Jobs and biopharma

Ten-year BLS projection sees a healthy industry ahead


The 2012–13 Occupational Outlook Handbook* has just been published by the Bureau of Labor Statistics of the US Dept. of Labor. That news might be important if you have a college-age child who is doing some long-term career planning, or perhaps you’re in graduate school yourself and doing the same planning. The rest of us tend to deal with careers, and jobs, on a more day-to-day basis: What do I do if I am about to be laid off? Or promoted into another career path?—and there are some insights to be gleaned.  The biennial Outlook gives a ten-year projection (in this case, 2010 to 2020) of the US economy, employment and other macro trends. Digging into the Outlook is a real exercise in wonky statistical details—not everyone’s cup of tea, to be sure. But there are a couple important messages to convey.

Before getting into that, though, a slight detour is necessary. BLS uses an econometric input-output model of the US economy to calculate trends, and factors in demographic data of the US population from various US Census Bureau surveys. All this is matched against a grid of the US economy organized around the North American Industry Classification System (NAICS, the replacement of the “SIC” codes of years ago). The “pharmaceutical and medicine manufacturing” category is NAICS 3254. (By the way, Census has kept pharma in the broader category of “chemical manufacturing,” and biotechnology is simply a subset of pharma. NAICS changes only gradually because, as a Census policy paper puts it, “Time series continuity is maintained to the extent possible.”)

Here’s one piece of news: the employment in pharma in 2020 is projected to be 281,500. The actual employment in 2010? 276,500. And, going back a decade, employment in 2000 was 274,400. All these numbers are within a couple percentage points of each other. Which is remarkable stability over a 30-year period (if the projection holds up), and includes going from what was a high point of pharma business development at the turn of the century, to the slow recovery from the Great Recession of the past three years.

This is a notable contrast from the steady drumbeat of gloom and doom coming from press reports of Big Pharma layoffs announced routinely since the mid-2000s. Outsourcing removes jobs, but many of them stay in-country.  I’m particularly bugged by the layoff reports from outplacement firms, who are able to count tens of thousands in layoffs, but only a few thousand hirings in the same time frame; if all the layoffs were the only change, the pharma industry would have utterly vanished years ago. To be sure, the relatively flat employment projection is not cause for celebration; average annual growth over the next decade is projected to be a full percentage point below the US economy as a whole, meaning that pharma will be a smaller part of the US labor force in 2020.

Here’s the other piece of news: professional jobs in pharma, especially those involving science and technology, look positively rosy. In the Outlook, few jobs are specified as “pharmaceutical,” but the ones that would fall mostly into this category look good: biomedical engineering, up 62%, to 27,400 jobs in 2020; medicinal scientists, up 37% to 136,400. Pharmacists (some of whom trickle into pharma during their careers) will grow by 25%; and physicians and surgeons—the industry’s main “customer”—up 24%, to 859,300.

There are problems with the BLS data; biotechnology research (as opposed to biotech manufacturing) is in another NAICS category, and as pharma service providers take on more functions for pharma manufacturers, those service jobs fall out of the 3254 category. (Another econometric analysis, from Battelle Technology Partnership last summer, counted employment in the “biopharmaceutical sector” at 674,000—quite a different number.) But here’s where the input-output modeling and that “time series continuity” becomes important: even if the absolute count in 2010 or 2000 is off, any relative change in the industry would be tracked into the next time period. The BLS numbers point to a stable, durable industry that’s going to employ lots of people over this decade.

* Certain parts of the data here are drawn from the January Monthly Labor Review, accessible at www.bls.gov/opub/mlr/2012/01/home.htm