Biotech Wasn’t Immune to Job Loss in Great Recession, BIO Report Says

6/19/12Follow @xconomy

The biotechnology industry is often held up by public officials as an engine for producing lots of high-skill, high-wage jobs. But bioscience-based industries shed thousands of jobs in the Great Recession, and industry employment still hasn’t completely recovered to the pre-recession levels of 2007, according to a new economic analysis.

Biotech, which was defined broadly to include work on drugs, medical devices, research/testing, and agricultural chemicals/feedstocks, gained 96,000 total jobs in the U.S. over the decade from 2001 to 2010, according to the analysis Battelle performed for the Biotechnology Industry Organization. By Battelle’s count, there were 1,605,533 total bioscience-based jobs in the U.S. in 2010.

While gains over a decade might look good at first glance, biotech wasn’t immune to the Great Recession, as the industry employed 23,000 fewer people in 2010 than it did in 2007, Battelle said. What biotech can be thankful for is that it didn’t shed as many jobs as other large industries, as its 1.4 percent decline compared favorably to IT services/telecom (down 2.4 percent), aerospace (down 2.5 percent) and the overall U.S. private sector (down 6.9 percent), according to the Battelle analysis.

“This decline, while disappointing, was quite muted,” Battelle said in its report. The relatively small job losses of 0.3 percent in 2010 reflect overall “sluggish labor market conditions and reluctance to hire during the first year of the nascent recovery,” Battelle said.

A few biotech companies were able to prosper because the labor market threw so many talented employees out of work. Forma Therapeutics, founded in 2007, has built a 110-person drug discovery operation based in Watertown, MA.

“There’s lots of talent out there, especially as Big Pharma continues to downsize,” CEO Steve Tregay says. The bigger question for him is whether all the people have the right kind of skills to match what growing companies like Forma need, he says.

There are lots of interesting facts to mine in this report about various subsectors within biotech, including a state-by-state analysis. Here are some of the highlights, particularly from states that are in the Xconomy network:

—The drugs and pharmaceuticals subsector recorded an overall loss of 9,400 jobs, about 3.1 percent, over the decade from 2001 to 2010. Job growth was slow and steady from 2001 to 2007, but the losses were even greater from 2007 to 2010.

—The medical devices and equipment subsector was more stable, although it also lost jobs from 2001 to 2010. The medical device/equipment subsector lost fewer than 1,000 total jobs over the decade from 2001 to 2010, a 0.3 percent decline.

—The area called “bioscience-related distribution” saw more job growth, representing a 6 percent increase in the time period examined, with about 25,000 new jobs. But these jobs tended to be cyclical, according to the report.

—California, no surprise, remains the nation’s biggest state for biotech employment. About 228,700 biotech jobs were in California in 2010, about 14 percent of the nation’s total of 1.6 million biotech jobs. California’s total biotech employment grew by 13 percent over the 2001-2010 period, and the average annual wage was $96,962 in 2010 dollars, compared with $52,536 in the overall private sector.

—Massachusetts was home to about 77,762 jobs, or about 4.8 percent of the nation’s total biotech jobs in 2010. The Bay State saw biotech job growth of about 15.4 percent from 2001 to 2010. The average annual biotech salary in Massachusetts was about $105,559

—Washington state had about 30,127 jobs in 2010, by Battelle’s count. That figure grew by 15.8 percent from 2001. The average annual salary in Washington state was about $77,742.

—New York state claimed 74,873 biotech jobs in 2010, which represents 9.5 percent job growth over the decade. The average salary was $73,852.

—Some states were hit much harder than others. Pennsylvania had 81,796 biotech jobs in 2010, which was a 4.9 percent decrease over the past decade. New Jersey, home to many Big Pharma companies, had 91,167 total biotech jobs in 2010, a drop of 7.5 percent. Michigan, which once had a sizable pharmaceutical industry, saw its total biotech employment fall 4.7 percent over the decade, as Battelle counted 39,282 jobs there in 2010.

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  • Jim

    ["There’s lots of talent out there, especially as Big Pharma continues to
    downsize,” CEO Steve Tregay says. The bigger question for him is
    whether all the people have the right kind of skills to match what
    growing companies like Forma need]……..

    It seems the big problem with industry nowadays, expressed so well in the above statement, is a lack of leadership. Why are these companies NOT capturing talented people and fostering and developing in house the kinds of “skills” that they need?  It is a bit shortsighted to leave the training to somebody else while hoping to reap the benefit.