LIFE SCIENCES CORRIDOR COLLAPSE

The Detroit Free Press reported this morning that Pfizer Inc., the pharmaceutical giant, is closing its big research facility in Ann Arbor, another small one in Plymouth, and an office in Kalamazoo.  Altogether Pfizer is firing about 2,400 employees and 1,000 contract workers in these three cities.  Also the drug company is dumping its 177-acre, 2-million-square-foot Ann Arbor facility on the real estate market.

Few expected this bombshell from Pfizer.  Even the workers losing their jobs, many of whom are now scrambling in the Ann Arbor area to cancel new home purchases.  Governor Jennifer Granholm was caught flat-footed, as usual when it comes to the business of business.  She gasped that we shouldn't fret about the promises of bio-tech and shouldn't blame ourselves for the Pfizer fiasco.  (Hmm, to tell you the truth I had no inclination to take blame for the drug company's misfortunes.)

However, Pfizer's need to cut back and restructure should not have been that much of a surprise.  Not too long ago in the summer of 2005 the company shut down a manufacturing plant in Holland and curtailed major programs in Kalamazoo, Portage, and Ann Arbor to deal with an empty pipe line of blockbuster products to replace big revenue-generators like Lipitor, Zoloft, and Viagra when their patents expire.  This most recent decision by Pfizer (which includes the closure of many other facilities elsewhere in the U.S. and the world) is prompted by this continuing problem.

Why any of the matters to the denizens of River City is that Pfizer's shut-down of its big research facility craters the Ann Arbor end of the "Life Sciences Corridor" that pols like Granholm and Heartwell keep trying to sell to the taxpayers to pony up more bucks for them to distribute as tax breaks to favored parties.  The idea that government can plan, through so-called economic development, a Silicon Valley to capture a major segment of our economy is misbegotten from the get-go.  And when it is as amorphous as the "Life Sciences Corridor", an arbitrary geographical designation linking disparate communities that brings into its fold any enterprise or organization touching upon biology from bio-meds to surgical implements to hospitals to band-aids, it is folly -- and an expensive one at that.

None of this is to say that there are not great opportunities in bio-technology, but it is a business like any other.  It will have its winners and losers, like Toyota and GM currently in the automobile industry.  It will have those breaking new ground and other consolidating upon proven technologies, like Apple and Microsoft.  It will tend to cluster geographically, like diamond-cutting in Amsterdam and custom manufacturing in Grand Rapids.  And no government is going to make any of this happen the way it wants by throwing taxpayer dollars at an industry.  If anything, tax subsidies and other giveaways will have the perverse result of attracting marginal businesses while raising the cost on successful ones.

Keep that in mind as there are more and more calls from the bigwigs of River City to throw more bucks into the development of our end of the "Life Sciences Corridor".