Harry Nelson

Los Angeles: Home of Bioscience and Health Tech?

It’s time for Los Angeles to become a true hub of health tech and bioscience innovation. As it stands, we’re not there yet.

Two week ago, the Los Angeles Economic Development Corporation (LAEDC) invited me to give input as a stakeholder on draft recommendations for an LAEDC initiative to develop Los Angeles County as a bioscience industry cluster. What does LAEDC intend to cover as part of this initiative? The primary focus is on life sciences, i.e. biotechnology, pharmaceuticals, medical devices, and biomedical technologies.  The initiative also appears to include more broadly defined healthcare innovation, digital health, and healthcare information technology.

County Supervisor Mark Ridley-Thomas has been the driving force behind the project, which flows from the 2016-2020 strategic plan for economic development in Los Angeles County developed last year. The strategic plan identifies biosciences as an important industry in which to encourage more local innovation and entrepreneurship by, among other things, becoming more “business-friendly” and removing barriers to critical infrastructure development and financing.

The underlying impetus for the initiative is the perception that Los Angeles has significant undeveloped potential to be a hub of the bioscience industry nationally and, ultimately, globally.  One person involved with the initiative articulated that, despite a the concentration of major academic research centers like UCLA, USC, and other leading institutions in Los Angeles developing talent and ideas, L.A. is a “leaky bucket” for life sciences entrepreneurs, who often set up their ventures elsewhere. There are notable exceptions, such as NantHealth, the latest venture from Patrick Soon-Shiong. But apparently there multiple reasons why too many entrepreneurs who emerge in local institutions who find greener pastures elsewhere.

I support the LAEDC initiative because it aligns with my belief that Los Angeles is not yet but could be a true national (and even global) center for healthcare innovation. Even within California, there are stronger clusters of life sciences and healthcare innovation in northern San Diego, Orange County, and, of course,  Silicon Valley and the Bay Area.  Over the years, I’ve had conversations with many people working in these areas who share this sense that we in L.A. are the poor relations. I am not intending to detract from local Los Angeles ventures (and ask forgiveness of any clients and friends who are offended by this observation), but the levels of funding, track records, focus and access to talent are just on a different level in San Francisco and Silicon Valley.

Funding is a major part of the equation. My colleague and co-conspirator Jon Warner pointed out this gap in digital health funding (a subset of the broader envisioned category): Last year, Los Angeles saw only one-sixth as much funding activity as the Bay Area, half as much as Manhattan, and was even edged out by Boston. Boston! What’s going on here?


From the perspective of entrepreneurs, my sense is that, notwithstanding the beautiful weather, Los Angeles has historically been perceived as expensive, having a thinner talent pool, and a weaker network of funders than Northern California for technology-driven ventures. I experienced this a few years ago when I went looking for an entrepreneurial programmer to lead a technology venture and struggled to find the right person locally, yet wasn’t prepared to set up shop in the Bay Area. That was 2010.

In the past five years, Los Angeles has developed an up-and-coming tech scene, aka Silicon Beach. It may be a drop in the bucket compared to the Bay Area but, in fairness, it took four decades and the birth of giants like Google, Apple, and Facebook for Northern California to earn its reputation as a tech innovation hub. Los Angeles is at an earlier phase, but is showing promise. That Google and other tech giants have invested in building a large presence here is promising. As pricey as L.A. is, the inflation in Silicon Valley and San Francisco has actually made it more attractive, as have the influx of  a young, talented workforce.

As far as better funding, the Wall Street Journal reported a few days ago that Bay Area venture capital funds raised $13 billion in the past quarter for tech-focused investment. Los Angeles has no shortage of funders who could be supporting local tech and health-tech innovation as well, but if you talk to entrepreneurs in and around L.A., it’s much tougher sledding down here.

I think we can change that. In fact, I am excited to be leading an effort to establish a venture capital fund to catalyze early-stage healthcare innovation  in Los Angeles. I look forward to being able to share more of our plans in the coming weeks and months.

How else does Los Angeles become a true hub for biosciences and healthcare innovation? Beyond capital investment, the LAEDC’s approach combines multiple factors, including public policy (e.g. tax incentives) to make L.A. an inviting destination, marketing to raise awareness, making real estate (including public land) available, supporting research and development, and developing local talent.  I’m excited to be part of the innovation emerging in Los Angeles, and hope you will join me for the next chapter.

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