I still remember it vividly.
In February 2002, city, state, university and corporate leaders launched the Central Indiana Life Sciences Initiative.
The initiative was touted—at least by journalists, pundits and the local booster class—as the thing that would turn Indiana from its 20th century manufacturing roots to a 21st century, knowledge-based future.
That idea stuck with me. I was, at the time, less than three months into my first full-time reporting job, as a business reporter at The Indianapolis Star. So I was rather impressionable.
But it’s an idea that was always wrong.
Why? Because the math just doesn’t work.
In February 2002, Indiana boasted 587,000 manufacturing jobs, according to the U.S. Bureau of Labor Statistics. The state had lost about 85,000 manufacturing jobs since the start of the 2000 recession. And it had another 100,000 still to lose.
Meanwhile, Indiana’s life sciences sector—even when jobs in life sciences warehousing, or biologistics, are added in to pad the numbers—boasts just 55,000 jobs. That’s the latest figure from BioCrossroads, the entity created by the Central Indiana Life Sciences Initiative.
So life sciences will never be the job creator it was hoped, rather naively, it would be.
Even today, life sciences company payrolls are roughly one-tenth the size of the manufacturing sector—and that’s even with some overlap between the two. (Major life sciences companies, like Eli Lilly and Co., Roche Diagnostics Corp., Cook Medical Inc. and Zimmer Holdings Inc. are, after all, manufacturers.)
I was certainly slow to realize that.
But not so slow to realize it have been city governments, legislators, the Indiana Economic Development Corp. and Elevate Ventures.
They have, over the years, given tax breaks to employers paying just-higher-than-average wages–in part because those companies produce more jobs than life sciences companies. Investments in startups, meanwhile, have in recent years gone to information technology companies, in part because such firms can produce jobs faster than life sciences companies.
For background, read my story from a year ago on the plan life sciences companies hatched to try to circumvent IEDC and Elevate Ventures. The situation may have improved a bit in the past year, but I haven’t heard anyone from the life sciences world cheering, either.
The major life sciences-themed initiative of the Pence administration, the Indiana Biosciences Research Institute, is focused at the large corporate and university level, not at startups directly. BioCrossroads’ latest initiative is focused on agriculture, not on the traditional areas of life sciences—medical devices, health care services and biotech.
But the latest data from BioCrossroads include, again, a key statistic state leaders should remember: life sciences jobs pay great wages.
In 2012, life sciences jobs paid $89,056 on average, according to BioCrossroads’ data, which was compiled by the Indiana Business Research Center. That compares with an average annual wage of $41,357 in Indiana’s entire private sector.
Economic development is really about two things: jobs and incomes. The more jobs there are, the more incomes Hoosiers collectively receive. But higher-paying jobs also boost collective income.
So while life sciences companies don’t rack up huge jobs numbers, their relatively high pay means that for every job they do create, it’s worth two in the rest of the private sector.
With IEDC and local governments doling out tax incentives each year to attract jobs with average wages of about $47,000, it’s at least worth considering whether that money might be invested in other ways to boost higher-paying sectors.