Biotechnology / Culture / Health tech / Life sciences / Venture capital

Will the life sciences dethrone software as the king of technology?

The sector is capturing more venture capital, employing more people and reshaping innovation economies across the US.

Pittsburgh's BioBreakfast gathering regularly draws stakeholders across the VC life sciences space (Christopher Wink/
Life sciences is biology that makes money. 

Like other growth industries, many of its boosters stand to get rich. More than others, though, life sciences champions credibly claim their businesses can save lives. Even better to thrill local flag-wavers is that so much of the industry’s work is heavily place based — with expensive equipment, messy procedures and sterile requirements.

Over 15 years of publishing, software builders and web companies have been the focus of our coverage. But medical devices, biotechnology and a range of science-focused startups have always been in the mix. Back in 2015 and 2016, Baltimore economic leaders were encouraging scientists and entrepreneurs to mingle. Philadelphia too. Most recently in 2019, we answered “What are the life sciences anyway.” Our coverage has continued to grow, by following first the tech workers, then the entrepreneurs and finally the investors. 

Though still dominated by software, venture capital is bending toward the life sciences. 

In 2014, VCs invested about a quarter as much into pharma and biotech firms as in software.  By last year it had grown to command about a third as much: $21 billion vs. $64 billion nationally, according to Pitchbook. 

And in the first three months of 2024, life sciences firms raised nearly 60% as much as software. The life sciences are here.

On Tuesday I visited BioBreakfast, a friendly and informal weekly confab organized by Christian Manders, the COO of medical device company Promethean LifeSciences. Near the lobby of Pittsburgh’s 350 Technology Drive, Manders welcomed me into his longstanding networking affair, bustling with two dozen PhDs, entrepreneurs and life sciences pros. Over three cups of coffee and half a donut, I chatted up a handful of attendees on how life sciences intersects with technology. 

Whether you’re already enmeshed in the corner of the innovation economy or not, here’s a pass at how will describe this sector — and why it matters.

How big is the life sciences sector? 

Put simply, the life sciences concern that which is living (for example, biology), and the physical sciences concern everything else (e.g. geology). 

Gene therapies to alter living cells, medical processes to help human tissues heal, new vaccine discovery and research into extending human life expectancy can all be examples of the life sciences. 

Among policymakers and economic development strategists, “life sciences” commonly refers to the industry that commercializes discoveries in these fields — not pure research alone. Lots of these businesses do help advance scientific understanding. Nearly three-quarters of American research and development comes from the private sector — far outstripping universities and government. 

That’s why so many life sciences entrepreneurs pose for headshots in lab coats.

How healthcare, technology and the life sciences intersect is important for understanding this industry, but the terms are not of equal weight. Famously expensive, American healthcare accounts for nearly 1 in 5 of all dollars spent in the United States each year, according to federal data. Technology is a multi-purpose word, but for context the American tech industry employs about 3 million people, the life sciences closer to 2.2 million — and tech workers show up in every industry, as any software developer working for a big retail company can tell you. 

That means life sciences is small. The tech workforce is bigger. Healthcare is enormous.

But life sciences is growing. About 1.5% of all workers in the US economy in 2023 were employed in the sector, according to CBRE. And like tech, density ranges. Though also dominated by Silicon Valley and Boston, both the Washington DC-Baltimore joint area and the Philadelphia region are among the 10 largest employment bases in the country. Pittsburgh punches above its weight — out-employing larger Atlanta.

What do all those workers do? They’re scientists, engineers and, as these firms grow, they’re also salespeople, marketers and in all manner of back office functions. Where do the ideas from the companies come from? Lone wolf inventors are rare; far more common are spinouts from university and corporate research labs. 

That’s especially true among the most complicated inventions that are used on or in the human body, warranting federal government scrutiny. Life sciences companies tout “FDA approval” as a badge of honor, because the process is famously arduous and expensive, commonly requiring clinical trials and other rigorous standards.

In 2023, the US government approved more than 350,000 patents — and authorized just 124 new medical devices. 

Tech is a term for commercialized science

Technology has spawned a library of portmanteaus. (See: proptech, fintech, foodtech, regtech, edtech, insurtech and more). It’s done the same with the life sciences, though not all might fit neatly into that industry. 

Biotechnology is a term commonly describing tools and techniques developed to be used inside research labs, and so is heavily regulated. Medtech typically describes that which is used inside hospitals and other healthcare settings, so usually require some regulatory approval. In contrast, healthtech usually describes consumer tools, and so isn’t necessarily regulated — think of a fitness tracker or mental health mobile app. Such tools don’t typically make the cut as being part of the life sciences tribe.

Heaven prepare us for future sprawling terminology.

My longest conversation at the BioBreakfast was with a medical device sales rep and a life sciences exec who previously worked at a software coding bootcamp. We lingered on how technology is such a widely used term that the life sciences is bound to be shaped by it.

Put simply, technology is commercialized science. 

Today the word is so entwined with software simply because we’ve all lived through the era of digital transformation, in which generations of applications were developed to structure data and bring processes online. Plenty more work will continue, but we’re running low on easy problems to solve. Swap food delivery apps for challenges in energy, health and education. Artificial intelligence is something akin to the internet: both a series of technologies and a platform that will make all other technologies possible. Asking if a startup uses AI will be like asking if they use the internet. This seems as likely in life sciences as in consumer web technologies.

This is why we’ll increasingly use the word technology to describe devices, robotics and, yes, the life sciences. Get comfortable with the terminology.

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