Viewpoints: Despite caution signs, state investors aim to follow balanced road

In and around Boston, layoffs in the region’s cluster of biotechnology companies are unnerving to many. The Boston Business Journal recently counted 4,100 layoffs through 2025, with more to come as a mix of forces hit home in one of the nation’s oldest hubs of biotech and pharmaceutical research and development.

Are the layoffs a “canary in the laboratory” for Wisconsin, which has counted on life sciences companies large and small for much of its technology-related growth?

That’s possible, but the diversity of the state’s emerging and mature medical technology firms offers some economic insulation — even as a blend of factors, globally and locally, erect caution signs down the road.

Recent conversations with some veteran early stage investors and company founders painted a mosaic of Wisconsin challenges:

• Competition with China, especially around drug development;

• Major investments in artificial intelligence sucking some of the air out of the deal room;

• The effects of AI tools on conventional life sciences research;

• Regulatory paths that take too long while consuming company dollars;

• Cuts in federal research spending that can crimp major universities and companies alike.

Another major factor: While Wisconsin produces its share of life sciences startups, a lack of venture capital up the food chain makes it harder to achieve what investors call an “exit.” That’s defined as a profitable sale, merger or acquisition of a successful young company; an event that pumps profits back into the system.