Moving the Needle

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The Charlotte Region is emerging as a leader in the life sciences industry. The region's burgeoning workforce, flourishing growth rates in pertinent and highly technical skills, and recent economic development announcements have played an important role in growing the industry. Based on key market performance indicators around momentum and talent,  JLL named the Charlotte metro as the top potential market for life sciences in 2021. This report showcases the Charlotte metro as an emerging market that is progressing towards becoming a top-tier market. This article compiles quantitative data and qualitative interview data to understand current life sciences-related trends and where the Charlotte market currently stands against its peers and long-standing legacy markets. By understanding the regional trends behind the life sciences industry, firms will have the opportunity to leverage the growing momentum and add to their competitive advantage. As the ecosystem grows, market entry will allow for robust economic growth, drawing additional investment into the region. The potential of Charlotte as an up-and-coming life sciences market will create diverse opportunities for employment and business attraction.

Life sciences in the Charlotte Region, with an employment level of over 21,000, focuses on the following sub-industries: research and development (R&D), medical device equipment manufacturing, biopharmaceuticals, and products distribution wholesalers. Activities including, but not limited to, vaccine production, drug discovery, gene cell therapy, genomics, and technology-driven equipment are at the core of life sciences operations. This definition is based on 1) national reports from Deloitte, EY, McKinsey, TEConomy and Slalom, 2) CLT Alliance’s analysis of trends and internal project requests, and 3) codes used by the North American Industry Classification for industry sectors in the life sciences industry for the region. 

The core sub-industries of life sciences include:

• Biopharmaceuticals: comprises of companies that engage in pharmaceutical preparation, medicinal and botanical, biological product, and in-vitro diagnostic substance manufacturing
• Medical devices manufacturing: encompasses companies that manufacture surgical appliances, dental equipment and any essential hospital equipment for patient care and laboratory experiments
• Research and development (R&D): entails companies and research and innovation centers that engage in research, testing, medical laboratories experiments, and product discovery
• Nutrition and food precision: includes companies that engage in the discovery, production, and utilization of nutritional elements to create food-based medications and solutions for human body care.

In addition to the core sub-industries listed above, there is one key sub-industry that is related to life sciences: distributors and wholesalers. In this sub-industry, companies typically engage in sales, distribution, and business solutions for life sciences products including food, medical and hospital equipment, and pharmaceutical products.

The R&D sub-industry makes up more than half of the total employment (61%) in the core life sciences industry. While biopharmaceuticals represent a smaller portion, workforce growth is higher in this particular sub-industry in the region than others.

Regional employment for the life sciences industry is performing at the same pace as the nation. During the COVID-19 pandemic, there was a sharp decline. However, it did not affect recovery, showing immense resiliency, allowing the region to slightly outpace the nation and surpass pre-pandemic levels.

Regional workforces for the core life sciences sub-industries have undergone changes between 2011 and 2021. Of the aforementioned five sub-industries, four saw an increase in their workforces. The region’s biopharmaceuticals sub-industry, employing more than 3,200 people, saw the highest increase of 363% in the workforce. Nutrition and food precision, an emerging sub-industry currently employing more than 400 people, followed at 17% and there was a moderate increase of 39% in R&D, which employs nearly 10,000 people. The high growth in biopharmaceuticals serves as a strength for the region and is mostly driven by the biology product manufacturing sector. Within the region, this sector is supported by many local companies, such as Prinston Pharmaceuticals, a Chinese bioscience company, and ITM Isotopen Technologien Muchen, a German biomanufacturing company. Both companies have been in the region since 2018 and have contributed greatly to the industry through their capital investments and the creation of jobs. In addition, Eli Lilly, an American biopharmaceutical company, has made a recent announcement for the Charlotte Region. Eli Lilly will bring about 600 jobs and a capital investment close to $1 billion. This sector has high employment concentration in the Charlotte metro. It is three times higher than the national average, and one of the top five jobs markets among the 50 largest U.S. metros.

It is three times higher than the national average, and one of the top five jobs markets among the 50 largest U.S. metros.

In the last decade, medical device manufacturing was hit the hardest with a decline of 10% in talent. This sub-industry employs more than 2,400 people in the region. Dental equipment, a sector of medical device manufacturing, used to be highly concentrated in the region, two times higher than the national average. However, closure of dental manufacturing operations decreased the region’s visibility. Out of all the sectors in the medical device manufacturing sub-industry, both dental equipment manufacturing, and dental laboratories recorded steep declines of 201% and 257%, respectively. Growth in other core life sciences sub-industries is expected to replenish talent losses.

The Charlotte Region’s workforce growth in the biopharmaceuticals sub-industry outpaces most Southeast competitors. However, workforce growth for the region is less competitive in other life sciences sub-industries.

The biopharmaceutical sub-industry will drive the region’s life sciences future. For the other core sub-industries, the region has been less competitive when compared to peer markets. However, our analyses of relevant demographic and workforce indicators reflect a future of development. In addition, the region is already home to key assets such as strong health care systems and leading R&D centers, creating a strong foundation for a larger life sciences industry. Leveraging such assets will be beneficial because it will attract diverse talent and additional firms to the region.

As the 7 ^th  fastest-growing metro in the U.S.  ^[i]  , population growth is positively impacting the life sciences employment market. The region experienced an increase of 9.6% growth in population from 2015 to 2020 and is projected to increase by 8% by 2026. Most people moving to the region migrated from the New York metro area for two primary reasons: job opportunities and an affordable quality of life.

Based on regional projections, the population will be 4.7 million by 2050 which will drive employment growth by adding an additional 1.75 million people to the workforce. The population growth will be driven by the region’s strategic access to well-known research universities and strong business hubs. By continuing to attract talent to the region, the life sciences ecosystem can be further strengthened by the increasing pool of talent, who in turn, will attract more talent. By increasing our talent pool, firms will be attracted to the region and become more likely to relocate and expand their footprint within our region. For life sciences in particular, employment levels are projected to grow by 6% between 2022 and 2026. Jordan Schindler, CEO of Nufabrx, shared the following:

“A lot of our new hires have come from out of state, East Coast or CA; there is a clear need for additional analytical, drug delivery and pharmaceutical expertise here in the region. […] These are high paying PhD drug delivery scientist, analytical chemists and advanced materials experts that are adding to the incredible existing talent pool in the area.” 

Page Castrodale, executive director for Cabarrus Economic Development, added that

“based on the activity we’ve seen since the Eli Lilly announcement, I think the Charlotte Region is getting more attention from the life sciences community than it has before. We have the critical pieces in place to support the growth of bio/life sciences talent.”

 [i]  U.S. Census Bureau 2022

Cushman and Wakefield’s recent 2022  report  on the life sciences industry identifies Boston, Raleigh, Philadelphia, San Francisco, and Atlanta as the largest metros in the nation with the largest talent pool for life sciences. These metros are also known for having established reputable innovation district corridors and advancing technology and R&D in the nation.

We compare the Charlotte Region’s workforce against the top markets listed below. Charlotte has experienced one of the industry’s fastest-employment growths. The region’s employment in life sciences grew by 50% this past decade, which is more than double the national average (24%) and added more than 6,600 jobs. Though many industries suffered from COVID-19 economically, life sciences benefited from shifts in innovation in the health care sector, medical device manufacturing, and R&D. The Charlotte Region was no exception to this trend. Our region is currently capitalizing on existing assets, which include nationally ranked health care centers, a booming tech hub, and stellar research institutions. All these assets work in tandem to create our region’s life sciences market. From 2020 to 2021, regional talent in life sciences increased by 5%, adding more than 1,000 jobs through the pandemic.

Charlotte’s growth potential in the industry will be strengthened with the upcoming medical school, an anchoring point for The Pearl, the newly announced innovation district in the region, along with its proximity to the Innovation Quarter in Winston Salem and Research Triangle Park. The  urban model strategy  of developing innovation corridors along anchored medical universities, industrial infrastructure, and cutting-edge research and discovery centers has proven to be beneficial for the advancement of the life sciences industry in legacy and emerging markets. With the addition of The Pearl, the prominence of the life sciences industry in the region is reasonably expected to increase.

According to Aon’s recent 2021 Life Sciences Compensation Trends survey, the demand for lab and biomanufacturing spaces is leading to more jobs and increasing the highly skilled talent pools.  About 71% of life science companies plan to increase their recruitment goals over the next 12 months to meet hiring goals.

Life sciences companies look for skill sets that intersect often with other industries including manufacturing, technology, health care, and R&D. Based on EMSI job postings trends, the following occupations are concentrated within the Charlotte Region.

These shifts in talent, due to the pandemic, have resulted in skills, occupation requirements, and job title changes, causing a domino effect on the hiring and retention process of job seekers. Core life science jobs now include microbiologists, epidemiologists, biophysicists and biochemists, biological technicians, bioengineers, biomedical engineers, and pharmacy technicians. The pandemic has also led to a surge in other occupations including respiratory therapists, behavioral analysts, and occupational therapists. Despite the high demand, employers are continuing to face challenges in talent recruitment for these particular jobs. 

The growing use of AI across industries has led to intense competition amongst businesses. The Bureau of Labor Statistics anticipates job openings in AI will increase by 22% from 2020 to 2030, which is faster than the average for all other occupations at 7.7%  ^[i]  . Within the United States in 2021, the top states for AI skilled jobs were California, Texas, New York, and Virginia.

In the United States, private investments in AI companies reached $52.9 billion, the most in the world in 2021. Stanford University   reported that China was second in overall private investment in 2021 ($17.2 billion) and the United Kingdom was third ($4.65 billion)  ^[ii]  .

Since 2017, job postings that involve AI skills have grown by 355% in North Carolina and 350% in South Carolina. On average, demand for AI skills grew by 35% each year in North Carolina and South Carolina. The Charlotte Region makes up nearly 35% of the job postings in both North Carolina and South Carolina in 2021 and grew by 386% between 2017 and 2021. On average, the demand for AI skills reflected in the job postings in the Charlotte Region grew by 37% every year.

One of the big reasons why job growth is high is because of AI’s usefulness. AI-based technologies can produce large data sets and can be used in a variety of ways, including enhancing product quality testing or identifying diseases through imaging. However, humans must still be able to make sense of the data being produced and understand its meaning. As the life science industry makes advancements into its field, whether it be in drugs and medicine, operations, or technology, firms will require individuals who can understand the context behind the data and continue to feed data into the AI-based algorithms so that it can learn, train, and be maintained. 

The rapid growth of jobs requiring AI skills is no surprise, given its capabilities and increasing importance to firms. Billions of dollars are being spent to make AI more mainstream and accelerate adoption across a variety of sectors. In the Charlotte Region, key industries including tech, finance, transportation, health care, and life sciences are bound to be impacted through the influence of AI. Because AI is a skill that penetrates industry boundaries, talent in this area will be equipped with transferrable skills that allow them to move from industry to industry.

As AI becomes a key ingredient in building growth and competitiveness, many firms are seeking these tech-related, and innovation-oriented skillsets in the CLT Region:

• Artificial intelligence
• Machine learning
• Python
• Computer science
• SQL
• Robotics
• Data science
• Automation
• Apache spark
• Data analysis

Many of the skills listed above are found often in tech; however, they are highly transferable, particularly to life sciences. AI skillsets are considered major breakthrough technologies that will transform the life sciences industry. And given the Charlotte Region’s strength in the tech industry and the density of talent, the life sciences industry will be able to leverage existing opportunities as these skillsets are highly transferable. In addition, as the Charlotte market continues to add to its already high volume of educated professionals, it will continue to attract even more talent to the region.

There is clearly no lack of demand for AI skills, but there is a lack of supply. It is widely understood it is difficult to find talent skilled in AI techniques. This only contributes to the labor shortage that many other industries are seeing.

 [i]  U.S. Bureau of Labor Statistics, Computer and Information Research Scientists, accessed May 18, 2022,  https://www.bls.gov/ooh/computer-and-information-technology/computer-and-information-research-scientists.htm . 

 [ii]  “The AI Index Report,” Stanford University Human-Centered Artificial Intelligence. Stanford University, 2022, https://aiindex.stanford.edu/report/.

The Great Reshuffling continues as the nation experiences talent shortages. The North Carolina Biotechnology Center identified must-have talent needs in the following sub-industries: diagnostics and analytical services, therapeutics and pharmaceuticals, R&D, contract manufacturing operations, medical technology, digital health care, and bioinformatics, medical and distribution.

Between January 2022 and May 2022, there were 5,487 job postings in these industries, a 19% increase for the same period in 2019. Our analysis of recent job postings by local life sciences companies demonstrated needs for microbiologists, biological technicians, and laboratory analysts. The job postings for technicians typically require a high school degree at a minimum, and between zero and a couple of years of experience. Laboratory and core jobs mostly require a bachelor’s degree, but with zero to little experience in STEM fields. However, workforce trends in the region reflect high demand for highly educated talent. Only 21% of total postings for life sciences jobs in the region require to 3 years of experience whereas 41% of total job postings require a bachelor’s degree.

“The school of medicine, combined with the clinical arm of Atrium Health and its vast patient population will be an extremely attractive offering for life sciences companies looking to partner with an institution that can help develop and scale [new] technologies or solutions. An academic institution of that caliber has the potential to create new technologies, spin off new life science startups and more.” -Hillary Crittendon, Head of Innovation District Operations & Strategy at Atrium Health

Given the strong foundation for life sciences, it is no surprise that the region will be home to The Pearl, a regional innovation district, which will also house the Wake Forest School of Medicine. The new medical university is set to debut in 2024. It is strategically located at the center of Charlotte, and its presence will foster more collaborative opportunities for research, NIH grants, partnerships, and opportunities between critical players in the life sciences industry and the academic sphere.

Resulting from a public-private partnership with the City of Charlotte and Mecklenburg County, a key component for building a successful innovation district, The Pearl will be “ground-zero for entrepreneurial activity, research and development that is expected to reshape the economy of the Charlotte Region.”  ^[i]   By contributing to its infrastructure, this public-private partnership will foster the spirit of innovation and entrepreneurship, and deliver high quality growth for the life sciences industry and the region. The Pearl will serve as the next destination for top-tier clinicians, researchers, and modernized medicine through mounting knowledge flows and spillovers, increased growth for startup employment, and superior industrial performance that will lead to higher median incomes and employment growth rates. Hillary Crittendon, head of Innovation District operations & strategy at Atirum Health, said:

"We have been in the preliminary planning stages, gathering support from local stakeholders (including government officials) and we hope to break ground on the preliminary construction stages later this year. We are heavily engaged with our colleagues at the Innovation Quarter in Winston-Salem. With a head start of more than 20 years, the expertise they bring to the table on how to navigate the complexities of building this innovation district is integral. We’re also in constant touch and strategizing with economic development leaders in Charlotte, the region and across the state. The impact this district and the connection between Winston-Salem and Charlotte are creating will be significant, and for that reason, we want to ensure that we have all the right parties at the decision-making table."

Life sciences hubs are typically anchored around an institution of higher education and research. The medical school and the innovation district are projected to be huge growth contributors to the life sciences industry. 

 [i]  Atrium Health, “Introducing Charlotte’s Innovation District: “The Pearl”. Atrium Health, 2022, https://atriumhealth.org/about-us/newsroom/news/2022/03/introducing-charlottes-innovation-district-the-pearl

The life sciences industry is poised for growth, given its current assets. The following are key to increasing competitiveness in life sciences for the region.

The life sciences industry has been trending upwards because of a rapid infusion of innovation, leading to new products and technologies. Though still considered an emerging market, the Charlotte Region’s life sciences industry is poised to reach maturity as opportunities for growth are met.

Carried forward with Eli Lilly’s regional investment, the region’s momentous growth in biopharmaceuticals will help the region utilize its strategic industrial advantage to power regional economic growth. Also, additional investment into the life sciences industry will encourage the creation of startups, which will have a positive impact on wages and job creation. Furthermore, as the industry continues to expand, the density of educated professionals will increase, as the existing mass of educated millennial professionals will draw in additional talent.

With such winning factors, it is no wonder that the Charlotte Region is JLL’s number one potential market for life sciences. Great existing partnerships, both public and private, have enabled effective economic development, while also allowing the focus to remain on meeting the needs of companies who want to expand or relocate. The region’s collaborative ecosystem paired with highly skilled talent, competitive tax rates, established business hubs, and a great cost of living are more than enough to continue the momentum behind life sciences.