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THE EMERGING BIOTECHNOLOGY INDUSTRY
SUMMARY AND CONCLUSIONS
The 1989 survey of biotechnology firms indicated that strong employment growth is
anticipated for Ph.D. biomedical scientists in the near future. Firms appear to be having
problems finding scientists trained in pharmacology, toxicology, immunology,
human/animal molecular biology, and industrial microbiology. Biochemistry and chemistry
are the largest occupational groups, with almost a third of all biotechnology~specialists.
By and large, biotechnology firms are very pleased with the formal academic
training of scientists. Two major complaints appear to be the poor oral and written
communication skills of new graduates and the lack of a "focused" approach to research.
Postdoctoral appointments, especially nonacademic appointments, are viewed by industry as
valuable additions to the training process. The postdoctoral experience allows the young
scientists to prove their ability for independent research and at least partially moves them
toward a more focused research approach. The training implications of this are threefold.
First, graduate programs need to pay more attention to developing the communication skills
of their scientists. Second, industry appears to desire moving the research training toward
applied work and away from~basic work. Third, industry would like to see postdoctoral
appointments continue as an integral part of the training process and would like to see
more nonacademic (industry, foundations, etc.) postdoctoral appointments made.
SURVEY DESCRIPTION
In 1988 this committee collaborated with the National Science Foundation (NSF) in
a joint effort to collect information on the employment of biomedical scientists in the
biotechnology industry and in industry in general (hereafter the National Academy of
Sciences [NAS]/NSF survey). The survey frame was developed from a list of dedicated
biotechnology firms (DBCs)i used in a 1987 Office of Technology Assessment (OTA)
biotechnology industry survey and updated from a listing of U.S. biotechnology companies
as appeared in the Seventh Annual Genetic Engineering News fGEN) Guide to Biotechnology
Companies.2 Of a total of 512 firms queried, 71.3 percent returned usable responses. Based
on the assumption of no nonresponse bias, the returned survey tabulations were inflated to
represent an estimate of the total survey frame.3 The following discussion summarizes the
results of this estimate.
1989 Employment
· ~. . . .
Total 1989 employment in DBCs is estimated at 53,985; of this total, 3,527 (6.5
percent) are Ph.D.-level scientists. The total number of scientists employed by DBCs in
1989 was estimated at 8,937 (16.6 percent of total DBC employment); thus, almost 40
~DBCs are those companies whose primary line of work is in the biotechnology field. In
addition to these firms, large diversified companies exist that have a biotechnology
division or laboratory. In 1987, the Office of Technology Assessment (OTA) estimated that
total biotechnology employment in the diversified companies was 11,600 compared to
24,347 in DBCs (see footnote 2~.
2See Office of Technology Assessment, New Developments in Biotechnology, Volume 4:
U.S. Investment in Biotechnology, Washington, D.C.: Office of Technology Assessment, 1988,
Chapter 8; ant! Genetic Engineering News, vol. 8, no. 10, 1988.
3The returned-survey results were simply inflated by 1,403, which represents the ratio
of total survey frame (512) to usable responses (365~.
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percent of the scientists employed by DBCs hold a doctoral degree. In the NSF general
survey of all industry, 0.5 percent of total employment was composed of Ph.D.s; doctorates
made up approximately 25 percent of all employed scientists. Scientists of all degree levels
comprised 2.2 percent of total general employment. Not surprisingly, the biotechnology
industry is weighted heavily toward a Ph.D. work force, reflecting the research and
development nature of= its business. In 1989 79.5 percent of the scientists in the DBC survey
had R&D as their primary work activity.4
Occupational Employment: Table A-1 contains descriptive statistics on the
occupational employment of DBCs. The biotechnology areas of molecular genetics (9.6
percent of DBC Ph.D. employment), general microbiology (7.0 percent), human/animal
molecular biology (~.8 percent), immunology (6.1 percent), general biochemistry (14.1
percent), and other chemistry (18.3 percent) are the largest occupational groups. All other
Ph.D. scientist occupations combined totaled 36.6 percent of DBC Ph.D. employment.
Shortage Occupations: Table A-1 also contains-estimates of shortages by occupation.
A shortage was defined in the survey as "a vacancy that went unfilled for 90 days or
longer, even though you actively sought to fill it." Overall, 5.5 percent of total DBC
employment was classified as "shortages." Biotechnology specialties with "large" shortages
(defined as 9 percent or more of current employment) included industrial microbiology (9.8
percent), human/animal molecular biology (9.7 percent), pharmacology (11.9 percent),
toxicology (17.8 percent), and enzymology (11.9 percent). In terms of total shortages,
biochemistry and general chemistry had the most absolute vacancies with 42 and 45,
respectively. These findings are somewhat different from those of OTA in its 1987 report.
In that report companies reported an ample supply of scientists trained in molecular
biology, biochemistry, cell biology, and immunology.5
Planned Hires: The DBCs surveyed were asked to estimate the number of Ph.D.
scientists that they planned to hire in the 1988-1989 period. These planned hires were for
both replacements and new hires. Firms traditionally have been optimistic in estimating
future planned growth; however, the planned hires variable does give one an idea of the
relative growth among occupations.6
Table A-1 contains planned hires as a percent of total employment; this percent thus
reflects both growth and replacement. Most of the specialties that are expected to have a
high rate of planned hires also are those defined as shortage specialties. Toxicology,
industrial microbiology, and other biotechnology specialties all had high rates of planned
hires. Overall, the DBCs indicated that they planned to hire 18.S percent of their current
level of scientist employment in 1988-1989. The planned hire rate for engineers is 16.4
percent, which runs counter to recent speculation that the industry is moving away from
research (and a rich mix of scientists) toward production (and a rich mix of engineers and
technicians). The DBCs surveyed indicated that the most common response to shortages
was to increase recruitment efforts (69.S percent of the firms) and to offer higher salaries
(37.4 percent of the firms).
4This compares very favorably with the SDR 1987 survey results that indicated 77.6
percent of Ph.D. biomedical scientists employed by private industry had as a primary work
activity R&D or the management of R&D.
5Office of Technology Assessment, New Developments in Biotechnology, p. 135.
6Biotechnology companies reported a 42-percent planned staff increase for the 1983-
1984 period; the actual increase was 20 percent. (Office of Technology Assessment, New
Developments in Biotechnology, p. 133~.
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EMPLOYMENT GROWTH
The 1987 OTA report estimates 1987 DBC employment at 24,347 overall, with 13,221
scientists and technicians. Large diversified companies were estimated to have another
11,600 workers overall and 5,360 scientists and technicians.7 The NAS/NSF survey of
DBCs estimated a total 1989 employment of 53,985, with 14,534 scientists and technicians.
It is likely that most of the difference between the 1987 OTA and the NAS/NSF surveys is
explained by the more comprehensive survey frame: the OTA survey queried 296 firms,
and the NAS/NSF survey frame was 512. This difference also may explain a portion of the
difference in occupational structure (i.e., the OTA survey estimated 54 percent of total
employment composed of scientists and technicians, and the NAS/NSF survey estimated 27
percent). If the NAS/NSF frame included firms that engaged in medical services as well as
research (blood and urine testing, for example), they would have a smaller portion of their
work force research-oriented. Thus, the wider ~net" of the NAS/NSF survey may have
caught biotechnology firms outside the core of research firms.
However, it is likely that some portion of the difference in the OTA totals and the
NAS/NSF totals was due to growth. Planned scientist hires for 1988-1989 because of
growth were estimated by the DBCs at S.7 percent, which is close to the historical rate of
private sector growth of Ph.D. biomedical scientist employment of 9.1 percent experienced
from 1973-1987. Of firms with scientist job vacancies, 29.2 percent reported more
vacancies than the previous year, 45.6 percent reported the same level of scientist
vacancies, and 25.2 reported fewer vacancies.
FIRM PERCEPTIONS
In addition to the quantitative data, the NAS/NSF survey selected 40 firms that had
large segments of biomedical/behavioral scientist employment for a special follow-up
telephone survey. The supervisors of the biomedical and behavioral research scientist work
force in these firms were contacted and asked to discuss the two areas summarized below.
1. How well has the traditional training of scientists prepared them for their careers
in industry? In general, the telephone respondents were very pleased with the
quality of academic training that their scientists received. The major
2.
complaint that was expressed with newly trained scientists is that they do not
have a goal-oriented (or product-oriented) approach to their research.
Industrial research requires more "focus" than academic research. Even basic
research in industry requires timetables and goals. A second complaint
mentioned by several of the telephone respondents was a lack of both oral
and written communication skills.
What is the value of postdoctoral training for industrial research scientists?
Almost without exception, the telephone respondents felt that the
postdoctoral experience was a very important "seasoning" process for their
scientists. Firms actively sought out postdoctorates for hiring, and they were
more than willing to pay a salary premium for scientists with postdoctoral
experience.
In view of the comments in question 1 above, it appears that the postdoctorate
works as a screening mechanism that allows a newly minted Ph.D. to prove his/her ability
for independent research. A postdoctoral appointment in industry as opposed to an
academic setting is preferred.
7See Office of Technology Assessment, New Developments in Biotechnology, Table 8-1.
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Representative terms from entire chapter:
survey frame
