Industry Leaders Share Optimism About Region’s Life Sciences Economic Prospects Amid Recession Fears BioBuzz

BioBuzz by Workforce Genetics

I-270 Innovation Labs Hosts MD Commerce Secretary Mike Gill and a Panel of Industry Leaders to Discuss the Economic Outlook for the Biohealth Capital Region

It’s no secret that a recession could hit the United States before the end of the year. No one knows for sure yet, and many economists believe that the current record inflation and financial market distress are symptoms of what could be a major economic downturn,

The possible effects have already hit biotechnology and life sciences. To discuss how the Biohealth Capital Region would fare in the event of a potential recession and whether it could actually avoid one, I-270 Innovation Labs brought together an outstanding group of regional experts from all key sectors related to both industries.

Luis Rugeles, CEO of I-270 Innovation Labs, moderated the roundtable, which was hosted at their Frederick, MD facility on September 27, and sponsored by BioBuzz, Workforce Genetics, St. John Properties, BaneBioand 1UP IT Consulting.

Attendees were a mix of executives and leaders from across the Biohealth Capital Region. Some of the notable guests included Maryland Secretary of Commerce Mike Gill, who also served as a panelist; Heather Gramm, assistant secretary for business and industry development; and Jessica Fitzwater, Frederick County Council Member and Frederick County Executive Candidate.

In a welcome speech, Fitzwater thanked I-270 Innovation Laboratories for hosting this important and timely discussion and noted the region’s rapid rise in biotechnology and life sciences, as well as the unique success of Frederick in the north end anchorage of the I-270 corridor. She went on to highlight her commitment to continuing to foster well-paying jobs and industry growth, should she be elected as the next county executive in November, and her desire to engage and work with industry groups. important and key emerging such as the I-270 innovation labs.

Rugeles kicked off the discussion by outlining the current state of the economy both globally and regionally while noting that while the stock market has fallen significantly in value, biotechnology has fallen even more, sometimes being worth less than their money. at hand. From there, he then asked the panelists questions ranging from their current and future outlook for the region, what they see in each of their sectors, and what advice they would give leaders and entrepreneurs regarding navigation in these uncertain times. .

Overall, the panel was largely optimistic about the future of the region, particularly in the long term, although somewhat less so in the months ahead.

RELATED: Commerce Secretary Tours New I-270 Innovation Labs, Flexible Lab Space Meeting Critical Industry Needs

Workforce development was one of the topics discussed by the panel. Fitzwater had mentioned ongoing efforts to collaborate across educational institutions to bolster the talent pool required by the region’s projected growth, and many panelists pointed to the employment and job openings as good indicators of both a possible recession and subsequent recovery.

“The compelling metric for us is employment data, because employment translates into headcount which translates into square footage and space requirement. And when you look at how we compare here in Maryland to other regions, we look great,” said Pete Briskman, JLL’s executive general manager and co-head of their life science practice. He also mentioned that lab vacancies have been very low, reflecting constant demand.

Chris Frew, CEO of Labor genetics and the founder of BioBuzz, said there haven’t been many layoffs in the area yet. While job seekers can now have more influence on businesses than in the past, BHCR is still well placed to attract new talent to the region when needed. Moreover, the mission-driven focus of the biotech industry will not disappear in a recession.

“In 2009 we experienced a recession of high unemployment, but I see the factors impacting our industry very differently now in 2022-23. This will more likely produce a potential recession with continued employment levels in the life sciences. It will be more of an economic downturn than a labor downturn,” Frew commented. For his part, Rugeles asked if this was the result of pandemic-induced changes in the labor market, such as noted elsewhere, and Frew said he definitely sees that dynamic in play.

Doug Bane, CEO of BaneBio and co-founder of I-270 Innovation Labs, also said the current landscape reminds him of when he started his company in 2009. Coming out of a major recession, companies are scrambling for any equipment inventory. they could get their hands on it. One difference, he said, is that businesses aren’t going bankrupt right now and entrepreneurship is still rampant.

Sarah Miller, vice president of economic development at BioHealth Innovation, also commented on entrepreneurship. According to Miller, supporting entrepreneurs, especially during a recession, can help the region pave the way for continued growth after it ends. She cited Boston as an example of a city that continued to boost entrepreneurship during the 2009 recession.

RELATED: How to prepare now for possible layoffs in biotech

“I was working in Montgomery County during the last, great recession, and one of the things that we didn’t do well was we were too nervous as an administration to really think about this as an opportunity to stimulate entrepreneurship,” she commented. .

Panelists also pointed to the presence of federal agencies in the region as firm assurance that funding will continue to flow to Capital Region biohealth businesses, albeit not to the same extent as in the past. peak of the COVID-19 pandemic.

“Uncle Sam is likely to want to increase spending if the economy goes into a recession, and the way they do that is to give more money to government contractors who are doing a good job. A lot of that money is being deployed here in the capital region,” said Matt Holbrook, regional partner for St. John’s Properties. “So I think even if the storm clouds are dark going forward, they’re softened for us here, as proven by previous recessions that we have all experienced.”

Of course, most experts don’t expect the coming year to be as fruitful for business as it has been for the past two years. Michael Caspani, managing director of BroadOak Capital Partners, wondered if companies would be able to sustain the growth they’ve had during the pandemic and if they would be able to find new applications for their new capacity.

However, he pointed to the growing need for innovation in the biotech space combined with increased NIH funding and plenty of cash in investment funds – aka “dry powder” – in the region as proof of the reason for which biotech companies, new and old, will continue to find local support.

After the panel, Rugeles said it was reassuring to hear someone like Caspini talk about a significant amount of dry powder available in the region. “There are certain challenges, like how to convince these people to invest in you, especially in a recession,” he said. “But at least the money is there.”

Rugeles also noted how fortunate the region is to have high-quality resources, such as the Maryland Tech Council’s Business Continuity Task Force, available to help executives and entrepreneurs navigate these complex dynamics. . Brad Fackler, their VP of Life Sciences and task force member, explained how everything fell into place when the pandemic hit and how it is still helping many organizations in the region. He also highlighted some of the recommendations made by the Milken Institute, which would help prepare the region for better performance and future crises.

Commerce Secretary Mike Gill, a self-proclaimed optimist, said he doesn’t expect things to continue on the trend they have been. But he also doesn’t see sluggish business as the worst outcome.

“I think things are going to be flat. I think everyone should anticipate that they are going to be flat and if they are better, good for you,” Gill commented. “So pay attention to detail. Don’t stretch beyond what’s reasonable and we’ll get through 2023.”

Rugeles ended the panel by noting that the region’s resilience seemed to be the common factor linking most of the panelists’ responses, then asked each of them to share what indicators they will be looking at in order to identify the start. of the next phase of growth.

“To take advantage of opportunities, you have to be ready, and also know when the tide has turned,” he added.

Watch the full roundtable on our YouTube channel: https://www.youtube.com/watch?v=BSTApkHDjBg

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