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Last modified: Wednesday, May 13, 2009

New IU report: Life sciences accounted for nearly a fourth of new Indiana jobs this decade

FOR IMMEDIATE RELEASE:
May 13, 2009

BLOOMINGTON, Ind. -- During a period when auto industry employment in Indiana and elsewhere has been in decline, the Hoosier state's life sciences firms have accounted for nearly a quarter of the jobs created during this decade.

Total payroll employment in Indiana increased by 33,000 between 2001 and 2007 -- or 0.2 percent average annual growth -- while life sciences expanded by 7,600 well-paying jobs -- representing 23 percent of Indiana's total growth during the period.

That's one finding in a new 28-page report, "Indiana's Life Sciences Industries," prepared by the Indiana Business Research Center of Indiana University's Kelley School of Business. The benchmark study was commissioned by the Indiana Economic Development Corp.

"The life sciences now rival the auto industry as Indiana's most dynamic manufacturing sector," the report said among its key findings. "The life science share of total manufacturing output has increased from 11 percent to 20 percent."

Indiana was home to 1,652 life sciences-related firms that employed 50,000 Hoosiers in 2007. Within that firm total, there were 300 manufacturers, more than 200 biotechnology or physical science research laboratories and nearly 1,100 life science product wholesalers.

"The state is fortunate to be home to some of the industry's most recognizable and successful companies," the report said.

The benefits are obvious for life science employees. The annual wage of a typical life sciences job in 2007 was $82,000, which was more than double the average wage for all those employed statewide.

Using an automotive analogy, Timothy Slaper, co-author of the report and the IBRC's director of economic analysis, added this assessment of life sciences activity in the state: "We may not be firing on all eight cylinders, but I'd say seven out of the eight are firing pretty well."

Manufacturing Output

Share of Indiana Total Manufacturing Output by Select Industries

Print-Quality Photo

Pharmaceutical and medicine manufacturing are particular strengths for Indiana, where total output of firms engaged in that sector was nearly $9 billion in 2007. The only states with higher levels of output in that sector were California, New Jersey and New York.

Indiana ranked second nationally in the share of total workforce engaged in pharmaceutical manufacturing and third overall in terms of output per pharmaceutical worker -- $450,000.

The Hoosier state also is a leader in the production of medical equipment and supplies. Its output in this sector totaled $3.7 billion in 2007 and was second only to California.

Exports of state-made life science products totaled $5.1 billion in 2007, which was the third highest of among the 50 states, behind California and Massachusetts.

While the state's gains in manufacturing are impressive, Slaper does point to a need for additional progress in research and development and for more post-secondary biological science teachers.

Employment in physical, engineering and life science research has declined in Indiana at an annual rate of 1.6 percent since 2001, while growing by 2.4 percent nationally.

The state's share of total employment in key life sciences occupations exceeded the national share, including medical scientists, natural science managers and biomedical engineers. Indiana's average wages also exceeded national average for biochemists, biophysicists and microbiologists. However, Indiana's concentration of post-secondary biological science teachers was among the lowest in the nation.

"I would focus on ways we can keep the growth going and where we can bolster areas of relative weakness," Slaper said. "We need to strengthen the R&D component, for example, because research and development builds the foundation for high-value production five or 10 years in the future."

The report cautioned about a continued need for a balanced economic development strategy overall.

"While life science manufacturing output has surpassed that of transportation manufacturing in recent years, it has done so with less than one-third the workforce. The importance of this sector's tremendous productivity cannot be overstated," the report said.

"Yet it is important to keep in mind that, in terms of employment alone, gains in life science manufacturing will not offset losses in the broader manufacturing sector if recent trends persist."

The new report also presents observations about Indiana's position in the global marketplace, with a look at the state's life science-related foreign exports and the direct investment of foreign companies in Indiana. It is available online at http://www.ibrc.indiana.edu/studies/life-science-industries_2009.pdf.

Established in 1925, the IBRC is an information outreach service of the Kelley School. It provides and interprets economic, demographic and social information needed by business, government, educational and other nonprofit organizations, and individual data users in the state and throughout the nation. Its research can be found online at http://www.ibrc.indiana.edu/.