Orange County dominates the medical device industry in Southern California and has developed extensive reach in the broader “life science” industry, according to a recently issued report by a regional trade group.
San Diego-based Biocom examined the life science landscape in Orange and three other counties—Los Angeles County was not included—in its Southern California Economic Impact Report 2013.
Biocom gives a snapshot look at five subsectors within the broader life science industry: biopharmaceuticals; research, lab services and education; medical devices and diagnostics; industrial biotechnology and biofuels; and what it calls “life sciences trade.”
The report shows that Orange County is projected to have 40,771 workers spread over the five subsectors in 2014, up 7% from 38,031 in 2012. Total economic activity related to the industry comes to $27.3 billion here.
The life sciences cluster provides more than 107,000 jobs among Orange, San Diego, Riverside and Imperial counties, and it has a total economic impact of $76.4 billion.
It noted that OC life science workers are well-paid, with an average annual wage of $93,729. Workers in the medical device and diagnostic subsector ranked highest, with an average of $120,687.
The average wage for all workers in Orange County is $57,114 annually, according to the U.S. Bureau of Labor Statistics.
The report broke out expectations for specific subsectors in the coming year, with projections that Orange County will have 6,945 jobs in its medical device and diagnostic subsector in 2014, up 3% from 2012.
“Competitive Effect”
The expected gains next year represent a partial rebound from declines between 2010 and 2012, when the medical device and diagnostic sector jobs declined 9% from a high point of about 7,400 workers. The declines were partly due to what the report called a “weak competitive effect value” in OC.
Competitive effect is a term used to describe how much of a change in a given industry “is due to a unique competitive advantage that the region possesses because the growth cannot be explained by national trends in the industry or the economy as a whole,” according to the report.
Medical devices and diagnostic jobs also stimulate OC’s wider economy—the report showed that particular subsector accounted for $5.3 billion in total economic activity.
Biocom broke down the Orange County medical devices and diagnostics subsector’s history and growth in the report’s introduction. The group noted that scientists and engineers who were originally attracted to the region for military research and manufacturing jobs began to translate basic bioscience research from the surrounding labs and universities into potential products.
“Edwards Lifesciences [Corp.], founded in Santa Ana in the late 1950s, anchored the device cluster to the north,” Biocom said. “It, too, graduated a new generation of entrepreneurs who started their own companies in Orange County.”
Irvine-based drug maker Allergan Inc. also merited a mention in the introduction. Biocom noted that Allergan, which was founded in the 1950s around eye drugs, “began to move into the new field of biotechnology in the late 1980s with the acquisition of Botox.”
Orange County also had the highest number of jobs in Biocom’s “life sciences trade” subsector. The group describes that category as “engaged in the wholesale distribution of professional medical equipment, pharmaceuticals, and instruments used by hospitals, research labs, other life science companies, ophthalmologists and other health professionals.”
Biocom projects that OC jobs in the trade subsector will grow to 7,363 in 2014, a gain of 13% from 2012. The report showed that the average OC wage for the life sciences trade subsector was $114,567.
Lake Forest-based home health provider Apria Healthcare Inc. is the top employer in the subsector, accounting for 4,795 local employees in the study region. InSight Health Services Corp., a medical imaging company also based in Lake Forest, accounted for 1,434 jobs throughout the region.
Allergan was the top-ranked company, based on study region employees in Biocom’s biopharmaceutical subsector. That subsector includes drugs, biological products and therapeutics.
Allergan had 4,800 workers within the study region. Brea-based medical test equipment and supply maker Beckman Coulter Inc., with 1,200 jobs, ranked third on the list of major biopharmaceutical employers in the region.
Biocom is projecting that the county’s biopharmaceutical employment will fall 3% next year to 4,161 workers with average earnings of $96,968.
Orange County—specifically the University of California, Irvine—also holds its own in the report’s research, lab services and education subsector. Jobs among all those institutions are projected to rise 10% to 21,951 in 2014.
Biocom noted that research, lab services and education jobs in OC and San Diego County had a 1.79 “location quotient,” which is used to help identify a region’s specialization within a particular industry or sector. That means there are almost 80% more of those types of jobs per capita in the two counties than the national average.
“The competitive effect for the research, lab services and education [subsector] in the region over the past few years has been very strong,” Biocom said, noting that there are a growing number of medical laboratory jobs in OC.
Not Dominating All
Orange County doesn’t dominate all of the five subsectors.
It is expected to see a drop in employment of 25% to 352 jobs next year in the industrial biotechnology and biofuel subsector spread across 19 entities, according to the report. The average wage came in at $47,413, lower than the other four subsectors because agricultural jobs are included, Biocom said.
Industrial biotechnology includes enzymes, microbe biofuels, and other technologies that are created to be sustainable and intended to replace chemicals or other fuels that rely on petrochemicals and harm the environment, according to Biocom.
Such chemicals or processes, the report said, are used in manufacturing, as livestock feed additives, or to help break down waste products.
San Diego County is expected to continue to lead the biotechnology and biofuels subsector, with 2,480 jobs and an overall $2.5 billion in economic activity in 2014.
