San Antonio's healthcare and bioscience economy has more than doubled in the last decade and continues to grow robustly, according to the biennial economic impact report released Tuesday by the Greater San Antonio Chamber of Commerce. More than one in every six employed adults in the city works in the sector that is second only to the U.S. military in terms of overall economic impact that will surpass the $30 billion mark in 2013.
It's a good news story for San Antonio, a garland of cranberries and popcorn to festoon the city's holiday mood. The economic picture locally is good and getting better, and certainly outpacing national growth after the Great Recession. Tuesday's numbers were not unexpected, but who can ignore economic fever charts where the arrows all point upward?
More than 156,000 people are employed in healthcare and the biosciences here. These are good-paying, stable jobs, and what the numbers don't tell us is the story of so many smart, dedicated people who are saving lives, caring for others, or making all our lives better through innovative technology and medical advances.
Our city's growing prosperity -- and its potential for achieving so much more -- stands in stark contrast to the headlines only four years ago. The city was plunged into its version of the Great Recession in June 2008 with the announcement that AT&T Corp. was leaving town and moving to Dallas. While economists mark the start of the recession in December 2007, it was the September 2008 collapse of Lehman Brothers that triggered panic on and off Wall Street and brought interbank lending to a stop. One now wonders if AT&T's Chairman and CEO Randall Stephenson could have been stopped from leaving had he waited one more quarter when markets and shareholder confidence plunged. After all, a move that was supposedly about getting closer to its customers and a busier international airport seemed more about a CEO trading San Antonio's great lifestyle for Big D's status.
Speaking of then and now...That same year, in June. a young, growing San Antonio company named Rackspace Hosting defied the odds and launched its IPO, a move the markets punished. At the end of the first day or trading, shares sat at $10, right where they had started. Tuesday I watched as Rackspace shares hit $73.36, a record high and more than double their value two years ago. (No, I do not own Rackspace stock. Alas.)
What's the connection among these seemingly disparate facts and anecdotes? From my perspective, its San Antonio's economic development strategies, or the lack thereof, within the San Antonio Economic Development Foundation. The evidence suggests leaders in the biosciences and high-tech fields are frustrated with the EDF and are pursuing their own independent economic development strategies. "To each his own," might best define our current approach.
Rackspace Chairman Graham Weston and some of his fellow co-founders gave birth to Geekdom, the coworking space and startup incubator in the Weston Centre, and the same brain trust attracted TechStars Cloud to the city, which identifies and nurtures promising tech startups and helps bring them to market where they can find the capital to become real businesses with revenues and profits. This isn't the only pure hi tech play in San Antonio, but its the dominant one that aims to retain our best and brightest in the field and recruit talented players from elsewhere. It's an initiative launched around the EDF rather than with it.
The EDF, meanwhile, seems more closely wed to an incentive-driven strategy that emphasizes the city's pro-business approach rather than our evolution into an economy driven by knowledge-based job growth.
BioMedSA was launched in 2005 with a mission "to organize and promote San Antonio's healthcare and bioscience assets to accelerate growth of the sector and enhance San Antonio's reputation as a city of science and health." It began with a staff of two, President Ann Stevens and Director of Membership and Administrative Services Donna Miller, and a very modest budget of $250,000 that came in the form of grants from the City of San Antonio, Bexar County and CPS Energy. The initiative was the brainchild of former Mayor Henry Cisneros and then Greater Chamber President Joe Krier.
Seven years later, BioMedSA still has a staff of two, Stevens and Miller, and a very modest budget of $550,000 that include a paltry $12,000 travel budget, hardly what anyone would call an effective recruitment tool. EDF has agreed to contribute $50,000 of that 2103 budget, while Bexar County now contributes nothing, apparently taking the unstated position that EDF should be doing much more than it is doing. CPS Energy, with only an indirect interest in growth of the biosciences, continues to contribute, as does the City of San Antonio.
"The budget should be at least double its current size, or even more," BioMed SA Chairman Ken Trevett told me during a recent conversation, a bit of frustration showing through his diplomatic demeanor.
Two people who could single-handedly change the current dynamic are Cisneros, the founding chairman of BioMed SA and the current EDF chair, and Mayor Julián Castro, who has the political capital to bring all the stakeholders to the table to devise a new, more integrated strategy.
How San Antonio approaches economic development has been the topic of periodic debate and disagreement in recent years, mostly behind closed doors at City Hall and in the executive suites of the city's leading employers. But nothing fundamentally different has been undertaken. The result, its seems, is that EDF's focus remains more traditional, while parallel entities operate independently.
Perhaps that kind of decentralization will prove to be a suitable model. From my viewpoint, local government is too willing to grant traditional tax abatements and offer other incentives, yet spends far too little on direct support of San Antonio's most promising growth sectors.
The public, of course, should be more engaged in an open debate. but the cutting edge basic research underway at the Texas Biomedical Research Institute and applied research work at the Southwest Research Institute in San Antonio are the most undertold stories in the city.
TBRI's work in genetics, virology, immunology, Type II diabetes and obesity is producing transformative results in medical treatments. SwRI's work is equally ground-breaking, but is usually carried out under contract with the federal agencies ranging from NASA to the CIA and often known only among those with a need to know and a Top Secret clearance.
Both research institutes employ scientists, researchers, technologists and others who would be highly sought after in leading research institutes across the nation. They are in San Antonio because they can do important work here and they and their families enjoy the city's attractive lifestyle.
San Antonio needs integrated, well-funded economic development strategies that keep these talented people here, even as we accelerate efforts to import more good individuals and companies.