Knock Down the Bio-Barriers Before They Stunt Growth

Anyone in business knows that little things matter. When enough little things go wrong, you can find yourself mired in big problems. That’s what bothers me about some recent developments on the biotechnology and life-sciences front in the Kansas City region. None of them appears to present an existential threat to the spectacular success this region has achieved in biotech and life sciences growth over the past decade.

There are, however, a few nagging issues emerging on this front that bear pointing out, and on both sides of the state line:— Although Gov. Jay Nixon has authorized $4 million after legislative approval of the Missouri Science and Innovation Reinvestment Act last fall, it’s fair to question whether that’s a big enough first step to create critical mass badly needed on the Missouri side, in general, and in the Kansas City region, in particular. For an incumbent trying to make job creation a center-piece of his campaign, doesn’t it make sense to give this more oomph?

— A related concern lies with the Missouri Technology Corp., the public-private agency that will administer MOSIRA funding. Life-sciences company executives in the Kansas City area have privately expressed concerns about the geographic tilt of the MTC’s 15-member board, which boasts seven representatives from the St. Louis area. The greater KC area contingent, by contrast, has three—from Liberty, Independence and a distant St. Joseph. That’s fewer than the combined representation of the Columbia-Jefferson City corridor. I think it’s also fair to ask how any geographically proportionate distribution of funding will occur within that dynamic.

— In Kansas, there was just enough smoke in the forensic audit involving the Kansas Bioscience Authority to justify that examination of how former chief executive Tom Thornton was administering the organization. But the audit cost more than $1 million and yielded a conclusion that the KBA, in general, was competently run. It netted a reimbursement check from Thornton for less than $4,700. I’m inclined to agree with those who question whether that kind of ROI on the audit costs was acceptable.

— Finally, Gov. Sam Brownback has ordered $22 million withheld from the KBA, pending further inquiries, and legislators who have accused the agency’s leadership of living the high life on taxpayer dollars continue to raise questions about how it operates. They’ve even hinted at hearings to investigate further. The KBA says it still has $80 million on hand to act on its mission, and the withholding of the $22 million might not withstand legal review in any case. Still, the conflict sends the wrong signal out of Topeka.

Of all those, the political fallout from disputes over the KBA could pose the most serious threat to this region’s biotech climate. The fact is, most people who are aware of the authority can’t tell you exactly how it promotes life-science sector growth; far fewer know anything at all about it. But people do understand $500 lunches, and the populist overtones of KBA critics seem grounded more in exploiting emotions than in solid evidence of impropriety.

That’s more than unfortunate; it’s potentially damaging to the state’s hard-earned reputation as an emerging center of research and product commercialization in the life-sciences realm.

There’s a chance, of course, that continuing review of 52,000 e-mails from Thornton’s laptop could vindicate KBA critics. But unless and until that determination has been made, Kansas is giving interested parties around the nation just enough reasons to question whether they really want to be pursuing opportunities there right now.

As for Missouri, it may turn out that the capture of income taxes from new life-sciences jobs under MOSIRA will quickly generate substantial sums to help the state catch up with developments in Kansas over the past eight years, but there’s a lot of catch-up to play.

And the Missouri Technology Corp. board might surprise me by crafting a structure to ensure adequate funding of Kansas City-area interests with MOSIRA money. But if there’s any guidance in the history of public spending where Kansas City and St. Louis are concerned, I wouldn’t bet on it. St. Louis may have a legitimate claim to the lion’s share of funding, based on its head start with greater numbers of large companies in the biotech sector. I’m not, however, in favor of creating a new structure that ensures that dominance into perpetuity.

These may all be little things, perhaps. At least for now. But at a time when sustaining momentum in this vital sector is paramount, the state-level officials who should be working hardest to create a platform for success in Missouri and Kansas aren’t delivering.

As a consequence, it looks like some stumbling blocks are falling into the Kansas City region’s path. The question is: Do we have the resources and the will needed to remove them?