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a number of mutual funds and VC firms, and some of their investment portfolios (e.g. the Burrill Life Sciences Capital Fund III) really do cast a wide net. In the case of mutual funds, a potential investor can look at a detailed breakdown of investments in the annual report to see just how diverse a fund is. The Janus Global Life Sciences Fund, while heavily weighted towards biopharma and medical devices, does include investments in a small amount of other sectors, such as hospitals, diagnostic kits, and physician practice management. However, based on its current holdings this could just have easily been named the Janus Global Biomedical Fund without misleading investors.
Vague biomedical descriptors extend beyond the term “Life Sciences”. Many organizations put together yearly lists predicting where future job growth is expected to be. These categories, once again, are so overly broad that it’s hard to believe that there isn’t a huge range of hiring probabilities within these descriptions. For example, the Website 24/7 Wall St. reported (using numbers from the Bureau of Labor Statistics) in 2012 that “Natural Science Managers” was a job category that offered excellent prospects for people who can “direct and supervise research projects for biologists, physicists, and chemists”. It’s not clear whether these future jobs are expected in academia, in industry, or both. I’ve worked in biomedical research for decades, and have never met anyone who introduced himself or herself as a Natural Science Manager. I don’t think of job prospects within these three disciplines as being equivalent, especially given the huge number of Big Pharma layoffs seen over the past five years, with R&D shrinking at nearly every company. In addition, I think the recent Federal budget sequester diminished job prospects in this category within academia as well. Despite this, some 33,500 job openings were predicted between 2010-2020, with a median annual wage of $116,020. Can we really rely on these predictions?
The use of ill-defined terminology has parallels in consumer products, where a “lifetime warranty” is often as worthless as the paper it’s printed on. In the food industry, terms like “natural” and “organic” often get bandied about without much regard for what they really signify. The FDA discourages companies from using the term “natural” as it is essentially meaningless with no formal definition. Despite this, the word is deliberately and widely misused as a way of tricking consumers into thinking a food is in some way healthier than items not bearing this label. The word “organic”, in contrast, now has a very clear legal definition that consumers can rely upon after being widely abused in the past.
The tactic of lumping together a variety of items under a wide umbrella shows up in personal finance, where again it obscures details that might be useful. Your stockbroker uses this approach to let you know how much your investments went up (or down) last year. While lumping gives you a helpful overall number (e.g. your portfolio was up 7% last year), most of us would want to drill down into the details to see how the individual components performed. This is actionable information that would enable you to cull underperformers, but you can’t do that if you only have a single number in front of you.
Another example of how lumping obscures important numbers is seen in minimum wage statistics. Steve Forbes pointed out in a recent column that “the average income of households with a minimum-wage worker is more than $53,000, and within a year of hiring, two-thirds of those who start at the minimum wage receive a raise.” I don’t doubt these numbers are true, but they are also highly misleading. As written, it makes it seem that families with minimum wage workers are doing OK financially, especially since the average family income in the US is also slightly more than $53,000. So what’s the problem? What you don’t see in these numbers is what happens if a family is dependent upon a single minimum wage earner. According to the Center for Poverty Research, “An individual working full time at minimum wage will make enough to live above the poverty line. However, if he or she is the sole earner for a family of four, that income is only 65 percent of the federal poverty guideline.” The median family income for families with a single mother (many of whom earn the minimum wage) is just $23,000; single parents account for 40 percent of low-wage workers in the US, and the poverty rate was about 44 percent for children in female-headed families. The average wage of households with a minimum wage worker is an illusionary number, and I think it’s deliberately used to obscure the economic difficulties that many minimum wage workers actually experience.
Don’t follow the example of Alan Greenspan, the former Chairman of the Federal Reserve, who famously said of his speeches, “I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.” Strive for clarity in your writings and oral presentations. Be careful to choose a word or phrase that best illustrates your actual meaning. Think twice the next time you want to use the term “Life Sciences”. I’d make a strong effort to shy away from this catchphrase since those hearing the term will, in all likelihood, not have a distinct picture of your intentions and exact meaning. And if you hear someone use this phrase, ask him or her to clarify exactly what group(s) it is that they are referring to. Words and phrases go in and out of popular usage all the time. I’d like to see “Life Sciences” tossed onto the scrap heap of expressions, like “new normal” and “as if”, that have simply outlived their usefulness.
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