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Study: Mass. Life Science Jobs May Grow At Twice the Rate of Other Sectors by 2014

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BOSTON — Massachusetts’ life sciences workforce over the next six years will likely grow at twice the rate of all the state’s employment sectors, according to preliminary results of a workforce-development study released last week.
 
That figure does not account for jobs that would be created if Gov. Deval Patrick’s $1 billion, 10-year Life Sciences Initiative is passed by both houses of the state General Assembly.  
 
According to the report, which is being conducted by the University of Massachusetts Donahue Institute (see sidebar), even without that initiative, employment in the Bay State’s life sciences sector will rise by 1.3 percent each year through 2014, or almost double the overall employment increase of 0.7 percent projected by the New England Economic Partnership, a regional group.
 
Where the potential future growth of the industry is concerned, “I’m not sure I’m ready to say that it’s unlimited, but it is certainly substantial,” said Michael Goodman, director of economic and public policy research for the Donahue Institute.
 
The Donahue Institute’s findings were released Feb. 1 during the Life Sciences Talent Summit, a day-long conference that drew more than 200 business, academic, and government leaders to UMass’ Boston campus. The report was followed by breakout groups devoted to identifying problems and developing solutions to creating more life sciences jobs in Massachusetts (see related story, this issue).
 
According to the preliminary report, Massachusetts stands to see a net increase of 9,384 new jobs in "critical and core life sciences occupations" through 2014, up from 84,080 such positions in 2006.
 
The state’s total workforce was 3.28 million as of December 2007, according to the most recent monthly labor force statistics, released Jan. 17.
 
Deval in the Details
 
While Donahue’s job-creation projection is limited to "critical and core" life science positions, that number could swell considerably if "indirect" jobs spurred by the life science economy are taken into account.
 
In his State of the State address Jan. 24, Gov. Patrick projected that 250,000 new jobs would be created over the 10 years of his biotech bill, for an average of 25,000 new jobs per year.
 
“On the jobs front, let’s both advance human healing and add another 250,000 jobs over the next decade by passing the Life Sciences Bill next month,” the governor urged legislators in his address, which can be read here
 
Gov. Patrick has drawn criticism for that projection; two economists quoted by the Associated Press and the Boston Globe said the governor’s forecast was overly optimistic. Yet at a brief press conference with reporters at the Talent Summit, the governor defended his estimate but acknowledged it includes “indirect” jobs attributable to hiring in the life sciences, such as intellectual property lawyers and business services providers, calculated using economic multipliers.
 
But there is no consensus on how many indirect jobs are created when life sciences companies employ people. Gov. Patrick himself noted that while the Milken Institute calculated that the economy creates 3.6 support jobs for every life sciences position, Boston-based Northeastern University has pegged that multiplier at five support jobs.
 
Donahue has no plans to revise its job growth estimates to reflect the life-sciences bill. Daniel O’Connell, Gov. Patrick’s secretary of housing and economic development, told reporters at the Summit that such a move would be premature since the legislation remains under review by lawmakers (see related story, this issue).
 
Minutes later, in a formal luncheon address, Gov. Patrick said his bill is necessary to the health of the state life sciences industry. He said the state has 90,000 more life sciences jobs available than people qualified to fill them, all in a state where about 150,000 people are looking for work.
 
In 2006, while the overall statewide labor vacancy rate was 3 percent, the rate for medical scientists, excluding epidemiologists, was 12 percent, with 574 unfilled jobs. Next-highest vacancy rate was biochemists and biophysicists at 10.3 percent, with 157 unfilled positions, according to “The Economic, Labor Market, and Fiscal Performance and Impacts of the Biopharmaceutical Industries of Massachusetts,” a study published last year by Northeastern University’s Center for Labor Market Studies.
 
And according to Donahue, the occupational category with the greatest projected increase in demand between 2006 and 2014 will be biochemists and biophysicists, up 28.9 percent from 1,454 to 1,875. Next-highest is projected to be medical scientists, up 25 percent from 3,672 to 4,589; followed by life, physical, and social science technicians, up 10.3 percent from 3,621 to 3,994.
 
“Those folks looking for work don’t have the skills to do the work we have available,” Gov. Patrick said. “The cost of inaction is just too high; indeed, it is intolerable.”
 
Mass Appeal
 
One likely reason why the state is so interested in adding to its life sciences workforce is that those employees paid almost twice as much in combined federal, state, and local taxes as workers in all industries, a consequence of their higher-than-average salaries. The average amount of annual taxes paid in 2004 and 2005 by biopharmaceutical workers was $21,019, compared with $11,340 for workers in all industries, according to the Northeastern University study.
 
Three other reasons can be found tucked within the data released by Donahue. The products of life sciences, from drugs to medical devices, accounted for almost one-third, or $7.5 billion, of the total $24 billion in commodities exported by Massachusetts companies in 2006, according to Worldwide Institute for Social and Economic Research figures cited by the UMass Institute.
 
The institute also cited figures placing Massachusetts at number-one in two areas: the amount of biotech venture capital awarded to state companies per employee, and the amount of federal grants from the National Institutes of Health awarded per employee.
 

Where the potential future growth of the industry is concerned, “I’m not sure I’m ready to say that it’s unlimited, but it is certainly substantial.”

“Massachusetts is really at the head of the table when it comes to productivity, fiscal contributions, and the ability to attract significant private capital,” Donahue’s Goodman said.
 
In addition, Massachusetts leads the nation in the amount of funds it receives per researcher from National Institutes of Health grants — $47,112 as of 2005, up 34.6 percent from $35,005 in 1998.
 
Not highlighted in the Donahue report were two trends that cast Massachusetts in a weaker light than two top life science states on two barometers related to life sciences growth.
 
While VC spending in Massachusetts per-employee rose 40 percent between 1998 and 2005, to $11,644 from $8,310, California’s rose more than twice that rate during the same period, or 86 percent to $10,275 from $5,519. California’s life-sciences VC boom appears to reflect a shift by tech-oriented venture capitalists from information technology and Internet startups to early-stage biotech and pharma companies.
 
Joshua Boger, the founder, president and CEO of Massachusetts-based Vertex Pharmaceuticals, said the state needs to grow its life sciences workforce if his company is to fill most of the 229 job openings it has posted on its website.
 
While most of those jobs involve scientific research, Boger said his company has also posted open positions in accounting, product management and quality assurance, corporate and intellectual property law, human resources, public policy, procurement, logistics, and medical writing.
 
“We have as hard a time finding someone who can write a paragraph as we do to hold a beaker,” said Boger, the summit’s keynote speaker.
 
Boger said those jobs are among 300 his company plans to create this year, adding to a Massachusetts workforce that accounts for 1,000 of his company’s total 1,200 jobs. About one-third of those 300 jobs entail non-science positions.
 
“Building a talent pool for the life-sciences industry is more than building expertise in science,” Boger said. “My advice to students, or people looking to change jobs and move into the life sciences industry is, get a job in the industry – any job. Do not look for a position. Look for a company, and become part of the industry.”
 
He said that as much as Vertex and other life sciences companies may be growing, they will still limit the number of jobs they create in coming years by outsourcing many functions to networks of companies – a trend he defended as necessary to life science companies remaining competitive: “It started first in the manufacturing area. It’s moving into the development area, and it’s moving into the research area of the industry.”
 
Outsourcing is just one obstacle to creating life science jobs, Massachusetts’ top higher education official said. Patricia Plummer, chancellor of the Massachusetts Board of Higher Education, said the state’s changing demographics must be addressed as part of any future job-creation policies for the life sciences.
 
“We know that nearly all of our new population is going to be made up of first-generation college-going kids, who come from families with income challenges and other challenges,” Plummer said. “We have to make sure we’re prepared to bring them to the door of some of our industries. It’s more of a challenge than we’ve had in the past.”
 
Despite these obstacles, Goodman said, prospects for life science job creation in the state remain high. He cited the state’s concentrations of nonprofits, such as universities and research institutions, and businesses in biotech, pharmaceuticals, medical devices, and commercial research and development. Also working in the state’s favor, he said, is an aging Baby Boomer population.
 
“It’s very clear [that] the demand for healthcare products and services and technologies can only be expected to increase,” Goodman said. “Healthcare is a countercyclical industry: Healthcare does not go out of style. You don’t cut back on healthcare when times are tough.
 
“The commonwealth benefits substantially from the presence and from the health of the life science sector,” Goodman said. “To the extent that Massachusetts can remain competitive and can grow this industry and can continue to be the source of this high-end technology, we’re going to reap substantial economic benefits as a result.”

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