New Life Science Industry report: Mass. gained only 55 life science jobs between 2010 and 2012

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Last week, Pioneer Institute issued a report calling for Massachusetts to adopt two enhanced research and development tax credits, pointing out that research and development expenditures by Massachusetts industries dropped by 19% between 2007 and 2011 while California’s increased by 16.9% and the rest of states by 9.2% on average.  We also pointed out that California, which offers R&D tax credits vastly superior to Massachusetts’, has outpaced the nation in R&D growth.  Over the past two decades, the growth of industrial R&D expenditures by California business was greater than that of its top seven competitor states combined, Massachusetts included.

But the part of our report that generated the biggest controversy was the calculation that Massachusetts had added only 571 life science jobs in the first five years of a ten year publicly-funded $1 billion life science initiative, using the industry’s own methodology of counting jobs.

[quote align=”right” color=”#999999″]By any of these measures Massachusetts is falling far short of creating the 250,000 new jobs promised by Governor Patrick over the ten-year term of the life science initiative.[/quote] Actually, Pioneer reported the 571 figure as one of three separate calculations of life science job growth, each one using the precise methodology that had been employed in three published reports sponsored by the Massachusetts life science industry.  Pioneer used the industry’s own counting methods, simply plugging in the jobs data as reported by the federal government.  Measured by the two other industry-employed methodologies, Massachusetts had gained 1,438 jobs and 3,024 jobs respectively.  We reported all three numbers and pointed out that by any of these measures Massachusetts is falling far short of creating the 250,000 new jobs promised by Governor Patrick over the ten-year term of the life science initiative.

The Pioneer report, issued on the first day of the life science industry’s annual BIO conference in San Diego, prompted reactions.

Susan Windham-Bannister, president of the state authority in charge of the life science initiative, the Massachusetts Life Sciences Center, said, “We just don’t understand how the Pioneer Institute did its analysis.”  Senate President Murray, who like Windham-Bannister was in attendance at the conference, said. “It seems like they started with the conclusion and created a study to support the conclusion.”

Given that Pioneer had used the industry’s own methods of counting life science jobs, and, as we explained in the report,  used the same federal source of jobs data that the industry had used, we found both comments to be remarkable.  The first comment stands for the proposition that the president of the Massachusetts Life Sciences Center claims not to understand the very analytics that her constituent companies used to advocate for the legislation and to report on its consequences.  The second stands for the proposition that Pioneer’s calculation of job gains using the industry’s own methodology represents a preordained conclusion.  In fact, Pioneer didn’t even “create a study” in this regard.  We simply totaled the job gains using the industry’s methodology.

What is more astonishing is that a national state-by-state report on life science job growth was issued at the BIO conference by Battelle on the very same day that Pioneer issued its report, Battelle/BIO State Bioscience Jobs, Investments and Innovation 2014 was handed out at the conference.  And here is the truly amazing thing about it: Battelle’s report shows that Massachusetts gained 55 jobs between 2010 and 2012.

That’s right.  Even as they were calling our (their) job numbers into question, the critics in San Diego were in receipt of Battelle’s biannual state-by-state life science jobs report showing that even that fewer jobs had been created than we reported using their methodology.

Here’s Battelle’s 2014 report showing that Massachusetts had 77,817 life science jobs in 2012:

Here’s Battelle’s 2012 report for Massachusetts, issued at the 2012 BIO conference, showing that in 2010 Massachusetts had 77,762 life science jobs in 2010:   (see page 89.)

So, let me be completely clear about my methodology showing that Massachusetts has added only 55 jobs between 2010 and 2012, according to Battelle’s state-by-state industry report:

Battelle’s calculation of MA life science employment 2012 77,817 jobs
Battelle’s calculation of MA life science employment 2010 77,762 jobs
Net increase in MA life science employment 2012-2010        55 jobs

Please note: these are not Pioneer’s figures.  They were calculated by Battelle using Battelle’s methodology.  Pioneer did not design this methodology, just as we did not design the job counting methodology reported by us last week.  All Pioneer did then and again today is to total up the results.

Of additional interest is a comparison of life science job gains of each state between 2010 and 2012, derived from the two aforementioned Battelle reports, showing that Massachusetts ranked 31st among the states in percentage increase in life science employment and 29th among the states in increase in life science employment.

State 2010 2012 % Incr/Decr Rank % Incr/Decr Incr/Decr Rank Incr/Decr
CA 228,700 235,864 3.1% 18 7,164 1
NC 62,386 66,123 6.0% 12 3,737 2
MI 39,282 41,892 6.6% 8 2,610 3
AZ 21,084 23,545 11.7% 3 2,461 4
TN 38,025 40,411 6.3% 9 2,386 5
TX 78,452 80,792 3.0% 20 2,340 6
UT 23,406 25,101 7.2% 6 1,695 7
CO 26,830 28,510 6.3% 10 1,680 8
NY 74,873 76,070 1.6% 25 1,197 9
WI 30,796 31,758 3.1% 19 962 10
MO 27,180 28,109 3.4% 16 929 11
FL 78,062 78,925 1.1% 28 863 12
NM 7,443 8,304 11.6% 4 861 13
AL 11,945 12,794 7.1% 7 849 14
OH 47,536 48,294 1.6% 26 758 15
MD 33,257 33,981 2.2% 23 724 16
VT 1,957 2,585 32.1% 1 628 17
NE 14,978 15,467 3.3% 17 489 18
VA 26,127 26,545 1.6% 24 418 19
ND 3,638 4,004 10.1% 5 366 20
DE 7,938 8,174 3.0% 21 236 21
SD 4,976 5,175 4.0% 13 199 22
AR 6,223 6,405 2.9% 22 182 23
KS 13,266 13,446 1.4% 27 180 24
OR 13,423 13,556 1.0% 29 133 25
AK 735 843 14.7% 2 108 26
MT 2,464 2,559 3.9% 14 95 27
D.C. 1,962 2,037 3.8% 15 75 28
MA 77,762 77,817 0.1% 31 55 29
KY 11,351 11,405 0.5% 30 54 30
WY 831 883 6.3% 11 52 31

It is pretty remarkable that Pioneer’s reporting of life science job gains, calculated using the same methodologies employed by industry reports, could be characterized as a study created to support a conclusion.  I think the Battelle report debunks that myth.

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