The state’s life-sciences industry, which includes biotech, medical device and global health companies, lost 900 jobs between 2011 and 2014, according to a study.
Washington’s biotech industry is stagnating, industry leaders say, and they’re calling on the state to reinstate incentive programs to invigorate it.
The state’s life-sciences industry, which includes biotech, medical device and global health companies, lost 900 jobs between 2011 and 2014, according to a study released Thursday from TEConomy Partners. The study was commissioned by the Washington Life Science & Global Health Advisory Council, a group established by Gov. Jay Inslee to study how the industry could become more competitive with other regions.
Washington’s industry employment levels dropped 3 percent during the study period, compared with 2.7 percent growth nationally.
The shrinking industry during those four years contrasts with its Great Recession years, from 2007 to 2012, when state employment in the industry increased by 10 percent, according to a study by the trade association Life Science Washington.
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Industry leaders point to legislative changes they say have negatively affected the industry: research-and-development tax credits that the Legislature let expire and its elimination of the Life Sciences Discovery Fund. The study says the decline in jobs coincides with the programs’ expirations.
Both programs closed in 2015, after the 2014 end date of the study period.
It was more a case of “smoke before the fire,” said Leen Kawas, CEO of Seattle-based M3 Biotechnology, which received a Discovery Fund investment in 2014 when it was starting up. There were indications that the programs would be eliminated, causing a loss of confidence, said Kawas, a member of the governor’s council.
Leslie Alexandre, CEO of Life Science Washington, said “you cannot do a one-to-one correspondence” between the job losses and the loss of the incentive programs, but she said it was clear the state was not offering the support it once had.
“What we’re saying is, it’s time to pay attention again,” she said. “Companies are perceiving a lack of true state support to growing and sustaining this industry.”
The declining employment numbers also coincided with the announcement in summer 2014 that California-based biotech giant Amgen was leaving the state as part of a nationwide restructuring, taking at least 660 jobs.
Alexandre said the organization doesn’t think Amgen layoffs make up many of the 900 job losses cited in the report, because the company didn’t start major cuts until December of that year.
A bill, requested by the governor’s office, has been introduced in the state House to reinstate R&D tax credits that gave companies tax breaks for investing in biotech products or real estate. The proposed legislation would apply to the life-sciences industry, but not software companies as it has in the past.
Life Sciences Washington said the tax savings for companies would be about $21 million. Such incentive programs, which are common in the majority of U.S. states, encourage companies to open offices and start up in the region, industry leaders say.
“The reason we decided to stay in Seattle was because of the state funding,” Kawas said. “If that didn’t happen in 2014, we probably would have been in San Diego right now.”
The average wage for a life-sciences employee is $82,000, and every life-sciences job creates nearly four in other industries in the state, the study says.
It’s not all dreary news for the industry. Seattle Genetics CEO Clay Siegall has said that the company plans to hire 200 people this year.
The global health sector is also growing. Employment grew by 4.4 percent each year between 2009 and 2013, according to the study.