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Micro Cells, Macro Economics


The U.S. Senate debate on measures designed to expand federally funded research with the use of embryonic stem cells promises to sound familiar – in its claims and its omissions – to the debate held here in California two years ago.
Led by Sen. Arlen Specter – who has been fighting cancer – there will be plenty of tales and moving anecdotes about the life-saving potential of stem cell research. There will be more talk about the show-down that Congress is having with the White House over this legislation. And there will probably be a few more long-drawn out op-eds about politics and religion. But there won’t be a lot of talk about another aspect of the measure – its economic importance to the U.S. And the omission of that argument is worth noting.
There’s nothing wrong with a little bathos and pathos. It’s how laws like this get passed. The California proposition was approved by almost 60 percent of the state’s voters just a few days after one of its most famous supporters, the actor Christopher Reeves, died. And it had hard core Republican support from Nancy Reagan and her son, Ron, still grieving over former President Ronald Reagan’s death. And almost everyone has a relative or friend with a disease or syndrome that might be relieved by the research and discoveries that come from embryonic stem cell research. And that potential should offer a clue to what should be talked about in the debate over this research: Its power to give real economic clout to the biotech industry.
The campaign to create state-funded stem cell research was backed here in California by a group of savvy and smart businessmen, many of them the same folks who brought you Google, and other companies. These venture capitalists many of them affiliated with the powerhouse firm Kleiner Perkins Caufield and Byers are interested in the life-saving potential of stem cells. But they are businessmen, not humanitarians.
Stem cell research has the promise to make the biotech businesses as important – in real dollar terms – as the Internet and tech business that have made so much money and effected so many changes in how we live and work. That’s the argument that politicians – particularly Democrats so anxious to show up the White House – ought to be making. For biotech backers in California, the stem cell debate is one about stay competitive against scientists in India, the U.K. and other places that support – even foster – stem cell research.
And most everyone in Silicon Valley knows, federally funded research has been the seedbed of tech innovation for a long time. The federal money that made the valley what it is today – the grants, procurements and research conducted during the Vietnam war and the space race – came here for a reason, however. It’s where the brains were. They were already working in California drawn by a research institute started at the turn of the century by a wacky Gold Rush millionaire now best known for the highways and streets that bear his name.
James Lick‘s decision to fund construction of an observatory and build a telescope – then, the largest in the world – high on Mt. Hamilton a few miles from downtown San Jose, is the beginning of California’s attraction for physicists and astronomers. As Carey McWIlliams recounts, Lick figured that a telescope high on a hill in the clear dry California air, would give a clear and accurate view of the heavens. He was right. The scientists came and they stayed, turning Mt. Hamilton into an important research center for its time. That research center, which is now part of the University of California, attracted scientists and so 50 years later when the feds wanted to fund brains to build missiles, satellites and lunar modules – and the microchips that make them go “boom” – they came to California.
Something similar is already at work with the funding that’s been unleashed over the California stem cell program. The $3 billion initiative – that’s more than $250 million a year for 10 years – isn’t just about the pure research that will be done. It’s about the discoveries that will be made – and commercialized – as that research is conducted along the way. As they say in Silicon Valley, it’s about “the IP” – the intellectual property that will accrue. That intellectual property – the knowledge that’s built up over time – that’s a 21st Century gold mine.
There’s an argument to be made that having private funding for this sort of effort is desirable. The religious one – with which I don’t agree – that the state should not fund the taking of human life, no matter how young. Better to have the sin rest in the private sector. And, of course, there’s the small-government case. Why should tax dollars be spent on what will in the end be commercial enterprises?
Those arguments over look the role that the U.S. government has played in advancing scientific and technological achievement since this country was founded. A look at how Lick’s hunch about telescopes fostered a place for a future industry he could only have imagined is a good example. It’s what has allowed this nation’s economy to dominate the world.
The private funding argument also sidesteps an important element in the role that government plays when it fund research: the ethical and thorough accounting of how public money is spent. Putting moral and ethical decisions in the hands of peoples who are interested in commerce a bit more than the public good is always risky. When the money gets good, the temptations gets stronger. A look at the fate, er, fable created in South Korea is a good example of how dramatically things can go wrong.
The stem cell research legislation is expected to pass and President Bush is expected to veto it. But in doing so he’s acting against the nation’s economic interest. And that’s an argument that ought to be made with a lot more force and vigor.

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