World's Largest Biotech Hubs: Boston and the San Francisco Bay

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The biotechnology industry in Boston is a powerhouse even when compared with the innovation and development seen in the San Francisco Bay Area. The Boston region, especially Cambridge, hosts a large biotech community. There are a number of biotech clusters in the US, and while there is certainly a focus of biotech businesses in those areas, the breadth and depth of biotech in the San Francisco area functioned at a whole different level. In Boston, the number of small startups, large established pharmaceuticals, incubators sites, large biotech-focused research institutions rivals the activity in the San Francisco area.

Biotech in San Francisco and Boston

The regions around the San Francisco Bay and Boston substantially contribute to the ever-growing number of bioscience-related jobs. Most of the biotech jobs in Massachusetts appear to be more narrowly focused on pharmaceutical and biotech drug discovery. According to the Massachusetts Biotechnology Education Foundation, in 2017 the number of life sciences industry jobs in Massachusetts surpassed 70,000 for the first time ever. That represents a substantial escalation of the industry's economic reach that has been building up momentum.

Data available from the Bureau of Labor and Statistics shows that in 2010 around 28,000 Massachusetts jobs—half the bioscience jobs at that time—were focused on and biotech drug discovery. By comparison, only about a quarter (15,000) of the San Francisco Bay area jobs in 2010 were in the category.

San Francisco's bioscience industry quickly expanded and saw significant job growth. According to the San Francisco Center for Economic Development, by the end of 2016, the metropolitan area's biotech sector employed 127,500 workers. Those numbers were drawn from professional, scientific, and technical services needed by the industry, which may include jobs not directly involved in bioscience or biotech.

The concentration and growth of these hubs seems natural, particularly with the large biotech companies in Massachusetts. Sanofi, ​Pfizer, Biogen, and Novartis are major pharmaceutical companies with large research centers just outside Boston and represent a significant portion of the local job market.

Boston's Focus on Drug Discovery

This disparity between pharmaceutical-focused Massachusetts and the broader biotech segment in California is also reflected in the 1,896 new potential drugs in development or trials mentioned in the Massachusetts Biotechnology Council 2017 Industry snapshot versus the 1,274 medicines in the pipeline cited in the California Life Sciences Industry 2018 report for the entire state, not just the San Francisco Bay region.

Venture Investments More Concentrated in San Francisco

The prevalence of small biotech in the San Francisco isn't surprising for anyone familiar with the quantity of venture investment in this area. Based on a PricewaterhouseCoopers/CB Insights HealthCare MoneyTree Report, in second quarter 2018 approximately $1.65 billion was invested in Silicon Valley area healthcare companies. That compares with $1.62 billion in investments for that same period for all of Massachusetts.

Principle Biotech Business Hubs

It is not clear which is the top biotech cluster, but what is clear is that combined, Boston and San Francisco host the largest concentration of biotech activity in the world. Both areas have growing established broad-based biotech industry segments. Almost half of all US biotech investment is made in these areas, about 1/3 of the biotechnology employees work for companies in these areas, and about a quarter of US biotech companies are located in one of these clusters. These two regions are the major drivers for global biotechnology innovation.

With the economic climate of the last few years, both regions have faced some challenges, but the unique mix of features that have enabled the biotech industry sector to thrive in these areas is not easily replicated, and investment continues, so both regions appear positioned to retain their roles as biotechnology leaders. It seems that the global biotech industry will continue to revolve around these two hubs for some time.