The Kansas City region has made strides in the past decade toward becoming a major life sciences industry hub, but to keep growing it’s going to need a better educated workforce and $100 million or more in new venture capital.
So says the Kansas City Area Life Sciences Institute, which released a new report Wednesday on what it will take to keep the region competitive in biotech over the next 10 years.
“If we do nothing, yes, we’ll grow, but we probably won’t attract entrepreneurs and investors,” said institute president Wayne Carter, whose nonprofit group represents the region’s research universities and hospitals.
The report by the Deloitte financial consulting firm said the Kansas City region has a number of strengths in the life sciences, notably health care information technology with industry giant Cerner Corp., along with several startup companies and the Animal Health Corridor of research institutions and businesses extending from Kansas State University in Manhattan to the University of Missouri in Columbia. Already a major national presence, the corridor is poised for greater prominence when the National Bio and Agro Defense Facility opens in Manhattan in 2021.
With strong programs at the University of Kansas, University of Missouri, St. Luke’s Hospital and Children’s Mercy Hospital, research into cancer and neurological disorders holds great promise, the report said.
But the report also warned that the region has significant weaknesses that threaten future growth if not addressed.
With just 9.3 percent of residents holding college degrees in science, technology, engineering or math, Kansas City trails other cities for high-tech talent. High school students in Kansas and Missouri also are less likely to score well on Advanced Placement exams in calculus and biology than students nationwide, boding poorly for the future.
Life science businesses are able to recruit from other parts of the country, but not having enough homegrown talent is an impediment to development, Carter said. People brought in from outside the region also are less likely to remain here long term, he said.
Despite its reputation for entrepreneurship, the Kansas City area falls short on venture capital and angel investors, the report said. Even taking the size of their economies into account, Kansas and Missouri get just a small fraction of the venture capital investment of major biotech states like Minnesota, Washington and Massachusetts.
The report cites the Kansas City region’s risk-averse business climate and potential local investors with no experience in biotech industries for holding back investment.
To spur life sciences investment, Kansas City will need a venture capital fund of $100 million or more, Carter said.
“That’s an absolute requirement.”