California’s stem cell agency pumped $15.4 billion into the U.S. economy over 14 years, University of Southern California economists said in a study.
The report comes out 15 years after California voters approved $3 billion in bond sales to fund research at a time the federal government was pulling back on its support for embryonic stem cell research. It also arrives as backers are proposing a new $5 billion bond initiative to continue funding the research as the agency’s ability to raise money through bonds ceases under Proposition 71, which originally created the California Institute for Regenerative Medicine.
CIRM-funded activities added $10.7 billion in business in California for scientific research and development services; real estate; construction; hospitals; food manufacturing; wholesale trade; professional and health care services; rental and leasing services; and other sectors, the Oct. 9 report by the USC Price School of Public Policy said.
Funds were used for infrastructure development such as constructing new labs and research buildings, education including conferences and training, and hiring staff, the report said.
Spending through the bond-funded grants helped increase state and local tax receipts by $641.3 million. Federal taxes from CIRM-related activities in California rose $726.6 million, the report said.
“CIRM has led to California stem cell research and development becoming a leader among the states. In terms of economic impacts, the state’s investment in CIRM has paid handsome dividends in terms of output, employment, and tax revenues for California,” the report by research professors Dan Wei and Adam Rose said.
New Bond Measure for 2020 Ballot
Robert Klein, the Proposition 71 backer and first chairman of CIRM’s oversight board, pointed to the benefits from medical and research jobs created, the 79 human trials in progress, and the $3.65 billion from private donors, foundations, and institutions that matched the $3 billion in bonds.
Klein in the next month will submit language to the California attorney general and the state’s Legislative Analyst’s Office for a new initiative planned for the November 2020 ballot that asks voters to approve funding for CIRM’s next chapter. Signature gathering will begin in the first quarter of 2020, with a target of getting 1.1 million people to sign, according to Klein. That’s the same number of signatures gathered to put Proposition 71 on the ballot, he said Oct. 9.
“What I would say to voters is that California has created the medical infrastructure for the next generation of therapies and the people of California will be the beneficiaries. They’re the ones that are close enough to the clinics and hospitals for the first wave of new therapies. The people of the nation, of the world, will benefit but it’s the people of California that have the first access to these remarkable advances in stem cell therapies and genetic therapies,” Klein said.
CIRM funding helped create 56,549 additional full-time equivalent jobs in California, nearly half concentrated in the medical and health related research, manufacturing, and service sectors, the report said.
The agency’s total quantified impact on the rest of the U.S. of $4.7 billion in gross output includes 25,816 additional jobs. The estimates are based on economic stimulus created by CIRM grants; co-funding; partnership funding; leverage funding of alpha stem cell clinics that deliver clinical trials to patients; follow-on funding; and CIRM operating expenditures, the report said.
CIRM has awarded more than $2.67 billion in grant funding across six broad categories: physical and institutional infrastructure, basic research, education and training, research translation, research application, and clinical trials.
“This report reflects how CIRM is promoting economic growth in California by attracting scientific talent and additional capital, and by creating an environment that supports the development of businesses and commercial enterprises in the state,” CIRM President Maria Millan said in a statement.
CIRM grant recipients hired research and support staff and construction workers, bought lab equipment from suppliers and manufacturers, and bought food from restaurants and suppliers, the report said.
The California stem cell agency gives money to researchers in the “valley of death,” the four- to 10-year funding gap between the birth of a promising new technology or product and the later stages of development when the core research is completed and venture capitalists are more likely to kick in funding.