Michigan’s bioscience industry shoots up
Tuesday, July 22, 2014
Michigan’s biosciences industry outpaced the state’s economy, creating more than 2,000 new, high-paying jobs in the two-year period following the Great Recession.
The state was home to 1,760 bioscience companies in 2012, up 6.3 percent from 2010, according to a biennial report from Biotechnology Industry Organization (BIO), a Washington D.C.-based trade association. Those companies directly employed 41,892 people in Michigan in 2012, an increase of 6.6 percent from two years earlier. Those employees also earned an average annual salary of $81,296.
The BIO report shows growth occurred across five bioscience categories tracked (see chart on page 14) from 2010 to 2012, rebounding from earlier declines. Michigan also recorded increases over the two years in venture capital investments in the industry, academic research-and-development spending and patents issued.
The growth of Michigan’s bioscience industry was in stark contrast to the overall economy in the state in the period from 2010 to 2012. Total private-sector employment in Michigan declined 5.7 percent to 3.3 million, and the number of businesses decreased 17.3 percent to 210,880, according to the BIO report, which was prepared by the Columbus, Ohio-based research firm Battelle.
“We should be greatly encouraged by this,” said Steve Rapundalo, CEO of MichBio, an Ann Arbor-based statewide trade association. “The new Battelle/BIO findings once again reinforce the fact that Michigan has a robust and growing bio-industry, with specific strengths in several key sectors.”
Most importantly, Rapundalo said, is that the number of bioscience companies grew 11.4 percent and employment was only down a scant 0.4 percent over a broader five-year period that included the state’s deep economic downturn.
“That’s where I took the most encouragement,” he said. “If you just took a snapshot of the current numbers and the previous report, they are all very good, but it’s that longer-term trend that you are really looking for.
“When you throw it all together in the 2007 to 2012 period, which was economically very challenging here in the state, the industry survived pretty darn well and in some cases excelled.”
Over the five-year period, employment in the state’s medical device sector grew 16.1 percent and jobs at agricultural feedstock and chemical companies increased 35.7 percent. Employment in three other categories was still down from 2007 to 2012, despite the gains in the latter two years.
The BIO report shows the apparent stabilization in Michigan’s pharmaceutical industry from 2010 to 2012 following a decade of industry consolidation and two major downsizings by Pfizer Inc. in Kalamazoo and Ann Arbor. The number of drug and pharmaceutical companies in Michigan increased from 60 to 65 between 2010 and 2012, driving direct employment to 7,940 from 7,305, according to BIO.
Despite those gains, the number of drug and pharmaceutical companies in Michigan and their direct employment still remain slightly below the level of 2007.
The state’s bright spots in the BIO report were medical devices and research, testing and medical labs. Medical device employment in Michigan grew 16.1 percent between 2007 and 2012, and the number of companies increased to 240. The state’s job growth in the medical device sector outpaced the national rate of 12.0 percent during the five-year span.
Battelle labelled Michigan as a “sizeable” and “concentrated” state in the medical device equipment sector.
The Kalamazoo-Portage area — home to Stryker Corp. — ranked second nationally among medium-sized metropolitan statistical areas in the medical device/equipment category in terms of local job concentration, and third for drugs/pharmaceutical.
“We’ve really seen significant growth in the device sector,” Rapundalo said.
The BIO report shows strength in Michigan in other areas where Battelle analyzed data. For instance:
On the downside, National Institutes for Health research grants declined to $575.9 million in 2013 from $663.3 million in 2010, a result of reduced federal funding, Rapundalo said.
Venture capital investments in Michigan bioscience companies grew to $156.9 million in 2013, versus $93.6 million in 2009.
- Bioscience-related patents grew to 510 annually in 2013 from 286 in 2009.
- Academic R&D spending on bioscience totaled $1.2 billion in the 2012 fiscal year.
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