California’s Life Sciences Industry Generates $414B a Year: Report
There’s a lot of white lab coats walking around California after the state’s life sciences industry produced more jobs and a lot more money last year, even though private equity in the space retreated.
The Golden State was by Jan. 1 home to nearly 470,000 jobs that generated $413.7 billion in total business output in 2022, according to Biocom California’s 2023 Economic Impact Report released Tuesday. That represents a nearly 8 percent yearly increase in employment and a 10 percent jump in economic activity generated.
The state’s lab job growth outpaces all other industries in California (4.2 percent) as well as job growth in the U.S. overall (3.5 percent). The largest job gains in California came from research and development in biotechnology, and analytical laboratory instrument manufacturing. In aggregate, the industry supported approximately 1.2 million jobs in 2022, including direct, indirect and induced employment.
California also received a total of $5.4 billion in research funding from the National Institutes of Health (NIH) in 2022.
But at the same time, private investment in California’s life sciences from traditional sources declined during 2022, especially compared to the dynamic private financing environment during the first two years of the pandemic, according to Biocom. The IPO market in the second quarter last year reached the slowest three-month period for new stock offerings since 2009.
Venture capital funding for core life sciences also declined in 2022 to pre-pandemic levels, with the number of deals declining 18 percent from 2021 to 233 deals in 2022 (year ending Sept. 30). The total value of venture capital funding in 2022 was $12.5 billion.
However, Joe Panetta, president and CEO of Biocom California, said the state continues to be the leading innovation hub for the life sciences industry.
“When we create a business environment that encourages innovation, we unleash scientific creativity, leading to medical breakthroughs that will forever improve human health,” Panetta said in a statement. “The life sciences are a robust economic engine in California, with companies of all sizes dedicated to addressing significant unmet medical needs.”
The Bay Area is home to more than 258,000 of the state’s life sciences jobs, the report showed, the highest share in the state. The region received $2.1 billion in NIH awards, and its life sciences companies generated $133.5 billion in total economic output.
Life sciences employment grew by 8 percent in San Diego last year, anchored by companies like Bristol Myers, Eli Lilly and Pfizer. The region received $1.2 billion in NIH awards and generated $57.4 billion in economic activity last year.
Greater Los Angeles, which in this case includes San Bernardino and Ventura counties, employed more than 97,000 life sciences workers in 2022, representing a 4 percent increase over the previous year. The region received $1.2 billion in NIH funding, and its life sciences industry generated $61.5 billion in total output.
Gregory Cornfield can be reached at email@example.com.