Measuring Impact: The Critical Role of Life Sciences to the Bay Area and California Economies
When people think of marquee California industries, film, agriculture, or software probably come to mind. Many may be surprised to learn that another industry in California is larger than film and agriculture combined: life sciences. Just how important is the life sciences industry to California? That is a question the California Life Sciences Association (CLSA) deeply explores in their 2019 California Life Sciences Industry Report.
Each day, tens of thousands of researchers, engineers, and manufacturing technicians go to work at one of California’s more than 3,400 biopharmaceutical and medical device companies. These companies directly employ over 133,000 people in the state, more than the number employed by these sectors in the states of New York, New Jersey, and Massachusetts combined. Including research and testing labs, academia, and wholesale trade in medical equipment, the California life sciences industry directly employs more than 311,000 people and supports an additional 647,000 jobs throughout the state. Blockbuster material, right? We certainly think so!
From 2017 to 2018, California’s life sciences industry added a net 169 companies and 12,000 new jobs. The strongest growth came from the San Francisco Bay Area, where life sciences jobs jumped a staggering 15.6% year-to-year to over 82,500. Biotech companies in the Golden State earned their share of venture capital funding also, pulling in $7.6 billion for 2018, a 13% year-over-year increase. California life sciences companies — which reported $177.7 billion in sales in 2018 — contribute over $25 billion to the nation’s exports, making biopharmaceuticals and medical devices two of the most valuable non-commodity export sectors.
California life sciences companies are evenly split between biopharmaceutical, which account for 1,570 of the total firms, and medical device manufacturers, which account for 1,848 unique companies. As of September 2018, California companies had 1,332 medicines in the research and development pipeline for treatments ranging from cancer to central nervous system conditions. California medical equipment companies also had 454 FDA product approvals at the end of 2017, the most recent data available.
One of the key factors driving the California life science industry’s success is the state’s higher education system. California is home to 10 of the top 100 ranked universities in the world based on the Shanghai ARWU Index, with Stanford, UC Berkeley, and Caltech in the top 10. For comparison, New York and Pennsylvania each have four. California’s higher education system not only provides a robust pipeline for talent, it also provides innovation: in 2018, California universities and research institutes pulled in a staggering $3.9 billion in National Institutes for Health (NIH) grants, representing over 15% of total grant value issued that year.
Any way you slice it, the impact that the life sciences industry has on the California and Bay Area economies is staggering. The same can be said for the City of Fremont, where biomedical companies are the single largest sector by number of firms, with companies ranging from nascent startups to industry titans. Recently, a CLSA member company Boehringer Ingelheim doubled its employee count by investing in an expansion of their manufacturing facility in Fremont. These are good paying, clean tech jobs that are a benefit to the communities where they are located.
As we march forward into 2020, we expect to continue seeing strong growth in the life sciences sectors across the Bay Area and throughout California. In the meantime, we are grateful to the support of our members — including the City of Fremont — and will continue our work supporting California’s life sciences industry.
CLSA is an advocacy and business leadership group for the life sciences industry in California. We collaborate with industry, government, and academia to support the innovation ecosystem that allows California’s life sciences industry to thrive. Our annual industry report provides a snapshot of why our mission is so important.