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Insight & Intelligence : Dec 5, 2011
Biotech Hiring Faces Uncertain Recovery as Pain of Economic Crash Continues to Throb
After recession flattened job numbers, some areas are seeing growth but have hurdles to overcome.!--h2>
Washington declared that the recession ended in 2009, but the impact of the downturn continues to ripple through the U.S. economy. The number of working Americans fell more than 6% between 2007 and 2009.
The nation’s biotech industry, though, has had slightly better news on the labor front. According to the most recently available figures by Battelle, U.S. biotech employment inched up 0.2% during the same two-year period, to about 1.36 million jobs.
This upward blip came despite a 4.8% drop in drugs and pharmaceutical jobs to 303,087, as big pharma continued to shed positions through consolidation. Medical device and equipment jobs dipped 0.3% to 424,228 jobs. Agricultural feedstock and chemicals, however, rose 0.7% to 110,556 jobs.
The final sector, covering employment in research, testing, and medical laboratories, also increased. The 3.6% boost to reach 520,521 jobs was largely due to continued outsourcing of many functions to contract research organizations and a spike in federal spending through the $814 million American Recovery and Reinvestment Act (ARRA) enacted by President Barack Obama.
Another bright spot for the industry: The number of bioscience establishments climbed between ’08 and ’09 from 47,593 to 48,059. That reflects a truism of recessions: When the economic going gets tough, businesses get going by cutting employees, many of whom go on to create their own start-up companies.
When employment is measured across the first decade of the 21st century, the number of bioscience jobs rose 7.1%, the Battelle numbers showed. Nearly all of that growth comes from a 24.5% spike in research, testing, and medical lab positions between 2001 and 2009 to reach a total of 520,521 jobs.
The other three subcategories measured showed slight decreases. Between 2001 and 2009, medical devices and equipment jobs dipped 0.3% to 424,228 jobs; drugs and pharmaceuticals slid just 0.1% to 303,987 jobs; while agricultural feedstock and chemicals fell 9% to 110,566 jobs.
Two sets of data separately covering the state of the industry’s hiring practices in two major biotech hubs, California and Massachusetts, depict a troubled 2009 in both areas but also an upswing in 2010 for Massachusetts. Yet, there are still some longer-term challenges for Massachusetts, as with all other states, that have to be overcome.
Earlier this year, the biotechnology industry group for the San Francisco Bay Area and California Healthcare Institute (CHI) released figures showing the Golden State’s first decline in biomedical employment since CHI began tracking industry jobs data in 1993. The biomedical industry was defined as positions in academic research, biopharma, lab services, medical devices, and wholesale trade positions serving the industry.
Statewide the number of biomedical jobs dropped by nearly 6,000, or 2.1%, between 2008 and ’09, from 273,559 to 267,772 jobs. In the Bay Area, the nation’s largest life science cluster, jobs declined 3.8%, from 53,999 to 51,945
Of the jobs lost by California, more than half (4,495) were in the medical device, instrument, and diagnostic category, which fell 4% from 111,942 to 107,447 jobs. Academic research dipped 0.4%, from 43,038 to 42,866 jobs, while biopharma slid 0.8%, from 81,268 to 80,560 jobs. Wholesale trade jobs—focused on managing import, export, and exchange of pharmaceuticals, diagnostics, research reagents, and medical devices—saw a slightly larger decline, down 1.6% from 31,920 to 31,407 jobs. Among specialty categories, the only category that gained was laboratory services, which rose 1.9% from 5,390 to 5,493 jobs.
“The California life sciences innovation machine has stalled,” CHI declared in the 2011 edition of its annual California Biomedical Industry report, released February 1. “If the past year’s decline is modest, it nonetheless raises questions about what must change for the industry to get back on track and thrive in the future.”
Despite the sober numbers, the report said California biotech CEOs remained upbeat about their prospects for hiring within the state over the next two years. According to a survey of CEOs, 68% said they anticipated their workforces inside California would grow, while 19% expected them to hold steady, and 13%, to be reduced. In the same survey, 41% said they intended to increase manufacturing in California rather than beyond the state’s borders (21%).
In Massachusetts the latest biopharma employment numbers, published in September, showed a 3.9% increase in jobs in 2010. More importantly it demonstrated a resumption of industry job growth following a flat 2009.
According to MassBio, the life science industry group for Massachusetts, biopharma employment in the Bay State rose to 48,657 jobs from 46,826 in 2009. Fifty five percent of Massachusetts’ biopharma jobs, or 26,807 jobs, have an R&D focus, highest of 11 peer states studied by MassBio. R&D employment in Massachusetts rose 9% over 2009’s 24,565 jobs. The state’s second largest share of jobs, at nearly 20%, is in pharmaceutical manufacturing. Jobs in this segment slid 2% to 9,514 jobs, making it the third lowest of the 11 peer states.
Peter Abair, MassBio’s director of economic development, told GEN the state saw continued R&D job growth by both industry and academia, while the dip in biomanufacturing jobs reflected, in part, cutbacks by two big pharma employers: Pfizer, which announced plans in May 2010 to cut 300 jobs over five years from a former Wyeth plant in Andover, MA; and AstraZeneca, which in late 2009 began eliminating 113 jobs, 10% of its workforce, in a Westborough, MA, plant. Last May, AstraZeneca announced plans to lay off another 135 employees from the same facility.
Biomanufacturing employment is expected to increase over the coming year as new plants come fully online in Massachusetts. Bristol-Myers Squibb plans to ramp up its biologics plant in Devens where 350 people will work, while Genzyme expects to win FDA approval for a new plant in Framingham during Q1 2012. Genzyme parent Sanofi earlier this month announced a restructuring that will consolidate U.S. drug discovery and early R&D activity in Massachusetts, a move that should boost its current state workforce of about 5,000.
Sanofi/Genzyme was the state’s leading biopharma employer last year according to MassBio, (when it recorded 4,356 employees), followed by Pfizer (2,600), Biogen Idec (2,300), and Novartis (2,100). AstraZeneca finished 2010 with 900 workers, placing 12th. Since then, all five have either laid off or announced plans to idle employees.
The state’s reliance on big pharma is less a challenge for growing biopharma, Abair said, than remaining life sci friendly: “I think the biggest vulnerability would be should there be a dramatic public policy change, for example, that affects the industry in such a way that investment in R&D is curtailed. That really is the strength of this industry in Massachusetts.”
During 2010, Massachusetts benefited from ARRA, which brought $1.1 billion to the life science segment in Massachusetts. And the state has showered pharma and biotech companies with its own tax breaks and other incentives: In 2008, Gov. Deval Patrick (D) enacted the $1 billion Life Sciences Initiative. It included $500 million in borrowed capital spending, $250 million in research grants, and $250 million in tax incentives.
Creating a Supply
The quasi-public Massachusetts Life Sciences Center oversees the spending of the $1 billion. The center’s activities have included assisting workforce development programs intended to help life science employers fill jobs.
“We know that more of the population is going to be people of color. We know women are not represented well in the U.S. when you compare them to other countries around the world, especially in Asia,” Susan Windham-Bannister, Ph.D., president and CEO of the Life Sciences Center, told GEN. “What do we do to get more of our population focused on these technology sectors?”
One answer: The center awarded 32 equipment and supply grants totaling $3.5 million to community colleges, vocational-technical schools, and community workforce development programs serving underrepresented communities. Also, Dr. Windham-Bannister’s budget includes $250,000 set aside for grants of up to $50,000 for groups that mentor and support women and minorities for life science careers.
The other workforce issue where the center has been busy, she added, entails finding “middle-skill” workers below Ph.D. or postdoc levels for jobs, especially biomanufacturing positions some companies are returning to the U.S. from overseas. “We want to make sure as part of our interest in attracting companies and retaining jobs in Massachusetts that we’ve got a good supply and distribution of workers with these middle skills,” Dr. Windham-Bannister said.
The Life Science Center’s workforce development efforts offer an example for public and private entities committed to supporting biotech. Growing employment in biotech and pharma is less an issue of stoking employer demand for workers than of raising the supply of qualified employees. Such an approach to job growth has over the past generation catapulted China and India toward the top in life sciences at the expense of Europe and especially the U.S. It’s time the U.S. considers this strategy more seriously.
Alex Philippidis is senior news editor at Genetic Engineering & Biotechnology News.
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