More States Using Pension Money To Lure Biotech Start-Ups

As competition grows for biotech and other life-science jobs, more states are using pension money to lure start-ups in the risky industry. States from Washington to Florida are tapping public money to invest in private venture-capital funds because VC firms — the top investors in start-ups — favor areas that already dominate life sciences, such as the San Francisco Bay area, San Diego and Boston. States worry they'll miss out on an industry expected to create high-paying jobs making cancer drugs, medical devices and disease-resistant crops. The number of life-science jobs is expected to grow 13 percent more than overall annual job growth through 2012, says a study by Battelle and other researchers. Pay is at least $18,600 more than the average for all jobs. But in betting on life sciences, states face plenty of competition and uncertain returns. At least 40 states target the industry, up from 14 just three years ago. The industry is awash in losses. And 30 years after starting, it still has fewer than 900,000 jobs — less than 1 percent of overall U.S. employment. Florida agreed in April to pump $350 million into start-ups over the next three years. It wants some of that for state biotech ventures, an industry Gov. Jeb Bush began pushing hard last year. Overall, Florida plans to devote 5 percent, up from 4 percent, of its $101 billion in pension money to venture and other private-equity deals.