San Diego's biotech industry remains a growth engine for our economy. During this decade the industry will -- has been providing an increasing number of biotech jobs in the region. A word of caution is coming from a new report from trade group fire con. It shows that WyoTech jobs are only projected to grow by 2.7% by the year 2021. Is slower than San Diego's overall job market. Joining me to discuss some of the reasons why is reporter Britney Miley who covers biotech and startup companies for the San Diego business Journal. Welcome to the program. Shying away for a moment from the future projections. What does the bile, court say about the health of San Diego's biotech industry now. For the last five years we have seen a lot of growth. When you look at employment has grown about 20% of the last five years which is impressive to we've seen economic impact of about 33 billion. This is a very competitive cluster for us especially when you look at the clusters across the country. San Diego still sounds really strong. I think it is fourth in the nation right now. So how does the biotech industry stack up against San Diego's other economic sectors. I'm thinking of defense and things like that to It is kind of hard to say. It is definitely not the largest industry in San Diego however these are very high-paying jobs and this is a very entrepreneurial crowd you will see people that work at companies like bulimia that may go out and start accompaniment of their on. What does the report say about the projected slowdown in job growth and biotech? Interesting it doesn't actually say anything about it rather than the data. It doesn't really explain why. What we do see is that job growth is expected to slow and four out of five sectors. They are expecting no job growth at all and a decline in for a five -- four out of five sectors. Sector is seen in increase which is less than 3%. Especially with what we have seen in the last five years what could be behind this slowdown. Because I actually talked with Biocon and Emily are not saying for sure think maybe there are a few factors. Maybe uncertainty about what will happen with healthcare policy that will affect the entire policy. Speculation about maybe a coming recession. There is also a change in how biotech is being done. When it comes to employment growth maybe the reason we are not seeing a big ticket is that biotech's are often by -- virtual companies Give us an idea of what efforts will company is. And biotech that often means that there are executives that have a good idea of something that may be good medicine or therapy so they will outsource the clinical trials out to contract research organization. They will actually carry out the experiment and that's the labor intensive work. Sometimes they could be hiring them in San Diego or they could be hiring contract research organizations that are in a different country. Does the fact that there are so many universities in San Diego doing this kind of research also add to the idea of limiting job growth in away. A lot of these early-stage assets are spent out of research institutions and academic institutions. Once the company has developed a certain value threshold they still might only have the executives but they know that the medicine could be worth something. Once it hits the value threshold it is in the best interest of the San Diego companies to often just sell that to the highest bidder rather than letting it grow in scale. That is often because we do not have a lot of local and institutional money to grow a business be on that stage. That's where the jobs would come in but since it is not going to do that then there is no job increase. What could the region do to stave off this potential for them if anything. What comes to mind for me is attracting global pharmaceutical companies to set up shop in San Diego. If you look at the San Diego employment and life sciences there's a lot of private employers global pharmaceutical firms. The came here because they acquired a small biotech company and then they saw that we had a huge talent researchers San Diego. They were like let's set up our headquarters in San Diego and employed thousands of people.. You have also reported local companies are increasingly turning to Chinese investors. It is actually Chinese investors that are looking to biotech. They have lecterns some IP protections in China. They're looking at clusters what biotech is done best. It that keep the job numbers high. It could help keep the company's growth since we do not have a lot of institutional capital. Look into this for and partners to help and the research could help the small biotech scrub. What is your overall take away from the support. It came as a surprise of how dependent the life science Academy -- is on life sciences and universities both public and private in San Diego. When you look at the employment numbers it's like 68 combined of the entire life science employment is coming from private and public colleges and universities. That came as a surprise to me. We are very dependent on those academic institutions. I've been speaking with Britney Miley of the San Diego business Journal. Taking a much. Thank you.
San Diego is one of the top regions in the country for biotechnology companies, which create $34 billion in local economic impact. But a report this week from California's biotech trade group shows the industry's strong job growth in recent years is starting to slow significantly.
While biotech jobs grew 19.6 percent between 2011 and 2016, San Diego-based Biocom expects that to increase only another 2.7 percent by 2021. That is lower than Biocom's estimate of about 4 percent employment growth for San Diego overall by 2021.
San Diego Business Journal reporter Brittany Meiling, who covers the biotech industry, said that while other regions are also expected to see a slowdown in biotech hiring, San Diego could be disproportionately affected.
The industry is increasingly relying on so-called virtual biotech firms, small companies with promising ideas which contract out much of their research work to other firms sometimes outside of the San Diego region. Early-stage companies, the ones San Diego is known for fostering, are the most likely to rely on that kind of contract work. And when they do find a winning product or discovery, according to Meiling, there's a good chance they get acquired by a larger company instead of growing locally.
"In our economy, most of the companies are spun-out of academic institutions. They’re small and they’re virtual companies," Meiling said. "They can be two to three people."
Meiling joins KPBS Midday Edition on Thursday with more on what's happening to San Diego's biotech sector.
