Arizona's Bioscience Sector Has Substantial Economic Impact, Analysis Says.

PHOENIX -- A new analysis of Arizona's emerging bioscience sector reveals that it has a multibillion-dollar annual economic impact and generates hundreds of millions of dollars in yearly state and local taxes. The study findings will be presented in Phoenix today at Biozona 2009, the annual conference of the Arizona BioIndustry Association.

The analysis was performed by the Battelle Technology Partnership Practice, the Ohio-based group that has provided research and facilitation for Arizona's Bioscience Roadmap since its launch in 2002, and compiles national and state profiles biennially for the national Biotechnology Industry Organization. The 10-year Roadmap plan, commissioned by the Flinn Foundation, provides recommended strategies and actions for Arizona to become an internationally viable bioscience region.

The study found that in 2007, the year offering the most recent data, Arizona's non-hospital bioscience sector accounted for $3.6 billion in revenues and more than 13,500 jobs. This sector includes four segments: research, testing, and medical labs; medical devices and equipment; drugs and pharmaceuticals; and agricultural feedstock and chemicals.

Hospitals--many of which have extensive biomedical research activities--are also part of the state's bioscience sector. When added to the equation, along with academic research at the state's universities, the figures for Arizona's total bioscience sector rise to $12.5 billion in revenues in 2007 and more than 87,400 jobs.

The non-hospital bioscience sector contributed $178 million in state and local tax revenues in 2007. The entire bioscience sector, including hospitals and academic research, generated more than $765 million.

"Some have described Arizona's bioscience base as 'fledgling,' but these numbers are very real and significant--and they're growing rapidly," said Marty Shultz, chair of the steering committee that oversees the implementation of the Roadmap. "Knowledge-based industries such as the biosciences are vital to diversifying Arizona's economy and lessening the impact of economic downturns such as one Arizona is struggling with at present."

The Battelle analysis also examined the multiplier effect--the economic activity generated by the bioscience sector that carries over to additional spending within other industries. With this included, the non-hospital bioscience sector generated a $5.8 billion economic contribution in 2007 and nearly 29,700 jobs. With hospitals and academic research added, the totals rise to $21 billion in economic activity and more than 155,000 jobs.

"Equally important to measuring the annual economic impact is assessing its growth since the launch of the Roadmap," said Walter Plosila, Ph.D., the lead Battelle consultant on the Roadmap since its 2002 launch. "Between 2002 and 2007, economic activity within the bioscience sector increased 57 percent, jobs 20 percent, and tax revenues 35 percent. This rate of growth is difficult to find elsewhere in the nation."

The study also suggests the potential for even greater economic-impact projections for 2020 if the Roadmap goals and targets are achieved. These data were compiled based on sustaining the historical level of growth and meeting Roadmap performance goals. "The economic downturn will clearly have an impact on reaching these numbers," Plosila said. "It affects the biosciences, just as it affects all industries. Arizona is on the right trajectory, though given the state of the global economy, it may take longer to realize these long-term gains."

The study involved a review of annual performance metrics and measured economic impact by reviewing employment data and bioscience-related research and development. It used the IMPLAN input-output model, one of the most widely used in the nation which tracks the impact that spending within one industry has on other industries. Academic research findings were compiled using data from the National Science Foundation.

The Flinn Foundation is a Phoenix-based, private, nonprofit philanthropic endowment. In addition to commissioning the Roadmap project, the Foundation staffs its committees and workgroups. The Foundation is dedicated to improving the quality of life in Arizona principally by advancing the medical sciences. It fulfills this mission through its support of various scientific and educational programs and activities, including the Flinn Scholars program.

[Editor's note: Report and PowerPoint presentation are available here]