
od of research, clinical trials, and the FDA approval process. In addition, creative solutions like allowing
smaller biotechnology companies to sell their tax credits to larger companies will not only provide tax ben-
efits to existing companies and provide needed cash to growing companies, but will also encourage closer
cooperation among firms in the area.
Governments can also adjust tax policy to encourage large firms to continue to invest in the area. For
example, by changing the apportionment formula for corporate income to determine what is taxable in the
state of California from the current 3-component formula (property, payroll and double-weighted sales)
to a single sales factor, companies will no longer have a disincentive to build manufacturing facilities and
provide jobs in the state. Additionally, this change will encourage other firms to locate manufacturing
facilities in this region. Addressing the workers compensation problems in the state will provide a gener-
al benefit to all businesses and, for Life Sciences companies in particular, offer additional encouragement
to invest in manufacturing facilities in California instead of moving outside of the state.
Targeted incentives like the ones mentioned will spur investment in the Life Sciences. Such investment
will not come at the expense of other industries or other important initiatives needed to grow the econo-
my, including education and public infrastructure. Instead, these incentives will provide a way to grow the
overall economy and tax base as a whole.
PRIORITY ISSUES AND RECOMMENDATIONS FOR LOWERING THE DIFFICULTY
OF DOING BUSINESS
Whether through zoning rules and permits for new plants, or through procedures for decommissioning
former research and manufacturing facilities, regulations play a role in the execution of Life Sciences com-
panies’ strategies. Indeed, Life Sciences companies interact with government regulations at almost every
phase of their value chain. Both government and business leaders developed two distinct recommenda-
tions for the government to become a facilitator for—not an obstacle to—executing business strategy.
Streamline existing regulations for Life Sciences companies and designate a point person or
group for companies to contact when faced with regulatory barriers.
During the Los Angeles Region Life Sciences Summit, business leaders discussed the need to simplify
the regulations facing the industry. They suggested that governments survey business leaders on the reg-
ulations that cause the most confusion and difficulty. Then, having identified the most problematic reg-
ulations, governments should work to streamline them and make them more comprehensible in order to
reduce the overall cost of compliance. Some progress is under way: the State of California has already
started a similar effort, with the Office of Small Business Advocate recently conducting hearings to get
additional feedback on precisely this issue. Another idea for streamlining the process is to set up a zoning
board comprised of members from industry, government, and real estate development to serve as a sound-
ing board for land usage issues.
In addition, Life Sciences enterprise zones could be established that would have land earmarked for Life
Sciences research and manufacturing facilities. These zones would create space that companies could
move into without having to worry about extended zoning and permitting processes. Biotechnology
parks, as discussed in the preceding chapter, would be an excellent example of such areas.
Business leaders called for the creation of a government contact person or group, either at the state or
local level, for Life Sciences companies to consult for regulatory questions and concerns. This position
would supplement already existing services at the county level, which provide regulatory and relocation
guidance through their public-private economic development corporations. During the course of the
summit, many firms described the need to hire outside consultants just to understand all of the regulations
that apply to them. Instead of paying third parties to determine how to comply with regulations, firms
should be able to have a clear point of communication within the government to deal with the necessary
regulations. Supporters of this position felt strongly that this contact should have a special focus on the
Life Sciences, so that the contact point will be well versed in the intricacies of the issues facing this indus-
try. Other regions, such as Singapore or South San Francisco, already have such a model in place. By pro-
viding a primary contact for the industry, the government will have a more visible role as a facilitator of
business activity. Without the California Technology, Trade and Commerce Agency (CTTCA), the
Governor’s Office of Planning and Research could play an integral role as the primary point of contact for
Life Sciences businesses when they have to manage regulations.
Create a group within the state and/or local government that will focus on attracting target-
ed new Life Sciences companies to the region by coordinating incentive packages.
Other regions have task forces specifically designed to attract Life Sciences companies to their areas.
These groups target attractive companies for their growth and job creation potential. Then, they work

closely with the firm’s executives to design incentives to locate new facilities in their region. These pack-
ages include not only tax incentives, but zoning and regulatory issues as well. Examples of well-organized
efforts by government entities to attract Life Sciences companies to their region abound. There is no rea-
son why the Los Angeles Region could not develop a target list of companies including those with opera-
tions already here and proactively reach out to these companies.
The proposed task force should be made up of representatives from a cross section of government agen-
cies both at the state and local levels. Once a team and leader are designated, the group can identify best
practices from around the globe. Then, working with available resources, the team can develop targeted
pitches to attract firms to the region. This team could be a group of approximately 15 people, experienced
in issues relating to Life Sciences, and armed with the appropriate financial incentives and influence to
attract Life Science companies and jobs to the region.
Implementing these recommendations will have a broad effect on the economy of the Los Angeles
Region. First, and perhaps most importantly, these efforts will ensure that the companies currently in this
region stay in this region. Several large firms have cited higher tax rates and cumbersome regulations as
the main reasons they look outside of the Los Angeles Region when they want to grow and expand. Other
companies are considering moving existing parts of their business to other areas for these reasons. Not
only will lowering the cost and difficulty of doing business keep our existing base of companies, it will also
attract other companies to the region. This increased economic activity will generate additional jobs and
tax revenues that eventually could more than compensate for the cost of any targeted incentives.
With a more Life Sciences-friendly commercial environment, sources of funding in the form of venture
capital and foreign investment will flow more freely. As seen in the previous chapter, the Los Angeles
Region currently lags behind comparable regions in its venture capital investments in the Life Sciences.
However, venture capitalists from other regions such as the Bay Area and San Diego are more than will-
ing to make investments in the Los Angeles Region, and if the conditions and opportunities are right, they
will come to this region. Improving the cost and difficulty of doing business will open up these funds to
growing Life Sciences companies.
DEVELOPING AND IMPROVING
WORKFORCE EFFICIENCY
3
The depth and quality of human assets a region can provide to an industry play a critical role in the
development of any industry cluster. This dependence is especially true in the Life Sciences, which relies
heavily upon highly-trained specialists in the field of laboratory support, regulatory affairs, research and
development, business development, quality control, and sales and marketing. In fact, the presence of a
superior talent pool across the entire value chain can be the pivotal component of a region’s competitive
advantage.
There is an increasing demand for laboratory technicians for research, clinical trials, and in the manu-
facturing processes. To shepherd their new products across regulatory hurdles, Life Sciences companies
also demand people well versed in the processes and requirements established by governmental agencies
such as the Food and Drug Administration (FDA). In the area of business development, experienced
executives are needed to identify target markets for drugs, establish strategic partnerships and develop the
brand identification for the firm and its products. There is an increasing demand for these types of posi-
tions as government regulatory agencies approve new drugs for commercialization and a growing number
of companies in the region enter the drug manufacturing stage.
Connecting the existing talent pool of human resources across the entire value chain to the Life Sciences
industry and addressing gaps in necessary skills and capabilities represent a significant challenge to the
region. In order to provide needed human assets and to grow the Life Sciences cluster, the Los Angeles
Region must do a better job of training its human resources and in attracting new talent.

Winning in the highly competitive global Life Sciences industry requires having the available human
assets—be they in research, manufacturing, marketing or in senior management—to scale-up efforts rap-
idly and to maintain a high level of competitiveness. The manufacturing process for making biologics is
highly technical and sophisticated. As such, the Life Sciences require quality human resources to remain
competitive. Companies need highly skilled technicians for exacting manufacturing processes with
extremely low tolerances for error. Often complex and always demanding FDA regulations require peo-
ple with experience in guiding products through clinical trials. Leveraging a product’s full potential in the
marketplace requires seasoned marketers with industry experience. The industry needs quality workers
that it can recruit quickly from the local economy or from another region. This need is a result of the con-
stant innovation in this industry, which requires companies to quickly adapt to changing conditions,
including the efficient deployment of resources to execute those strategies. For example, when the FDA
CHAPTER 3: DEVELOPING AND IMPROVING WORKFORCE EFFICIENCY 25

approves drugs for commercial marketing, companies must quickly expand their manufacturing assets to
produce the drug in large quantities, establish their sales and marketing team, and potentially even nego-
tiate strategic distribution agreements with other companies.
Life Sciences companies will want to locate where the available pool of talent is well trained, and they
can attract others to the region for specific skills not present in the region.
PRIORITY ISSUES AND RECOMMENDATIONS FOR IMPROVING THE

WORKFORCE
The development of a world-class Life Sciences workforce in the Los Angeles Region will require all
three of the major stakeholders—government, industry and academia—to work closely together. In order
to facilitate this development, it is necessary to invest an appropriate amount of resources to train the
workforce efficiently.
Explore entrepreneurial deployment of the Governor’s Workforce Investment Act (WIA) dis-
cretionary federal funds earmarked for workforce training.
The workforce development engine fueled by the California Workforce Investment Boards, Education
Training Programs, and the Economic Development Department does not sufficiently address biotech-
nology workforce development needs in the state. These have traditionally focused on the most basic of
entry-level positions rather than the high-level skill sets needed by the industry. A sizable fraction of dis-
cretionary funds could be directed into new training programs in the applied sector, focusing upon FDA
regulatory affairs, biomedical quality, clinical affairs, federal reimbursement and other issues. These need-
ed programs are outside of the traditional focus of California’s universities, and new resources are needed
which would catalyze the creation and maintenance of these programs.
More recently the Governor, in partnership with the local workforce investment boards, higher educa-
tion and other state entities, is redirecting a portion of his Workforce Investment Act discretionary funds
and applying them to workforce development specifically in the Life Sciences industry, to develop and
fund pilot projects for higher skills training. Two pilot projects have already received funding approval to
support the retraining of dislocated workers and include training for higher skilled and higher wage jobs.
Further projects like these are planned for the future.
Develop closer ties between industry and education and training programs at all levels in
order to create more responsive educational programs that benefit both.
The Life Sciences industry must develop a coordinated way to make its human asset needs known to the
Los Angeles Region’s universities, colleges and vocational programs. These needs should include both the
anticipated number and type of jobs needed in the near future and the educational programs desired. One
way such communication can be achieved is through the development of a single Life Sciences industry-
generated and industry-validated workforce assessment survey instrument. The Economic Development
Department is currently building a tool that will be updated quarterly with industry data to track shifts in
the Life Sciences industry employment throughout the state. By having an up-to-date snapshot of what
skill sets are in demand, the state can shorten the ramp-up time needed to deploy new training programs.
Communication from the industry to academia must include not only skills specific to the positions
they have open, but also to skills that will allow graduates to remain competitive in the ever-evolving work-
place. Collegiate and graduate-level educational programs must balance Life Science training, (knowledge
tailored to specific jobs), with more general scientific education, (knowledge tailored for longer-terms skill
sets). Courses and programs with direct industry relevance can provide graduates with a unique advan-
tage when competing for jobs and at the same time attract and keep Life Sciences companies in the region.
For example, new professional graduate degrees that are shorter, faster, industry-focused and deploy com-
pany scientists in unique academic-industry partnerships should be considered. Offerings by the Keck
Graduate Institute of Applied Life Sciences and by programs under California State University Program
for Education and Research in Biotechnology (CSUPERB) in the Life Sciences are good examples of
progress in building links between academia and industry.
The communication channel needs to flow both ways: just as industry needs to tell academia what they
want in employees, the universities need to communicate and promote their students and faculty to local
companies. This communication could take several forms. For example, one opportunity to bridge the
gap is for the university system to create a region-wide website that posts resumes of graduates searching
for jobs in the Life Science industry or to sponsor industry-based job fairs. Recruiters from companies
could use these channels to circulate job openings and reach out to prospective employees.
One way of creating this communication channel is by establishing sabbatical programs for professors
to take time away from teaching to gain industry exposure. An excellent example of the benefits of such
cross-communication between industry and academia is the LA/Orange County Biotech Center head-
quartered at Pasadena City College. Professor Wendie Johnston, the director of the center, developed the
52-unit certificate program in biotechnology wet lab techniques after taking a 1 year sabbatical from her
Robert A. Koch, PhD, Chair, CSUPERB Strategic Planning Council, Professor, Cal State Fullerton
Workforce development is a multifaceted issue. The needs of the biotechnology industry exist at several levels and
depend on the maturity of the specific company in question. If a company is young and is focused on research and early
development, it will need a few very focused high-level researchers. As the company matures and is transitioning to late
stage development and early concerns about productivity, it will need more mid-level researchers and developers. And, as
it moves to the stage where productivity is the focus, the number of lower-level technologists needed increases.
The California State University Program for Education and Research in Biotechnology (CSUPERB) is uniquely placed to
meet the need for intermediate level researchers and developers and is prepared to work with the University of California,
the California Community College and state agencies with an interest in biotechnology workforce development to meet the
entire range of needs identified for the Los Angeles Region. Broader support from state agencies (perhaps in the form of
special state grants programs) needs to be made available to develop professional degrees that augment our existing
degree programs. The standard bachelor’s and master’s degrees offer excellent training in biotechnology-related areas
and the growing number of professional bachelor’s and master’s degrees improve the focus of that training in many areas.
Direct involvement by the biotechnology industry will be required to develop and shape any programs as they evolve over
time. We support development and funding of regional facilities whose mission is to foster the industry-university collabo-
ration essential to this process and to create workforce development programs at all levels.

teaching duties to work at multiple industry sites. Her program has become a model for providing applied
biotechnology training and connecting graduates with meaningful career opportunities. David Rozzell,
the President and CEO of BioCatalytics, a biotechnology firm in Pasadena, is a serial user of her graduates
and calls the program, “An excellent source of well-trained individuals that allows me to expand my oper-
ations as needed.” Programs like Professor Johnston’s should be replicated across the region. Providing
opportunities similar to the ones she received to other teachers and researchers may result in closer coor-
dination between industry and academia.
Create new intersegmental training facilities that serve the educational needs of universities,
community colleges and vocational education institutions.
A regional multi-use Life Sciences training center could serve as an anchor and catalyst for Life Sciences
enterprise growth in the Los Angeles Region. It would offer practical, hands-on learning experiences,
including short-term workshops, courses and more extended training. It would provide opportunities for
students to work with multi-disciplinary, multi-level teams of researchers, technical experts and produc-
tion specialists in a business-like mock-FDA environment. The center could also coordinate an extensive
applied biotechnology internship program for student placements in local biotechnology companies. By
containing a collection of instruments and facilities not generally available to the regional secondary edu-
A. Stephen Dahms, Ph.D.

Member, Board of Directors, Southern California Biomedical Council
Chair, US Biotechnology Industry Organization and Council of Biotechnology Centers Workforce
Committee
Biotechnology has arisen from many exciting technologies flowing from the molecular Life Sciences, chemistry, biology,
applied physics, several engineering sectors, and applied mathematics/computational sciences, as well as from a pool of
talented individuals who can apply these technologies at all stages of product development. Importantly, biotechnology
clusters now identify workforce development as the third largest hurdle to economic success. Dramatic workforce short-
ages exist, as indicated by recent hearings, including this Summit, which has identified at least four major solutions. (1)
The state receives over $900 million annually in US Workforce Investment Act (WIA) funding, funds that have not been
directed towards solving the industry’s needs. The Governor is asked to apply his substantial discretionary WIA funds
towards new, high level biotechnology training programs and processes, which will hopefully in turn refocus the Workforce
Investment Boards and Employment Training Panel to address this most dynamic of industries; (2) There is an immediate
need for workforce assessment and tracking processes that provide the necessary data and also more effectively identify
directions for the many players in the workforce development arena; (3) California must create new training facilities that
serve the intersegmental educational arena spanning the universities, community colleges, and voc-ed institutions.
Regional intersegmental training facilities are needed in Los Angeles, San Diego, and San Jose-South Bay; and (4) Three
California State University-based, technologically distinct Centers of Excellence in Biotechnology Applied/Translational
Research and Workforce Development are required, analogous to, but distinct from, the UC discovery/basic research cen-
ters of excellence.
cational institutions, the center could serve as cap-stone training site for the region. The creation of this
intersegmental training facility would require funding through a combination of state, federal and private
foundation resources.
Work with governments in the region to provide more on-the-job training opportunities
through increased public funding and the establishment of more internship opportunities.
Government and industry share an equal responsibility in enhancing the region’s Life Sciences human
assets. A vice-president of operations of a large Life Sciences company, whose job it is to determine where
new manufacturing facilities are built, suggested that if the government helped finance the training of new
technicians his firm would be willing to keep jobs in the Los Angeles Region and guarantee those jobs for
over two years. While such a program would require an upfront investment, the return on this invest-
ment, not only in the form of those particular jobs, but also in the form of other jobs that would accom-
pany them, would be substantial. Investment in job training, where a portion of an employee’s salary
would be paid while they are training, is a direct investment into the people of the Los Angeles Region and
would guarantee that the money would go to improving the lives of every day Californians.
Industry also must shoulder some of the training burden. Perhaps the best way to train a prospective
employee is to offer student internships. These internships have benefits for both students and firms alike.
Firms have the opportunity to recruit the finest students before they graduate. Students get invaluable real
world experience to be more competitive upon graduation. Creating more of these internship opportuni-
ties and making them available to undergraduate and graduate students at local institutions will help devel-
op a powerful source of local talent.
There is a clear and unequivocal case for strong, integrated action on the part of California’s workforce
development community to realize the economic opportunities at hand. The workforce development
assets in California will need to be marshaled in new fashion if we are to achieve the efficiencies necessary
to respond quickly and effectively to Life Science employers. This will, indeed, require strong, integrated
action from the Labor and Workforce Development Agency to insure that state and federal training funds
leverage each other to the best outcomes for the industry and its workers.
By developing a world-class workforce at every phase in the Life Sciences’ value chain, the Los Angeles
Region will have a competitive advantage that is not only highly desirable for Life Science companies, but will
be enduring and difficult to replicate by competing regions. Once in place, a world-class work force is a sus-
tainable competitive advantage, one that cannot be quickly duplicated through quick-fix legislative action.
Not only will educating and training the workforce result in benefits to companies, it will significant-
ly increase the wealth of the citizens of the Los Angeles Region. Training in the Life Sciences will open
up employment opportunities for skilled and higher paying jobs to people who may not have had them
before. Both the number of jobs in the region (Exhibit 14) and the overall quality of those jobs, in terms
of higher salaries (Exhibit 15), are growing. In 2002, the Life Sciences industry employed over 80,000 peo-
ple in the region at an average wage of $67,000, an 80% premium over the average wage across all other
industries in the region ($37,000). Over the past five years, employment growth in the Life Sciences
industry in the region has been 17% in comparison to the average regional employment growth rate of only

7%.5 These jobs have immediate and future rewards. They help drive new and existing Life Sciences
companies and, over the course of time, top performing employees can move up through the ranks and
establish careers with skills that become highly transferable.
Exhibit 14: Total 5 Year Employment Growth (1997 - 2002)
Exhibit 15: Annualized Wages in Life Science Jobs, 2002
Annual Wages
STRENGTHENING THE
REGIONAL LIFE SCIENCES COMMUNITY
4
Geographical clustering has the potential of generating synergistic benefits that allow a region to devel-
op a competitive advantage. As research by Harvard University Professor Michael Porter has shown, these
benefits include access to better human assets, creation of support industries and increased innovation. An
additional benefit is the creation of a sustainable community that promotes and protects the interest of its
members, provides opportunities for the exchange of ideas and for networking, works with state and local
government to create a regulatory environment that encourages economic development, and fosters the
“critical mass” of companies that signals to others that the chance of success is greater inside the cluster.

The Life Sciences cluster in the Los Angeles Region — unlike its equivalent in other areas such as San
Diego or Seattle— sprawls across a large area and consists of many industry segments and sub-clusters
with seemingly different interests, technologies, markets and perspectives. From the large biotechnology
companies in the northern reaches of the region to the medical device companies in the south, such a wide
range of research and industrial activities, combined with geographic dispersal, have added to the chal-
lenges of fostering a strong and cohesive community that binds these industry segments and geographies
together.
For example, the lack of a geographical clustering in the Los Angeles Region carries real costs for all
firms in the region. Gary Lazar, Managing Director of California Technology Ventures, a venture capital
firm in Pasadena, pointed to one of them when he discussed the challenges of attracting new Life Sciences
talent to the region: “People are hesitant to move here because they look around, don’t see many other
firms close by and worry that if they leave their job, there might not be many alternatives.”
In addition, the task of forming a distinctive culture that reflects both the creative spirit of the Los
Angeles Region’s Life Sciences industry and the sense of togetherness among its entrepreneurs has been
complicated by the geographic dispersal and the diversity of its industry segments. One of the conse-
quences was the absence of identifiable regional branding efforts — a task made all the more difficult by
the fact that Los Angeles is such a large and busy region with so many other attention-grabbing industries.
“From Silicon Valley to Hollywood, industry clusters have enhanced their competitive advantages by
branding and positioning themselves. In contrast, the Los Angeles Region has yet to cultivate a perception
that this is the place to be in Life Sciences - despite the richness of its successes, resources and opportuni-
ties,” said James B. Lucas, a former SCBC Board Member and a managing director at the Abernathy
MacGregor Group, a corporate public relations firm. “Even some people who should know better—
CHAPTER 4: STRENGTHENING THE REGIONAL LIFE SCIENCES COMMUNITY 31

including venture capitalists and potential business partners — view the idea of a Life Sciences cluster in
Los Angeles with skepticism.”
But this skepticism is fueled by the perception that many anchor firms in the region have developed
insular and detached cultures. Not only does this culture — to the degree that it exists — prevent entre-
preneurs from coming together to speak with one voice over issues of immediate interest, it also reduces
the intellectual synergies so vital for a science-based industry.
PRIORITY ISSUES AND RECOMMENDATIONS TO SUSTAIN AND ENHANCE THE

LIFE SCIENCES COMMUNITY
The future of the Los Angeles Life Sciences cluster will be shaped by many factors including the suc-
cess of ongoing efforts to facilitate academia-industry interface, the quality and speed of new firm forma-
tion, ease of access to capital, success in creating shared spaces to anchor the industry, and the location
choices of cluster members. Unfortunately, as in the case of all industries undergoing fast technological
change, it is not easy to predict this cluster’s evolutionary pathway.
It is also unwise to look at existing regional models of success for guidance. The Los Angeles Region,
unlike some of its competitors, has a unique and very diverse industrial and social mix and lacks large firms
that have spawned multiple spin-off companies — a role played by Hybritech in San Diego and Genentech
in the Bay Area.6 So, too, with fewer biotechnologies having spun out of this region’s universities than in
other areas, firms have not, as of today, grown and coalesced in large numbers around these academic cen-
ters, resulting in the wide dispersal of Life Sciences companies over the six-county region. This lack of
proximity is only worsened by the region’s congested freeways and limited housing availability. It is also
obvious that — by comparison to competing regions such as the Bay Area, Boston and San Diego — com-
munity-building efforts in the Los Angeles Region are still at an earlier stage of evolution.
But history teaches us that regional success is a function, not just of the abundance of factors of pro-
duction (such as capital or labor), but also of the political and social will to discover and nurture unique
combinations of regional assets to build sustainable competitive advantages. The Los Angeles Region has
to invent its own evolutionary pathway — and this cannot easily or reliably be dictated by a top-down
industrial policy.
Build upon early successes and continue to promote the Life Sciences community in the Los
Angeles Region.
Local efforts to promote a sense of community are still at an early-stage of evolution. From the outside
the Los Angeles Region may appear to be devoid of a sense of community among its Life Sciences entre-
preneurs. But the coming together of more than 200 participants in the recent Los Angeles Region Life
Sciences Summit has shown otherwise. This summit has also demonstrated that there is willingness on
the part of companies in this region to participate and help in fostering the growth of the Life Science
industry.
There are specialized organizations serving various segments of the Los Angeles Region’s Life Sciences
industry sub-clusters. Groups and entities like the Life Sciences Industry Council in Orange County
(LINC), the Medical Marketing Association of Greater Los Angeles and Orange County (MMA),
BioBrew, VCBio, the Pasadena Bioscience Center, and the Los Angeles Chapter of the Society for Life
Science Professionals (ISPE) all play important and, often times, complimentary roles in meeting some of
the region’s Life Sciences community’s demands.
But, in response to the growing need for the community to come together and bring the weight of the
entire Los Angeles Region behind a common set of goals, the Southern California Biomedical Council
(SCBC) was spun out from Rebuild LA (RLA) as an active independent organization in mid-1997.7
According to Alfred E. Mann, Chairman of the SCBC and founder of numerous medical device and
biotech companies in the region, “the SCBC was created to give the industry a unifying voice and a source
of identity.” 8
Alfred E. Mann, Chair, Advanced Bionics, Chair, Southern California Biomedical Council,
Successful communities don’t just spring to life. They grow because they are cultivated. They draw their vitality from the
leadership and vision that inspire them. In the Los Angeles region, a small group has been instrumental in nurturing our
fledgling Life Sciences community into a world-class region.
They did it because they, like me, saw the value in reaching beyond our private needs to cultivate the larger community.
Our actions were, in fact, perfectly consistent with the larger mission of the Life Sciences industry. My newest ventures
aim to restore hearing to the deaf, help the blind see and the lame walk, and my greatest successes came from helping
improve the quality of life for heart patients and diabetics.
The Mann Institute at USC is an expression of this same drive. It first attracted notice for the size of its endowment, but
as it works to speed the commercialization of promising biomedical ideas I expect it to spawn a new generation of firms
in Los Angeles.
Similarly, the Southern California Biomedical Council has worked to systematically address the challenges facing our Life
Sciences community. Along the way, we have helped bring together people who, only a few years before, would never
have crossed paths – and as more of them join in, the life of our community grows richer.
In addition to offering educational forums, CEO roundtables, and networking events designed to bring
the Life Sciences community together, the SCBC organizes an annual investor conference to help area
entrepreneurs in tapping individual and institutional sources of funding. Participation in this forum has
helped a number of firms in their capital-raising efforts. Orqis Medical and Second Sight LLC are exam-
ples of firms that have benefited from the SCBC conference. Other organizations host investor forums
as well. For example, the LAEDC and Larta host the Annual Venture Forum to create opportunities for
entrepreneurs in Life Sciences and other technology-related industries to present their cutting-edge ven-
tures to investors.
A single representative organization can do much to advance the industry. One example of the way an
organization can be effective is to lobby local governments and improve land use issues. MiniMed’s
expansion in Northridge provides a case-study of changing attitudes by local governments towards the Life
Sciences industry.9 Recognizing the role of Life Sciences companies in adding high-paying jobs, and
prompted by the efforts of the SCBC, the City of Los Angeles – under Mayor Riordan — provided incen-

tives that facilitated the construction of MiniMed’s headquarters on 28 acres adjacent to the CSUN cam-
pus. This, in turn, enabled MiniMed to increase employment from 400 to about 1600 employees prior to
the company’s sale to Medtronic in 2001. The MiniMed expansion is an example of a successful public-
private partnership created in the Los Angeles Region.
This change of attitudes was also evident two years ago, when Mayor James Hahn of the City of Los
Angeles assembled a roundtable to seek advice on how to make the City of Los Angeles biotech-friendly.
The feedback the Mayor received centered on the need to overcome capital raising problems, create facil-
ities to accommodate startups, offer support for workforce training and ensure the availability of ameni-
ties, such as adequate housing. The Mayor expressed his interest in promoting biosciences “because it’s
about improving the quality of life, about extending life, and enabling people to live fuller lives with first-
class jobs.”10
Although large strides have been made in the past six years, the Los Angeles Region is still in its early
stage of developing a Life Sciences community. Perhaps Stephen Dahms, Executive Director of the CSU-
PERB, summarized it best when he said, “The successes have been apparent, but the need remains clear
and there is still much to do to create the community of Life Sciences businesses, and even more work to
be done to create the perceptions beyond Los Angeles that, in Life Sciences, this is indeed the place to be
in the future.”
Organize regular Life Science summits for continued dialogue among stakeholders.
The Los Angeles Region Life Sciences Summit in June of 2003 provided a unique and valuable oppor-
tunity for a wide range of people and organizations to get together and share ideas. Participants in the sum-
mit consistently voiced their interest in continuing the dialogue that the summit started. A similar event
should be held once a year to help the Los Angeles Life Sciences community continue its journey of
self-discovery. State government should work closely with local governments, economic develop-
ment agencies and a non-governmental industry organization that spans the entire region to host
these annual summits.
These summits should provide ample time for participants to network, discuss problems, investigate
solutions and share aspirations. In addition to providing a unique networking opportunity at the highest
executive and political levels, the summits can help the politically-fragmented Los Angeles Region in
avoiding parochial Life Sciences development strategies and deterring business poaching tactics sometimes
adopted by competing municipalities and sub-regions.
Future summits should address the action steps that have been taken in confronting issues raised in pre-
vious summits. To remain relevant, the summits need to produce tangible results, just as this action plan
is the result of the 2003 summit. To this end, coming out of the summits, action committees should be
formed to investigate issues and report back findings and recommendations at the next summit.
Rohit Shukla, President and CEO, Larta
There is a high degree of dissatisfaction among entrepreneurs—creators of wealth and opportunity—with the entrepre-
neurial environment for the Life Sciences in the Southern California region. All of the associated issues converge at the
level of the Life Sciences community: the lack of spin-off and spinout activity in the region, the lack of consistency (due
to multiple jurisdictions) in everything from incentives to workforce training, the confusing chorus of voices that suc-
ceeds in making us second-rate players with first-rate assets. While ‘superheroes’ like Al Mann can and do get started
here, they are the exceptions that prove the rule.
To encourage spin-offs (and startups), which are the lifeblood of a growing community, the leaders in large companies
must be committed to encouraging ventures in areas complementary to their own, and sometimes spun off (or out) from
their own. So long as our larger companies believe that encouraging intrapreneurial ventures is a zero-sum game, and
then fail to develop their own spin-outs, we will never succeed in building a wide and deep cluster of companies in the
field, whether in devices, biotechnology, or services.
These ventures also need a supportive infrastructure of organizations in all parts of the region committed to training
and exposure to best business practices, forums for presentation of their plans to committed investors (managed and
driven by the most motivated service professionals dedicated to building the industry and their practices), industry
roundtables, and an awareness of the pieces of the industry pie that are scattered throughout. If these forums and
roundtables are consistent in look and feel between all of the Life Sciences organizations, more (and better) entrepre-
neurs (and even stealthy intrapreneurs) will be forthcoming.
The organizations also need to work together, again on a common front, to tackle the maze of jurisdictional regulation
that threatens wealth creation and economic growth – whether on big single issues like workers’ compensation or on
the plethora of zoning and incentive packages available in the region. And they need to incorporate the diverse work-
force training programs into a simple, easily accessible program for which they can all take responsibility. A similar pro-
posal in San Diego is likely to pass, with BIOCOM being the managing organization.
The point is this: Life Sciences organizations that currently exist – especially membership organizations – need to work
together on a common set of priorities. When this happens, the industry in the region will then be truly able to repre-
sent itself as a community.

As the Life Sciences community in the Los Angeles Region evolves, it will provide both immediate and
long-term benefits for community members and also increase the overall economic strength and compet-
itiveness of the region. A vibrant community will inevitably spark new ideas and business opportunities.
This, in turn, will help in, not only generating wealth and more high-paying jobs, but also in utilizing the
region’s reservoir of knowledge in improving the health of people everywhere.
Finally, while the Los Angeles Region may always be thought of as the entertainment capital of the world
by the layperson, a stronger sense of community could generate a very positive image for this region in the
minds of Life Sciences decision makers around the world. That image would lead more companies to
consider the Los Angeles Region as a location for new investment opportunities and will cause Life
Sciences professionals to select the Los Angeles Region as a place that can provide ample opportunities to
develop a long, fruitful career. Both results carry significant benefits for the region’s economy and pres-
tige as a whole.
THE STRATEGIC PLANNING PROCESS
appendix a
In early 2003, the Governor’s Office approached Monitor Group to organize a process to write a 10-year
strategic plan for the Life Sciences in the Los Angeles Region, much in the same way Monitor Group did
for the Bay Area. To accomplish this goal, the team set out to first get input from industry, academic and
government leaders focused on the Life Sciences industry.
The first step to capturing the voice of the industry was to organize a Life Sciences Summit for the area.
A broader team that included members of the Office of the Governor of the State of California, Larta and
IEtechSource was created to design and organize the summit. A Blue Ribbon Steering Committee con-
sisting of 18 of the industry’s top regional leaders was formed to help provide insight and vision. Each
member of the Blue Ribbon Steering Committee was interviewed to provide input and direction on the
issues facing the region.
The Los Angeles Region Life Sciences Summit was held on June 19, 2003. Over 200 industry, academic
and government leaders attended the summit. Attendees were divided into breakout sessions to discuss
specific issues identified by the Blue Ribbon Steering Committee as the most critical concerns for the
region. During the breakout sessions, moderators lead discussions to identify the most important issues
facing the cluster and potential action recommendations. These recommendations were then presented at
the end of the summit.
To supplement the Blue Ribbon Steering Committee interviews and the summit findings themselves,
additional interviews were conducted to refine the summit recommendations. In total 40 in-person inter-
views were conducted to generate the insights and recommendations used to create this strategic plan.
The Clusters of Innovation Regional Survey is a comprehensive diagnostic tool used to assess the com-
petitiveness of a particular region’s local business environment. The survey was sent out to all of the sum-
mit participants. The findings provided further quantitative evidence of the importance of issues raised.
After collecting the insights and recommendations from the industry, the team employed the Clusters
of Innovation theory as a basis for framing its critical choices. This framework, which is described in
greater detail in Appendix C, was used as a guide for defining the Life Sciences cluster and for structuring
choices relating to prioritizing investments, allocating resources and planning for growth.
Initial outlines of the action plan were discussed with several key members of the industry. Feedback
on drafts of the plan by selected industry, academic and government leaders was incorporated into the
final version.
APPENDIX A: THE STRATEGIC PLANNING PROCESS 37

SELECTED SOURCES
appendix b
Biomedicine: The Next Wave for Southern California’s Economy
California Healthcare Institute
California’s Bioscience Industries: Overview and Policy Issues

Assembly Member Howard Wayne, Chair of the Assembly Select Committee on Biotechnology
Clusters of Innovation: Regional Foundations of U.S. Competitiveness

Michael E. Porter
The Monitor Group
Council on Competitiveness
Heart of Gold: The Bioscience Industry in Southern California

Larta
Israeli Biotechnology Strategy Project: Realizing our Potential

The Monitor Group
MassBiotech 2010: Achieving Global Leadership in the Life Sciences Economy

Massachusetts Biotechnology Council
Signs of Life: The Growth of Biotechnology Centers in the U.S.

The Brookings Institution
Center on Urban and Metropolitan Policy
Taking Action for Tomorrow: Bay Area Life Sciences Strategic Action Plan
Office of the Governor of California
Bay Area Council
Bay Area BioScience Center
The Monitor Group
Technology Innovation Index

Larta
38 APPENDIX B: SELECTED SOURCES

CLUSTERS OF INNOVATION THEORY
appendix c
The working team employed the Clusters of Innovation theory as a basis for defining the Los Angeles
Region’s Life Sciences cluster and for structuring such choices as those relating to prioritizing investments,
allocating resources and planning for growth. In addition, the working team drew on learning derived
from the Monitor Group’s experience in the area of regional competitiveness. It leveraged the knowledge
of the participants on the working team regarding the development and evolution of industry clusters and
the forms of intervention that positively and negatively influence them.
Conventional thinking places clear boundaries between industries and focuses exclusively on an indus-
try’s internal structure and dynamics as the space for competitive advantage. Cluster thinking does not
disregard the relevance of the “inside” of an industry, but broadens the terrain for competitive advantage
to capture cross-industry linkages. The broader cluster approach to Life Sciences recognizes and places
value on the cross-industry interactions among multiple constituencies in the Life Sciences cluster, its
inputs, related industries, buyers and government (Exhibit 16).
Exhibit 16: Determinants of a Regional Business Environment
APPENDIX C: CLUSTERS OF INNOVATION THEORY 39

The broad perspective enabled by the idea of clusters permits a comprehensive understanding of the
prosperity of a region. At a high level, prosperity depends on a region’s ability to create a business envi-
ronment that fosters innovation and productivity (Exhibit 17). Strong, competitive clusters are a critical
component of a good business environment and are the driving force behind regional innovation and ris-
ing productivity. Clusters allow companies to operate more productively in sourcing inputs, accessing
information, technology and needed institutions, coordinating with related companies, and measuring and
motivating improvement. Clusters allow each member to benefit as if it had greater scale or as if it had
joined others without sacrificing autonomy.
Cluster theory implies that the four key determinants of a region’s business environment must be con-
sidered as the region plans for its future success. However, it is important to note that the theory recog-
nizes the unique nature of each cluster. Thus, the four determinants have differing degrees of relevance
depending on the cluster and region in question.
In the Life Sciences cluster, the primary determinant of the regional business environment is factor or
input conditions (Exhibit 16). The quality of specialized inputs and related conditions are particularly
important to the success of the Life Sciences. This action plan focuses on the following three factors as
priorities for the Los Angeles Region: Technology Commercialization, Cost of Doing Business, and
Workforce and Training.
The additional determinants are the Context for Firm Strategy and Rivalry, Demand Conditions, and
Related and Supporting Industries. Context for Firm Strategy and Rivalry refers to the “rules, incentives,
and pressures governing the competition in a region.” The presence of rivals creates healthy competition
between local firms. The quality of Demand Conditions has “a strong influence on the process of creat-
ing and improving products and services.” These Demand Conditions are present to the extent that
sophisticated local customers create an efficient feedback mechanism to catalyze innovation. Related and
Supporting Industries stimulate the efficient communication and flow of ideas within and across clusters
(Exhibit 16).
Exhibit 17: Prosperity Chain
CLUSTERS OF INNOVATION SURVEY:
SELECTED RESULTS
appendix d
Exhibit 18: Availability of Factor Conditions
APPENDIX D: CLUSTERS OF INNOVATION SURVEY, SELECTED RESULTS 41

Exhibit 19: Firm Location Factors
Exhibit 20: Barriers to Firm Expansion
APPENDIX D: CLUSTERS OF INNOVATION SURVEY, SELECTED RESULTS 43

Exhibit 21: Priorities for Government
endnotes
1. Andreas Ekman, Consul General, Sweden and Tal Finney, Interim Director, Governor’s Office of
Planning and Research, Sacramento, CA, Sweden + California: Partners in Biotechnology,(Los
Angeles, CA. Summer, 2003: 1-23, plus Appendices.
2. Economic Development Department.
3. Brookings Institute 2002; Larta.
4. CTTCA.
5. Economic Development Department.
6. “Alumnus of Genentech, Chiron, Cetus Make Bay Area the Capital of Biotech Industry,” San
Francisco Chronicle, April 2, 2001.
7. Rebuild L.A. (RLA) was a non-profit corporation formed immediately after the L.A. civil disturbances
of April 29-30, 1992 to restore the economic health and vitality of Los Angeles. Information about
RLA can be found on the web at: http://lib.lmu.edu/special/csla/rla/rla_hist.htm.
8. For a concise statement on the SCBC mission, see: “Nurturing LA’s Biomed Industry: Challenges and
the Road Ahead,” Biomedical Synergies, Vol. II, No. 2, Summer/Fall 1997.
9. “The MiniMed/CSUN Partnership: A New Center of Los Angeles’ Knowledge-Value Economy,” San
Fernando Valley Business Journal, October 5, 1998. See, also, “University-Related Research Parks
Offer Device Firms a Range of Benefits” Medical Device & Diagnostic Industry, September 1998.
10. “L.A.’s New Mayor Zeroes in on Biotechnology at USC,” USC News and Features, July 20, 2001.
LOS ANGELES REGION LIFE SCIENCES STRATEGIC PLAN: Taking Action for Tomorrow 45
NOTES
OFFICE OF THE GOVERNOR
MONITOR GROUP

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TAKING

OFFICE OF THE GOVERNOR

For all of our region’s leading companies and world-class

MONITOR COMPANY GROUP, L.P.

Joan Chu Matthew Le Merle

David Baltimore Jeffrey D. Linton

David Baltimore* Michael A. Friedman

* member of the Blue Ribbon Committee

Robert A. Koch William J. Rich

* member of the Blue Ribbon Committee

Agensys California State University, San EpiGenX Pharmaceuticals

Beckman Coulter Center for Neuromorphic Systems Hanson Research Corporation

BioCatalytics Engineering Hardy Diagnostics

BioDiscovery Central Coast Biotechnology Center I/O Software

Bio-Financial Consulting cFour Partners IEtechSOURCE

Bio-Safe America Chemicon International Inland Empire Economic Partnership

BioZak City of Hope InTouch Health

Birch, Stewart, Kolasch & Birch CMTC IntraTherapies

Boone Fetter Coastview Capital, LLC ISCA Technologies

British Consulate General Cognisys Keck Graduate Institute

Macropore Biosurgery Regenesis Bioremediation Products

MannKind Corporation Santarus

Materia Second Sight

Maven Technologies Senator Jack Scott

MaXim Biosystems Silicon Valley Bank

Miravant Medical Technologies Skymetrics

Monitor Group Southern California Biomedical Council

Monitor Ventures State of California, Employment Training Panel

Morrison & Foerster Symbion Research International

Nanostream Technolink Association

NASA Commercialization Center TechTran

National Childhood Cancer Foundation Telemeducation

NeoStem The Bellwether Group

Newport Medical Instruments The Regulatory Consultants

Orange County Business Council Tinnitus Mitigation Systems

Pacific Venture Group TKB International

Pasadena Area Community College District UC Davis CONNECT

Pasadena Bioscience Center University of California

Pasadena Entretec University of California, Irvine

Pathway Diagnostics University of California, Los Angeles

Perkins & Will University of California, Riverside

Pierce College University of California, Santa Barbara

Preston Gates & Ellis University of Southern California

PricewaterhouseCoopers Vasgene Therapeutics

ProLacta BioScience Veeco Instruments

Proneuron Biotechnologies Venture Coast Biotechnology Institute (VCBio)

Protein Pathways Versant Ventures

Public Policy Institute of California ViaLogy

Pyro Pharmaceuticals William Sproule & Associates

QuantumCorp Workforce Strategy Center

Ramus Medical Technologies Xencor

Introduction: A Life Sciences Strategic Action Plan . . . . . . . . . . . . . . 1

1. Enhancing Technology Commercialization . . . . . . . . . . . . . . . . . . . 9

2. Lowering the Cost and Difficulty of Doing Business . . . . . . . . . . . . 19

3. Developing and Improving Workforce Efficiency . . . . . . . . . . . . . . 25

4. Strengthening the Regional Life Sciences Community . . . . . . . . . . 31

A. The Strategic Planning Process . . . . . . . . . . . . . . . . . . . . . . . . . . 37

C. Clusters of Innovation Theory . . . . . . . . . . . . . . . . . . . . . . . . . . 39

D. Clusters of Innovation Survey: Selected Results . . . . . . . . . . . . . 41

Human resources are a critical component of a region’s sustainable competitive advantage,

THE LIFE SCIENCES CLUSTER

Exhibit 1: The Life Sciences Cluster Definition

INTRODUCTION: A LIFE SCIENCES STRATEGIC ACTION PLAN 1