Arizona Bioscience Sector Sustains Strong Job Growth

Flinn Foundation News Release

Summary:

Neither the recession nor the subsequent economic doldrums have impeded growth of Arizona’s bioscience sector, a new report shows. During the post-recessionary period of 2009-10, bioscience jobs increased by 7.4 percent, compared to a 1.8 percent drop for the state’s overall private sector, according to an analysis of Arizona biosciences, commissioned by the Flinn Foundation. 

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Heliae Inc., a biofuels firm based in Gilbert, is one of the young companies that
has rapidly added jobs during and since the recession. (Photo courtesy Heliae)

PHOENIX— Neither the recession nor the subsequent economic doldrums have impeded the growth of Arizona’s bioscience sector, a new report shows. During the post-recessionary period of 2009-10, bioscience jobs increased by 7.4 percent, compared to a 1.8 percent decline for the state’s overall private sector, according to a new performance analysis of Arizona’s bioscience sector, commissioned by the Flinn Foundation.

The annual study by the Battelle Technology Partnership Practice found that since 2002 Arizona has outpaced the nation in generating bioscience jobs and firms, and in winning National Institutes of Health grants, the gold standard for biomedical research funding. Even venture-capital funding, long a challenge for Arizona’s bioscience sector, was on an upswing in the past year.

“Through the most trying economic circumstances of our lifetimes, bio in Arizona more than held its own,” said Walter Plosila, senior advisor to the Battelle Technology Partnership Practice. “The bioscience sector is past the ‘promising’ stage. It is now becoming integral to Arizona’s future.”

Since Arizona’s Bioscience Roadmap was launched in 2002, bioscience jobs in the state have grown 41 percent to a total of 96,223, versus 11 percent growth for the nation as a whole. Those jobs pay an average annual wages of $55,353, 29 percent higher than the overall average for private-sector wages in Arizona.

Martin Shultz, chair of the statewide steering committee that oversees the Roadmap, applauded the commitment of Arizona leaders. “Over the past decade, officials ranging from school principals to mayors to three governors have made long-term investments in our state’s future by supporting the biosciences,” Shultz said. “The excellent return on those investments is undeniable.”

In NIH funding, Arizona generated $184 million in 2011. That total, though down from 2009 and 2010, which were boosted by NIH federal stimulus awards, is significantly higher than 2008. Since 2002, NIH grants are up 25 percent in Arizona, outpacing the nation’s top-10 NIH states (20 percent) and the U.S. average (17 percent).

Other findings, using the latest available data, include:

  • The number of Arizona bioscience firms increased by 27 percent from 2002 to 2010, compared to 20 percent growth for the U.S. as a whole. At the end of 2010, the state had 867 bioscience establishments across five industry subsectors: agricultural feedstocks and chemicals; drugs and pharmaceuticals; hospitals; medical devices; and research, testing, and medical laboratories.

  • Research, testing, and medical laboratories remains Arizona’s largest subsector, with 436 establishments, a 49 percent jump since 2002. That subsector also pays the best annual wages in the biosciences, on average nearly $62,000. With respect to regional strength, the Flagstaff metropolitan area has seen a 98 percent increase in medical-devices jobs since 2002, led by W.L. Gore and Associates.

  • Venture-capital funding rose sharply after a weak 2010 to $69 million in 2011. This is the second-highest total since 2002, though still well short of the Roadmap goal of $100 million annually.

  • Arizona universities spun out 7 bioscience companies in 2011, increasing the total to 60 bioscience startups from university discoveries since 2002.

  • From 2002 to 2009, the direct economic impact of the biosciences in Arizona grew 96 percent to $15.6 billion, based on Battelle’s updated analysis. Total annual economic, which adds the impact of the biosciences on other industries, now stands at $28.8 billion.

Beyond the data, several 2011 developments helped Arizona draw closer to the Roadmap’s goals. The Chan Soon-Shiong Institute for Advanced Health announced plans to establish its headquarters and build a powerful health-information supercomputer and data center in Phoenix, investing some $200 million. Arizona Gov. Jan Brewer signed the Arizona Competitiveness Package, which established the Arizona Commerce Authority, and instituted a $25 million deal-closing fund and a tax credit to incentivize hiring.

Mayo Clinic announced that it will establish a new medical-school campus in Scottsdale, partnering with Arizona State University on a master’s degree program in the science of health-care delivery. The University of Arizona and Maricopa Integrated Health System signed an agreement to make MIHS the primary teaching hospital for the UA College of Medicine-Phoenix.

Clinical providers continued to grow, with the $109 million Banner MD Anderson Cancer Center opening its doors in Gilbert, Phoenix Children’s Hospital unveiling its new $588 million facility, and UA and St. Joseph’s Hospital reaching agreement on an affiliation to bring the UA Cancer Center to St. Joseph’s and a planned outpatient clinic on the Phoenix Biomedical Campus.

Looking forward, Shultz said, supporters of the biosciences can consult the “Policy Principles” paper compiled in 2011 by the Roadmap Steering Committee. That document frames examples of key policy steps needed to continue advancing Arizona’s biosciences.

Jack Jewett, president and CEO of the Flinn Foundation, which commissions Battelle’s annual assessments, said that since the Roadmap launched in 2002, the biosciences have improved the quality of life in Arizona. “We see rewarding jobs created at a rapid rate. We see technology incubators brimming with the next generation of innovation. And we see new medical discoveries in Arizona benefiting Arizona patients first,” Jewett said.

The Flinn Foundation is a Phoenix-based, private, nonprofit philanthropic endowment. It was established by Dr. and Mrs. Robert S. Flinn in 1965 with the mission of improving the quality of life in Arizona to benefit future generations. The nonprofit philanthropy supports the advancement of Arizona’s bioscience sector, the Flinn Scholars program, the arts, and the Arizona Center for Civic Leadership.


For more information:

"Arizona's Bioscience Roadmap: Performance Assessment 2002-11," Battelle Technology Partnership Practice, 01/31/2012

"Distance Traveled," Progress Report Brochure, Flinn Foundation 01/31/2012