The 2026 California Life Sciences Sector Report was prepared by TEConomy Partners in collaboration with California Life Sciences (CLS). The report is built on a foundation of national best practices for industry analysis, including standardized industry definitions, harmonized employment and wage data, and input-output economic modeling. Data reflect the most recent full-year or quarterly figures available as of early 2026.

Key objectives:

• Accurately estimate the scale and impact of the life sciences industry across California and four key regions
• Ensure consistency with national and state-level benchmarking standards
• Reflect nuances of regional specialization and emerging sectors

The life sciences industry employment analyses in these snapshots examine regional and state data and corresponding trends in the life sciences from 2024 to 2025. For employment analysis, TEConomy Partners used the Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) data. The QCEW data provide the most current, detailed industry employment, establishment, and wage figures available at both a national and subnational level. TEConomy utilizes an enhanced version of these data from a private vendor, Lightcast. For more information on the BLS Quarterly Census of Employment and Wages, see http://www.bls.gov/cew/.

Twenty-six NAICS industries at the most detailed (6-digit) level make up the TEConomy/BIO definition of the life sciences and its subsectors (Table 1). These detailed industries are aggregated up to five major subsectors of the life sciences industry. Six of the detailed NAICS industries, Testing Laboratories (NAICS 541380); Research and Development in Nanotechnology (541713); Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology) (541715); Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers (423450); Drug and Druggists’ Sundries Merchant Wholesalers (424210); and Farm Supplies Merchant Wholesalers (424910) are adjusted in this analysis by TEConomy to include only the share of these industries directly involved in biological or other life science activities. To isolate these relevant life science components, TEConomy used the most current available data from the U.S. Census Bureau’s Economic Census.

*Note: Includes only the portion of these industries engaged in relevant life science activities

At the time of analysis, the most recent QCEW data release from BLS contained Q3 2025 industry data. Employment, establishment, and wage data presented in these snapshots represent an average of the three available quarters from 2025, consistent with how annual employment figures are calculated by BLS when all four quarters are published.

In some cases, granular BLS data are not available. BLS suppresses certain QCEW data to maintain the confidentiality of individual employers. When there are very few establishments in a specific industry or geographic area, the publishing of employment or wage data could inadvertently disclose identifiable information about those businesses. To comply with federal confidentiality laws and ensure that no individual firm’s data can be discerned, the BLS applies suppression rules to prevent the release of potentially sensitive information.

Through proprietary modeling, Lightcast incorporates other publicly available data, such as the Census Bureau’s County Business Patterns (CBP), to estimate employment for suppressed industries not provided by BLS. When certain 2025 data points were suppressed by BLS, Lightcast Datarun 2026.1 was substituted to maintain the consistency of the time series.

A characteristic at the core of the NAICS classification scheme is to allow for the classification of individual establishments based upon the functions occurring within a particular establishment. As with all large, multinational industries, a meaningful share of life sciences industry employment is captured within Management of Companies and Enterprises (NAICS 5511). To assess the level of this employment, a special estimation effort is required to account for these locations’ impacts. With specific corporate information to work from, individual life science-related sites are identified as life science “headquarters”. These address-specific sites were examined to ascertain whether any significant manufacturing or R&D activities were occurring within these establishments that would support these locations to be re-classified as either Pharmaceutical and Medicine Manufacturing (3254); or Scientific Research and Development Services (5417). While every attempt is made to specifically identify these corporate and administrative locations, the number and employment values used in this analysis are likely conservative in nature.

To estimate the economic impact of the life sciences industry, an input-output model was used to represent the interrelationships among economic sectors. Input-output multipliers are based on the flow of commodities between industries, consumers and institutions in a regional economy. The premise is that every dollar spent in the economy (the direct impact) is re-spent on the purchase of additional goods or services generating additional economic activity and impact (the multiplier – indirect and induced effect).

This analysis was performed using 2024 State of California and county-specific input-output models from IMPLAN. The IMPLAN model is the most widely used model in the nation and is based on the U.S. Bureau of Economic Analysis (BEA) national accounts data, supplemented with employment data from the U.S. Bureau of Labor Statistics (BLS) and other economic data from U.S. Census Bureau. The impacts are modeled using the most detailed sectors available within the IMPLAN model. In most instances (e.g., manufacturing sectors) this is at a full six-digit NAICS level. However, in some instances (e.g., Research, Testing, & Medical Laboratories) the IMPLAN model only captures the subsector component data at the four-digit NAICS level.

The trade flows built into the IMPLAN input-output (I-O) model permit estimating the impacts of one sector on other sectors. These impacts consist of three types of effects:

• Direct – the specific impact of the sector(s) in question
• Indirect – the impact on suppliers to the focus industry
• Induced – the additional economic impact of the spending of employees’ personal incomes in the overall economy
• Total – the aggregated direct, indirect, and induced impacts

In other words, the I-O analysis models the “ripple effect” that originates from the expenditures of California’s life science industry firms in the economy, flows through suppliers and vendors as additional inputs are purchased, and through employees who spend their wages in the economy.

The IMPLAN models were used to estimate five specific types of impacts:

• Employment is the total number of jobs created and supported; includes the direct jobs paid for through salary and benefit expenditures of the life sciences industry and the additional indirect/induced jobs generated through corporate and personal expenditures.
• Labor Income is the total amount of income, including salaries, wages and benefits (total compensation), received by industry employees and other workers in the economy.
• Value Added is the difference between an industry’s total output and the cost of its intermediate inputs; sometimes referred to as the industry’s “Contribution to GDP”.
• Output, also known as production, sales, or business volume, is the total value of goods and services produced in the economy. The Total Output impacts are often referred to as the “Total Economic Impact”.
• Government Tax Revenues includes the estimated revenues of federal, state, and local/county governments from all sources as a result of the output and employment impacts estimated.

Economic impacts were modeled individually for the state of California and for San Diego County, Orange County, each county in the Los Angeles Region (Los Angeles and Ventura Counties), and each county in the Bay Area (Alameda, Contra Costa, San Francisco, San Mateo, and Santa Clara Counties). Individual county results were totaled for multi-county regions.

For each geography above, a second model was created using research expenditure figures from the National Science Foundation Higher Education Research and Development (HERD) survey. HERD collects information on annual academic research expenditures by field of research and source of funds. Expenditure totals for the most recently available data, 2024, in life science disciplines (which includes agricultural sciences, biological and biomedical sciences, health sciences, natural resources and conservation, and other life sciences) and the bioengineering and biomedical engineering disciplines were entered as direct output in IMPLAN’s scientific research and development sector. The QCEW-based results and HERD-based results were combined for each region’s final impact results in 2025 dollars.

NIH extramural funding data for FY 2025 and for previous years were obtained using the NIH RePORTER tool within the RePORT database. For more information on the NIH Awards data, see https://reporter.nih.gov/.

Venture capital investments, while not the only source of equity capital for life science firms, are often the largest and typically the most publicly known and reported source of investment funds.

Venture capital data were collected using the PitchBook venture capital database capturing all venture capital (including “Angel” and pre-seed investment activity) for 2025 and for previous years. The analysis includes selected investments categorized in PitchBook in the Healthcare industry sector, including all companies in Healthcare Devices and Supplies, Healthcare Technology Systems, Pharmaceuticals and Biotechnology and Other Healthcare as well as all additional companies included in PitchBook’s Digital Health and HealthTech industry verticals. Only Healthcare Distributors and Laboratory Services companies are included from PitchBook’s Healthcare Services industry group; the analysis excludes healthcare service providers. Investments in Agricultural Chemicals within PitchBook’s Materials and Resources industry sector were also included.

TEConomy Partners is a national leader in innovation-based economic research and strategy. The firm works with states, regions, and associations to analyze technology-driven industries and guide economic development initiatives. TEConomy has authored more than 50 state-level and national reports on the life sciences sector in collaboration with BIO and other partners.

For more information, visit: www.teconomypartners.com