Bioscience is driving the Northeast Ohio economy

1. Our partners include:
Greater Cleveland Partnership
Greater Akron Chamber
Stark Development Board
Team Lorain County
Youngstown-Warren Regional Chamber
Medina County Economic Development Corporation
Cleveland
Plus ®
Economic
Review
March 2009
Volume 3, Issue 1
biomedical industry
a driving force in Northeast Ohio

3. March 2009 | Volume 3, Issue 1
Growing Biomedical Sectors are Helping to
Transition the Cleveland Plus Region’s Economy
With 60 hospitals, we know that the Cleveland
Plus region is a healthcare hub, but how does
that translate into business for the economy?
7.4
The biomedical industry is a driving force in
%
Northeast Ohio. While the region has long been
a leader in healthcare, our 30 colleges and annual growth
600
universities, strong manufacturing capabilities,
plus billions of dollars in private and public
investment are making the region a premiere biomedical
$2.3B
companies
location for biomedical business.
State of Ohio
Northeast Ohio’s biomedical industry is producing
$395M
Technology
Investment
goods and services that are exported nationally
and internationally, thus redefining healthcare in
2008 outside
the 21st century, and increasing the wealth of VC/NIH
the Cleveland Plus region. funding
According to BioEnterprise—Northeast Ohio’s
healthcare business formation, recruitment, and
acceleration initiative—the regional biomedical
industry has grown by more than 30% in the past
five years. Northeast Ohio is now home to 600
biomedical companies, with many more starting
or moving to the region each year.
“Access to partners, customers and workforce
is critical to Proxy Biomedical’s success.
Establishing US Operations in Northeast Ohio
will allow us to take advantage of critical
product development support and clinical trials
that will enable our accelerated growth and
service to the world’s largest market, the United States.”
Peter Gingras, CEO, Proxy Biomedical, an Irish Biomaterials Firm

4. NEO Bio Sector Growing 7.4% Annually:
Outpacing U.S. Average
NEO Bio-Related GRP Growth: 2003-2008
6000.00
The GRP for the biomedical sector
5000.00
4000.00
(Millions 2008 $)
(which includes pharmaceuticals & 3000.00
therapeutics; medical devices & equip- 2000.00
ment; and research & development) 1000.00
has grown more than 37% over the
0.00
2003 2004 2005 2006 2007 2008
past five years. Medical Device Manufacturing Pharmaceuticals & Therapeutics R&D and Labs
Source : Moody’s Economy.com
Biomedical Share of Total NEO GRP: 2003-2008
2.9%
2.7%
2.5%
2.3%
Furthermore, as a share of the
2.1%
total GRP for Northeast Ohio, the
1.9%
biomedical sector has increased
1.7%
33%—from 2.1 to 2.8 over the
1.5%
past five years.
2003 2004 2005 2006 2007 2008
Series 1
Source : Moody’s Economy.com
Aggregate Bio Sectors GDP: NEO vs US: 2003-2008
1.4%
1.3%
1.2%
While the Cleveland Plus region has
grown an average of 7.4% annually, 1.1%
the United States has grown at 1.0%
6.8% annually.
0.9%
2003 2004 2005 2006 2007 2008
NEO US
Source : Moody’s Economy.com

5. Historical Assets Fuel New Economic Landscape
“Prior to 2003, at Astro Manufacturing
Manufacturing in Northeast Ohio continues to account for a
higher share of output than the national average and remains
and Design the revenue we generated
an important advantage for the Cleveland Plus region.
was more than 50% automotive related.
However, the products that are being produced are changing
as the economy is transitioning. For example, the medical By the end of 2008, we had evolved
devices & equipment manufacturing sector has grown 75%
our production to the point that more
in the past five years. Because of Northeast Ohio’s strength in
than 60% of our revenue comes from
healthcare, and the region’s strong legacy of skilled manufacturing,
the Cleveland Plus region is primed to meet the needs of the
work done for customers in the medical
biomedical industry.
and biomedical markets.”
Proactive attraction of new venture capital (VC) funding from
outside of Ohio is fueling much of this biomedical growth. Rich Peterson,
Since 2005, the State of Ohio has attracted $783.9 million in new Vice President, Business Development
VC funding. In fact, more than 60% of this has been attracted Astro Manufacturing & Design, Inc.
to the 16-county Cleveland Plus region: $493.2 million.
National Institute of Health (NIH) funding has added additional
fuel. In fact, in 2008 alone, Ohio attracted $817 million combined
VC/NIH funding, making Ohio the second in the Midwest for
outside VC and biomedical funding. These grants recognize and
fund cutting edge research in the treatment and prevention of
diseases, and their funding is pivotal to advancing the biomedical
industry in the United States and Northeast Ohio. The Cleveland
Plus region alone has attracted nearly half of Ohio’s VC/NIH
2008 funding, accounting for $395 million of Ohio’s total.
This ranks our region higher than some states, including Indiana,
Kentucky, and Kansas.
In addition, Ohio’s Third Frontier Project has
Venture Capital & NIH Funding on Bio/Healthcare: 2008
added $1.6 billion to expand the state’s research
( in Mid-American States)
capabilities, company formation, new product
development, and advance manufacturing
technologies in Ohio’s high-tech industries Illinois
such as alternative energies and biomedical. Ohio
When coupled with $750 million Building Ohio Minnesota
Jobs programs, $2.3 billion in state technology Michigan
funding is leveraged. Pennsylvania
Missouri
Wisconsin
The Cleveland Plus region Cleveland Plus
attracts more outside VC funding Indiana
than many states, fueling new Kentucky
business start-ups. Kansas
$0 $100 $200 $300 $400 $500 $600 $700 $800 $900
$ Millions Venture Capital NIH Grants
Source : National Institute of Health and Midwest Health Care Venture Report (2008),
BioEnterprise and Mid-American Healthcare Investor Network.
Since 2005, Ohio has attracted $783.9 million in new VC Funding.

6. NEO Total Employment ( Not Seasonally Adjusted )
Soft Economy Reflected 2.08
in NEO Job Total 2.06
2.04
2.02
This chart shows total employment in Northeast Ohio
(Millions)
2.00
without seasonal adjustments.
1.98
1.96
By viewing employment on a quarter to quarter basis
1.94
we can see the overall trend that occurs due to seasonal
2006
2002
2003
2004
2005
2006
2007
2008
2002
2003
2004
2005
2007
2008
2002
2003
2004
2005
2006
2007
2008
2002
2003
2004
2005
2006
2007
2008
patterns of employment. Typically there is a drop between
the third and fourth quarters, however the state of the Q1 Q2 Q3 Q4
national economy is reflected in the more substantial drop
realized from a year ago. Total employment dropped just
Source : Ohio Labor Market Information (LAUS Data)
below 2 million workers in Q4 2008, down 3% from Q4 2007.
NEO Unemployment Rate NEO Quarterly Unemployment Rate
Trending Better Than
7.5%
7.0%
National Rate 6.5%
6.0%
The regional unemployment rate has been following the 5.5%
pattern of both the U.S. and Ohio. However, Northeast 5.0%
Ohio did show a slight improvement from Q3 2008 to Q4
4.5%
2008, closing the gap between the region and the state.
Over the last 18 months, the rise in unemployment in 4.0%
Q2
Q2
Q2
Q2
Q2
Q2
Q2
Q3
Q3
Q3
Q3
Q3
Q3
Q3
Q1
Q4
Q1
Q4
Q1
Q4
Q1
Q4
Q1
Q4
Q1
Q4
Q1
Q4
Northeast Ohio has been less than the U.S. as a whole.
2002 2003 2004 2005 2006 2007 2008
NEO 16 counties Ohio U.S.
Source : Ohio Labor Market Information (LAUS Data)
GRP Continues to Grow
NEO Real GRP Billions (2007 Dollars)
$190
0.4%
0.4%
$180 (-0.9%)
Modest growth is still projected for Northeast Ohio’s
0.5%
2.6%
1.8%
$170 0.3% (-1.9)% 1.2%
1.2%
2008 Gross Regional Product, based on the most recent
2.6%
4.8%
$160
projections available from Moody’s Economy.com.
3.0%
3.8%
$150 5.1%
Moody’s detailed models of regional economic
0.3%
3.6%
$140
conditions are revised as actual data is received.
$130
Moody’s estimates that the Northeast Ohio economy
$120
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
has grown at an annual rate of 1.6% over the past
Real GRP Average Annual Growth = 1.6%
15 years and has grown in 13 of the past 15 years.
Source : Moody’s Economy.com

7. March 2009 | Volume 3, Issue 1
Demand for Industrial NEO Occupied Industrial Space & Vacancy Rate
Space Remains Strong 405 9.5%
Occupied Square Feet (Millions)
400 9.0%
Vacancy Rate
395 8.5%
This graph shows the total amount of
390 8.0%
industrial space occupied by quarter
from Q1 2004 to Q4 2008. Over this period, 385 7.5%
total occupied industrial space grew steadily. 380 7.0%
In addition, the vacancy rate of 7.4% remains 375 6.5%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
at the lowest point in the past five years.
2004 2005 2006 2007 2008
Industrial space includes primarily manufacturing,
warehouse, and distribution related space. Occupied Square Feet Vacancy Rate
Source : CoStar Industrial Data
About Team NEO
Due to market limits within the CoStar database, historic trend data for the
Team NEO advances Northeast Ohio’s economy Team NEO region is defined as 10 of the 16 counties forming the regional
by attracting businesses worldwide to the 16-county footprint. These counties include Ashtabula, Cuyahoga, Geauga, Lake,
Lorain, Medina, Portage, Richland, Stark and Summit.
Cleveland Plus region. The organization is a joint
venture of the region’s largest metro chambers The categories and data used to analyze the Northeast Ohio Biomedical
sector, including medical device and equipment manufacturing,
of commerce. Since 2007, the organization has pharmaceuticals and therapeutics, and R&D and Labs, were compiled
attracted more than 20 new companies, 2,200 based on sector definitions provided in the BioOhio 2007-2008 Ohio
Bioscience Growth Report.
new jobs and more than $70M in annual payroll
to Northeast Ohio, leading to a total regional
annual impact of $150M. For more information, Ashtabula
Lake
visit www.clevelandplusbusiness.com. Cleveland Plus 16-County Region
Cleveland Geauga
Data Sources: Team Northeast Ohio uses a number of data sources for
Cuyahoga
the Regional Economic Review. One of the primary sources is the Moody’s
Trumbull
Lorain
Economy.com (www.economy.com) Northeast Ohio modeling system.
This firm is the leading independent provider of economic, financial and
Summit Portage
industry research and data that specializes in national and metropolitan Youngstown
Medina Akron
economic growth forecasts. Moody’s Economy.com county level output, Mahoning
employment and payroll historical data are estimated from several
publicly available sources and are summarized into the Team NEO Ashland
Wayne
regional footprint. It is important to understand data provided by Columbiana
Canton
Richland Stark
Economy.com are estimates of economic activity.
Carroll
Team NEO also uses data from federal and state sources as part of the
report. As with Economy.com, the information for the Team NEO footprint
is derived from data reported at either the county or metropolitan level.
We rely heavily on data from the U.S. Bureau of Labor Statistics
(www.bls.gov) and Ohio’s Labor Market Information (www.lmi.state.oh.us)
for information on wages, unemployment and both general and industry-
specific employment. In addition, Team NEO uses data from the Census
(www.census.gov) to track housing-related activity including the
number of single and multifamily permits, as well as their values.
Industrial real estate data for this edition was derived from the CoStar Group.
The CoStar Group is a leading provider of commercial real estate data
throughout the United States, covering more than 58 billion square feet This report made possible through the generous
of property throughout the country. support of Dominion.
737 Bolivar Road, Suite 2000, Cleveland, Ohio 44115
888.NEO.1411 • www.clevelandplusbusiness.com