As the national unemployment rate nears 10 percent, job creation and industrial growth are more important than ever. America’s continued international competitiveness depends on building on our successes and fostering economic growth. The biopharmaceutical sector is one of those successes. Moreover, it has been one of the few sources of good news during the recession of 2008. While private-sector employment was declining, the biopharmaceutical sector grew by 1.4 percent.
Biopharma is a sector with a broad and deep economic footprint, providing jobs in all 50 states, Washington D.C. and Puerto Rico. The average salary in biopharma was $77,595 in 2008, which amounts to $32,000 more than the average private-sector job. These are high-value jobs that generate a significant ripple effect in the economy. A recent study on the impact of the industry on the larger economy found that every direct job in the biopharmaceutical sector supported 3.7 other jobs in the U.S.
While biopharma is important to the national economy, it is also important to Colorado. Between 1996 and 2006, Colorado ranked third nationally in growth of venture capital investments in biotechnology. These are investments that generate jobs and tax revenues that benefit all Coloradoans. In 2006 the industry paid $46.9 million in state taxes. Nationally, Colorado is 16th for total employment supported by the biopharmaceutical sector at 184 of each 10,000 jobs in the state. Locally this is a vibrant component of our economy and one that is growing at a time when good economic news is hard to find.
Beyond jobs, the biopharmaceutical sector invests in research that improves health and lengthens lives. Researchers in the biopharma industry are working on treatments for diseases than range from AIDS to Tuberculosis to West Nile Virus. These medicines improve the quality of our lives and also lower our health care bills. Research shows that each dollar increase in pharmaceutical spending yields as reduction in hospital expenses of $3.65.
Internationally, the United States is unrivaled in biopharma. In 2007, more than 2,700 drugs were under development in America. Throughout the rest of the world the total was only 1,700. While celebrating their advances, we shouldn’t take the success of the biopharmaceutical industry for granted. European and Asian companies are working diligently to overcome the American industry’s dominance.
It is essential that the U.S. remain a place where creativity is fostered, where research is rewarded and innovation is encouraged. This requires that our leaders make certain it is easy for biotech firms to start up and that they support policies that help these firms attract venture capital. Our leaders should also promote the education, training, and incentives needed to foster an environment of innovation. Critical to this effort are the strong intellectual property laws that safeguard the return to innovation and research and development investments.
In addition, we must work to improve the U.S. educational system to ensure that today’s students are prepared to be tomorrow’s research scientists. In a comparison of students across 30 countries, American students currently rank 21st in science and 25th in math. America’s leaders must commit to closing this gap and equipping our children with the tools they need to compete in the global economy.
The resilience of the American biopharma industry provides us a little good news amid otherwise bleak economic reports. Our economic future depends on replicating their success and promoting the policies that will make that happen.
Dr. Kristina M. Lybecker is assistant professor of Economics at Colorado College. EDITOR’S NOTE: This is an online-only column and has not been edited.
