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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~. 89

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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~. 90

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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. 91

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