Four years ago this spring, I was on a Qantas jet coming into Melbourne, Australia. I had no idea what to expect other than I wanted to see some kangaroos and taste the national delicacy known as Vegemite. I saw the former (mobs of kangaroos roam around the edges of the city like deer do here) and tasted the latter (not eager to do it again, either. Sorry, mate.). I also went to Australia with a typical American idea that I was coming from the most advanced nation in the world and came back chastened that maybe we’re not.
The first thing that struck me was the Melbourne skyline, a gleaming mass of towers that all looked as if they’d been built in the past 10 years. Melbourne immediately gave off the vibe of a city where things were happening.
These memories of Melbourne came flooding back recently as I read a 136-page report on the world’s life sciences economy, and not just because I needed a distraction from all the charts and graphs. We’ve heard a lot lately about how the Roanoke Valley is building a cluster of life sciences businesses, many of them spinning off from the research at the Fralin Biomedical Research Institute at VTC. Here’s an amazing statistic: Roanoke now attracts more research funding – $180 million – than all of its official 15 peer cities put together. Keep in mind this institute is just a dozen years old, having been founded in 2010. Where not long ago there was an industrial brownfield, there is now a brand new economy taking shape. This is the new Roanoke. Roanoke doesn’t quite realize yet what is happening down at Riverside Circle. Some locals may still think of this as the place across from the old Victory Stadium, but, increasingly, people from around the world are starting to recognize it as a hotspot for brain research. I’m not kidding about the around the world part: The institute recently hosted something called the international Precision Neuroscience Conference. It drew 140 people from four countries. Now try to imagine where this is going. The budget that the General Assembly just passed includes $15.7 million to build life sciences labs in the city – think of this as a modern-day industrial park. Roanoke is at the beginning of something big. The only question is how big?
That led me to StartUp Genome. That’s a San Francisco-based nonprofit that studies startup ecosystems around the world. Conveniently, the group produced a report last October on the global life sciences ecosystem. I didn’t expect to find Roanoke listed, and I wasn’t disappointed. But I did find an extensive section on Melbourne, and how it’s become a global center for life sciences. What are the lessons from other cities listed in this report that we can apply here at home?
Some are so obvious that they are almost tiresome to repeat. A talented labor pool market. Universities matter because they help produce that labor pool. That’s a lesson from Melbourne, from Boston, from Silicon Valley, from everywhere, really – and not just with life sciences. That seems a lesson we’re already applying. Virginia Western Community College recently announced it’s launching a biotechnology program in fall 2023, with an eye toward training the lab workers that Roanoke will need to support this growing sector. This summer, the school is hosting elementary, middle and high school teachers “to advance their knowledge of biotechnology so they can then incorporate biotechnology into their STEM curriculum and introduce elementary and secondary students to biotechnology learning and career opportunities.” We always need to remember that our economic competition isn’t just in North Carolina or Georgia, it’s sometimes on the other side of the world. The report says that Seoul, South Korea, “plans to train 1,600 technologists annually” to work in the city’s life sciences labs.
Another city on the other side of the world kept coming up, though: Melbourne. It’s not the top city for life sciences companies – that’s universally acknowledged to be Boston. It’s not the top for startups – that’s Silicon Valley. But Melbourne is unusual in the life sciences sector in that it’s not in North America. We may worry about China out-competing us in some fields, but this is a field where the United States dominates. Startup Genome says that eight of the top 10 ecosystems for life sciences are in the United States. The only two non-American cities to make the top 10 are London and Shanghai. Melbourne ranks No. 24 but is moving up fast. Only three cities in the world have two or more universities that are in the global top 30 biomedicine rankings. Boston and London are the others – Melbourne is the third. Melbourne also claims to have 10,000 medical researchers working in one square kilometer, or about 247 of our acres. (Downtown Roanoke is about 117 acres, so imagine about 5,000 medical researchers in downtown Roanoke or 10,000 between downtown and South Roanoke and you have some sense of Melbourne’s life sciences density.) Not all the start-ups in Melbourne are in life sciences (or biotech, or healthtech, the terms seem interbut about 20% are, according to Startup Genome. That’s more than in any other sector.
Melbourne is also unusual in that it seems to have been very intentional about trying to build a life sciences sector. “Melbourne is one of the few places in the world that has prioritized the development of the life sciences sector,” reports the Indian-based website Your Story, which covers entrepreneurship. “Putting its full weight for the development of the sector, the state government has invested billions of dollars to create a strong and holistic research ecosystem.”
So the obvious question: If Melbourne is rising as a global star on the life scenes scene, how does Roanoke compare? Can we compare a city of more than 5 million people to a metro area of roughly 315,500? In some ways, obviously not. I’ve been congratulating the General Assembly for ponying up $15.7 million for life sciences labs in Roanoke. Great! But there are five such projects underway in Melbourne. Roanoke has RAMP – the Regional Accelerator and Mentoring Program – to help grow startups. Through 2021, it has nurtured 31 businesses. In and around Melbourne, LaunchVic expects more than 3,000 startups by next year. Melbourne can make our efforts seem pretty puny.
If we really want to compare and contrast the life sciences sectors in Melbourne and Roanoke, though, we need to look at the state level. This feels like a better comparison. Melbourne obviously dwarfs Roanoke but the surrounding Australian state of Victoria, with a population of roughly 6.7 million is slightly smaller than Virginia, which is home to 8.67 million people.
Now, it’s hard enough to compare one American state government with another – so many different circumstances – so it’s doubly hard to compare ours with one in Australia. More than three-quarters of Victoria’s population is in Melbourne (for all the romanticization of the Outback, Australia’s population is very urban), so Victoria is basically a city-state. As a result, it probably doesn’t have to pay for an extensive rural road system like ours. And that also means that Melbourne’s economy is probably the No. 1 priority of the Victorian state legislature. I don’t need to tell you that Roanoke’s economy hasn’t always been the No. 1 priority for the Virginia General Assembly (although the most recent state budget does seem mighty generous). Still, some comparisons between here and Australia might be useful just so we can see what others are doing.
In 2016, Victoria founded LaunchVic, an independent state agency “to drive the long-term success of Victoria’s startup ecosystem,” according to its annual report, and, in particular, create more high-wage jobs. To that extent, LaunchVic sounds roughly similar in mission to our GO Virginia economic development initiative, which also has the creation of more high-wage jobs as its pole star. (Random fact: There is no pole star in the Southern Hemisphere.) LaunchVic began with $43 million over four years (it was $60 million in Australian dollars but I’ve converted everything to U.S. dollars); GO Virginia began with $86.5 million in a single budget so Virginia beats Victoria on that score.
LaunchVic isn’t the biggest state-sponsored initiative in Victoria, though. In 2020, the state set up the Breakthrough Victoria Fund with a pledge of $2 billion ($1.44 million in our dollars) over 10 years, or $200 million ($144 million to us) a year. Its goal is to “support research and development adoption and commercialization outcomes across Victoria,” whether from startups or existing businesses. Breakthrough Victoria sounds exciting, and it certainly sounds big. But it’s not necessarily bigger than things happening in Virginia.
Virginia has its Virginia Innovation Partnership Corporation, which seems to serve much the same function as the Breakthrough Victoria fund, just with a less snappy name. The VIPC began life back in 1985 as the Center for Innovative Technology, which was charged with commercializing a lot of the research taking place at Virginia universities. In 2020, the General Assembly consolidated the old CIT with some other state programs into the VIPC. The VIPC essentially serves as an early-stage investor to help jump-start Virginia-based start-ups. We often hear certain American politicians say that for the economy to prosper, government just needs to get out of the way, and certainly that’s a tempting philosophy. That’s not how our competitors are doing things, though. If Virginia wants more start-up businesses, then we need to do something to make sure that happens. And Virginia is: Since 2005, VIPC and its predecessors have invested $36.5 billion into 264 companies, generating 9,200 jobs.
It sure sounds to me like Virginia is outdoing Victoria by several orders of magnitude on this score. We just don’t necessarily see this because a) a lot of these jobs aren’t in our part of the state and b) VIPC doesn’t exactly send out a lot of press releases. Its predecessor, CIT, was sometimes criticized for not paying much attention to any place outside Northern Virginia. I don’t know if that’s so or not; that was then, this is now. What I do know is that VIPC has funded multiple companies in Southwest and Southside.
VIPC operates multiple programs, but the easiest and clearest to focus on is the Commonwealth Commercialization Fund, which is exactly what it sounds like.
Out of 34 awards so far this year, 16 have gone to firms in Northern Virginia, seven to Richmond, three to companies in Montgomery County (Corvus Labs, CytoRecovery and Enabled Manufacturing), two to companies in Roanoke (Chorda Pharma and ArchiveCore) – and one apiece to companies in Floyd County (Daily Sensors), James City County, Nelson County, Norfolk, Salem (Autonomous Flight Technologies) and Winchester.
Of 34 awards in 2021, 12 went to Northern Virginia, 11 to Charlottesville/Albemarle County, four to Richmond, two to Hampton Roads, two to the New River Valley (Li Industries in Montgomery County and MOVA Technologies in Pulaski), two to Roanoke (BEAM Diagnostics and Itus Digital) and one to Lynchburg (3 Ridge Technologies).
Of 30 awards in 2020, six went to Charlottesville/Albemarle County, four to Northern Virginia, five to the New River Valley (Cowden Technologies, Eksdyne, Li Industries and Techulon, all in Montgomery County, plus GATACA in Giles County), four to Hampton Roads, three to Richmond, two to the Roanoke Valley (a Virginia Tech project registered in Roanoke and Micro Harmonics in Botetourt County) and one to Accomack County.
Of the 39 awards in 2019, 12 went to Northern Virginia, six went to Richmond, six went to Hampton Roads, five went to Charlottesville, four went to the New River Valley (AVEC, Eksdyne and VoltMed in Montgomery County plus MOVA Technologies in Pulaski), four to the Roanoke Valley (BEAM Diagnostics and two Virginia Tech projects registered in Roanoke, plus Micro Harmonics in Botetourt County), and one apiece in Staunton and Accomack County.
If you add all these up, we get a pretty good map of the innovation sector in Virginia. What I notice: Over two and a half years, projects in the New River Valley (10) outnumbered those in Hampton Roads (six). And, of course, the absence of projects from Southside and far Southwest Virginia (although there have been projects in both those places that received other funding in other years). Ultimately this map reflects the reality on the ground – VIPC can’t fund things that don’t exist. Notice, too, how many are based in places where there are major research universities. That’s another way that Southside and Southwest come up short (outside the Roanoke and New River valleys).
But now to bring this back home. Five of the 17 projects in the Roanoke and New River Valley funded this year are life sciences-related – 29%, or a little higher than the percentage in Melbourne. (Many of the others are transportation-related, so fit into what I’ve written previously about the growth of a transportation cluster in the New River Valley). Here’s another way to measure it: Of the 36 life sciences awards made in the past four years, six have been in the Roanoke and New River Valley — about 17%, so slightly lower than Melbourne’s percentage. By either measure, it seems we are pretty comparable to Melbourne, similar percentages, just at different scales. And on the statewide level, Virginia seems to be outdoing Victoria in terms of trying to grow new businesses– it’s just that Virginia’s successes are spread across the whole state, while Victoria’s are concentrated in a single city.
So, no, Roanoke is not going to become Melbourne. Melbourne is too big and Roanoke is too small for that. Proportionately, though, Roanoke seems to already be doing many of the things Melbourne is doing – and Virginia is outdoing the things that Melbourne’s state government is doing. Often when I write these examinations of the cities, it feels we’re lagging behind in some ways. Not so much here. We could always do more, of course, but we have no reason to feel we’re coming up short.
That said, if anyone wants to make a fact-finding trip Down Under to make sure, I’m more than happy to tag along.