The biomedical industry in Northeast Ohio has been growing at a fevered pace.
Since 2000, the region’s value of goods and services in the biomedical industry, adjusted for inflation, has increased 59 percent, from $3.5 billion to $5.6 billion, according to a new report released today by business attraction group Team NEO.
The latest version of Team NEO’s quarterly economic indicators report for Northeast Ohio focuses on the biomedical industry, which includes medical device manufacturing; pharmaceuticals and therapeutics; and research and development and labs.
The industry still is a small fraction of Northeast Ohio’s overall economy, making up about 2.8 percent of the region’s nearly $200 billion overall gross product this year and employing about 33,000 people, according to Team NEO.
Manufacturing still is a leading sector, comprising 20 percent or $35 billion of the overall gross product in the region, Team NEO officials said. But that industry declined 9 percent during the same time the biomedical sector surged.
“It’s been on a 14-year upswing now,” said Jacob Duritsky, managing director of research for Team NEO, said of the biomedical industry. “There’s no reason now to think it isn’t going to continue.”
Growth within the biomedical industry ultimately can help two of the region’s largest sectors — health care and manufacturing, Duritsky said.
Dr. Frank Douglas, president and chief executive of the Austen BioInnovation Institute in Akron, said the region’s expertise in biomaterials, particularly polymers, needs to continue to be promoted.
The BioInnovation Institute brings together Akron-area partners to promote medical-related research, development, education and economic development.
“One of the major parts of the mission is to leverage the polymer strength to apply to regenerative medicine, particularly in orthopedics and wound healing,” he said.
Strong research focus
The strong research focus at the region’s college and universities, the reputation of Cleveland and Akron hospitals and the local manufacturing workforce that could potentially transfer their skills to making medical products could help the biomedical industry in Northeast Ohio continue to grow, said Thomas S. Campanella, director of the Health Care MBA program at Baldwin Wallace University in Berea.
“This industry has a lot of potential,” he said.
But, he added, “it’s going to be somewhat of a risky industry, too.”
Some of these very small, entrepreneurial firms might end up being sold, he said. The buyer could take the business elsewhere or opt to invest in the region and grow the venture locally.
Quest Medical Imaging, one of the newest additions to the local biomedical industry, has the goal of growing in the region.
The company from the Netherlands that makes a camera system used to locate lymph nodes and make cancer tumors visible during surgery last year opted to set up a base in Akron to expand into the U.S. market.
Quest Medical in Akron
Quest Medical was among the five biomedical companies that located or expanded in Northeast Ohio with assistance from Team NEO, which helped recruit a total of 16 companies across all sectors in 2013.
The company is in the process of completing a pre-marketing application with the U.S. Food and Drug Administration to begin marketing its medical camera system, which runs about $250,000.
Quest Medical is located within the Akron Global Business Accelerator, the business incubator at the old B.F. Goodrich complex on South Main Street in downtown.
“Besides the ability to accelerate our business and get it off the ground, the soft landing, the people in the Akron Global Business Accelerator really help us get started with all the practical things,” Richard Meester, Quest Medical’s president and chief executive, said in an email interview.
“Furthermore, the tight community and close vicinity of large hospitals to run our tests are attractive.
“Akron is easy to reach from the Netherlands and the culture is similar, which makes it real easy to get started.
‘‘Within 800 miles we can cover a large piece of the U.S., which is very convenient.”
Report highlights
These are some other highlights from Team NEO’s quarterly snapshot of the Northeast Ohio economy:
• The region’s total employment averaged almost 1.9 million in the third quarter of 2013 — an increase of about 9,900 from the same time period a year earlier.
• Northeast Ohio’s unemployment rate for the third quarter of 2013 was 7.1 percent, relatively unchanged from a year earlier.
• The service sector added almost 10,000 workers, construction added more than 1,200 workers and manufacturing stayed relatively flat in 2013’s third quarter compared to 2012.
• Northeast Ohio’s gross product reached almost $200 billion this year, about $2 billion less than the height of the pre-recession economy in 2005.
• The vacancy rate for industrial space throughout Northeast Ohio dropped to 8.3 percent in the fourth quarter of 2013, the lowest rate since third quarter 2009.
Cheryl Powell can be reached at 330-996-3902 or cpowell@thebeaconjournal.com. Follow Powell on Twitter at twitter.com/CherylPowellABJ.