Monday, January 28, 2008

Mass Governor's Biotech Job Growth Predictions Raise Eyebrows

From the Boston Globe:

Job growth prediction raises eyebrows
Patrick sees 250,000 added in life sciences

By Todd Wallack, Globe Staff | January 26, 2008

Governor Deval Patrick raised some eyebrows during his State of the State address Thursday by saying his $1 billion life-sciences initiative would create 250,000 jobs over the next decade - twice as many jobs as the state added from all sources over the past decade.

"On the face of it, it looks huge," said Alan Clayton-Matthews, a University of Massachusetts at Boston associate professor who helps track the state's economy. "I have no idea how these numbers were arrived at."

The state has about 3.2 million workers; 250,000 new jobs would represent an 8 percent increase - on top of any natural growth expected without legislation.

"It sounds very ambitious," said John Bitner, chief economist for Eastern Investment Advisors in Boston, noting the state has traditionally had a hard time attracting workers because of its high cost of living and harsh winters.

Damon Barglow, a healthcare analyst at Eastern Investment Advisors, said it's possible legislation could create as many as 100,000 jobs, assuming the investment is well-targeted and every new life-sciences job spawns several more in other sectors.

But Barglow said even that projection is ambitious. Of Patrick's 250,000 estimate he said: "I don't see how he gets there."

Kofi Jones, spokeswoman for the Executive Office of Housing and Economic Development, said the Patrick administration is confident it can achieve the 250,000 new jobs in even less time - by 2015 - if the Legislature approves the proposal without major changes.

"It's a comprehensive piece of legislation that seeks to strengthen the industry on several levels," from academic research to tax incentives for companies, she said.

The administration calculates one-third of the new jobs would be in the life-sciences sector. The sector currently employs 60,000 to 75,000 people. The rest of the new jobs would come in other areas, including retail and construction, as the life-sciences sector grows.

Jones said the agency assumed that for every job created in life sciences, two more would be created in other sectors, a multiple it obtained from Boston Consulting Group. State officials said other studies used significantly higher multiples to calculate the economic benefit of adding life-sciences jobs.

Jones said the administration examined current growth projections and estimated the rates would significantly increase with additional investment. Although Patrick's proposal calls for spending an average of $100 million a year over 10 years, state officials say companies and universities could leverage much of that money to bring in even more dollars.

The Massachusetts Biotechnology Council and the Massachusetts Medical Device Industry Council said Patrick's legislation would create jobs, but they aren't sure how many. "We have no projections," said Peter Abair, director of economic development for the biotech council.

There is also debate about whether the $1 billion is calibrated for maximum impact.

Many industry officials predict life sciences will grow with or without legislation. A recent report by Northeastern University's Center for Labor Market Studies projected the biopharmaceutical industry will generate more than 12,000 jobs from 2004 to 2014.

The drug industry sponsored the study.

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