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San Diego County remains the country’s third largest life science hotspot, with the industry’s rapid rise largely unaffected by the COVID-19 pandemic, according to two recent reports.
Commercial real estate company Jones Lang LaSalle ranked in the top 10 life science markets in the United States based on factors such as the number of residents of each region with advanced science degrees; the concentration of life science employees and companies; the amount of investment money going into local businesses and universities; and total laboratory space.
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Greater Boston and the San Francisco Bay Area stayed in the top two places in JLL’s September 15th rankings. That’s no surprise, as Boston and the Bay Area have long been recognized as the country’s leading biotech hubs, followed by San Diego.
“Each of these three clusters have continued to grow and thrive in similar ways: business start-ups, venture capital, National Institutes of Health funding, employment,” said Joe Panetta, CEO of the life science trading group Biocom California.
And while some regions, like the Raleigh-Durham region, also have world-class research universities, Panetta says they don’t quite have the same culture of entrepreneurs who start businesses and grow quickly before jumping into their next business.
Biocom published its own report on Monday assessing the impact of the life science industry on the California economy. The report found that the industry employed nearly 500,000 Californians in 2020 and grew about 0.5 percent, while the state’s total workforce shrank 7 percent due to the deterrent effect of the pandemic on the economy.
This gap between the life sciences and other sectors was even more pronounced in San Diego. The number of employees in the life science sector in the district rose from around 68,000 in 2019 to around 72,400 at the end of last year, an increase of 6 percent. Meanwhile, the total workforce fell 10 percent, according to the state’s Department of Employment Development.
About one in 30 San Diegans employees work in the life sciences. These jobs are well paid at a time when many residents are struggling to find housing. The average life science worker made $ 127,000 in 2020; The median household income in the county is around $ 84,000, according to the American Community Survey.
Biocom’s report, prepared by Point Loma Nazarene University economist Lynn Reaser, estimates that local industry generated nearly $ 48 billion in total economic activity last year, compared to $ 41 billion in 2019. That figure explains both the direct and indirect effects of life science companies on San Diego’s economy. Similarly, the life science sector helped support a total of 178,000 local jobs.
“This year’s report revealed two key dimensions of the life sciences cluster in San Diego,” Reaser wrote in an email. “First, it is an important source of stability that can grow even in recessions. Second, it is at the forefront of what promises to be increasing demand for interest and investment in the life sciences over the next decade. ”
While the Bay Area and San Diego are widely recognized as the state’s two top biotech hubs, the report shows that the industry is also growing rapidly in Los Angeles County, where 97,000 life science employees are employed. Los Angeles corporations, universities, and research institutes raised nearly $ 2 billion
“Life Science” is a collective term that encompasses small biotech companies, large pharmaceutical companies and manufacturers of medical devices. The term also applies to contract manufacturing and research companies, as well as companies that manufacture test tubes, beakers, and other equipment essential to any laboratory.
The most recent report on Biocom’s Economic Impact uses a slightly different definition of what qualifies as a life science company than previous reports, which could affect some of the numbers slightly.
Panetta believes San Diego will be stuck in 3rd place for the foreseeable future. But there are ways that could change, he says, like building a thriving downtown biotech community.
“One of the restraints on growth in San Diego has always been property density,” he said. “They have licensed facilities in 10, 12, 15 story buildings in South San Francisco. We don’t have that here. But if we see increased density, we could see stronger growth. “
Reaser also sees the industry’s expansion into new parts of the county as a great growth opportunity – but one that raises new questions about where this growing workforce will live and how it will commute to an ever-growing network of laboratories and offices.
“As the life sciences expand their geographic reach from North County to Downtown and beyond, connecting offices, laboratories, and manufacturing facilities to residential buildings will become a growing challenge,” she said. “It will be of vital importance that biotechnology has a place at the table when discussing transportation and housing solutions.”
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