Biotechnology Research Services NAICS 541714
Unlock access to the full platform with more than 900 industry reports and local economic insights.
Get access to this Industry Profile including 18+ chapters and more than 50 pages of industry research.
Industry Summary
The 4,937 Biotechnology research firms in the US study the use of microorganisms and cellular and biomolecular processes to develop or alter living or non-living materials. Firms develop new biotechnology processes or prototypes of new or genetically-altered products that may be reproduced, utilized, or implemented by various industries. A firm may specialize in a particular field, such as oncology, cardiovascular medicine, or agricultural products. Companies may also specialize in a particular stage of drug development (discovery, pre-clinical, clinical) or offer a full-service model that allows a firm to play a part in each step of the drug approval process.
Liability
Because biotechnology research and development involves the testing of new drugs on patients in clinical trials, firms are exposed to the risk of liability for personal injury to or death of patients, particularly those with life‑threatening illnesses.
Failure Is Inherent
The overall probability that a drug in the discovery and preclinical phases of development will reach the final market is extremely low.
Recent Developments
Mar 3, 2026 - Agentic AI Use Is Increasing
- Agentic artificial intelligence (AI) systems are poised to accelerate labor-intensive biomedical research by making autonomous decisions, according to research published in the Nature Biotechnology journal. Agentic AI systems have been developed for applications including drug discovery, data analysis, and biomarker identification. These systems are poised to accelerate labor-intensive biomedical research by making autonomous decisions based on contextual information and expert feedback.
- Boston’s biotech sector, long a hub of the biotech industry, is struggling, according to The Wall Street Journal. Cutbacks in venture capital and government funding are key causes of the struggles. Venture-capital funding in the first half of 2025 reached the lowest point since the same period in 2017, according to MassBio. Nearly 28% of greater Boston’s laboratory space sat empty in September 2025, according to real estate firm CBRE. "Every stage of the life cycle has been impacted by policy or regulatory uncertainty," said Kendalle Burlin O’Connell, chief executive of MassBio, an industry trade group. The impact has hit startups especially hard, she said. "There was so much money that the sector got overbuilt," said Alexis Borisy, founder of Boston-based Curie.Bio, a biotech venture firm that has raised more than $1 billion for early-stage biotechs. "If there was a good idea, there’d be 10 companies all built at the same time to go do it."
- China has taken the lead in biomanufacturing, a discipline that leverages biological processes to aid in the creation of substances like food, medicine, and materials, according to US Senator Todd Young, who chairs the National Security Commission on Emerging Biotechnology. Young also acknowledged that ensuring continued investment in the US research enterprise, which has faced funding cuts in the second Trump administration, is intrinsic to advancements in emerging areas like biotechnology. Investing more in this sector could aid US warfighters and could activate economic sectors in rural America, according to Young.
- Biotechnology research industry employment and average wages for nonsupervisory employees increased slightly during the first eight months of 2025, according to the US Bureau of Labor Statistics. Biotechnology research service industry sales are forecast to grow at a 4.98% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
Industry Revenue
Biotechnology Research Services
Industry Structure
Industry size & Structure
The average biotech research and development firm operates out of a single location, employs about 60 workers, and generates about $15.8 million annually.
- The biotech research and development industry consists of about 4,937 firms that employ 294,900 workers and generate $77.8 billion annually.
- About 5% of firms operate as non-profit organizations that generate just under 15% of industry revenue.
- The average non-profit biotech research firm employs about 64-65 workers and generates about $16 million annually.
- The industry is moderately concentrated at the top and fragmented at the bottom; the top 50 companies account for about 53% of industry revenue.
- Large firms, which include PAREXEL, Covance (LabCorp), and Syneos Health (merger of inVentiv Health and INC Research), may be vertically integrated and operate manufacturing facilities in addition to R&D centers. The largest firms typically have global operations.
- Large non-profit organizations that operate biotechnology R&D facilities include major research universities (SUNY system), IAVI, and Battelle Memorial.
- The major contract research organizations (CRO) typically focus on the development phase and offer limited services related to research/discovery.
- The broader bioscience industry includes five major subsectors: agricultural feedstock and chemicals; bioscience-related distribution; drugs and pharmaceuticals; medical devices and equipment; and research, testing, and medical laboratories.
Industry Forecast
Industry Forecast
Biotechnology Research Services Industry Growth
Vertical IQ Industry Report
For anyone actively digging deeper into a specific industry.
50+ pages of timely industry insights
18+ chapters
PDF delivered to your inbox
