The Bioscience of Reversing Capital Flight

On December 21 of last year, the “Commercial Appeal” ran a feature story titled The Great Migration: Taxpayers Pouring Out of Shelby County . I have been thinking about that story ever since it ran. Yes, Memphis has had a problem in recent years of losing more wage earners than it attracts, and of seeing higher wage jobs being “replaced” with lower wage jobs. Those are facts that can’t be disputed. What can be disputed is the fatalistic feeling that many have after reading such articles.

Capital Flight is not a forgone conclusion for Memphis and the Memphis Region. We have the tools and the foundations in place to build a story the exact opposite of what the “Commercial Appeal” article articulated. It is because of the opportunity that is here, that organizations like the Memphis Bioworks Foundation exist in the first place. The financial future of this city and of the world economy overall will be created in a few defined, high-growth, high-opportunity sectors. One of those sectors, a sector in which we have the foundational tools to compete, is the bioscience economy.

We only have to look at one example to see where opportunity lies; GTx. This company is a perfect example of the potential that is brewing within the laboratories, research offices and entrepreneurial minds in this city. GTx represents research that took place within our own UT Health Science Center. GTx was developed from the minds of our own local scientists. The GTx vision was seen by Memphis investors willing to invest. There is no need for me to dig into the GTx financials in this brief document; you can read their filings on the GTx Web site (www.gtxinc.com). But, a few things do stand out. First, GTx employs 130 people in Memphis with an average annual salary of over $100,000. Like most organizations, there are some that are highly paid, others highly specialized and still more that are in excellent support-level positions. Second, if you look at GTx’s most recent SEC filings, you see that for the last quarter of reported financials, the company’s research and development expense (investment) was $9.2 million and general and administrative expense (investment) was $6.1 million.

Why do I bring up these statistics? Because what GTx brings to our local economy is jobs and financial investment – which combined spells opportunity. And, what stops the Capital Flight for a community? The opportunity that new jobs and capital investment represent.

A second story that ran in the “Commercial Appeal” on December 21 was entitled Memphis is a City in Need of a Narrative . I would argue that our city narrative needs to be about GTx and all of the other bioscience opportunities at various stages of development, investment or imagination in our city. Because, that narrative ultimately leads to a story about inward Capital Flow.

Companies like GTx build or fill buildings. They create financial exchange through payrolls and taxes and attract investors from across the globe. At Memphis Bioworks Foundation, we understand that, which is why we created and launched Innova to invest in early stage, dynamic companies that have the potential to grow into significant economic contributors. It is why we are building a research park capable of housing even the most advanced research and discovery organizations and companies. It is the reason we have invested so much in building the educational opportunities to feed our workforce.

Yes, Capital Flight is terrible. No, it is not an endless spiral. A key step to reversing it is every one of us investing in our community. Keep our dollars here, keep our minds here, and keep our science here. We need a strong educational system, from public schools through a strong and vital Medical School. We need an environment that encourages and mentors potential new businesses. We need Memphians to invest their dollars locally. Together, we will have not just GTx, but scores of others that will follow … and the Capital Flight will end.

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One Response to “The Bioscience of Reversing Capital Flight”

  1. gwin scott Says:

    steve…you are right on target here…good note…

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