California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute

The biomedical industry has been identified as one of the most recession-resilient
sectors in California's hard-hit economy and a critical driver of innovation, job
growth and revenue that will help lead the state to economic recovery according to
a new report released by the California Healthcare Institute (CHI) and
PriceWaterhouseCoopers LLP (PwC). 

The report illustrates that California remains home to the largest concentration of
biomedical companies in the world. California's biomedical industry directly employs
274,000 people, representing one in six of the 1.6 million biomedical jobs in the
United States, according to PwC's analysis of Bureau of Labor statistics and company-
specific filings with the Securities and Exchange Commission.  The industry supports
more than 750,000 direct and indirect jobs statewide and is the second largest sector
of California's high-tech workforce.

Jobs Holding Steady
After years of rapid expansion, California's biomedical workforce still experienced
modest growth even during the downturn in 2008, adding nearly 3,000 jobs and increasing
1 percent from nearly 271,000 jobs in 2007. The state's biomedical sectors include
medical devices, instruments and diagnostics (111,942 employees), biopharmaceuticals
(81,268 employees), academic research (43,038 employees), wholesale trade (31,920
employees) and laboratory services (5,390 employees), according to the report.

As the recession intensified, all of the state's high-tech sectors downsized.  However,
the California biomedical industry shed only 2,572 jobs or less than 1 percent of its
workforce from March 2008 and March 2009, ending the period with 272,181 jobs. During
this time of economic upheaval, the biomedical industry tied with aerospace manufacturing
for the smallest percentage loss among high tech industries in California.  Biomedical
job losses were primarily driven by the decline of 2,955 positions in the medical devices
and wholesale trade industries, which were offset by a gain of 428 positions in academic
research, biopharmaceuticals and laboratory services.

Even during the economic downturn and despite a slight drop in statewide biomedical
employment, all four of the state's leading biomedical clusters grew from March 2008
to March 2009 according to county-level data:    
                            

                                             March 2008      March 2009
                                             Biomedical      Biomedical
    Biomedical Cluster            Workforce       Employment     Growth
    --------------------------------------------------------------------------------------------------------
    San Francisco Bay Area          51,347           51,886          1.0%
    Los Angeles                           44,156           45,064           2.1%
    Orange County                       30,052           30,386           1.1%
    San Diego                              23,545           24,123           2.5%
   
However, the report points to signs that the state’s biomedical industry is facing
unprecedented challenges and that the state’s biomedical leadership is being tested
as other regions compete for biomedical research and manufacturing jobs."California
is the birthplace of biotechnology, and our state's biomedical innovation delivers
not only global advances in healthcare but the jobs that drive our economy," said
David Gollaher, Ph.D., president and CEO of CHI. "While the biomedical industry has
weathered the recession, it faces unprecedented challenges – access to capital, the
educational funding crisis and uncertainty surrounding healthcare reform. Now more
than ever, the sustainability of California's biomedical industry depends on decisions
made in Sacramento and Washington."

A full copy of the 2010 California Biomedical Industry Report is available at
www.chi.org or at www.pwc.com/pharma/2010chireport.
 
I am Tim Johnson and this has been the California Business Minute.