Life-sciences outlook brightens bleak economy
December 24, 2008
In the most sobering employment news since 1974, the U.S. Labor Department reports the economy lost 533,000 jobs in November, pushing the nation's jobless rate to 6.7 percent. The only sectors actually adding workers were government, education and health services.
That shouldn't come as a surprise.
With an aging population and the largest health-care spending in the world, the U.S. medical sector may fare well in a recession. And during economic downturns, sales of prescription drugs and medical devices historically hold up better than nonessential goods, giving hope to those parts of the nation -- particularly Indiana -- that have invested in the life sciences.
While predicting the full impact of a national recession may be difficult, Indiana is still on pace to add more than 40,000 new jobs in the life sciences sector by 2012, broadening the profile of an industry that currently has a $13.5 billion economic impact on the state every year.
A prime example, Arcadia Healthcare initially will create 60 jobs and plans to have 400 employees by 2010 at a distribution center opening soon in Boone County. Salaries will range from $45,000 to more than $100,000 at Arcadia, a leader in health-care products and home-health services.
Indiana has an estimated 670 life sciences companies, employing more than 48,000 people and accounting for a total employment impact of 223,292 jobs. The average annual salary for a job in the life sciences is $68,715, ranking among the highest of any industry in the state.
Recent reports by the Biotechnology Industry Organization and technology giant Battelle Memorial Institute rank Indiana as one of the nation's top four life sciences leaders and Indianapolis as the ninth-largest life sciences region.
The same reports placed Indiana among only three states with a specialization in three key life sciences sectors in 2006. Only New Jersey ranked higher, with a presence in all four sectors -- agricultural feedstock and chemicals, drugs and pharmaceuticals, medical devices and equipment, and research testing and medical laboratories.
Indiana's venture capital investment ranking has jumped from the bottom 10 nationally just five years ago to 27th today. More than 25 Indiana-based life sciences entrepreneurial companies received venture capital investment during that same period.
One reason is BioCrossroads, the state's nonprofit life sciences initiative that helped raise $120 million for life-sciences companies in the state during that organization's first five years.
In 2007, BioCrossroads launched BioCrossroads LINX, which is connecting the state's biopharmaceutical industry with biotech discovery centers nationwide, especially in Boston and San Diego. Its summary of biopharma discovery and development activity in Indiana identified more than 40 contract research organization companies in this sector that span all activities required to commercialize a new drug or diagnostic or medical device.
More is needed, however, to ensure the life sciences offer a broader remedy for the current economic downturn and the worst employment picture in more than three decades.
Targeted programs must support life sciences research to promote health and to answer the challenges from chronic diseases with huge economic impacts such as cancer and diabetes.
Life sciences and biotechnology can help build a lasting bridge to sustainable, renewable alternative fuels that increase our nation's energy security.
The industry also can continue to develop new crops that have higher nutritional content, lower environmental impacts to produce and that require less fuel to grow.
Indiana is a shining example of what can be accomplished when elected leaders work with the state's established life sciences employers, research universities, venture capitalists, entrepreneurs, and local and state business constituents.
The state's investment in life sciences may help Indiana emerge sooner than its neighbors from the current economic downturn. Continuing that commitment, even during tough times, will translate into a healthier nation and a healthier Indiana that grows quality companies and jobs.
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