Industrial Biotechnology Workforce Survey

California’s industrial biotechnology sector experienced record-setting growth over 2009, anew statewide survey found.

Job Growth

According to results from the first ever statewide California Industrial Biotechnology Workforce Survey, industrial biotechnology companies - those focused on biofuels, feedstock and green industrial chemicals - grew 19 percent between 2009 and 2010. Over the past five years, this unique California segment grew 50 percent, or about 8 percent annually.

Additionally, the survey identified key employment trends to assist California’s educational system to better prepare the workforce for this emerging industry. Current hiring by companies in the survey has focused on chemists, molecular/cellbiologists, fermentation specialists, analytics/testing, and chemical engineers. In addition, many respondents also report substantial hires of project managers, purification specialists, informatics, process engineers, and regulatory affairs. Looking forward over the next twelve months, these same specialties are expected to be in comparable demand, although with increased demand for manufacturing/production technicians, and de-emphasis of regulatory affairs. Hiring demand over the next twelve months among these companies is expected to be strongest for molecular/cell biologists, chemists,chemical engineers, fermentation specialists, and process engineers. Positions that are anticipated to be the most difficult to hire include fermentation specialists, chemical engineers, analytics/testing, chemists, and process engineers.

ANTICIPATED HIRING

Of the 22 Total Respondents, the Greatest Number of Companies Anticipate Hiring Molecular/Cell Biologists, Chemists, Chemical Engineers,Fermentation, Process Engineers

Note: “Count” does not refer to number of positions—it refers to the number of respondents who cited this job function. This count does not necessarily correlate with the actual number of employment positions.

The industry is in particular need of workers with hands-on, commercial-scale experience in chemical processing—with experience in industry preferred. These companies also cited their specific need for employees who understand both science and business functions, with particular emphasis on project management, business and teamwork skills.

There is particular need for employees with knowledge and experience in industry (especially the Chemicals Industry), commercial-scale production, and end-productareas and markets. The surveyed companies also specified the need for employees who demonstrate hands-on capabilities, business appreciation and skills, project management, and“plug-and-play” capabilities in new applications of biotechnology.

Surveyed companies hire employees predominantly from the biotechnology (95 percent), energy (73 percent), and chemicals (64 percent) industries, as well as from academia/national labs (59 percent). Major barriers to current or anticipated hiring include the lack of talent with specialized knowledge in these newend-product areas, high housing costs and other challenges to relocating employees, and tight financing that is delaying corporate expansion.

About the Survey

BayBio and BIOCOM in August conducted the first ever statewide Industrial BiotechnologyWorkforce Survey in conjunction with Radford and in partnership with the CSUPERB program of the California State University system and the EWD Biotechnology Initiative of the California Community Colleges.

Twenty-two companies responded, ranging from start-up companies with zero revenues to divisions of a $1.6 billion multi-national corporation. Respondents represent the full range of industrial biotechnology, including companies developing biofuels, green chemicals from renewable feedstock, improved feedstock (including energy crops andalgae), and new technologies for product development and optimization (including synthetic biology). Nearly two-thirds of the respondents are new, having been founded within the last ten years. Eighty percent of these recently formed companies/business units are developing biofuels and/or chemicals,underscoring the recent wave of start-up activity and new investments in this field.

Future Growth

Key insights into California’s role in this rapidly growing industry are highlighted by where respondents currently locate their facilities, and where they intend to place them in the future. The majority of respondents has and intends to maintain California facilities for their corporate headquarters and R&D laboratories. Half or more of pilot scale facilities, commercial production and potentially product distribution and logistics are expected to be conducted outside thestate:

Note: Percentage totals may exceed 100% as not allrespondents viewed categories to be mutually exclusive

The targeted survey reveals these companies overwhelmingly maintain corporate headquarters and research and development laboratories in California—and intend to keep these facilities within the state—but at least half of them have orintend to build pilot production facilities, commercial production and product distribution and logistics outside California. The number of respondents who intend to manufacture feedstock, biofuels and/or green industrial chemicals outside the state outweighs those who have orintend to conduct commercial manufacturing in California by three to one.

The most frequently specified reasons that respondents consider conducting commercial production outside of California include:

1. Cost of doing business: Taxes (55% of respondents)

2. Cost of doing business: Salaries (55% of respondents)

3. Cost of doing business: Rents (50% of respondents)

4. Regulatory environment (45% of respondents)

5. Incentives from other states (40% of respondents)

Proximity to feedstock and customers is also cited as a reason for expanding outside of California.

About the Contributors

Radford: For more than 35 years, Radford has provided compensation market intelligence to the technology and life sciences industries. Global survey databases, which include 3.6 million incumbents, offer current, reliable data to more than 2,000 clients. Leveraging Radford survey data, our thought-leading global Radford Consulting team creates tailored solutions for the toughest global business and compensation challenges facing companies at all stages of development. In addition to our consulting team, we also offer equity valuation assistance via Radford ValuationServices, and leading-edge market analyses and survey services with Radford AnalyticServices. Radford's suite of surveys includes the Global Technology, Sales, and Life Sciences Surveys, as well as the US BenefitsSurvey.

BayBio: BayBio is the association of Northern California’s life sciences companies. BayBio advocates for improved science education and encourages the development of workforce training programs to provide workers with the skills they need to take jobs in the industry. Online at www.baybio.org

BIOCOM: BIOCOM is the world’s largest regional life science industry trade organization, representing more than 550 member companies in Southern California. BIOCOM positions the region’s life science companies competitively on the world stage and promotes its members development and commercialization of innovative products that improve health and the quality of life.

California State University Program for Education and Research in Biotechnology (CSUPERB): CSUPERB’s mission is to develop a professional biotechnology workforce by mobilizing and supporting collaborative CSU student and faculty research, innovating educational practices, and responding to and anticipating the needs of the life scienceindustry. CSUPERB involves and provides grant support to students and faculty from 23 CSU campuses across California.

EWD Biotechnology Initiative: The Biotechnology Initiative is one of ten initiatives of the Economic and Workforce Development Program of the California Community Colleges, established to maintain California’s growth and global economic competitiveness. The Biotechnology Initiative supports the Biotechnology community through four Applied Biotechnology Centers that promote industry-specific education, training and services to maintain a skilled and productive workforce.

Key Findings From The CaliforniaIndustrial Biotechnology Workforce Survey

Industrial Biotechnology uses living organisms to manufacture a varietyof products that result in the reduction of pollution, resource consumption andwaste. Products include biofuels, industrial enzymes, biological fuel cells,enzymes for bioremediation, biodegradable plastics and much more. This is anemerging industry in California - nearly two-thirds of respondents foundedsince 2000. Biofuels and Industrial Chemical are nearly 80 percent of allrespondents founded since 2000.

Year-end company growth 2005-2010:

Total employment among all respondents has risen 8.4% annually between 2005 - 2010

Among respondents, CA is predominantly the location for Corporate HQ and R&D Labs:
• 81% of respondents have Corporate HQ in CA; 43% intend to keep HQ in CA
• 91% of respondents have R&D Labs in CA; 55% intend to keep R&D Labs in CA, and 18% also intend to expand R&D outside the state

Picture is much different for Pilot Scale Facilities, Commercial Production, and Distribution/Logistics-no more than half expect to locate these functions in CA:
• 50% of respondents have Pilot Facilities in CA, and 33% have them outside the state (in both places for some respondents)
• 50% of respondents intend to maintain Pilot Facilities in CA, and 50% intend to expand Pilot Facilities outside the state

Most respondents with Pilot Facilities in CA intend to maintain these in-state, and some intend to expand out-of-state while maintaining their CA facilities
• 14% of respondents have Commercial Production in CA, whereas nearly three times as many (38%) have facilities out-of-state
• 19% of respondents intend to do Commercial Production in CA, whereas three times as many (57%) intend to expand commercial production out-of-state
Two-thirds of those with existing commercial production in CA intend to remain
Eleven respondents with no current CA commercial production facilities intend to produce out-of-state

One-third of respondents expressed they are uncertain where they will do commercial production: these respondents have no current commercial production facilities either in CA or out-of-state
• 30% of respondents have product distribution/logistics in CA, and 25% have these out-of-state
• 25% of respondents intend to maintain distribution/logistics in CA, whereas 40% intend to expand out-of-state
• 30% of respondents expressed uncertainty where they will locate these functions
• Of those already in CA, one-half intend to remain

The most frequently cited factors to conduct commercial production outside of California include:
1. Cost of doing business: Taxes (55% of respondents)
2. Cost of doing business: Salaries (55% of respondents)
3. Cost of doing business: Rents (50% of respondents)
4. Regulatory environment (45% of respondents)
5. Incentives from other states (40% of respondents)

Workforce Trends

Current hires among the respondents are predominantly for: Chemists, Molecular/Cell Biologists, Fermentation Specialists, Analytics/Testing, Chemical Engineers. Many respondents also report hiring for Project Managers, Purification Specialists, Informatics, Process Engineers, and Regulatory Affairs.

Job functions anticipated to be hired by respondents the most in the next twelve months are Molecular/Cell Biologists, Chemists, Chemical Engineers, Fermentation Specialists, and Process Engineers. Respondents also anticipate hiring for Project Managers, Analytics/Testing, Manufacturing/Production Technicians, and Purification Specialists.

Job functions that respondents find most difficult to fill include Fermentation Specialists, Chemical Engineers, Analytics/Testing, Chemists, and Process Engineers.

Industrial Biotechnology respondents are hiring employees primarily from the Biotechnology Industry, although also in large numbers from Energy, Chemicals and Academia/National Labs.

Industry Sectors from which employees are predominantly recruited are:
• Biotechnology (95%)
• Energy (73%)
• Chemicals (64%)
• Academia/National Labs (59%)

Barriers to current or anticipated hiring difficulties for current or prospective employees include:
• Lack of talent and specialized knowledge
• Housing costs and ability to relocate
• Availability of credit/financing

Industry feedback underscored the need for employees with experience in vertically integrated markets, especially for the target industrial applications.

Skills in current and prospective employees most frequently cited by respondents include:
• Lack of commercial experience, including business appreciation and skills-including project management
• Chemical industry experience, especially in scale-up and commercial-level production
• Overall vision to integrate business and science, "plug-and-play" skills

Specific training/skills most frequently identified that respondents would most like current/prospective employees to have include:
• Project management, business & teamwork skills, greater awareness of business environment
• Chemical industry and/or commercial production experience for targeted application
• Hands-on experience
• Laboratory safety and SOPs
• Specific technical knowledge/skill