Oregon Bioscience Industry Makes Gains During the Recession
By Linda Barney, Barney and Associates
“The bioscience industry in Oregon has not only weathered the recession, but is growing while other industries are losing jobs,” states Alec Josephson, senior economist for ECONorthwest. That’s the result of a recent study performed for the Oregon Bioscience Association to measure the economic contributions of the bioscience industry in Oregon. Josephson has performed over 300 economic impact analyses for ECONorthwest, a large economics consulting firm with staff and offices in Oregon, Washington, California, and Colorado.
A closer look at bioscience gains in jobs and income
The findings of the 2010 study are exciting and show that the bioscience industry in Oregon is growing and can become a major industry in terms of job creation and above-average wages. Let’s look closer at the findings:
Between 2007 and 2009, the private bioscience sector added 600 jobs, which is a 6% increase. This contrasts with total private-sector employment in Oregon, which experienced a loss of 127,000 jobs or roughly a 9% decrease over the same time period.
Bioscience payrolls increased by $55 million, showing a 10% increase in payroll between 2007-2009. With payroll increasing faster than employment, the average annual income in the bioscience industry increased by 4%.
The average wage is $56,000 in the private bioscience sector for 2009, which is 40% above the average wage in Oregon.
Defining the bioscience industry in Oregon
ECONorthwest defines the private bioscience industry in Oregon using the Battelle Institute’s definition, which includes these industry segments:
Agricultural feedstock and chemical manufacturing
Drugs and pharmaceutical manufacturing
Medical devices and equipment manufacturing
Research, testing, and medical laboratories
Josephson indicates that according to a recent Battelle study, Oregon’s bioscience industry doesn’t have enough employment concentration to be called a cluster. “However, the industry is growing in a recession, has important supply-chain relationships with Oregon-based companies, and has relatively high wages. Combined, these factors contribute to the industry’s multiplier effect and spread economic benefits to workers and business owners in other sectors of the Oregon economy. Perhaps just as important, this is an industry that markets around the world and, as a result, brings new money and jobs into Oregon. It is the kind of industry that the state needs,” according to Josephson.
Josephson indicates that the Battelle definition allows for the most reliable estimate of the bioscience industry over time and across states. In addition to the private bioscience industry, there is also life science research conducted by universities and hospitals that is not captured by official government industry codes. OBA surveys universities and hospitals to get an idea of their employment, expenditures, and funding sources for life science research to include in the study.
Out of these bioscience segments, medical devices account for over 50% of the Oregon bioscience jobs during 2009. This makes the Oregon medical devices percentage slightly larger than the U.S. as a whole while the other sectors are modestly smaller. The medical devices segment reported a 4% decline in overall employment during 2009.
The pharmaceutical segment showed a 14% increase during the recession. Josephson notes that the 2010 study does not include employment by Genentech since the study ended in 2009. This suggests that the pharmaceutical segment could experience even greater growth as employment numbers for Genentech and other companies supporting them are counted in 2010 and beyond.
How ECONorthwest arrived at these findings
To arrive at these findings, Josephson used employment and payroll data (called ES-202 data) from the Oregon Department of Employment. Josephson then organized companies by NAICS codes and removed companies that he knew were not in the bioscience industry. Next, he used the IMPLAN economic impact modeling software to analyze the data. “IMPLAN software is used by hundreds of government agencies, colleges and universities, non-profits, corporations, and business development and community planning organizations. It is the most reliable modeling software used to measure economic impact,” states Josephson.
How to improve the biosciences industry in Oregon
When asked what Oregon could do to improve the biosciences industry in Oregon, Josephson states, “Businesses and researchers in universities should network and collaborate to develop a relationship that can help grow the bioscience industry. They should work together to identify, support, and grow important supply chain relationships with Oregon based companies.” He also recommends creating a pool of temporary resources so that companies needing help can find a readily available supply of people trained in bioscience area. “Coordination among education and businesses is critical. Having readily available bioscience talent and a strong bioscience group, such as the Oregon Bioscience Association, will help attract companies who are considering relocating to Oregon,” Josephson states.
Linda Barney is the founder and owner of Barney and Associates, a technical / marketing writing, training and web design firm in Beaverton, Oregon that provides writing and web content for the high tech, government, biotechnology, medical, sustainability and scientific communities. Linda writes articles for the Software Association of Oregon, the Oregon Bioscience Association, the Clean Technology Alliance, and the Supercomputing Conference. Contact Linda at linda@barneyassoc.com.