Washington state is a leader in many areas of science, technology, and innovation. But over the past few years, the state’s life science industry — once among its strongest — has begun to languish.
A new report commissioned by the Washington Life Science & Global Health Advisory Council shows that the industry lost 3 percent of its jobs between 2011 and 2014 in the state. In a contrast, the national life science industry saw job growth of 2.7 percent in the same time period.
The new job data shows a reversal in the trend of strong job growth in the previous decade, which was faster and more dramatic than the nation as a whole and fared well during two economic crises. It’s also a stark contrast to the skyrocketing growth of employment in Washington’s technology industry.
The report blames this downturn on an erosion of state programs meant to support the life sciences industry, including the end of the state’s research and development tax credit and the elimination of multiple state funding programs.
The advisory council, which was established in 2015 by Gov. Jay Inslee to address concerns that the industry was falling behind, presented the report to the governor today as part of a bid to revive those state programs and reinvigorate the industry.
One of the clearest examples of this erosion is the closing of the Life Sciences Discovery Fund (LSDF), a state-run fund which gave research grants to early stage startups, nonprofits and research institutions.
Leen Kawas, CEO of Seattle-based M3 Biotechnology and a member of the advisory council, told GeekWire that the financial assistance and connections she made through the fund made her entrepreneurial journey possible.
“Probably M3 would have not been here if we didn’t get the funding from the state, and also the support for the community,” she said. M3 was one of the last groups to be funded before the fund was closed abruptly in June of 2015.
“We were also being asked to move to California,” and if the company had gotten off the ground without the LSDF, it likely would have relocated to San Diego, Kawas said.
“It was a great tool for me as an entrepreneur, and I feel that we need to empower our entrepreneurs to build life science companies,” she said. “It’s not only creating revenue for the state, but potentially we could be changing and improving the quality of life for a lot of people.”
The life science industry does indeed have major repercussions beyond corporate and government balance sheets. Washington is recognized as one of the leaders in life sciences research, and work at institutions like the University of Washington and Fred Hutchinson Cancer Research Center is advancing cutting-edge therapies for cancer, Alzheimer’s, HIV and more.
But the state is struggling to translate that leading research into a thriving industry.
Leslie Alexandre, CEO of industry group Life Science Washington and a member of the governor’s advisory council, told GeekWire that much more could be done to leverage that wealth of research.
“We have this incredible foundation to build upon, that other states dream of. Most other states can’t touch what we have in research,” Alexandre said.
The advisory council’s most immediate recommendation to fuel growth in the industry is to reinstate a research and development tax credit that the legislature allowed to expire in 2015.
Governor Inslee has written that credit into his budget, which is currently being examined by the state Legislature. If the budget is approved, the tax credit would assist companies investing in research and development, often companies who are not yet profitable.
The report identifies the tax credit and Washington’s business and operation tax as two measures which make it “one of the most challenging states in the country for life science companies to grow and add manufacturing jobs in the state.”
Other measures endorsed in the report include steps to retain mid-size and high-growth companies, of which the state has very few; assist entrepreneurs by allocating more wet lab space, particularly in urban areas; and attract more investment opportunities, possibly including state-sponsored funds like the LSDF.
The report included another notable number: for every job created directly by the life science industry, 3.8 additional jobs were created across the state.
Life science jobs also fared well during recent periods of economic difficulty, including the great recession in 2007 and 2008. The industry fared better than Washington as a whole during those economic crises, with respects to job retention.