FW: the latest high-tech "labor shortage"

Building up hope
Biotech industry in East Bay faces staff shortage
Tom Abate, Chronicle Staff Writer Friday, June 28, 2002

A shortage of skilled technicians and sales representatives threatens
the growth of the biotech industry in the East Bay, according to an
economic development report released Thursday.

"Hundreds of biotech jobs in Alameda, Contra Costa and Solano counties
go begging due to a lack of qualified talent," warned the 77-page
study commissioned by eight economic development and policy groups in
the three- county area.

The report suggests that the most-difficult positions to fill involve
skilled technicians with two years of community college or the
equivalent laboratory training, who can expect earning $35,000 per
year.

Ironically, East Bay companies said it was not very difficult to hire
top researchers from the United States or abroad, provided that the
firms could pay housing allowances of $20,000 to $30,000 over two to
three years in addition to fat salaries and relocation packages.

The study paints the most complete picture yet of biotech activity in
the East Bay, where 164 companies employ nearly 15,000 people.

Small firms dominate the mix of companies. Nearly a third of the firms
surveyed reported having fewer than 10 employees. An additional 44
percent have fewer than 100 persons on the payroll.

At the same time, the 10 largest firms -- including Bio-Rad in
Hercules, Bayer Corp. in Berkeley and Alza Corp. in Vacaville --
account for nearly half of all biotech employment in the region.

Inside these companies, large and small, the report suggests that
employee turnover is relatively high at 10 to 15 percent per year on
average. Some firms reported up to 50 percent of their employees had
quit voluntarily in the past 12 months.

Although the thrust of the report was that the East Bay biotech
industry needs more workers -- two-thirds of the firms surveyed
anticipated openings in the coming year -- the economic downturn has
touched the industry.

"One-third of the local biotech firms had staff reductions last year,"
with layoffs averaging between 3 and 5 percent, according to the
report.

The study contains dozens of policy recommendations that call upon
city, county and state leaders to address a range of issues including
the costly housing and transportation woes that complicate business
everywhere in Northern California.

In addition, the report recommends the creation of industrial parks,
business incubators and mentoring programs to help startups -- spun
out of local universities -- take root in the East Bay.

The report urged biotech leaders to work more closely with nearby
state universities, community colleges and high schools to increase
the number of trained technical workers.

The report notes that some local institutions, including California
State University at Hayward, Contra Costa Community College, Laney
College and Ohlone College, are already graduating significant numbers
of students with four- or two-year degrees in biotech-related fields.

Overall, the report conveys the sense that the East Bay, which has one
of the world's strongest concentrations of biotech firms, must pay
more attention to the industry's needs.

"Biotechnology is one of the fastest-growing business sectors of the
world economy," said Linda Brown, president of the Solano Economic
Development Corp. and one of the report's sponsors. "Communities that
successfully establish themselves as a magnet for leading biotech
companies will reap many benefits."

E-mail Tom Abate at tabate@sfchronicle.com.
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