LANSING – Gov. Jennifer Granholm’s $2 billion bond proposal is critical for the state to build a presence competitively in the life sciences and high technology industry globally, MichBio executives as well as officials from Oakland County and Michigan Technological University said Wednesday. But some said the proposal, in the end, may not be enough.
In a press conference, and before the Senate Commerce, Labor and Economic Development Appropriations Subcommittee, the executives said it is critical for the state to have a significant investment program in place to attract new companies and more private investment funds.
“If you don’t do it, there’s no point to a road program because you’ll have grass growing in the roads,” said Randal Charlton, CEO of Asterand in Detroit.
“$2 billion is probably not enough,” said Rob Risser co-founder of Picometrix Incorporated of Ann Arbor, which this month merged with Advanced Photonics of California, especially when considering the 10-year payout of the funds for investment.
“It’s important that it’s an enormous number to set Michigan on the world stage, saying we are serious,” said Charlton. “I wouldn’t, at this stage, want to nickel and dime it” because big investment companies in Europe and Asia that want to come into the U.S. market will take notice.
Public assistance at the early stages of research-based corporations is critical because the development and commercialization of products in the life-sciences and high-tech industries is extremely expensive. Charlton said his company, which has now reached the break-even point, needed assistance through universities for incubation services and to acquire equipment at academic prices.
David Zimmerman, a former Pharmacia worker who created a new company, Kalexsyn, said that while he wanted to remain in the Kalamazoo area, his firm and others are being recruited repeatedly to move to other states.
And he said firms like his are “not the most attractive from the traditional banking standpoint” for financing. So the chance to get state funding is critical, he said.
They also said that it was important for the state to be able to take direct equity positions in the companies to help boost the state’s return.
Dennis Toffolo, deputy Oakland County executive, said the proposal at the $2 billion level is strategic, and it is needed to help the state and counties like his capitalize on efforts to attract emerging industries to replace jobs lost in the manufacturing sector.
“I can’t compete in the global marketplace without more funds,” he said of county efforts to bring in companies based in other states and countries. “We’re out there but we need the tools if you want us to compete.”
Pat Kelly, vice president of communications for the Van Andel Institute in Grand Rapids, which just announced it is tripling its size to about 600 employees, said the health research center is “100 percent committed to expanding the state’s economy through the life sciences industry. A bond issue will be an improvement of where we currently are in life science investments.”
He did not have a position on how large the bond proposal should be, and expressed some concern about how much would be allocated to various industries.
David Reed, vice president for research at Michigan Tech, said research universities need additional support to attract and retain “world-class” faculty and expressed concern that at $2 billion the proposal may be undercapitalized. “We need to move research to the marketplace and the bond can help companies survive,” he said.
Sen. Valde Garcia (R-Howell), chair of the subcommittee, said the panel would be making decisions in the next few days on the size and scope of the bond proposal and whether to put it to voters at all. Granholm had proposed it be placed on this year’s November ballot.
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