Arizonans have embraced the goal of doubling the Economic Impact of Arizona’s Health Innovation Sector by 2033. On December 12, 2024, the Arizona Bioindustry Association, Inc. (AZBio) released the most recent results and the progress being made towards this ambitious and achievable goal.
Watch the video to view the updated metrics in less than a minute.
Arizona’s bioscience industry employed 40,399 in 2023 across 3,652 state business establishments, representing a rapid 24.6 percent increase in employment since 2019 and placing the state among the leaders in employment growth. The average wage in the bioscience industry was $102,161—53 percent higher than the state’s private sector average. Academic R&D expenditures in bioscience fields reached a new height of $683.3 million in 2022. NIH funding for Arizona totaled $366.5 million in 2023 following steady annual growth since 2019. Arizona’s bioscience companies attracted strong venture capital investment, with $281.8 million invested in 2023. Arizona stands out in patent activity in bioscience-related technology areas—its 3,387 patent awards from 2019 through 2023 places the state in the second quintile among all states. Source: AZ-BIO2024 – state profile
A National Perspective
The Biotechnology Innovation Organization (BIO) and the Council of State Bioscience Associations (CSBA) released new national and state-level data on the U.S. bioscience industry’s economic performance, its impacts, and its geographic footprint at the annual CSBA Summit in Phoenix.
The report, “The U.S. Bioscience Economy: Driving Economic Growth and Opportunity in States and Regions,” analyzes the sector’s economic impact via employment, overall output, wages/benefits, and tax revenue.
Key takeaways from the report include:
- The industry’s economic impact, as measured by overall output, totaled more than $3.2 trillion in 2023.
- In 2023, the nation’s bioscience industry employed nearly 2.3 million Americans across almost 150,000 U.S. business establishments and in every U.S. state. The sector indirectly supports nearly 8 million additional jobs.
- The industry’s employment has increased significantly, by nearly 15 percent since 2019, maintaining its long-term growth trend and well outpacing the nation’s overall private sector job growth during this period.
- Between 2019 and 2023, 49 states, DC, and Puerto Rico experienced net job growth in the bioscience industry.
Arizona is home to the second fastest job creator for the Biosciences in the US over the last 10 years on a percentage basis. At AZBio’s annual Trailblazers Awards and Legislative Luncheon, Joan Koerber-Walker, President & CEO at AZBio, and Peter Pellerito, Senior Policy Advisor at the Biotechnology Innovation Organization shared insights into the growth of Arizona’s Health Innovation sector and how it will continue to grow even faster.
Peter M. Pellerito is the senior policy advisor and former interim vice president for state government relations and alliance development for the Washington DC-based Biotechnology Innovation Organization (BIO) where he focuses on Federal and State economic development initiatives and technology transfer/commercialization. Mr. Pellerito has co-authored nineteen reports and best practices guides on bioscience/life science economic development legislation and business development, and is also a contributing author/editor to the seven bi-ennial Battelle/BIO national publications focusing on state initiatives that support bioscience commercialization of research technologies, and state public policy initiatives. He sits on several national and regional university-industry committees that focus on technology transfer and commercialization efforts for universities and community college workforce development. Those organizations include the Association of University Technology Managers (AUTM), Association of Public Land-grant Universities (APLU), and American Association of Universities (AAU).
Watch the video to hear what they shared or read some highlights below:
Key Takeaways on Arizona’s Health Innovation Economic Metrics shared by Joan Koerber-Walker
- The Arizona Bioindustry Association was born out of the clusters in 1997 and then became what we know as AZBio in 2003. Today, over 300 organizations are part of AZBio and they employ 365,000 Arizonans. That’s 365,000 voters. That’s 365,000 neighbors. That’s 365,000 champions for health innovation.
- Arizona’s Health Innovation Ecosystem generated $43.64 billion in Economic Impact in 2023 up from $38.54 billion in 2021 reflecting growth of over 13% in 2 years. Growth in economic impact means brings benefits for all Arizonans. It means more activity in the community, it generates more tax dollars. This provides more money for education, for roads, for public safety, and more. And, when those dollars are circulating in our community, they multiply.
- The number of companies life science companies increased from 2,912 in 2021 to 3,652 in 2023.
- Employment is a key driver of economic impact. Jobs increased from 36,410 to 40,399 over the period from 2021 to 2023. Our goal is to grow employment to over 72,000 people by 2033. If we’re attracting more companies and growing more companies, they’re hiring more people making the goal a very doable number.
- For the first time in history, Arizona life science companies generated in excess of a billion dollars in venture capital over the reporting period. ($1,116.7 from 2019-2023) Arizona currently ranks #23 nationally for venture capital. To reach top-10 status, our goal is to get to 4.5 billion. That means that we have to make smart decisions and fund our early-stage companies so they become investable.
- Arizona Ranks 9th nationally for clinical trials. This evidences the best in class research sites we have in our community and creates opportunities for Arizonans to access breakthrough treatments.
- Reaching our goals will require additional investment. Goals include funding for AZAdvances to deploy today, and beginning the process of funding the Arizona Health Innovation Trust Fund so that it reaches its $200 million goal and can help drive heath innovation forward faster in Arizona forever.
Key Takeaways from the discussion with Pete Pellerito
This discussion starts at the 22.0 minute mark.
There is significant interest in states across the country to build up their bioscience sectors. It is not just the traditional players like California, Massachusetts, New Jersey, New York, and North Carolina. We’re seeing it happen in places that may surprise you. Arizona is extremely well positioned for growth.
Purpose
Our purpose is to improve the human condition and make a difference. It’s fundamentally to be able to care for people in need, to lower the cost of healthcare, to be able in the agricultural context, to have food for a country, a community. It includes bioremediation that addresses environmental challenges, and over $3.2 trillion in economic impact and over 2.3 million jobs nationally.
People
Companies at every stage have workforce needs. Companies focused on research and development will need people with advance degrees for their workforce. The manufacturing sector needs workers at every level. Community Colleges are making a major impact in training workers in the life science manufacturing space. Leverage and build on these resources. Companies at every level need managerial talent. Arizona companies must develop it and attract it from other states.
Place
With over 6 million square feet of life science infrastructure in development in Phoenix alone, Arizona is positioned for growth. Arizona’s university research parks also play an important role in helping to make connections, build important relationships, and share ideas.
Purse
Funding fuels growth. States that have access to early-stage funding have a strategic advantage. This allows ideas to become startups and emerging growth companies. The Arizona Health Innovation Trust Fund and AZAdvances are two key strategies Arizona is developing to address this need.
Leadership
States that are growing have leaders from industry, academia, community, and government working together to plan and execute on that plan. Arizona’s Bioscience Roadmap is the longest running, continuously managed strategic plan to build a state-based bio economy. AZBio, including its board of directors and members for every facet of the industry, is well positioned to execute
Thank you to the state legislators…
“As my colleagues at Bio know, I’m around the country all the time working with our companies and other stakeholders, working with governor’s offices, legislators, legislative staff and committees,” shared Pete Pellerito. “The work you’re doing adds greatly to the mix. Best case scenarios, best practices in support of legislation not only for our particular industry, but for the other communities of interest in your state, that’s a huge thing because there are so many pressures on you as public officials…That’s incredibly appreciated by our industry.”