FY2010 House 1 Budget Recommendation:
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
On June 16, 2008 the Governor signed legislation establishing a 10-year, $1 billion investment in Massachusetts life sciences ( Chapter 130 of the Acts of 2008). This landmark signing event culminated a year's worth of efforts put forth by the Governor and the Legislature to draft an innovative new initiative to expand the life sciences activities in the Commonwealth. This includes a comprehensive plan to promote life sciences across all facets and stages of the sector, from as early as middle and high school classrooms, to workforce development, academic research and commercialization, to globally-competitive businesses that provide high-paying jobs for workers in the state. It has been just seven months since the signing of the Life Sciences Act, and the Commonwealth is already seeing a substantial return on this investment, both in jobs created and in support for live-saving scientific research.
The effort to expand the life sciences industry in Massachusetts will be undertaken by the Massachusetts Life Sciences Center (MLSC), as established in Chapter 23I of the General Laws. The authority and responsibility of the Center, which is governed by a 7-member board of State officials and leaders in academia and industry, were expanded to enable the quasi-public entity to implement comprehensive new programs and investments that will promote the state as the global leader in the industry.
The Life Sciences legislation provides $1 billion over ten years, which will fund three major initiatives:
In the fiscal year 2010 House 1 recommendation, the Governor provides $20 million to MLSC to fund its activities and grant awards for the 12-month period beginning on July 1, 2009. A limited amount of this funding will be used by MLSC to support its administrative activities; the large majority of the funding will be used by the Center to:
In the current economic downturn, these investments are more essential than ever to help Massachusetts continue its transformation to a knowledge-based, technology-focused economy and remain a destination of choice for businesses at every stage of their development. Moreover, this funding will enhance the Commonwealth's efforts to spur economic growth across the state to all of its regions, ensuring a balanced approach to the State's economic development objectives.
The Governor's budget assumes that $25 million in fiscal year 2010 for tax incentives will be awarded by MLSC to certified life sciences companies, in agreement with the annual ceiling provided by the life sciences legislation. The tax incentives offer MLSC and the state a vital economic tool to encourage economic growth and investments in one of the state's highest-paying sectors. All companies receiving benefits under this program will be required to demonstrate substantial economic benefits to the Commonwealth, through employment growth and expanded revenues to the state. The legislation provides significant "return on investment" protections to and the Center and the state, including "clawback" provisions that require regular scrutiny of companies' activities to ensure they are meeting their promises. When companies fail to meet their commitments, the legislation authorizes the Center to recover the benefits and award them instead to a company willing and able to live up to its end of the bargain.
The Life Sciences Center, led by Dr. Susan Windham-Bannister, is pursuing a strategy of using public investments to leverage private dollars, and that strategy is already generating results. To date, the Center has made nearly $30 million in public investments in the life sciences sector, leveraging more than twice that amount in additional private investment, and creating hundreds of jobs across the Commonwealth at a critical time, all the while expanding scientific knowledge and discoveries.
Through an investment of $10.6 million in scientific research grants, the Center was able to leverage $10.6 million in matching funds from academia and industry to support crucial life sciences research projects and attract the best and brightest faculty across the state, while creating dozens of new jobs.
Likewise, through an investment of $10 million in infrastructure improvements at the Marine Biological Laboratory in Woods Hole (home of Dr. Osamu Shimomura, 2008 recipient of the Nobel Prize for Chemistry), the Center was responsible for leveraging $15 million in private investment from the Howard Hughes Medical Institute for that project, creating a projected 200 construction jobs and dozens of long-terms research positions. Finally, through an investment of $5 million in wastewater infrastructure in Framingham, the Center facilitated the construction of a new Genzyme facility that will create 300 new manufacturing jobs this year. This type of innovation is exactly what the Massachusetts economy needs to recover from this difficult economic downturn.
In this difficult economic climate, the Center and the state are committed to creative strategies that will help to enhance Massachusetts' position as a world leader in life sciences, while leveraging and capitalizing upon the State's current strengths and assets in life sciences. A notable example of this is the innovative public/private program Massachusetts Life Sciences Center has forged. Known as the Corporate Consortium Program, this new initiative allows partner companies to co-invest with the Life Sciences Center, greatly leveraging the investment of the Center's public dollars. Johnson & Johnson, the charter member of this program, has contributed $500,000 in matching funds, and more companies have already expressed great interest in following behind them. The Center continues to develop similar programs and partnerships to leverage private sector capital and expertise, thereby maximizing the value that taxpayers receive from their investments.
Massachusetts is a world leader in the life sciences industry, which includes research and university-based discovery, biotechnology and pharmaceuticals, medical device manufacturers, as well as a developing network for stem cell-based innovation. Massachusetts employs an estimated 100,000 life sciences workers, with more than 400,000 more in the health care industry. This represents just under 20% of the total state workforce. It is estimated that the life sciences industry generates over $25 billion in revenues to the Massachusetts economy annually. Highly regarded studies, including those from the Milken Institute and the Center for Labor Market Studies at Northeastern University, estimate that between 3.6 - 5 jobs, result from the creation of every 1 direct life sciences job because "supplier industries" such as legal, financial and advertising are necessary to support life sciences workers. This is known as the "multiplier effect" and must be taken into consideration when analyzing the impact the life sciences industry has on the overall Massachusetts economy.
Massachusetts also leads the nation in per capita National Institutes of Health (NIH) funding. NIH funding is a key measure of a region's academic and industry success in life sciences as on average, each dollar of NIH funding generates more than twice as much in state economic output. Massachusetts currently receives the most funding annually per capita among all US states, and is second only to California in total volume in NIH funding.
As a world leader in the life sciences industry, Massachusetts is targeted by other states and countries seeking to develop or expand their life sciences-based economies. In fact, Massachusetts faces aggressive competition among states such as North Carolina, California, and Texas, as well as countries in Europe and Asia. These states and nations have all increased their efforts to recruit top researchers in the life sciences as well as attract businesses to expand or relocate to their areas. Massachusetts is often cited as the model for such plans to expand life sciences activities. The 10-year life sciences initiative will ensure that the state remains globally-competitive while expanding opportunities for all of its regions to attract businesses and advance medical breakthroughs that will improve the human condition.
Demand for the products and services provided by life sciences companies and institutions will most certainly continue to grow in the short and long term future. As the U.S. and global populations age, life saving and illness-preventing technologies and procedures will be further needed and more countries will expend their resources to discover the most efficient and effective ways to keep their citizens healthy.
Many factors favor Massachusetts' prospects for continuing its leadership in the life sciences industry. For example, the state has a highly-trained and diverse workforce with skills that range from manufacturing to research. This skill-mix encourages businesses and institutions to locate a variety of their essential operations in the state and invest in their Massachusetts-based workforce. Massachusetts has a world class education system at all levels, which offers an unprecedented pipeline of future employees available to companies thinking of doing business in the Commonwealth. Furthermore, there are countless leading universities and research institutions committed to discovery and innovation in the life sciences fields, providing a limitless supply of opportunities for commercialization and technology transfer to the market place. Lastly, Massachusetts is a great place to live for companies' employees, offering a wealth of historical, cultural and natural attractions and excellent communities in which to settle down.
Prepared by the Executive Office for Administration and Finance · Rooms 373 & 272 · State House
For more information contact:
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