Peter Abair
Over the past decade, the biopharmaceutical industry has grown by 40 percent in Massachusetts, reaching 58,000 employees and contributing over $7 billion in Massachusetts-based payroll in 2013. It’s a great story. Biotech is a homegrown industry, with a strong presence throughout most of Massachusetts. Even as global news outlets broadcast stories from Massachusetts that it is the drug development capital of the world (as CNBC did in April), the Pioneer Institute rains on the parade.
The Pioneer Institute has published reports suggesting that actual industry job creation since the passage of the LSI has lagged behind that of many other states. Long story short, Pioneer uses some faulty methodologies, admittedly from other organizations, with results suggesting that states with virtually no presence of the life sciences industry, like Montana, Arkansas and North Dakota, are outperforming Massachusetts.
“Lies, damned lies, and statistics,” stated Mark Twain, as he bemoaned the use of numbers to support otherwise unsteady arguments. In fact, by almost every measure, the growth of the industry has been impressive (view MassBio’s 2014 Industry Snapshot at its website).
Pioneer’s unflattering portrayal of the industry’s growth is much more about the Patrick Administration’s approach to job creation by creating an initiative specifically for one particular industry – with the 10-year, $1 billion Massachusetts Life Sciences Initiative (LSI). Enacted by the Legislature in 2008, the LSI has been administered by the Massachusetts Life Sciences Center.
As Gov. Charlie Baker considers the future of the LSI and economic development in general, the Pioneer reports align well with those who say that the state “shouldn’t pick winners and losers” in crafting economic policy. It’s one contention in what should be a valuable discussion on what the proper role of government should be in fostering economic expansion. An alternative argument is that, if government is to offer economic incentives to support job growth at all, it had better damned well be ready and able to pick winners. The alternative, picking losers, doesn’t make a great deal of sense. Recall Rhode Island’s 38 Studios calamity and the Evergreen Solar misadventure in Massachusetts.
Government develops and administers economic programs well when it has a thorough understanding of industries, regional economies and global markets. Considering all of the data government collects from businesses about businesses, it spends precious little time using the information and analysis tools to affect informed economic policy development. This is the opportunity for the Baker Administration, to develop policy that is informed by a thorough understanding of the economy it seeks to grow.
That gets us back to the Life Sciences Initiative. Before the passage of the LSI, the biopharmaceutical industry had been growing at a steady rate since the early 1980s. A period of rapid growth in the industry took place between 2000 and 2007, with employment jumping by more than 50 percent. As the world plunged into the Great Recession, the LSI was enacted in 2008. The growth rate of the industry slowed in Massachusetts but never stopped, until an appreciable uptick in growth occurred in 2013 and 2014.
The life sciences industry includes the medical device industry. Subject to very sharp global competition, the medical device industry in Massachusetts produced fewer new jobs over the past decade, but still retained its position as one of the Big Three medical device states. Not every program developed through the MLSC was wise, nor was implementation of every aspect of the LSI mistake-free. Nor must there be too much credit for life sciences growth attributed to the LSI.
But even the Pioneer report shows that the life sciences have grown between 4,280 and 6,107 jobs since the LSI’s passage. Today, the biggest issue facing the life sciences industry in Massachusetts is workforce. There are over 2,160 job listings posted on the MassBio careers webpage. GE Life Sciences, Shire, Amgen, Bristol-Myers Squibb, Baxter Healthcare have announced sizeable expansions in Massachusetts and a host of smaller companies are in substantial growth mode, such as Foundation Medicine, Synageva, Radius, Moderna Therapeutic.
Drive down Binney Street in Cambridge or Hartwell Avenue in Lexington or Marlborough Hills in Marlborough. The construction cranes tell the tale. This industry has been a good pick for Massachusetts.
