A Look at the Economic Impact of Bioscience Innovation in the US

A Look at the Economic Impact of Bioscience Innovation in the US

In recent years, the bioscience industry has emerged as an important driver of economic growth and job creation in the US. Once a highly specialized, niche industry, the biosciences now span a diverse array of economic sectors, and the industry’s ever-increasing pace of innovation has brought proven value in terms of both new jobs and quality-of-life improvements to every state in the country. Since 2001, the biosciences employment base has expanded by nearly 10%. This growth rate is not only faster than the overall private sector, it is also faster than other knowledge- or technology-based sectors, including aerospace, finance, and computer hardware. Today, approximately 1.66 million people are employed in more than 77,000 bioscience businesses in America.

To examine the economic and job creation impact of US biosciences in greater detail, a 2016 report from the Biotechnology Innovation Organization (BIO) and the innovation-based economic research firm TEConomy Partners breaks the industry down into five distinct subsectors. While these subsectors are united in their application of biological knowledge and associated technologies, they each have their own individual employment trends and economic patterns. These subsectors include the following:

Agricultural feedstock and chemicals

soybeansThis subsector takes knowledge and techniques from life sciences, biochemistry, and biotechnologies and applies them to agricultural goods processing and organic and agricultural chemical production. The subsector’s two major focus areas are the bio-based processing of oilseeds like corn and soybeans, and the manufacture of biofuels such as ethanol and biodiesel. Other products produced by the subsector include fertilizers, pesticides, and herbicides; biocatalysts; and biodegradable materials that are synthesized using plant-based feedstock.

The agricultural feedstock and chemicals subsector represents 5% of all American bioscience jobs, and employment in the subsector has increased each year over the past four years for an overall increase of 1.5% since 2012. For the most part, jobs are concentrated in Midwestern and Southern states, such as Illinois, Indiana, Iowa, and Texas.

Bioscience-related distribution

This logistical subsector coordinates the delivery of all products related to bioscience, including drugs and pharmaceuticals; equipment and supplies for medical, dental, and hospital facilities; and agbioscience products like plant seeds and agricultural chemicals. In order to ensure the safe delivery of these often highly sensitive or specialized products, such as plasma or blood, the subsector is making increasing use of sophisticated technologies like automated drug distribution systems, highly regulated product monitoring, cold storage, and radio-frequency identification (RFID) technologies that help track and locate items.

27% of bioscience jobs nationally fall into this subsector: a total of more than 452,000 jobs across close to 38,000 business establishments. Since 2012, the subsector has seen employment grow by 2.3%. Of all states with bioscience-related distribution employment, Florida and Illinois are the leading states which feature both high employment rates and a specialized concentration of jobs.

Drugs and pharmaceuticals

The drugs and pharmaceuticals subsector develops and brings to market medicines, diagnostic substances, and therapeutic treatments: products ranging from biopharmaceuticals to tissue and cell culture media to animal vaccines fall into this category. For the most part, employment in this subsector comes through large multinational firms whose activities span the entire lifecycle of drugs and pharmaceuticals, from research and development to manufacturing.

This subsector was among those hit hardest by the 2008 recession, but 2012 saw it gradually rebound. The following few years added just over 9,000 new jobs (an employment growth rate of 3.2%). In 2014, 18% of US bioscience jobs were directly encompassed by the drugs and pharmaceuticals category, but the subsector naturally has many close ties and indirect employment links with other subsectors, particularly research and testing, and bioscience distribution. Employment in this subsector is highly concentrated among fewer states, with California and New Jersey alone accounting for over 25% of drugs and pharmaceuticals jobs.

Medical devices and equipment

flasksThis subsector produces a range of health care products and supplies, including biomedical instruments, for use in patient care, diagnostics, surgery, and laboratories. Products made by firms working in this subsector include surgical instruments and supplies; genomic sequencing equipment; dental instruments and orthodontics; and implantable medical devices like vascular stents. At the heart of the subsector’s activities is the goal of improving testing and patient care capabilities through the innovative application of electronics and information technologies.

Medical devices and equipment is a high-employing subsector in which every state is represented. In 2014, nearly 350,000 employees were working across the country in over 7,600 establishments.

Research, testing, and medical laboratories

Firms of all sizes operate in this broad subsector, whose range of activities includes the development and commercialization of new industrial biotechnologies; research into drug discovery and drug delivery systems; gene and cell therapy development; and medical testing services.

Uniquely focusing on service and solutions offerings, this subsector is the largest and fastest growing in the entire US bioscience industry. Almost three out of every 10 US bioscience workers are employed in this subsector (for a total of more than 483,000 individual jobs), and jobs have been consistently added to the employment base every year since 2001.