Status Report on the Job Creation Impact of the Life Sciences Act of 2008

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This is the second in a continuing series of status reports published by Pioneer Institute on the Massachusetts Life Sciences Act of 2008 (LSA).

This report presents an analysis of job growth in the life sciences industry in Massachusetts and other states utilizing data from the Quarterly Census of Employment and Wages (QCEW) published by the U.S. Bureau of Labor Statistics (BLS). The data presented in this report are for the 69-month period (23 quarters) beginning with the first quarter of fiscal 2009, the effective date of the Massachusetts Life Sciences Act of 2008 (LSA), through the third quarter of fiscal 2014, the most recent quarter for which BLS data are available.

The LSA (Chapter 130 of the Acts of 2008) was enacted on June 16, 2008. The legislation established a basis for Massachusetts state government to invest $1 billion to expand life sciences-related employment and support research, development, manufacturing, and commercialization in the life sciences industry over a 10-year period, subject to continuing appropriation by the legislature.  The tax incentive provisions of the LSA had an effective date of January 1, 2009. The act defines life sciences as advanced and applied sciences, including but not limited to regenerative medicine, biotechnology, biopharmaceuticals, nanotechnology, and medical devices.  The Life Sciences Act established three funding mechanisms:  the Life Sciences Investment Fund, capped at $250 million over the 10-year period, the Capital Program, capped at $500 million, and the Life Sciences Tax Incentive Program, capped at $250 million.

The LSA is administered by the Massachusetts Life Sciences Center (MLSC), a quasi-independent government entity established by Chapter 123 of the Acts of 2006. A seven-member board of directors governs MLSC, comprised of the secretary of administration and finance, the secretary of housing and economic development, the president of the University of Massachusetts, and four members appointed by the Governor on staggered terms.  The ex-officio members may appoint designees to the board.   Although established in 2006, the MLSC had no significant activity, and only one employee, through fiscal year 2008.

The Center’s enabling legislation requires MLSC to monitor and report on how many new life sciences jobs it has helped to create.  An independent audit published by State Auditor Joseph DeNucci on August 27, 2010 reported that from July 1, 2007 through March 4, 2010, 443 permanent, full-time life science employee jobs and 176 construction jobs had been created.  The auditor’s report described the job creation monitoring process as follows:

“MLSC tracks jobs created through its programs by requiring reports from recipient entities.  Entities receiving tax incentives or funds from the Life Sciences Investment Fund must be registered life sciences companies, which are subject to annual reporting requirements. All capital grant agreements we reviewed specifically required recipients to annually report the number of employees employed and the total salary of these employees at the benefiting facility. The MLSC Chief Financial Officer monitors all jobs created and tracks them according to each MLSC program from which they are produced.”

The Life Sciences Act of 2008 anticipated an annual appropriation from the Legislature to the Massachusetts Life Sciences Investment Fund totaling $250 million over 10 years. The Massachusetts Life Sciences Investment Fund is used in part to pay for administrative and operating expenses of MLSC.

Figure 1 presents the amount that MLSC has expended or dispersed in each program since its inception.  In total, $541.1 million has been incurred to date in the following nine programs, according to MLSC’s website on April 16, 2015.

Figure 1. The Cost of Mass. Life Sciences Center Programs, $millions

MA Life Sciences Center ProgramsCost to date (millions)
Tax Incentive Program$115.00
Capital Program$372.00
Accelerator Loan Program$20.80
Cooperative Research Matching Grant Program$6.80
Life Sciences Milestone Achievement Program$2.00
Life Sciences International Collaborative Industry Program$1.60
Small Business Matching Grant Program$4.00
STEM Equipment and Supplies Grant Program$12.00
New Faculty Matching Grant Program$3.80
New Investigator Matching Grant Program$3.10
Total$541.10

Figure 2 presents MLSC’s operating expenses from its inception through FY2014.  Data for FY2010-FY2014 are derived from MLSC’s audited financial statements.  Data from FY2007-FY2009 are derived from the previously-cited 2011 Massachusetts State Auditor’s report.  Data from FY2007-FY2009 only include totals for each year and include property and equipment expenses.  The data from FY2010-FY2014 do not include property and equipment expenses.  The chart shows that total expenditures of $15,561,863 have been expended as described.  Combined with the $541.1 million in program expenditures described in Figure 1, total expenditures at MLSC have totaled $566.7 million.  FY2016 operating expenses are expected to add approximately $3 million.

Figure 2. MA Life Sciences Center Operating Expenses 2007-2014, $

Operating ExpensesSalary and related employee expensesProfessional and consulting feesCommunications programs, sponsorships and contributions General and administrative expensesTotal
FY2007nananana $232,000
FY2008nananana $347,000
FY2009nananana $2,500,000
FY2010$1,419,959 $244,345 $308,408 $298,420 $2,271,132
FY2011$1,277,158 $202,576 $326,516 $383,184 $2,189,434
FY2012$1,438,984 $180,152 $224,874 $368,248 $2,212,258
FY2013$1,573,275 $336,985 $300,304 $423,569 $2,634,133
FY2014$1,960,143 $291,116 $313,406 $611,241 $3,175,906
FY2007-FY2014$7,669,519 $1,255,174 $1,473,508 $2,084,662 $15,561,863

Figure 3 presents a comparison of life science employment in Massachusetts in FY2009-Q1 and FY2014-Q3 using the definition of life science jobs employed by the Massachusetts Life Science Collaborative in its 2007 report entitled “Superclusters,” produced by its consultant, PricewaterhouseCoopers, LLC.  This report was issued by MLSC during legislative deliberations about the Life Sciences Act.  Its definition of the life sciences industry as presented here includes 21 North American Industrial Classification System (NAICS) sectors as indicated, each with a percentage (life sciences portion) of total sector employment attributable to life sciences.  For example, NAICS sector 622-Hospitals, had 189,254 Massachusetts employees in FY2009-Q1 with 4.5 percent of them attributable to life sciences according to MLSC’s methodology, resulting in 8,516 life science jobs in FY2009-Q1.  Likewise, total NAICS sector 622-Hospitals employment in FY2014-Q3 was 198,201 with 4.5 percent attributable to life sciences according to MLSC’s methodology, resulting in 8,919 life science jobs in FY2014-Q3.  According to the methodology, NAICS sector 622-Hospitals therefore added 403 life science jobs (8,919-8,516=403) from FY2009-Q1 to FY2014-Q3. This methodology is employed with each of the 21 NAICS sectors that MLSC chose to include in its definition of life science employment in its “Superclusters” report.

Pioneer Institute has applied this same methodology to compute life science job gains/losses between FY2009-Q1 and FY2014-Q3.  Pioneer has never used a self-designed methodology to measure life science employment gains/losses.

Figure 3 calculates that, using MLSC’s methodology as employed in its 2007 “Superclusters” report, Massachusetts added 3,639 life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 3. Job gains (Mass Life Science Collaborative/PWC 2007 methodology), FY09/Q1-FY14/Q3

NAICS CodeNAICS Industry DescriptionSector total 2009-Q1Sector total 2014-Q3Life Sciences portionLife science jobs 2009-Q1Life science jobs 2014-Q3Gain/loss 2009Q1-2014Q3Percent gain 2009Q1-2014Q3
622Hospitals189,254198,2014.50%8,5168,9194034.70%
325411Medicinal and botanical manufacturing433207100%433207-226-52.20%
325412Pharmaceutical preparation manufacturing7,1827,567100%7,1827,5673855.40%
325413In-vitro diagnostic substance manufacturing1,3791,528100%1,3791,52814910.80%
325414Other biological product manufacturing638678100%638678406.30%
334510Electro-medical apparatus manufacturing5,2213,695100%5,2213,695-1,526-29.20%
334516Analytical laboratory instrument manufacturing5,3586,546100%5,3586,5461,18822.20%
334517Irradiation apparatus manufacturing1,048961100%1,048961-87-8.30%
339112Surgical and medical instrument manufacturing5,8347,080100%5,8347,0801,24621.40%
339113Surgical appliance and supplies manufacturing2,5752,108100%2,5752,108-467-18.10%
339114Dental equipment and supplies manufacturing337409100%3374097221.40%
339115Ophthalmic goods manufacturing1,104744100%1,104744-360-32.60%
339116Dental laboratories870731100%870731-139-16.00%
423450Medical equipment merchant wholesalers6,4375,149100%6,4375,149-1,288-20.00%
423460Ophthalmic goods merchant wholesalers359316100%359316-43-12.00%
424210Druggists’ goods merchant wholesalers4,4294,149100%4,4294,149-280-6.30%
541380Testing laboratories7,0723,4019%636306-330-51.90%
541711Research and development in biotechnology26,68229,876100%26,68229,8763,19412.00%
541712Other physical and biological research15,64420,60222%3,4424,5321,09131.70%
621511Medical laboratories3,4554,048100%3,4554,04859317.20%
621512Diagnostic imaging centers1,4861,511100%1,4861,511251.70%
TOTAL: MA Life Sciences per methodology of Mass Life Science Collaborative - PriceWaterhouseCooper (2007)87,42291,0613,6394.20%

Figure 4 is a graphic depiction of the data presented in Figure 3 showing the sectors that gained and lost jobs between FY2009-Q1 and FY2014-Q3 using MLSC’s methodology as employed in its 2007 “Superclusters” report.

Figure 4. Job gains (Mass Life Sciences Collaborative–PWC 2007 methodology), FY09/Q1 – FY14/Q3

Fig2Graphic

 

Figure 5 presents a comparison of life science employment in Massachusetts in FY2009-Q1 and FY2014-Q3 using the definition of life science jobs employed by the MassBiotechnology Council in its 2013 report entitled “Industry Snapshot.”  Its definition of the life sciences industry, as presented here, includes 11 North American Industrial Classification System (NAICS) sectors as indicated, each with a percentage (life sciences portion) of total sector employment attributable to life sciences.  Figure 5 calculates job gains using MLSC’s methodology as employed in its 2013 “Industry Snapshot” report.

According to the MassBiotechnology Council methodology, Massachusetts added 5,894 life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 5. Job gains (MassBiotechnology Council 2013 methodology), FY09/Q1 – FY14/Q3

NAICS CodeNAICS Industry DescriptionSector total 2009-Q1Sector total 2014-Q3Life Sciences portionLife science jobs 2009-Q1Life science jobs 2014-Q3Gain/loss 2009-2014Percent gain 2009-2014
622Hospitals189,254198,2014.5%8,5168,9194034.70%
61131Colleges and universities105,418118,0381.9%2,0032,24324012.00%
325411Medicinal and botanical manufacturing433207100%433207-226-52.20%
325412Pharmaceutical preparation manufacturing7,1827,567100%7,1827,5673855.40%
325413In-vitro diagnostic substance manufacturing1,3791,528100%1,3791,52814910.80%
325414Other biological product manufacturing638678100%638678406.30%
334516Analytical laboratory instrument manufacturing5,3586,54630%1,6071,96435622.20%
541380Testing laboratories7,0723,4019%636306-330-51.90%
541711Research and development in biotechnology26,68229,876100%26,68229,8763,19412.00%
541712Other physical and biological research15,6442060222%3,4424,5321,09131.70%
621511Medical laboratories3,4554,048100%3,4554,04859317.20%
TOTAL: MA Life Sciences per methodology of Mass Biotechnology Council "Industry Snapshot" (2013) 55,97461,8685,89410.50%

Figure 6 is a graphic depiction of the data presented in Figure 5 showing the sectors that gained and lost jobs between FY2009-Q1 and FY2014-Q3, according to the methodology used by MassBiotechnology Council in its “Industry Snapshot” report in 2013.

Figure 6. Job gains (MassBiotechnology Council 2013 methodology), FY09/Q1 – FY14/Q3 (Graphical)

Fig4Graphic

Figure 7 presents a comparison of life science employment in Massachusetts in FY2009-Q1 and FY2014-Q3 using the definition of life science jobs employed by the Boston Foundation in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development : The Role of the Massachusetts Life Sciences Center” written by Northeastern University professors/economists Barry Bluestone and Alan Clayton-Matthews.  Its definition of the life sciences industry, as presented here, includes 16 NAICS sectors as indicated, each with a percentage (life sciences portion) of total sector employment attributable to life sciences.  Figure 5 calculates job gains using Boston Foundation as employed in its 2007 report.

According to the Boston Foundation methodology, Massachusetts added 4,280 life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 7. Job gains (Boston Fdtn–Bluestone/Clayton-Matthews 2013 methodology), FY09/Q1–FY14/Q3

NAICS CodeNAICS Industry DescriptionSector total 2009-Q1Sector total 2014-Q3Life Sciences portionLife science jobs 2009-Q1Life science jobs 2014-Q3Gain/loss 2009-2014Percent gain 2009-2014
325411Medicinal and botanical manufacturing433207100%433207-226-52.20%
325412Pharmaceutical preparation manufacturing7,1827,567100%7,1827,5673855.40%
325413In-vitro diagnostic substance manufacturing1,3791,528100%1,3791,52814910.80%
325414Other biological product manufacturing638678100%638678406.30%
334510Electro-medical apparatus manufacturing5,2213,695100%5,2213,695-1,526-29.20%
334516Analytical laboratory instrument manufacturing5,3586,546100%5,3586,5461,18822.20%
334517Irradiation apparatus manufacturing1,048961100%1,048961-87-8.30%
339112Surgical and medical instrument manufacturing5,8347,080100%5,8347,0801,24621.40%
339113Surgical appliance and supplies manufacturing2,5752,108100%2,5752,108-467-18.10%
339114Dental equipment and supplies manufacturing337409100%3374097221.40%
423450Medical equipment merchant wholesalers6,4375,149100%6,4375,149-1,288-20.00%
424210Druggists' goods merchant wholesalers4,4294,149100%4,4294,149-280-6.30%
541380Testing laboratories7,0723,401100%7,0723,401-3,671-51.90%
541711Research and development in biotechnology26,68229,876100%26,68229,8763,19412.00%
541712Other physical and biological research15,64420602100%15,64420,6024,95831.70%
621511Medical laboratories3,4554,048100%3,4554,04859317.20%
MA Life Sciences per methodology of Boston Foundation - Professors Bluestone/Clayton-Matthews (2013) 93,72498,0044,2804.60%

Figure 8 is a graphic depiction of the data presented in Figure 7 showing the sectors that gained and lost jobs between FY2009-Q1 and FY2014-Q3, according to the methodology used by the Boston Foundation in its in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center.”

Figure 8. Job gains/losses (Boston Foundation–Bluestone/Clayton-Matthews 2013 methodology), FY09/Q1 – FY14/Q3 (Graphical)

Fig6Graphic

Figure 9 presents a comparison of Massachusetts life science employment in FY2009-Q1 and FY2014-Q3 using the definition of life science jobs employed by Battelle Memorial Institute and the Biotechnology Industry Organization in the 2014 edition of their biennial report “Battelle/BIO State Bioscience Jobs, Investments and Innovation.”  Its definition of the life sciences industry includes 25 NAICS sectors of which nine are in the agricultural and feedstock NAICS group.  Fewer than 100 Massachusetts residents in total are employed in the agricultural and feedstock sectors, so for the purpose of the present review of Massachusetts life sciences employment, these seven sectors are excluded from this analysis.[1]  The remaining 16 sectors included in the Battelle/BIO methodology are presented here, each of which has a substantial level of Massachusetts employment.  Figure 9 includes the percentage of total sector employment attributable to life sciences in Massachusetts according to Battelle/BIO.  Because Battelle/BIO uses a proprietary state-by-state methodology to determine the relevant life sciences portion of several NAICS sectors, Pioneer was unable to employ its methodology later in this report for state-to-state comparisons, but Battelle/BIO generously shared the percentages for Massachusetts with Pioneer and therefore Pioneer is able to utilize this methodology for comparative purposes within Massachusetts from FY2009-Q1 to FY2014-Q3.

According to the Battelle/BIO methodology, Massachusetts added 6,107 life science jobs between FY2009-Q1 and FY2014-Q3.

[1] Wet Corn Milling, Soybean Processing, Other Oilseed Processing, Ethyl Alcohol Manufacturing, Cellulosic Organic Fiber Manufacturing, Nitrogenous Fertilizer Manufacturing, Phosphatic Fertilizer Manufacturing, Fertilizer Mixing Manufacturing, Pesticide and other Agricultural Chemical Manufacturing.

Figure 9. Job gains (Battelle/BIO methodology), 2014 FY09/Q1–FY14/Q3

NAICS CodeNAICS Industry DescriptionSector total 2009-Q1Sector total 2014-Q3Life Sciences portionLife science jobs 2009-Q1Life science jobs 2014-Q3Gain/loss 2009-2014Percent gain 2009-2014
54171Physical, engineering and biological research40,62850,47875%30,47137,8597,38824.20%
325411Medicinal and botanical manufacturing433207100%433207-226-52.20%
325412Pharmaceutical preparation manufacturing7,1827,567100%7,1827,5673855.40%
325413In-vitro diagnostic substance manufacturing1,3791,528100%1,3791,52814910.80%
325414Other biological product manufacturing638678100%638678406.30%
334510Electro-medical apparatus manufacturing5,2213,695100%5,2213,695-1,526-29.20%
334516Analytical laboratory instrument manufacturing5,3586,546100%5,3586,5461,18822.20%
334517Irradiation apparatus manufacturing1,048961100%1,048961-87-8.30%
339112Surgical and medical instrument manufacturing5,8347,080100%5,8347,0801,24621.40%
339113Surgical appliance and supplies manufacturing2,5752,108100%2,5752,108-467-18.10%
339114Dental equipment and supplies manufacturing337409100%3374097221.40%
423450Medical equipment merchant wholesalers6,4375,149100%6,4375,149-1,288-20.00%
424210Druggists' goods merchant wholesalers4,4294,14974%3,2773,070-207-6.30%
424910Farm supplies merchant wholesalers34447772%2483439638.70%
541380Testing laboratories7,0723,40134%2,4041,156-1,248-51.90%
621511Medical laboratories3,4554,048100%3,4554,04859317.20%
MA Life Sciences per methodology of Battelle/BIO State Bioscience Jobs, Investments and Innovation (2014)76,29882,4056,1078.00%

Figure 10 is a graphic depiction of the data presented in Figure 9 showing the sectors that gained and lost jobs between FY2009-Q1 and FY2014-Q3, according to the methodology used by the Battelle/BIO in its in its 2014 report entitled “Battelle/BIO State Bioscience Jobs, Investments and Innovation.”

Figure 10. Job gains (Battelle/BIO State methodology), FY09/Q1 – FY14/Q3 (Graphical)

Fig8Graphic

Figure 11 presents a state-by-state comparison of job gains in life sciences using the methodology employed by the MLSC in its 2007 report entitled “Superclusters” produced by its consultant PricewaterhouseCoopers, LLC.  The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.  Full state-by-state data is available in downloadable form by clicking on a link elsewhere on the Pioneer Institute website.

Massachusetts ranked seventh in job gains with 3,639.

Figure 11. Top 20 States for Job Gains (Mass Life Science Center–PWC 2007 methodology)

StateLS jobs 2009-Q1 per MLSCLS jobs 2014-Q3 per MLSC% job gain per MLSC% job gain rank
CA260,388280,15419,7661
NC67,00375,8788,8762
TX101,379108,6957,3153
UT24,00229,4255,4244
MI51,84856,5814,7335
AZ25,20329,8764,6736
MA87,42291,0613,6397
FL105,459108,7973,3388
CO30,91133,9603,0499
KY12,97414,9241,95010
AL14,35515,7371,38211
OR14,42215,22280012
NV7,6568,33868113
MT2,4653,13166614
NY111,038111,57854015
ID6,5256,98746216
GA36,02536,43240617
WI33,53633,86533018
MN49,60849,92231419
OH57,42057,63621720

Figure 12 presents a graphic depiction of the data presented in Figure 11 of the state-by-state comparison of job gains in life sciences using the methodology employed by the MLSC in its 2007 report entitled “Superclusters” produced by its consultant PricewaterhouseCoopers, LLC.  The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.

Figure 12. Top 20 States for Job Gains (Mass Life Science Collaborative–PWC 2007 methodology) (Graphical)

Fig10Graphic

 

Figure 13 presents a state-by-state comparison of percentage increase in life sciences jobs using the methodology employed by the MLSC in its 2007 report entitled “Superclusters” produced by its consultant PricewaterhouseCoopers, LLC.  The top 20 states are presented, ranked by percent increase in jobs between FY2009-Q1 and FY2014-Q3.

Massachusetts ranked 16th in job gains at 4.2 percent.

Figure 13: Top 20 States for Job Gains by Percentage (Mass Life Science Collaborative– PWC 2007 methodology)

StateLS jobs 2009-Q1 per MLSCLS jobs 2014-Q3 per MLSC% job gain per MLSC% job gain rank
MT2,4653,13127.00%1
UT24,00229,42522.60%2
AZ25,20329,87618.50%3
KY12,97414,92415.00%4
NC67,00375,87813.20%5
AK1,2681,43413.10%6
CO30,91133,9609.90%7
AL14,35515,7379.60%8
MI51,84856,5819.10%9
NV7,6568,3388.90%10
CA260,388280,1547.60%11
TX101,379108,6957.20%12
ID6,5256,9877.10%13
OR14,42215,2225.50%14
ND1,7431,8315.00%15
MA87,42291,0614.20%16
FL105,459108,7973.20%17
DE5,5745,7403.00%18
NM11,38311,5461.40%19
GA36,02536,4321.10%20

Figure 14 presents a graphic depiction of the data presented in Figure 13 of the state-by-state comparison of percentage increase in life science jobs using the methodology employed by the MLSC in its 2007 report entitled “Superclusters” produced by its consultant PricewaterhouseCoopers, LLC.  The top 20 states are presented, ranked by increase in life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 14. Top 20 States for Jobs Gains by Percentage (Mass Life Science Collaborative–PWC 2007 methodology) (Graphical)

Fig12Graphic

Figure 15 presents a state-by-state comparison of job gains in life sciences using the methodology employed by the by the MassBiotechnology Council in its 2013 report entitled “Industry Snapshot.”  The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.  Full state-by-state data is available in downloadable form by clicking on a link elsewhere on the Pioneer Institute website.

Massachusetts ranked 3rd in job gains with 5,894.

Figure 15. Top 20 States for Job Gains (Mass BioTechnology Council 2013 methodology)

StateLS jobs 2009-Q1 per MBTCLS jobs 2014-Q3 per MBTC% job gain per MBTC% job gain rank
CA139,681155,00915,3291
NC46,21753,6547,4372
MA55,97461,8685,8943
TX50,72255,3854,6644
FL36,31539,3713,0565
AZ11,69614,4472,7516
MI27,81330,2622,4497
UT11,70713,9902,2838
CO13,85615,7621,9069
OH28,97830,6631,68510
AL8,42810,0021,57411
NY63,81065,1131,30312
WI14,92516,2221,29713
KY6,9528,1671,21514
DE1,7442,9251,18115
GA17,66618,7061,04016
OR6,8387,77994117
IA7,0357,81277718
MN13,89814,64474619
ID3,4654,21074520

Figure 16 presents a graphic depiction of the data presented in Figure 15 of the state-by-state comparison of life science job gains using the methodology employed by the by the MassBiotechnology Council in its 2013 report entitled “Industry Snapshot.”  The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.

Figure 16. Job Gains – Top 20 States (Mass BioTechnology Council 2013 methodology) (Graphical)

Fig14Graphic

Figure 17 presents a state-by-state comparison of percentage increase in life sciences jobs using the methodology employed by the by the MassBiotechnology Council in its 2013 report entitled “Industry Snapshot.”  The top 20 states are presented, ranked by percent increase in jobs between FY2009-Q1 and FY2014-Q3.

Massachusetts ranked 14th in job gains at 10.5 percent.

Figure 17. Top 20 States for Job Gains by Percentage (Mass BioTechnology Council 2013 methodology)

StateLS jobs 2009-Q1 per MBTCLS jobs 2014-Q3 per MBTC% job gain per MBTC% job gain rank
DE1,7442,92567.70%1
MT1,7042,26833.10%2
AZ11,69614,44723.50%3
ID3,4654,21021.50%4
UT11,70713,99019.50%5
AK78093219.50%6
AL8,42810,00218.70%7
KY6,9528,16717.50%8
NC46,21753,65416.10%9
OR6,8387,77913.80%10
CO13,85615,76213.80%11
IA7,0357,81211.00%12
CA139,681155,00911.00%13
MA55,97461,86810.50%14
TX50,72255,3859.20%15
MI27,81330,2628.80%16
WI14,92516,2228.70%17
AR3,7654,0828.40%18
FL36,31539,3718.40%19
LA7,7318,3237.70%20

Figure 18 presents a graphic depiction of the data presented in Figure 17 of the state-by-state comparison of percentage increase in life science jobs using the methodology employed by the by the MassBiotechnology Council in its 2013 report entitled “Industry Snapshot.” The top 20 states are presented, ranked by increase in life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 18. Top 20 States for Job Gains by Percentage (Mass BioTechnology Council 2013 methodology), (Graphical)

Fig16Graphic

Figure 19 presents a state-by-state comparison of job gains in life sciences using the definition of life science jobs employed by the Boston Foundation in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center” written by Northeastern University professors/economists Barry Bluestone and Alan Clayton-Matthews.  The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.  Full state-by-state data is available in downloadable form by clicking on a link elsewhere on the Pioneer Institute website.

Massachusetts ranked eighth in job gains with 4,280.

Figure 19. Top 20 States for Job Gains (Boston Foundation-Bluestone/Clayton-Matthews 2013 methodology)

StateLS jobs 2009-Q1 per BF/NULS jobs 2014-Q3 per BF/NUJob gains per BF/NUAdded jobs rank per BF/NU
CA301,036328,62627,5901
MI63,91182,97519,0642
NC67,42276,3508,9283
TX95,953102,3166,3634
UT24,59430,3245,7305
AZ23,09128,7645,6736
FL86,56191,2714,7107
MA93,72498,0044,2808
DE4,7447,8603,1169
CO35,64438,1162,47210
GA28,06430,2502,18611
MN47,45049,4301,98012
KY9,34211,3021,96013
OH55,70257,4271,72514
LA9,85711,5351,67815
OR12,77914,1841,40516
WI30,11431,274116017
AL14,43915,578113918
NY109,517110,629111219
NM26,19127,274108320

Figure 20 presents a graphic depiction of the data presented in Figure 19 of the state-by-state comparison of job gains in life sciences using the definition of life science jobs employed by the Boston Foundation in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center” written by Northeastern University professors/economists Barry Bluestone and Alan Clayton-Matthews. The top 20 states are presented, ranked by total jobs gained between FY2009-Q1 and FY2014-Q3.

Figure 20. Top 20 States for Job Gains (Boston Foundation-Bluestone/Clayton-Matthews 2013 methodology) (Graphical)

Fig18Graphic

Figure 21 presents a state-by-state comparison of percentage increase in life sciences jobs using the definition of life science jobs employed by the Boston Foundation in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center” written by Northeastern University professors/economists Barry Bluestone and Alan Clayton-Matthews.   The top 20 states are presented, ranked by percent increase in jobs between FY2009-Q1 and FY2014-Q3.

Massachusetts ranked 19th in job gains at 4.6 percent.

Figure 21. Top 20 States for Job Gains by Percentage (Boston Foundation-Bluestone/Clayton-Matthews 2013 methodology)

StateLS jobs 2009-Q1 per MBTCLS jobs 2014-Q3 per MBTC% job gain per MBTC% job gain rank
DE4,7447,86065.68%1
MI63,91182,97529.83%2
MT2,1372,69025.88%3
AZ23,09128,76424.57%4
UT24,59430,32423.30%5
AK1332163622.82%6
KY9,34211,30220.98%7
LA9,85711,53517.02%8
NC67,42276,35013.24%9
ND1,5411,74012.91%10
OR12,77914,18410.99%11
IA8,2629,0409.42%12
CA301,036328,6269.17%13
AL14,43915,5787.89%14
GA28,06430,2507.79%15
CO35,64438,1166.94%16
TX95,953102,3166.63%17
FL86,56191,2715.44%18
MA93,72498,0044.57%19
MN47,45049,4304.17%20

Figure 22 presents a graphic depiction of the data presented in Figure 21 of the state-by-state comparison of percentage increase in life science jobs using the definition of life science jobs employed by the Boston Foundation in its 2013 report entitled “Life Science Innovation as a Catalyst for Economic Development – The Role of Massachusetts Life Science Sector” written by Northeastern University professors/economists Barry Bluestone and Alan Clayton-Matthews. The top 20 states are presented, ranked by increase in life science jobs between FY2009-Q1 and FY2014-Q3.

Figure 22. Percent job gains – Top 20 States (methodology used by Boston Foundation-Professors Bluestone/Clayton-Matthews, 2013)

Fig20Graphic

 

Figure 23 presents Bureau of Labor Statistics data for total Massachusetts employment in all sectors for FY2009-Q1 and FY2014-Q3.  During this period, Massachusetts added 261,876 net new jobs, an increase of 8.4 percent.

Figure 23. Massachusetts All Industry Job Gains, 2009/Q1 – 2014/Q3

NAICS CodeNAICS Industry DescriptionTotal jobs 2009-Q1Total jobs 2014-Q3Gain/loss 2009-2014Percent gain 2009-2014
54171Total, all industries3,124,7803,386,656261,8768.40%

Figure 24 compares Massachusetts percentage job growth between FY2009-Q1 and FY2014-Q3 with Massachusetts life sciences percentage job growth over the same period. Over this period, Massachusetts total employment grew by 8.4 percent.  Measured by the MassBiotechnology Council methodology, life science job growth was greater, at 10.6 percent.  By the other three methodologies, it was lower. Measured by the Mass Life Science Collaborative methodology, Massachusetts life science job growth was virtually half as much by percent as Massachusetts overall job growth (4.2 percent vs. 8.4 percent).  The average percentage job growth of the four methodologies was 6.9 percent, less than Massachusetts percentage job growth, 8.4 percent, between FY2009-Q1 and FY2014-Q3.

Figure 24. Life Sciences Job Gains & Massachusetts Total Job Gains, 2009/Q1 – 2014/Q3

 Job gain 2009-2014Percent gain 2009-2014
Life sciences job gains (methodology used by MA Life Sciences Center, 2007) 3,6574.20%
Life sciences job gains (methodology used by MassBiotechnology Council, 2013) 5,91310.60%
Life sciences job gains (methodology used by Boston Foundation/Bluestone, 2013) 4,3644.70%
Life sciences job gains (methodology used by Battelle/BIO, 2014) 6,1078.00%
Life sciences job gains (average of 4 methodologies)5,0106.90%
Total job gains Massachusetts261,8768.40%

Figure 25 calculates how much MLSC has spent thus far per life sciences job added in Massachusetts between FY2009-Q1 and FY2014-Q2 on the basis of MLSC expenditures as shown in Figures 1 and Figure 2 above.  MLSC thus far has spent $556.7 million with a net increase of 5,010 life science jobs, according to the average of the four measures of life science employment review in this report.  That translates to approximately $111,000 per job added.

Figure 25. The Cost of Each Added Life Sciences Job, 2009/Q1 – 2014/Q3, $

 Life Science cost through 2014-Q3Job gains 2009-Q1 to 2014-Q3Cost per added job
Life Science Act costs(Figure 1 and Figure 2) per life sciences job added (average of 4 methodologies)$566,700,000 5,010$113.11

Conclusion

Pioneer Institute has taken the methodology used in four major studies of the Massachusetts life sciences sector and replicated each to calculate state life science job growth from the first quarter of fiscal 2009, the effective date of the Massachusetts Life Sciences Act of 2008, and the third quarter of fiscal 2014, the most recent quarter for which data are available from the U.S. Bureau of Labor Statistics.

Using the methodology employed by PricewaterhouseCoopers, LLC in “Superclusters,” the 2007 study it conducted for the Massachusetts Life Sciences Center, Massachusetts added 3,639 life science jobs during the period in question.  In terms of raw numbers, that ranks Massachusetts seventh in life science job growth among the states during that period.

Replicating the methodology used by the MassBiotechnology Council in its 2013 “Industry Snapshot,” life science employment grew by 5,894 jobs during the term explored in this study, ranking third among the states in the number of jobs created.

Applying the methodology used by two Northeastern University economists in “Life Science Innovation as a Catalyst for Economic Development:  The Role of the Massachusetts Life Sciences Center,” which was published by the Boston Foundation in 2013, Massachusetts added 4,280 life science jobs during the 2009-2014 period, a number that ranks 19th among the states.

Using the methodology in “Battelle/BIO State Bioscience Jobs, Investments and Innovation 2014,” from the Battelle Memorial Institute and the Biotechnology Industry Organization, Massachusetts gained 6,107 jobs during the applicable period.  Data to rank the number of jobs created against other states are unavailable.

From the first quarter of fiscal 2009 through the end of the third quarter of fiscal 2014, the total number of jobs in Massachusetts increased by 8.4 percent, according to BLS.  That number is below the 10.5 percent life science job growth during that time as calculated using the MassBiotechnology Council methodology.  But life science job growth was less than the overall 8.4 percent Massachusetts rate using the methodologies employed in the other three studies.  Life science job growth was 4.2 percent according to the Massachusetts Life Sciences Center methodology, 4.6 percent under the methodology used by the Boston Foundation, and 8 percent when the Battelle/BIO methodology is applied.

The Massachusetts Life Science Center has thus far spent $556.7 million (see Figures 1 and 2).  If we average the job creation numbers arrived at by duplicating the methodologies of the four studies discussed above, the number is 5,010, which comes out to $111,118 per job.

 

Data available for download:
MBTC methodology data 50 states

MLSC methodology data 50 states

BF-NU methodology data 50 states 

6 replies
  1. Peter Abair
    Peter Abair says:

    First, you are incorrect in naming the Massachusetts Life Sciences Center (MLSC) as the sponsor of 2007 PwC Super Cluster report. The MLSC,as currently established, did not exist in 2007. The PwC report was in part sponsored by the Mass Life Sciences Collaborative. It is an important distinction that you fail to make.

    In addition, you used MassBio’s methodology regarding biopharmaceutical industry employment incorrectly. A simple phone call to our research staff would have avoided this mistake. In our 2014 Snapshot, stated clearly, is the following:

    “As explained in the appendix, MassBio uses eight industry classifications in determining
    overall employment in the biopharma industry. This reflects a conservative approach, as
    other reports include additional industry classifications. In estimating employment
    attributable to the biopharma industry, MassBio uses only a percentage of employment
    reported for several industry classifications (1.9% of university employment, for
    example). Our determination of what percentage to utilize in our estimate is determined
    by the unique composition of these industries in Massachusetts. As the profile of each
    such industry segment varies by state, it’s not appropriate to compare these particular
    industry segments using the percentages that we have developed specifically for
    Massachusetts.”
    To further illustrate this, let’s consider the NAICS code 541712, R&D in Physical, Engineering, and Life Sciences (except biotech). The MassBio research team exhaustively researched companies classified under this code and determined that 22% of this industry employment was attributable to employers in the biopharmaceutical industry. This determination is distinct to Massachusetts, as the composition of NAICS 541712 will vary greatly by state. Examples of employers in this NAICS code are fisheries, electronic research, guided missile research, oceanographic research, and forestry research employers, among others. Without a thorough investigation of the composition of employment classified under this NAICS code in each state, it is not appropriate to use the MassBio-researched percentage for this industry classification for other states.

    Again, had you inquired as to how MassBio does compare and contrast biopharmaceutical industry performance across states, you would have found this in our 2014 Snapshot:

    “Fortunately, two NAICS classifications, Pharmaceutical Manufacturing (NAICS 3254)
    and Research and Development in Biotechnology (NAICS 541711) , are considered
    fully part of the biopharma industry and would be so considered in any state.
    Additionally, these two industry segments are core segments of the industry. These two
    industries, therefore, are particularly appropriate for “apples to apples” comparisons to
    determine industry performance among the biopharma states.
    Therefore, we have considered ONLY two NAICS codes for the following state-to-state
    employment performance comparison: NAICS 3254, Pharmaceutical Manufacturing,
    and NAICS 541711, Research and Development in Biotechnology.”

    Using this MassBio methodology, the following:

    Among the leading 15 biopharmaceutical employment states, Massachusetts grew 3,569 jobs between 2007 and 2013, second only to California. In percentage growth terms, Massachusetts was also second, in this case to Ohio, 13.7% growth to Massachusetts’ 10.6% growth. Compare this growth to other competitor states: New Jersey (-29%), Pennsylvania (-26.2%), Michigan (-16%), Connecticut (-29.6%).

    To see the entire 2014 Industry Snapshot, please see: http://www.massbio.org/writable/editor_files/2014_snapshot_final_8.20.14.pdf

    Please feel free to contact us at any time. We have a website, which features the aforementioned explanations and we have a phone number – 617-674-5100 – at which we are accessible during normal business hours.

  2. Peter Abair
    Peter Abair says:

    There are well over 2,100 jobs available in the biopharma industry on the MassBiocareers site alone – please see: http://www.massbio.org/careers/search_jobs
    The biggest issue in the industry is filling these jobs. Desperately needed are those with skills in information technology, quality assurance, regulatory and research.

  3. Greg Sullivan
    Greg Sullivan says:

    As indicated in our report above, Pioneer used four methodologies to measure life science job gains. Pioneer did not use internally-devised
    methodologies, but instead used ones that had been employed previously by Massachusetts and national life science and life science consulting organizations. Of the four methodologies used, one was MassBio’s methodology as described on page 28 of its “2013 Industry Snapshot” report. Mr. Abair does not call into question the accuracy of the numbers that Pioneer reported using MassBio’s “2013 Industry Snapshot” methodology. Instead, he says that Pioneer is incorrect to use MassBio’s 2013 methodology because MassBio revised its
    methodology a year later, after it had seen the Massachusetts jobs data published by the Bureau of Labor Statistics. In fact, we sent Mr. Abair the numbers two weeks before publication and he responded by saying: “I think the numbers are good” while arguing that other factors than Massachusetts job gains should be considered. Mr. Abair points out that this new methodology is Massachusetts-specific and cannot be used for state-by-state comparisons.

    Four thoughts about this:

    1) performance measurement standards should be established prior to the beginning of the performance period, not afterwards when they can be modified to make the results look better; 2) performance measurement standards that cannot be used for comparative purposes are of limited value at best; 3) results of pre-existing measurement standards should be published alongside post-result standards; and 4) Pioneer’s reporting of Massachusetts job gains using MassBio’s 2013 methodology, and that of other life science organizations, is an exercise in transparency. We are reporting how many jobs were created according to the measurement rules established ahead of time by
    the organizations themselves. It is unfair to describe such reports as being incorrect by virtue of the fact that the organization later redefined its job-counting methodology after having seen BLS data.

    Mr. Abair correctly points out that Massachusetts Life Science Collaborative (MLSC) was misidentified as Massachusetts Life Science
    Center (MLSC) on several graph titles, which has been corrected.

  4. Greg Sullivan
    Greg Sullivan says:

    As indicated in our report above, Pioneer used four methodologies to measure life science job gains. Pioneer did not use internally-devised
    methodologies, but instead used ones that had been employed previously by Massachusetts and national life science and life science consulting
    organizations. Of the four methodologies used, one was MassBio’s methodology as described on page 28 of its “2013 Industry Snapshot”
    report. Mr. Abair does not call into question the accuracy of the numbers that Pioneer reported using MassBio’s “2013 Industry Snapshot”
    methodology. Instead, he says that Pioneer is incorrect to use MassBio’s 2013 methodology because MassBio revised its
    methodology a year later, after it had seen the Massachusetts jobs data published by the Bureau of Labor Statistics. In fact, we sent Mr. Abair the numbers two weeks before publication and he responded by saying: “I think the numbers are good” while arguing that other factors than Massachusetts job gains should be considered. Mr. Abair points out that this new methodology is Massachusetts-specific and cannot be used for state-by-state comparisons.

    Four thoughts about this:

    1) Performance measurement standards should be established prior to the beginning of any performance period, not afterwards when they can be modified to make the results look better; 2) performance measurement standards that cannot be used for comparative purposes are of limited value at best; 3) results of pre-existing measurement standards should be published alongside post-result standards; and 4) Pioneer’s reporting
    of Massachusetts job gains using MassBio’s 2013 methodology, and that of other life science organizations, is an exercise in transparency. We
    are reporting how many jobs were created according to the measurement rules established ahead of time by the organizations themselves.

    Mr. Abair correctly points out that Massachusetts Life Science Collaborative (MLSC) was misidentified as Massachusetts Life Science
    Center (MLSC) on several graph titles, which has been corrected.

  5. Peter Abair
    Peter Abair says:

    Just a few notes to correct Greg’s assertions in regard to our concerns about misusing MassBio’s Industry Snapshots. In fact, our methodology has changed very little since first publishing the annual Snapshot in 2010. Our EMPLOYMENT methodology has always been focused on answering one question: How many people work in the biotechnology/pharmaceutical industry in Massachusetts. With this is mind, we define the industry first and then develop the data from federal sources. We have always stipulated by various means that our methodology works for answering the aforementioned question. We also understand the interest in comparing the performance of the industry in Massachusetts to that in other states. That’s why we have ALSO provided comparative data from federal sources on the two major industries that are part of the biopharma industry universally – NAICS 3254 Pharma MFG and NAICS 541711 R&D in Biotechnology. These two industries make up a majority of the employment in the biopharma industry and 100% of the employment attributed to these industries can be applied in state-to-state comparisons. These comparisons HAVE been provided in every MassBio Industry Snapshot to date. Our assertion is not that the numbers used by Pioneer are wrong, but that many industry classifications used by Pioneer can’t be appropriately applied in state-to-state comparisons because the nature of those industries vary by state. We have had these same concerns with other third party reports and all of them referenced by Pioneer. As noted, NAICS 541712, as an example, is an industry with a composition that varies from one state to another. It may be 60% life sciences-related in one state and 2% in another. My objections are limited to the proper use of MassBio’s methodology, not to the proper use of other third party methodologies. In answer to Greg’s “four thoughts”:

    “1) Performance measurement standards should be established prior to the
    beginning of any performance period, not afterwards when they can be
    modified to make the results look better;” MASSBIO DEVELOPED ITS METHODOLOGY IN 2009, IT HAS BEEN MODIFIED ONLY SLIGHTLY SINCE. OUR EMPLOYMENT REPORTING IS DEMONSTRABLY CONSERVATIVE IN NATURE. OTHER ORGANIZATIONS HAVE USED MORE LIBERAL ANALYSIS IN DETERMINING EMPLOYMENT IN OUR INDUSTRY AND THAT OF THE BROADER LIFE SCIENCES INDUSTRY. MASSBIO HAS CONSISTENTLY SOUGHT TO AVOID OVERESTIMATING THE SIZE OF THE INDUSTRY BY USING A CONSERVATIVE METHODOLOGY. YOU WILL FIND THAT OUR REPORTED EMPLOYMENT NUMBER IS LESS THAN OTHERS DEVELOPED BY OTHER SOURCES. MEA CULPA ON THAT!

    2) performance measurement
    standards that cannot be used for comparative purposes are of limited
    value at best; AGAIN, OUR EMPLOYMENT METHODOLOGY WAS NOT CREATED FOR COMPARATIVE PURPOSES, IT WAS DEVELOPED TO ANSWER A BASIC QUESTION – HOW MANY ARE EMPLOYED IN THE MASSACHUSETTS BIOPHARMACEUTICAL INDUSTRY. HOWEVER, IN EVERY SNAPSHOT, MASSBIO HAS ALSO PROVIDED DATA THAT IS COMPARABLE, AS NOTED, NAMELY NAICS 3254 (PHARMACEUTICAL MANUFACTURING) AND NAICS 541711 (R&D IN BIOTECHNOLOGY). THIS COMPARATIVE DATA HAS BEEN PROMINENTLY FEATURED IN EACH OF OUR SNAPSHOTS. ADMITEDLY, OUR 2014 SNAPSHOT DID THE BEST JOB IN CLEARLY PRESENTING THE ISSUES IN USING THE EMPLOYMENT METHODOLOGY FOR COMPARING EMPLOYMENT AMONG STATES. WHILE WE DID PROVIDE THE COMPARATIVE DATA APART FROM THE METHODOLOGY FOR EMPLOYMENT, HAD WE AS PROMINENTLY FEATURED THE CAUTIONS ON COMPARISONS FOUND IN THE 2014 SNAPSHOT IN PRIOR SNAPSHOTS, WE WOULD HAVE MADE IT EASIER FOR PIONEER TO AVOID ITS COMPARISON MISTAKES IN REGARD TO THE USE OF OUR EMPLOYMENT METHODOLOGY.

    3) results of pre-existing measurement standards should
    be published alongside post-result standards; and ?????

    4) Pioneer’s reporting of Massachusetts job gains using MassBio’s 2013 methodology, and that
    of other life science organizations, is an exercise in transparency.
    We’re reporting how many jobs were created according to the
    measurement rules established ahead of time by the organizations
    themselves UNDERSTOOD, WITH OUR CONCERNS NOTED ABOVE

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