July 2011: OrthoWorx eNewsletter
The Warsaw orthopedic cluster occupies an important space within the overall Indiana life sciences economy. A recent report offers two conclusions that might surprise casual observers—the first is the prominence nationally that Indiana has earned as a life sciences power. Indiana’s reputation outside the state may still be connected to autos and agriculture, but in fact only a few states excel in life sciences to the degree that we do. The second point of interest is the significance of the Indiana medical device industry to the overall life sciences economy.
The report, “Indiana’s Life Sciences Industry: 2002-2010,” was commissioned by BioCrossroads and was conducted by Walter Plosila, PhD. In 2002, Dr. Plosila had authored an assessment of the state by the Battelle Memorial Institute that recommended Indiana work to capitalize on its existing and potential strengths in the life sciences. One of those existing assets was and is the Warsaw orthopedic industry cluster.
According to a 2011 OrthoWorx study conducted by the Indiana Business Research Center at Indiana University, the orthopedic cluster currently has approximately 6,800 employees, an increase of 1,300 since 2003. That’s a sizable share of the overall picture. The study reports: “Altogether more than 50,000 workers across 825 establishments were found in the primary life sciences industries in Indiana in 2009. Medical devices and equipment stands as the largest sector, with nearly 20,300 employees, followed by drugs and pharmaceuticals, with nearly 17,800 employees.”
The 2002 study led to the formation of BioCrossroads, which was created to help organize, leverage and expand Indiana’s life sciences assets. Since that time, Indiana has made great strides. From the report:
Today, life sciences is seen as a way to further diversify Indiana’s economy from durable traditional manufacturing of the industrial age to a broader, technology-driven set of key industries of the future. Indiana has gained significant ground in terms of hard numbers as to jobs, firms, exports, and other wealth generation data. Indiana has continued to grow its life sciences industries in spite of the severe national and global recession of the last several years. Indiana is very close to becoming one of two states in the U.S. (the other being California) to have both a specialized and large employment base in three of the four subsectors of the life sciences: drugs and pharmaceuticals, medical devices and equipment, and agricultural feedstock and chemicals. Should this happen, Indiana can adopt the motto of the Life Sciences Super Cluster State.
The report further details the strength of the orthopedic cluster:
Warsaw – Regarded as the “Orthopedics Capital of the World” and Indiana’s most concentrated life sciences region. When compared with the larger (Metropolitan Statistical Area’s) analyzed nationally, the Warsaw Micropolitan Area (population 12,500) would rank as the 12th largest regional employer in medical devices and equipment in the U.S. with a total workforce of 6,800 in that category. Warsaw is almost 56 times more concentrated in life sciences jobs than anywhere else in the U.S.
In fact, the report identifies maintenance of the orthopedic cluster as one of the key challenges the state must address to assure Indiana’s life sciences prominence: “Warsaw’s relatively isolated location affects logistics, transportation, and other operating costs. The new federal healthcare reform law raises fees on orthopedic and other device firms and proposes a new regulatory scheme regarding how new devices can be introduced. Regulatory uncertainty at the U.S. Food and Drug Administration makes it more unpredictable when and if new products can be introduced.”
The report says that Indiana must seek “additional ways to assist the Warsaw-based orthopedics industry through successful implementation of collaborative approaches and mechanisms.” Toward that end, it says that, “The establishment of OrthoWorx as a regional initiative to support the growth of this cluster in Northern Indiana is a solid first step in this ongoing effort. OrthoWorx has identified a number of issues that will be addressed to ensure that the Warsaw-based cluster is better able to compete in the global market, and has developed a comprehensive strategic vision to address these issues.”
Most states and communities would be envious of our status in the life sciences. We’re excited about our role in helping maintain and expand that prominence. This report shows how important it needs to be to everyone who is concerned about the future of Indiana and of the Warsaw region.
The full report can be accessed at www.biocrossroads.com.