Jobs & Growth Generated by Industrial Biotechnology in Europe

The economic impact of the sector today and beyond

This study quantifies the different economic effects associated with the activities of the industrial biotechnology (IB) sector in Europe. These include the direct effect, i.e. the employment related from core IB sector activities such as production of enzymes or antibiotics, as well as upstream effects (employment generated by the suppliers to the IB sector), downstream effects (employment involved with processing and integrating IB outputs) and induced effects (resulting from the spending of employees from the aforementioned categories).

The results show that total employment in the IB value chain amounts to about 486.000 full-time equivalents (FTEs). About 94.000 FTEs are generated in the IB sector itself, while some 269.000 FTEs are created in the upstream part of the value chain, i.e. by the suppliers of good and services to the IB sector. In addition, some 98.000 FTEs are generated downstream of the IB sector, whereas the employment of about 25.000 people is induced by the spending of employees in the earlier categories. Along the IB value chain, more than €31 billion is generated in terms of value added..

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For every job in the IB sector, there are 4 jobs created elsewhere in the IB value chain. This high multiplier is driven especially by upstream employment in the IB sector. A high upstream job creation is a general characteristic of chemicals and pharmaceuticals production, but this is augmented by the IB sectors’ sourcing of bio-based inputs rather than fossil resources. Indeed, biomass production is much more labour intensive than fossil resource extraction, leading to a 16% higher overall upstream employment.

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Outlook to 2030 shows that employment in the IB value chain may increase to well above one million FTEs. Two different growth scenarios for the IB sector have been considered. The first is the extrapolation of the historical growth rate of IB production observed in the Key Enabling Technologies (KETs) Observatory time series. The second is the market forecast made for the IB sector in the context of the BIO-TIC market roadmap. When we apply the growth rates from both sources to current employment and calculate expected employment by 2030, we find that total employment for IB will lie between 900.000 FTEs (BIO-TIC scenario) and 1.500.000 FTEs (KETs Observatory scenario).

The IB sector is becoming an increasingly important source of employment in the chemical and pharmaceutical sector. As of 2013, the share of IB related employment in total chemicals and pharmaceutical amounted to about 5%. Assuming employment in these two sectors will remain stable, as has been observed over the past years, and combining this with the expected positive growth of IB employment, the share of IB based employment in these two sectors is anticipated to increase to between 10% and 15% by 2030, highlighting the importance of IB for maintaining employment in these key strategic EU sectors. The IB market in the EU is expected to contribute between €57,5 billion and €99,5 billion to the European Economy by 2030.