New Report Shows How Robust Life Sciences Have Been in California, and the Market Potential in Sacramento Region Including Davis

Thana Prasongsin/Getty Images

By David M. Greenwald
Executive Editor

Sacramento, CA – Biocom California’s 2021 California Economic Impact Report has been released, showing just how robust the life sciences industry has been.

“In 2020, the Life Science sector undertook groundbreaking work at an unprecedented pace to lead the fight against the SARS-COV-2 virus. With biotech and pharma leading the pandemic response, the Life Science industry quickly developed diagnostics, therapeutics and vaccines, served as a stabilizing economic force, and retained its role as a major source of innovation,” the report found.

More importantly the industry demonstrated strong and sustained growth across California in 2020 despite the economic disruption and loss of employment experienced by most sectors in the face of the pandemic.

“Job growth slowed, but venture capital surged,” the report found.

Among the key findings, “Total direct employment, including self-employed workers, reached 489,000 in 2020. The sector’s high paying jobs pushed average compensation to $134,000.”

While California’s total employment dropped by 7.4% in 2020, Life Sciences registered a 0.5% job gain.

Including all the multiplier effects of Life Sciences to the California economy, “this industry generated $239 billion in gross state product (GSP) for California and $405 billion in total business sales in 2020. For every $100 in initial sales, the supply chains and consumer spending yielded an additional $85.”

Further, “The inclusion of these multiplier effects means that Life Sciences was responsible for a total of 1.38 million jobs with total earnings (labor income) of $131 billion in 2020.”

The Vanguard has previously reported the high demand for wet lab and other facilities in the Sacramento region.

In December, a Business Journal article found, “Tenant demand outpaces life-sciences construction as sector heads into another robust year.”

CBRE Group Inc. found recently that “life-sciences companies were collectively seeking nearly 23.8 million square feet of new lab space across 12 U.S. markets with a life-sciences hub in the third quarter of this year.”

“Tenant demand for life-sciences space is outpacing supply in 2021, a trend that’ll continue next year as the sector sees billions pumped into it,” the article noted. “Nationally, lab space vacancy is at 4.9%, although several markets are far below that. Boston-Cambridge, Massachusetts’ lab market, for example, has 1.1% vacancy.”

“Life-sciences labs quickly are becoming a highly sought-after property type for both tenants and investors,” said Ian Anderson, CBRE’s Americas head of office research, in a statement. “This intense demand for lab space is the natural result of a global push for new medicines begetting strong funding and hiring in the life-sciences sector.”

Michelle Willard, the Chief Public Affairs Officer for the Greater Sacramento Economic Council, told the Vanguard in January “our life science industry and biotech industries are just booming in Greater Sacramento.

“There’s no shortage of—right now we have 558 life science companies in our region,” Willard pointed out.  She noted currently 26 percent of the Greater Sacramento Economic Council’s active business projects are food and ag, bio life sciences, and ag tech.

“I honestly think that number is larger,” she said.

This is a huge market that Davis can tap into—if it takes advantage of it.

“I like to refer to Davis as the front door to the Silicon Valley for the region,” Barry Broome CEO of Greater Sacramento said a few years ago.  Davis, he explained, helps to pull other communities along in the minds of Silicon Valley investors.

Economic development, he explained, is “if you do it right, it’s a profitable proposition.”

Holding Davis back is largely a lack of space, said Danielle Casey, then of Greater Sacramento.

“When we work with firms that are looking at coming into the region, they’re looking at expanding, it has already been said in terms of certainty…  We have innovative companies that are looking at connecting with Greater Sacramento.  I’d say, for the most part, Davis isn’t even considered because they’re going to do a look at a requirement in terms of commercial space availability and they’re just not finding it,” she said.

“They don’t even see it all,” Danielle Casey said.  “So you’re not even getting a look to begin with.”

Michelle Willard told the Vanguard earlier this month that there is a huge potential for life sciences in the Sacramento Region and that is still centered around Davis and UC Davis.

As indicated above, she said “our life science industry and biotech industries are just booming in Greater Sacramento.”

Housing costs are also a problem, but as Barry Broome noted back in December, that’s “out of whack everywhere.

“When I look at housing, it’s really not cheap in Phoenix any longer,” he noted.  “These cities and these metros where all the opportunity exists is just drawing people—and whether you’re Salt Lake, Denver, Phoenix, your housing market ends up being lopsided.”

He added, “Our community is really doing a good job of building housing right now.”

Broome noted, “From a scientific standpoint, Austin is nowhere near a scientific center the way our region is—with our food, agricultural, biomedical, and veterinarian science expertise.”  Though he acknowledged, “Software, you’d probably choose Austin headquarters because of the zero-income tax and the less liability.

“So, it’s really about understanding our market position and how we differentiate it,” he said.

Broome said, “I thought we would see more in food and ag” in the region when he came to Sacramento.

He noted the Food and Ag Center (World Food Center) that Chancellor Katehi was attempting to develop.

“The industry went through a big a transformation in terms of technology and then kind of stalled,” he said.

On the other hand, “When Aggie Square gets operational, I really see that life science center, especially around cell therapies, really exploding here and being a big industry driver.”

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

Related posts

24 Comments

  1. Alan Miller

    “New Report Shows How Robust Life Sciences Have Been in California, and the Market Potential in Sacramento Region Including Davis”

    I was going to just say from the headline – ‘Sounds like David Greenwald wants to be the Barry Broome of Davis’.  But reading then found the article was largely recycled Barry Broome quotes.  I find it so strange that a local progressive social justice advocate with a platform is cheerleader for local municipal expansion of industry.  I don’t see the connection.  And I won’t mention the DISC in the room.  I mean the elephant in the field.

        1. Ron Oertel

          It’s “hard to figure” on several levels:

          1)  There isn’t a lot of poverty in Davis.  And those in places outside of Davis that experience poverty generally don’t qualify for the jobs.

          2)  Local contribution toward climate change, resulting from a freeway-oriented development.

          3)  The resulting housing shortage.

          4)  Loss of farmland/open space.

          5)  Increased urban demand on water supply during a period of increasing drought and higher temperatures (see “climate change”).

          6) There isn’t even enough “demand” for the “innovation center” that moved to Woodland, after it failed in Davis. It’s taking the addition of 1,600 homes to make it viable.

          7) Traffic gridlock, and the “costs” (financial, hours lost and environmental impacts) of that. Which are transferred to existing residents and those passing through.

        2. Keith Y Echols

           There isn’t even enough “demand” for the “innovation center” that moved to Woodland, after it failed in Davis. It’s taking the addition of 1,600 homes to make it viable.

          Please stop with the 1,600 homes to make it viable as a comment on demand for the commercial component.  I’ve explained many times in the past how Davis’ political limitations make the financing and marketing (commercial real estate vapor ware) of a new commercial space prohibitive which makes the near guaranteed revenue of the homes the unfortunate but necessary foundation of the project.

        3. Ron Oertel

          Please stop with the 1,600 homes to make it viable as a comment on demand for the commercial component.

          I’ll “stop” when it ceases being the primary goal.

          I’ve explained many times in the past how Davis’ political limitations make the financing and marketing (commercial real estate vapor ware) of a new commercial space prohibitive which makes the near guaranteed revenue of the homes the unfortunate but necessary foundation of the project.

          The 1,600 are going to be in Woodland, not Davis.  Apparently, housing is needed for any business park these days, to make it “pencil out”.

          For DiSC, I believe it’s 460 housing units – of which 300 would be rentals.  (Probably half-filled with UCD students who would commute 4-5 miles to campus.)

           

      1. Keith Y Echols

        While, I’m all for growing the life sciences industry in this region, I’m not sure you can say that the jobs will lift people out of poverty.  Most of those jobs will be scientific in nature so those scientists and engineers likely wouldn’t have been the ones in poverty (they would have likely worked somewhere else). The most of the support staff will also not likely to have been the impoverished ones…as these days even administrative assistants are being required to have bachelors degrees and even specialized certificate training.  IT, HR, Accounting…all require higher than levels of education and training than most of the impoverished people.  Then you get to security guards, janitorial staff…etc…  Those jobs, yes would likely help the impoverished.  But they are not the bulk of the jobs created.  The you get support and retail services for the employees; accountants, lawyers, medical, retail….  So you get some jobs created to support the professionals that service the employees in the new bio-science companies.  And you get some new retail jobs.  But all this economic growth raises the cost of living in a region so it doesn’t turn out all dignified and rosy for the impoverished.   Like I said, I’m for growing the bio-tech industry in the reason but I just wanted to paint an accurate picture as a response to your comment.

    1. Keith Y Echols

      Anyone with half a brain has known for 30 years that Biotech was this area’s future.

      So does the City of Davis have less than half a brain?  I believe they city has had a few opportunities in the past to host these kinds of industries but have failed to do so?  Can someone who can remember the history of this elaborate?

      1. Richard_McCann

        Unfortunately, the political establishment has acted like it has half a brain. There was an effort a couple decades ago to land Genentech here but we lost it to Vacaville. And then there’s the three innovation parks proposed in about 2014. Rob White led that effort for the City under a contract half financed about an outside group. DiSC II is the remnant of that. One of those moved north to Woodland which was basically moving up 113 from its original location. I believe Bretton Woods is on that land instead. (So switched from jobs for UCD grads to housing more old people–quite the sensible economic policy–not.)

  2. Alan Miller

    Ron GlickMarch 10, 2022 at 8:27 amThe connection is that jobs help uplift people out of poverty and give people a sense of dignity.

    Reply button not working so I’ll post it here.

    DG has said if the jobs aren’t here they’ll be elsewhere.  So there’s is no ‘job creation’, as such.  If the idea is to lift the poor out of poverty, wouldn’t it be better to put the office parks in towns with lower income. This would also lead to shorter commutes that would be better for the environment.

    The question wasn’t about cheerleading for jobs, the question was about cheerleading for jobs in Davis as a social justice activist.

    1. Ron Oertel

      DG has said if the jobs aren’t here they’ll be elsewhere.  So there’s is no ‘job creation’, as such.

      You “got him”, with that one.  🙂

      If the idea is to lift the poor out of poverty, wouldn’t it be better to put the office parks in towns with lower income. This would also lead to shorter commutes that would be better for the environment.

      Not to mention locales offering better opportunities to experience rising equity, compared to Davis:

      Middle-class housing is declining. But in these markets, it’s rising and creating wealth (msn.com)

    2. David Greenwald

      “DG has said if the jobs aren’t here they’ll be elsewhere. ”

      Most people are going to work rather than be unemployed. That does not of course mean that they’ll make as much money at the replacement level job.

      1. Ron Oertel

        It’s all relative, isn’t it?  From the article referenced above:

        For instance, as of the fourth quarter of 2021, the largest price gains (as a percent of the purchase price) over the preceding decade were in Phoenix-Mesa-Scottsdale (275%), Atlanta-Sandy Springs-Roswell (275%), Las Vegas-Henderson-Paradise (252%), Cape Coral-Fort Myers (234%) and Riverside-San Bernardino-Ontario (208%).

        I don’t believe that Davis even comes close to these figures.

        And that’s without (also) factoring in lower taxes (e.g., no income tax at all, in some states – including our adjacent neighbor to the east).

        Not to mention lower costs for goods and services.

        1. Ron Oertel

          And in reference to some of the arguments on here (regarding Measure J), how does one explain the drastically-rising housing prices in these other locales?

    3. Keith Olson

      DG has said if the jobs aren’t here they’ll be elsewhere.

      Excellent point.  That’s what’s called a “reversal” in wrestling vernacular.😂

  3. Don Shor

    Where should new jobs be located?

    Where should people live?

    Where should people go to college?

    Where should new businesses seek to locate?

     

    The answer is always:

     

    Somewhere else.

    1. Keith Y Echols

      The answer is always:
       
      Somewhere else.

      It’s a valid answer.  While I’m leaning towards supporting DISC because of the benefits it provides for the city, I believe that every community has some degree of rights to manage what kind of community they want to be.  And if it’s a small one, a big one, a growing one or even a shrinking one…it’s all valid.   Communities should do what is in their own self interest.  Often times supporting the community or the larger regional community is in a smaller community’s own self interest….sometimes it’s not.

    2. Ron Oertel

      Somewhere else.

      Seems to me that a lot of people have been figuring-out that “somewhere else” (e.g., outside of California) makes more sense for them.  Austin is #2 on the list (from the article I posted), regarding the increase in middle-class households.

      “Somewhere else” is also (often) the places that create policies which welcome those starting out (e.g., lower taxes, lower costs, more opportunities).

      I see nothing wrong with that.

      Of course, there are areas which are “somewhere else” which don’t welcome newcomers that much, due to their impacts (and the resulting higher housing costs they bring with them).  And with telecommuting opportunities, “somewhere else” can include some pretty nice places, indeed.

      Davis and the region used to be (and still is) “somewhere else” for those priced-out of the Bay Area.

      Seems to me that once a locale becomes established, they often cease being a viable “somewhere else” for those starting out. But remaining, entrenched interests often don’t like that, and as a result – fight even harder to maintain the status quo (continued growth), to satisfy their own interests.

    3. Ron Oertel

      Though I would note that (eventually), even the places that aren’t “starter locations” will experience turnover, with new people and new businesses replacing the existing ones.

      That’s what a stable community actually looks like.

      There’s no way that anyone starting out should look to Davis as the first place that they’ll be able to purchase a home (using their salary alone, while simultaneously renting).  And that increasingly goes for the entire region, though it’s still enough of a sprawling hell-hole to accommodate it for some time – if you’re not outpriced by a Bay Area transplant.

      It happened a long time ago, in much of the Bay Area.  (It’s even starting to happen for some of the “techies”.)

      It’s hard enough in the places which actually welcome that.

       

       

       

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for