Components are sourced externally, manufacturing is in Asia, distribution is through multiple channels, some virtual, partnering with many. We are blessed here in the Midwest with the pieces that have broken off the industrial economy icebergs as well as the new ones we’ve invented. Using medical devices and scientific instruments as examples, we have expert machine shops, injection molding firms, metal and plastics fabricators, metallurgists, automation engineers, software firms, regulatory affairs consultants, toxicologists, reimbursement experts, purveyors of clinical trials and life-science legal practices. On the pharmaceutical side we also have a very deep complement of contract research firms and manufacturers. Many in this network earned their battle scars at the deceased Searle, Upjohn, Marion Labs, Merrill, Parke-Davis, Guidant and others. Some also hatched from transportation and communications industries with their strengths in plastics, metals, electronics and software.

 

Creative destruction is alive and well. Is the value derived from in-house headcount? No. The wealth creation comes from helping patients and learning how to use the network. Jobs are now more widely dispersed and more secure within the network, where they can be applied to many projects. Success brings capital gains that are recycled. Many young firms will fail and we learn from each one. Along the way, careers are made, families supported and wisdom gained.  

 

Do our state governments with their executive and legislative branches fully grasp this networked innovation economy? I think not. It’s certainly not intuitive or comfortable. Life-science risk rivals our Midwest state lotteries. It’s a risk we must keep taking. The origins of the anchor stores of life sciences all started with single-digit headcounts and no amount of planning guaranteed their success. Some lasted a very long time, but not longer. The DNA of the discontinued firms listed above continues in their acquirers, divestments and their vibrant spinouts.

 

It is important to value failures (common) and not focus only on the successes (rare) as we replace the ego system with a dynamic ecosystem. Could a business plan predict the origins of Illumina in California from a lab at Tufts University in Boston and the fact that Roche wants them badly for a gazillion beans? Nope! It only took a decade from their founding in April 1998. 

 

Try, try again. That’s our way. Plan less, do more. I’m sorry about Kodak’s challenges, but it is a natural process and they had a fabulous run while creating a lot of wealth and happiness through enhanced productivity.  

 

Peter T. Kissinger is professor of chemistry at Purdue University, chairman emeritus of BASi and a director of Chembio Diagnostics, Phlebotics and Prosolia.