Can the industry that came up with the growth hormone and other wonder drugs provide a powerful job stimulant for the economy?
President Bush, pushing a $500-million plan to bolster job training and education, called biotechnology one of the industries that would supply "much of our job growth" during his State of the Union address.
But the reality is that although the business is expanding -- one expert thinks biotech payrolls could grow by 15% in 2004 -- it is probably too small and too geographically concentrated to give the broader economy a big booster shot.
Biotech firms employ only about 200,000 people in all. That's relatively puny, a mere 15% of the number of people who work for retail giant Wal-Mart Stores Inc. Total annual revenue for biotech firms in 2002 was not quite $35 billion, which is less than General Electric Co.'s sales for about three months.
"If you look narrowly at biotechnology, it is not a huge part of the economy, job-growth wise," said consultant Scott Morrison of Ernst & Young.
One-third of the country's biotech workers live in California, home to the nation's two largest biotech firms, Amgen Inc. of Thousand Oaks and Genentech Inc. of South San Francisco; Genentech invented the growth hormone a quarter-century ago. Remaining workers are collected in a few cities with entrepreneurial environments and strong academic institutions, including Boston and Seattle.
Those clusters stand to benefit most from the coming job gains, which Morrison said could reach 30,000 this year.
Many states have been eagerly courting biotechnology firms to diversify economies dependent on manufacturing and agriculture, though with little success. At the industry's annual meeting in Washington last year, governors from eight states prowled the convention floor for biotechs willing to relocate.
It's no secret why the industry is coveted: Biotech workers are highly skilled and well paid. The average salary at California biomedical firms is $65,000, according to the California Healthcare Institute, an industry group. Amgen employees earn an average of $100,000, enough to keep luxury automobile dealerships in business and spark bidding wars on houses, Chief Executive Kevin Sharer said recently.
Few experts foresee a biotech migration to Indiana or Delaware, however.
"Biotech isn't like Krispy Kreme," whose growth depends on expansion into new territories where consumers hunger for doughnuts, said economist Joseph Cortright.
