In 2012, the Dukakis Center conducted an evaluation of the Massachusetts Life Sciences Initiative and the associated Massachusetts Life Sciences Center (MLSC). The analysis showed the policy has had a significant and positive economic impact on the state’s life sciences sector, and encourages lawmakers to continue to invest in and provide support to these industries.
Life Sciences Innovation as a Catalyst for Economic Development
The Role of the Massachusetts Life Sciences Center
This report provides an up-to-date, independent evaluation of the $1 billion, 10-year Massachusetts Life Sciences Initiative and the Massachusetts Life Sciences Center (MLSC) charged with the responsibility of carrying out its mission. The initiative was established in 2008 by Governor Deval Patrick’s administration and the state legislature to encourage the growth of discovery and production in the life sciences, including biotechnology, pharmaceuticals, medical diagnostics, medical devices and bioinformatics in the Commonwealth.
Based on the region’s existing comparative advantage in life sciences research and development (R&D) emanating from the laboratories of its leading universities and medical institutions, this substantial infusion of public funds was undertaken with the ambitious goal of making this cluster of industry sectors the most successful in the world. This evaluation comes at a propitious time, given the state of fiscal affairs in the Commonwealth and the nation. Virtually every unit of government is scrutinizing the use of each tax dollar to ensure that public revenue is being spent effectively and efficiently. Put simply, our goal in this evaluation was to gather as much data as possible to assess whether the Commonwealth’s sizeable commitment of public resources is paying off in the form of a life sciences “super cluster” capable of attracting massive amounts of investment dollars, generating well-paying jobs for Massachusetts residents and yielding additional tax revenue for the Commonwealth.
Has the MLSC Been Successful?
Yes, especially when it comes to short-term economic impact. The $56.6 million Massachusetts awarded in tax incentives to life sciences firms between 2009 and 2011 has created 2,500 jobs, which should generate more than $266 million in wages and salaries during the next five years. In fact, the Commonwealth’s life sciences super cluster has risen to number one in the nation in terms of per capita employment, with close to 14,300 jobs for every one million residents. And these jobs are not just for workers with advanced degrees; at least one in five require no more than a two-year associate’s degree and another 48 percent require just a bachelor’s degree.
The Boston-area super cluster’s performance is particularly impressive relative to the United States as a whole and to other states vying for supremacy in this rapidly evolving cluster of industries. The Commonwealth has indeed overtaken the rest of the nation in terms of employment growth in the life sciences, fulfilling an initial goal of the MLSC. Between 2001 and 2011, Massachusetts life sciences employment growth outperformed the nation by a factor of better than 2-to-1, growing by 27.3 percent vs. 11.9 percent for the nation.
Because Massachusetts has so many small life sciences firms, nine of the world’s ten major drug companies have now set up shop in the Commonwealth. investing billions in plant and equipment and creating thousands of additional jobs. And by providing funds for translational research and development, the MLSC can help keep these growing companies in the Commonwealth instead of losing them to investment funds in other regions.
The most important benefits stemming from MLSC activities are likely to come in the future. This is due to the unique growth pattern of highly innovative sectors like the life sciences. In such a regional concentration of life-sciences firms, the large companies that depend on the development of breakthrough innovations and sophisticated medical devices prosper by being near a concentration of small start-ups. Even the largest of the life sciences companies, with substantial research budgets, do not have the resources to generate more than a handful of breakthroughs in the biosciences, genomics and similar fields. These big firms grow and prosper by carefully monitoring the scientific discoveries under way in university research laboratories and in the translational research carried out by small start-up outfits.