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Turning Innovation Into Enterprise


Bioscience Industry as an Economic Driver

The Southern Technology Council recently hosted a webinar profiling bioscience industry employment in the South, which featured two experts in the field, Peter M. Pellerito of PMP Public Affairs Consulting and Ryan Helwig of Battelle.  Mr. Pellerito is a senior policy consultant and former interim vice president for state government relations and university outreach for the Biotechnology Industry Organization (BIO).

They discussed highlights of a recent Battelle report on the impact of the bioscience industry in Southern states, and analyzed the changing public policy environment for the industry.  The report—Battelle/BIO State Bioscience Industry Development 2012–reviews data (including NAICS codes) in the five subsectors of bioscience: agriculture feedstock and chemicals, drugs and pharmaceuticals, medical devices/equipment, research/testing/medical labs, and bio-related distribution.

The six major conclusions from the report are:

  1. Bio is a strong job generator
  2. In recent years, the staying power of bio has been demonstrated (stronger during recession than overall private sector)
  3. Bio offers high annual wages
  4. Growth prospects are strong for bio because of diverse markets
  5. Bio is one of the most innovative industries with close connections to advances in basic research. R&D advances global, societal issues of food, environment, energy and health
  6. Global competition is heating up—the U.S. will need to continue to raise its game.

Overall, bio jobs have increased more than other sectors and bio is an important regional economic driver.  In the South, the average wage in bio is $73,000 compared to the national private industry average of $43,000.

Bio has identified a Location Quotient Metric to show how specialized the industry is in a particular region compared to the private sector. In the South, the Location Quotient Metric is .83, meaning that the South is seeing about 83 percent of what is happening nationwide.  Bio is thus continuing to emerge as an economic driver in the region.

The report highlights state-specific strengths, with West Virginia showing a specialization and growth in drugs and pharmaceuticals, and growth in devices as well as research/technology.  By comparison, North Carolina has three of the five specializations, and Maryland has two of the five.

When asked what single state policy could do the most to improve a state’s Location Quotient Metric, these experts said workforce/talent and capital are at the top of the list.  Workforce remains a challenge, especially finding personnel with multi-disciplinary skills, such as biology and engineering, or genetics and computer science.  Other skills needed are regulatory and quality assurance.  Early stage and venture capital are also sorely needed.

From the report about West Virginia:  “WV employs more than 6,400 in its bioscience industry (2010) after a decade in which it grew by 22 percent. Four in ten state bioscience jobs are in drugs and pharmaceuticals, which has a specialized employment concentration in West Virginia with a location quotient of 1.72. Drugs manufacturing has grown its job base by 28 percent since 2001 and continued these gains in more recent years despite job declines at the national level.”