Slowdown seen in state's biopharmaceutical industry

Tuesday, October 12, 2004

By BRAD WONG
SEATTLE POST-INTELLIGENCER REPORTER

Employment growth in Washington state's biopharmaceutical industry is expected to slow in the next decade, according to a Milken Institute report that will be released today.

The 215-page document, which merges biology and pharmaceutical research, says the state will see about 3,200 new jobs, including research, development and manufacturing, for a total of more than 12,000 positions by 2014.

The report says the state has about 8,800 jobs now -- and the growth rate from this year until 2014 is expected to jump by 36.3 percent.

The California-based economic think tank said Washington state had about 1,800 biopharmaceutical employees in 1983 and more than 8,700 workers last year.

Nationwide, the industry will add 122,000 jobs during the same period, the report said.

Perry Wong, a report author, said limited industry resources in the state and increased business costs can hinder continued high rates of growth.

"It's slower than the past five years, but if you measure the long haul, it's still very substantial," said Wong, a senior institute research economist, referring to Washington.

"Statistically, you can't grow at the same rate for 20 years."

Seattle industry officials and observers offered explanations yesterday for the lower job growth rate projection.

"I think that the huge difference between today and five or 10 years ago is that there are more regions vying for biotechnology and bioscience business," said Ruth Martens Scott, president of the Washington Biotechnology and Biomedical Association.

She had not read the report. But she added that Washington needs a statewide biosciences strategy, including strong support for research institutions, to remain competitive.

A representative for Microsoft Corp. co-founder Paul Allen's Vulcan Inc., which is developing the South Lake Union neighborhood for more biotechnology research, declined comment until he had read the report.

Rodney Ho, a University of Washington professor of pharmaceutics, said companies that have merged in the past five years could be a factor in the lower growth rate projection. But he cautioned that products from the industry could help spawn more jobs.

The 36.3 percent job growth rate for Washington in the next 10 years is expected to be above the national average of 29.6 percent, the report said. But it is below the 64.3 percent rate for Massachusetts, a leading biopharmaceutical state, and California's 39.8 percent rate.

The report, however, highlighted that the industry's "ripple" effect will create nearly 39,900 jobs for Washington in the next 10 years.

The state's chief economist, Chang Mook Sohn, said the report's analysis of a lower job growth rate was not surprising.

"In terms of technological innovation, yes, it is the frontier industry," he said. "But in terms of employment, we never had dreams of a huge increase in employment."

Wong noted that job growth in the biopharmaceutical industry hinges on many forces.

For example, he said, it could change if a large firm opens a laboratory, or if the industry receives additional research money.

P-I reporter Brad Wong can be reached at 206-448-8137 or bradwong@seattlepi.com

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