By: Ken Alltucker
February 5, 2013
In the decade after Arizona embarked on a push to grow the biosciences, employment in the industry surged 45 percent despite recent challenges in raising venture-capital financing and securing federal research grants, a report released Tuesday shows.
Although the sector remains a small part of the state’s overall economy, the Battelle Technology Partnership Practice report found that Arizona’s bioscience jobs grew at nearly four times the national rate. The industry had 99,018 jobs in 2011, up from 68,302 in 2002, according to Battelle’s analysis.
Despite the job growth, analysts pointed out that the industry faces funding challenges, with venture-capital investment in 2012 falling to its lowest level since 2009 and a drop last year in federal research grants from the National Institutes of Health.
“This is not a sprint, it’s a marathon,” said Walt Plosila, senior adviser to Ohio-based Battelle Technology Partnership Practice. “The private sector is doing very good at this 10-year point, given where Arizona was at then.”
The Flinn Foundation commissioned the bioscience road map in 2002 to adopt strategies and goals to grow the sector. Every year, Battelle gauges how well the bioscience sector has fared in 19 categories, assessing areas such as growth of jobs, companies and federal grant funding. The report found that Arizona made progress in all categories and “substantial progress” in nine categories.
The report breaks down job growth in two major categories: hospital and non-hospital jobs. Hospital jobs dominate the sector’s overall employment, accounting for about 83percent of all positions.
Among the four areas in the non-hospital jobs category, the medical-devices and -equipment and the research, testing and medical-lab sectors have shown the fastest growth over the decade.
Medical-device and -equipment companies employed 6,190 in 2011, up from 3,824 in 2002. Research, testing and medical labs had 8,909 jobs in 2011, up from 5,567 in 2002, according to Plosila.
Like the health-care industry overall, the bioscience sector has added jobs at a faster pace than has the overall economy. The report found that bioscience job growth increased 11percent from 2009 through 2011 while private-sector employment remained flat.
Other economists said that the health-care and bioscience sectors remained strong during the recession and after the economic recovery started.
“The one industry that did not lose jobs was health care,” said Lee McPheters, an economist with Arizona State University’s W.P. Carey School of Business. Health-care employers “really have had a remarkable run through one of the worst economic downturns in U.S. history.”
McPheters said the bioscience jobs directly involved in research remain a small part of Arizona’s economy, but his research shows that such research jobs have grown since 2007 and pay greater-than-average wages.
“It is part of a larger industry (health care) that will likely continue to grow,” he said.
The report also showed that Arizona’s bioscience industry faces funding challenges with decline last year in NIH and venture capital finding
Arizona startups and firms secured $22 million in venture-capital funding in 2012, a 68 percent drop from 2011 and the state’s lowest level since 2009. NIH funding, considered a standard measure of how well researchers are faring compared with those in other states, also dropped last year.
Arizona’s share of these federal grants grew 19 percent from 2002 through 2012, slightly ahead of the national average but lagging the 31 percent growth of the top 10 states with the largest NIH grant awards over that period.
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