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Methodology

Employment, Wages, and Industry Impacts

Data

The data used to estimate employment and wages in California’s biomedical industry are made available by the Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW), available at http://www.bls.gov/cew/. The 2011 data reflected in this report were collected in the fall of 2012.

The QCEW is a near comprehensive census of employment and wage information at the national, state, and county levels for workers covered by state unemployment insurance laws and federal workers covered by the Unemployment Compensation for Federal Employees program. It does not include the self-employed, unpaid family workers, or private household employees. Jobs are counted regardless of full-time or part-time status. Individuals who hold more than one job may be counted more than once.  In order to protect the confidentiality of firms’ information, the Bureau of Labor Statistics does not disclose data that would be easily identifiable to individual participating companies. Given the smaller number of establishments that can occur at the county level, county-level totals may not represent the full number of employment positions and wages for each industry. These positions would be included by the BLS in aggregated state-level data.

This year, the methodology used to define the biomedical employment and wages was updated to focus the report on the core biomedical industry.  Thus, employment and wage figures cited in this report are not comparable to those published in years past.  For comparison, this year’s report provides the estimated 2011 biomedical industry employment as calculated using the methodology from prior years.  Additionally, this year’s report also provides biomedical industry employment calculated under the updated methodology back to 2007.

The sectors of the biomedical industry that are used in this analysis are comprised of several North American Industry Classification System (NAICS) codes that are assigned to sectors based off the description of the NAICS provided by the U.S. Census Bureau. For the QCEW, companies are assigned a single NAICS code by state workforce agencies, and therefore a company that manufactures both pharmaceuticals and medical devices would only be classified in one of these sectors depending on which is the primary production of the company at each establishment.

The following table displays the NAICS codes used to define the biomedical industry, along with the portion of the code attributable to the industry.

 

NAICS Code 2007 NAICS Definition** Sector
325411 Medicinal and Botanical Mfg Biopharmaceutical
325412 Pharmaceutical Preparation Mfg Biopharmaceutical
325413 In-Vitro Diagnostic Substance Mfg Biopharmaceutical
325414 Biological Product (exc. Diagnostic) Mfg Biopharmaceutical
334510 Electromedical & Electrotherapeutic Apparatus Mfg Medical Devices, Instruments and Diagnostics
334516 Analytical Laboratory Instrument Mfg Medical Devices, Instruments and Diagnostics
334517 Irradiation Apparatus Mfg Medical Devices, Instruments and Diagnostics
339112 Surgical and Medical Instrument Mfg Medical Devices, Instruments and Diagnostics
339113 Surgical Appliance and Supplies Mfg Medical Devices, Instruments and Diagnostics
339114 Dental Equipment and Supplies Mfg Medical Devices, Instruments and Diagnostics
339115 Ophthalmic Goods Mfg Medical Devices, Instruments and Diagnostics
339116 Dental Laboratories Medical Devices, Instruments and Diagnostics
541380* Testing Laboratories R&D and Testing Laboratories
541711 R&D in Biotechnology R&D and Testing Laboratories
541712* R&D in the Physical, Engineering, and Life Sciences (exc. Biotechnology) R&D and Testing Laboratories
* Only a portion of the employment and wages associated with the NAICS code were taken into account.
** The 2012 NAICS definition was used in the 2011 QCEW files from the Bureau of Labor Statistics. There were no changes from the 2007 NAICS definitions for the industries used in this report.

Methodology

The most recent full year for which wage and employment data were available for the publication of this report was 2011. QCEW employment and wage data are identified for selected  NAICS codes used to define the biomedical industry (see table above). For NAICS codes where less than 100% of the employment and wages are used, the total employment and wages reported in the QCEW are then multiplied by the portion of the industry taken into account.  This portion was derived by PwC from 2007 Economic Census data separately for each state considered in this analysis.

To protect the confidentiality of individual firms, QCEW data are suppressed if there are too few firms in a given industry in a given geographical area or if data could be used derive sensitive information.  In California, there is a particular problem with suppression of biopharmaceutical employment and wages at the county level where only about 56% of state biopharmaceutical employment was reported at the county level in 2011.  For employment and wage statistics by cluster, PwC attempted to minimize the suppression issue for the biopharmaceutical industry by relying on state level industry employment and reported employment totals by county at the 4-digit and 3-digit NAICS code levels.

Investment

Data

Data on venture capital investment nationally and by state were collected from The MoneyTree™ Report from PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Reuters. The data reflected in this report were collected in the fall of 2012.

NIH Grants

Data

Data for this analysis come from the National Institutes of Health Office of Extramural Research, available at http://grants.nih.gov/grants/oer.htm. The data do not include research and development contracts due to the unavailability of that data for 2012 years at the time of publication of this report.  Prior year’s data also do not include research and development contracts to ensure comparability across years. NIH grants funded under the American Recovery and Reinvestment Act of 2009 (ARRA) are not included in funding totals unless otherwise noted.

The data include all awards to California from NIH, some of which do not necessarily fund basic biomedical research. For example, some grants were used for training programs and projects that are designed to support the research training of scientists for careers in the biomedical and behavioral sciences, as well as to help professional schools to establish, expand, or improve programs of continuing professional education. Other grants were used to fund health policy or behavioral science research.

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