The Arkansas Biotech Opportunity

Executive Summary

The window is closing. Arkansas is positioned to seize what's left.

Biotechnology is no longer a niche coastal industry. It is a national strategic priority spanning agriculture, healthcare, manufacturing, and defense. The jobs it creates extend well beyond PhDs to include high school graduates, skilled tradespeople, farmers, and factory workers. The National Security Commission on Emerging Biotechnology (NSCEB) has stated that America's competitiveness in this sector now depends on geographic expansion beyond the traditional coastal hubs, and that the window for U.S. policy action is closing faster than expected.¹Arkansas is positioned to seize that opening. The question is whether we will.

The U.S. bioscience industry generated more than $3.2 trillion in total economic output in 2023, supporting 2.3 million direct jobs across nearly 150,000 establishments, with average annual wages of $132,314, 83% above the national private-sector average.² In Arkansas, the bioscience industry employed 10,967 workers across 1,579 establishments at an average wage of $89,847, 61% above the state private-sector average. State employment grew 16.1% from 2019 to 2023, faster than the national 14.7%. The Arkansas Biosciences Institute (ABI) reached $1 billion in cumulative external research funding in September 2025, returning $5.30 in extramural awards for every state dollar invested in fiscal year (FY) 2024.³

The picture is real but narrow. Arkansas's strength is disproportionately concentrated in agricultural feedstock and industrial biosciences (location quotient [LQ] 1.52) and in distribution (the largest subsector, with 6,024 jobs). Pharmaceuticals, medical devices, and research labs remain underrepresented relative to the national average. Eighty-one percent of Arkansas's academic R&D is bioscience, the highest share of any state in the country. The institutional research base is stronger than the industrial base.

Meanwhile, neighboring states have spent the past decade building coordinated biotech ecosystems. Missouri now employs 38,489 bioscience workers and draws $809.5 million in annual U.S. National Institutes of Health (NIH) funding. Alabama posted the highest bioscience employment growth in the Southeast, at 26.3% from 2019 to 2023, anchored by Birmingham's Tech Hub designation and a $44 million Phase 2 implementation award. Oklahoma City's biotech cluster employs 40,000 workers and generates $5.7 billion in gross regional product. Each of these is built around a clear strategy and dedicated coordinating organizations that Arkansas lacks.

Federal policy uncertainty is the single largest near-term variable. The February 2025 NIH attempt to cap indirect cost reimbursement at 15%, currently enjoined and on appeal, would reduce University of Arkansas for Medical Sciences (UAMS) NIH-related revenue by an estimated $10 million annually if implemented, with cascading effects across University of Arkansas (UA) Little Rock, Arkansas State University, UA Pine Bluff, and Arkansas Children's Hospital (ACH). Arkansas was not a party to the multistate litigation challenging the cap, leaving institutional disclosures as the primary advocacy vehicle.⁴

This brief lays out the case for state action: where Arkansas stands, what its neighbors have built, what the incentive structure makes possible, and what a credible path forward looks like, grounded in existing assets.

Life Science Jobs and the Wage Premium

The economic case for biotech starts with wages. The average bioscience worker in Arkansas earned $89,847 in 2023, 61% above the state's private-sector average wage of $55,953.² Bioscience-related distribution, the largest subsector in Arkansas, paid an average of $107,537. Research, testing, and medical laboratories paid $74,779. Pharmaceutical manufacturing paid $71,361. The national bioscience wage averages even higher at $132,314.

These wages are not concentrated in PhD-track roles. Eighty-two percent of life science industry roles fall into middle- or high-skill occupations, and one-third of all life science jobs are STEM occupations, more than five times the concentration in the broader private sector.² Chemical equipment operators, production supervisors, machine operators, industrial mechanics, and quality-control technicians make up a meaningful share of biotech employment, all accessible through adjacent industry sectors and educated through certificate or associate-degree programs.⁵

The economic multiplier is documented. Every direct U.S. bioscience job supports an estimated 3.48 additional jobs through indirect supply-chain and induced household-spending effects.² A 500-job biomanufacturing cluster in Arkansas would translate into roughly 2,240 total jobs once the multiplier is applied, representing a meaningful injection into a state where median household income still ranks 47th nationally and where 22% of children live in poverty.

The Growth Gap: Arkansas vs. Its Neighbors

Arkansas is keeping pace with the growth rates of some of its close neighbors, but it lags in development. The state's 16.1% bioscience employment growth since 2019 outpaces the U.S. rate, but the absolute base remains small relative to neighbors that have invested in coordinated bioscience strategies. Texas employs roughly 12 times as many bioscience workers as Arkansas, and Missouri employs more than 3 times as many. Alabama, with a coordinated push around the University of Alabama Birmingham Heersink School of Medicine (UABSM) and Southern Research, has grown its bioscience employment by 26.3% since 2019, the fastest rate in the Southeast.

On research-intensity metrics, the gap widens. Arkansas ranks 42nd nationally in total state R&D expenditures and 47th in R&D intensity, with R&D accounting for 0.71% of state GDP, compared with a 3.36% national average.⁶

Building a Skilled Workforce

A bioscience strategy without workforce infrastructure does not work. Leading states have invested in crucial K-12 STEM pipelines, community college certificates, and registered apprenticeships aligned with industry demand.⁵ Georgia's Biotech Teacher Training Initiative is in its seventh year, and Ohio is building a statewide network of community-college biomanufacturing programs through a $30 million, five-year JobsOhio investment. North Carolina runs the Biomanufacturing Research Institute and Technology Enterprise (BRITE) program in drug discovery, and Maryland's Employment Advancement Right Now (EARN) program funds employer-led workforce partnerships. Each state has responded to well-documented employer demand and has leaned in on workforce development as a strategy for economic prosperity.

Through institutions such as UAMS, the UA Fayetteville, the UA Pine Bluff, UA Division of Agriculture, ASU, University of Central Arkansas, and twenty-two community-college systems across the state, Arkansas has a strong institutional base with multi-regional implications. Through coordinated efforts and a clear path for upskilling our skilled and advanced manufacturing workforce, the state can deliver biomanufacturing certificates, lab-technology training, and quality-assurance programs within a 12-to-18-month build period. This also provides unique opportunities for technician-level workers to gain exposure to deeper scientific topics, which can lead to a non-traditional shift into advanced scientific positions, further growing our native scientific talent pipeline.

The HIRED workforce program announced in 2024 (an $88 million state investment) has already begun directing resources to bioscience-adjacent sectors, including a $2.75 million award to Southern Arkansas University to support workforce development tied to the Smackover lithium and bromine corridor. A program that can serve as a template that can be replicated for biomanufacturing and chemistry, manufacturing, and controls (CMC) certification programs.

For a state where 22% of children live in poverty, accessible pathways into $90,000-plus careers represent both an economic strategy and a generational equity intervention.

The Research Multiplier: What Arkansas Already Has

A bioscience ecosystem strengthens the research capacity and outlook of a state's universities. Faculty researchers gravitate to institutions with commercialization infrastructure that supports their work, and the cycle compounds. The ecosystem attracts faculty and industry partners, offers high-powered faculty and industry open opportunities for funding, provides diverse funding mechanisms that enable translational research leading to spinouts, and spinouts deepen the ecosystem and its national credibility. Arkansas already has measurable momentum in this cycle, even without a coordinated state strategy.

Arkansas NIH funding nearly doubled from FY 2019 to FY 2023, rising from $58.5 million to $105.7 million. UAMS receives roughly 80% of NIH funding awarded to Arkansas grant recipients, totaling between $70 million and $75 million annually. ACH is the second-largest recipient, with $20.3 million in 2024.²⁷

Major awards over the past two years signal where the institutional research base is strongest. UAMS secured a $31.7 million, seven-year Clinical and Translational Science Award (CTSA) in July 2024, renewing the Translational Research Institute through 2031 and adding linked K12 and T32 training grants. The Arkansas IDeA Network of Biomedical Research Excellence (AR INBRE), led by UAMS with UA Fayetteville and ACH Research Institute (ACHRI) as partners, secured an $18.4 million, five-year IDeA P20 grant from NIGMS, plus a $310,000 maternal health supplement. UAMS and Louisiana Tech were jointly awarded a $3.04 million National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) award in September 2024 to address inappropriate feeding practices at 80 early childhood care sites across Arkansas and Louisiana.⁸

The Institutional Research Footprint

In FY 2024, Arkansas's two flagship research institutions reported the following federally captured research expenditures through the National Science Foundation (NSF) Higher Education Research and Development (HERD) survey:

UAMS: $226.8 million in total R&D expenditures, 100% in life sciences, with $102.9 million from federal sources. Biological and biomedical sciences accounted for $67.3 million; health sciences $158.3 million.⁹ UAMS internal reporting puts total extramural research funding at $173 million in FY 2024, up 14.6% year-over-year, with roughly $75 million from NIH alone.⁷

University of Arkansas (Fayetteville): $230.6 million in total R&D expenditures in FY 2024, with $98.1 million in life sciences (including $72.1 million in agricultural sciences and $10.3 million in biological and biomedical sciences) and $7.5 million in bioengineering and biomedical engineering. Federal sources funded $95.8 million.¹⁰

Together, those two institutions invested $324.9 million in life-science R&D in a single year, with the federal share alone exceeding $200 million. That figure does not include the broader ABI consortium, ASU (Carnegie R2 reaffirmed in 2025), UA Little Rock, UAPB, the ACHRI, or the UA Division of Agriculture's agricultural research footprint.

Arkansas Biosciences Institute: A Working Model

The ABI, funded under the Tobacco Settlement Proceeds Act of 2000, is the closest existing analog to a coordinated bioscience entity in the state. ABI receives roughly $11.5 million in state funding annually and supports research at UAMS, ACHRI, the UA System Division of Agriculture, UA Fayetteville, and ASU. In FY 2024, ABI investigators secured $61 million in extramural grant funding against that $11.5 million budget, a leverage ratio of $5.30 per state dollar.³

In September 2025, ABI announced that cumulative extramural funding had crossed $1 billion since the consortium's establishment. ABI funding directly supports 210 full-time-equivalent research positions, recruited 6 new investigators in FY 2024, and generated 19 patent filings in the same year.

While the ABI model has demonstrated sustained growth, the proverbial ceiling, however, is being hit. ABIwas designed as a research consortium, not an ecosystem builder. It does not provide wet-lab incubatorspace, late-stage commercialization capital, or a coordinated job-creation incentive structure, and thereforenecessitates an independent and centralized coalition to further broaden the impact and position ofArkansas' bioscience research community.

Clinical Trial Footprint

Arkansas hosts a substantial clinical research infrastructure anchored by UAMS, ACHRI, the VA Medical Center system, and an expanding accelerator-driven trial network. An analysis of Arkansas clinical trials between 2000 and 2025 identified 6,872 ClinicalTrials.gov records associated with Arkansas locations across all phases and statuses since the registry's inception. The UAMS Translational Research Institute, operating since 2009 under continuous CTSA funding, is the central hub for multisite clinical trial expansion in the state, and the 2024 award renews this through 2031.

Kansas City, MO/KS: The Animal Health Corridor

Kansas City's biotech identity began to take shape in 2005, when regional leaders organized the metro's animal health assets into a deliberate economic development strategy that would become BioNexus KC. The Kansas City Animal Health Corridor stretches from Manhattan, Kansas, to Columbia, Missouri, and now includes more than 300 companies. Member companies account for 56% of total worldwide animal health, diagnostics, and pet food sales, totaling $10.5 billion in annual regional GDP and more than 22,000 direct jobs.¹⁵

In 2023, Kansas City earned a federal Tech Hub designation for inclusive biologics and biomanufacturing, led by the KC BioHub consortium. BioNexus KC, BioSTL, and the Missouri Biotechnology Association also secured a $2 million state workforce training grant to launch a statewide bioscience career initiative.

The Incentive Landscape: Arkansas vs. Its Competitors

Arkansas has functional incentive programs through the AEDC. Advantage Arkansas provides state income-tax credits for new-employee payroll under a $15.99-per-hour minimum wage. ArkPlus offers a 10% income-tax credit on total investment for new locations and expansions. Create Rebate provides annual cash payments based on new-employee payroll. The state R&D tax-credit program offers 20% on incremental in-house research over a five-year window, 33% for targeted businesses and university-based research, and 33% for strategic-value research, capped at $50,000 per year.¹⁹ Arkansas also offers SBIR matching grants and a manufacturing sales-and-use tax exemption.

Three structural gaps appear when programs are placed alongside neighboring states.

First, Missouri's QRE Program makes credits fully transferable, so pre-revenue biotech companies with no tax liability can sell credits for cash, with a 12-year carryforward. Arkansas credits are not transferable, which limits their value to early-stage companies precisely when they need it most.

Second, Tennessee's $4,500-per-job credit (doubled in distressed counties) and Oklahoma's Quality Jobs Program (cash payment of up to 5 percent of new payroll for ten years) provide direct cash-flow support during the capital-intensive startup phase. Arkansas's incentive structure is comparatively conservative.

Third, the $50,000 annual cap on Arkansas's strategic-value R&D credit is materially below what biotech R&D budgets justify. A modest seed-stage biotech typically runs $1 to $5 million in annual R&D spend; the $50,000 cap represents a fraction of 1% of that.

Workforce Incentives: Where Arkansas Leads

Where the tax-credit comparison shows Arkansas trailing its peers, the workforce-incentive comparison reverses the picture. Arkansas has assembled a workforce-incentive stack that few states match, and one that biotech site-selection analysts weigh as heavily as tax credits.

In December 2025, the U.S. Department of Labor selected Arkansas as the sole national administrator of the American Manufacturing Apprenticeship Incentive (AMAI) Fund, a four-year $35.8 million cooperative agreement supporting Registered Apprenticeship programs across more than 120 advanced manufacturing occupations. Biotechnology is named explicitly alongside aerospace and defense, automotive, shipbuilding, supply chain and automation, nuclear energy, and semiconductors as eligible sectors. More than 90% of Fund dollars flow directly to apprenticeship sponsors and manufacturing employers under a pay-for-performance model: $3,500 per apprentice following completion of a 90-day probationary period. The application portal opened January 28, 2026.²²

Two qualifications matter. The Fund is federally sourced and nationally distributed, so Arkansas-based biotech employers do not receive preferential access to the $3,500-per-apprentice dollars; this is available to all eligible state employers. The Arkansas advantage is administrative capacity, employer fluency, and the signal value of being chosen to run the national program, rather than exclusive funding access. The selection itself, however, reflects what the Department of Labor recognized as a workforce system already differentiated from peer states.

That system extends well beyond AMAI administration and expands upon the HIRED workforce program, an $88 million state investment launched in 2024, which has begun directing resources to bioscience-adjacent institutions, including the LiTHIUMLEARNS technical pipeline, which operates as a template that can be replicated for biomanufacturing within the same 12-to-18-month build period referenced earlier in this report.

Arkansas LAUNCH, the state's skill-based jobseeker-employer matching platform, has engaged nearly 12,000 users since launch, with 125 employers posting nearly 6,000 job opportunities and more than 100,000 statewide searches conducted. Recent state legislation designating Arkansas as a State Apprenticeship Agency further consolidated the state's authority to register, modify, and scale apprenticeship programs without federal intermediation, which is the structural credential that made the AMAI selection possible.²²

The composite picture is that Arkansas's workforce infrastructure is ahead of its tax-credit infrastructure. The asymmetry mirrors the broader pattern documented throughout this report: the state's research base, agricultural infrastructure, and now workforce systems are stronger than the company-creation pipeline that should be drawing on them. Closing the tax-credit gap while leveraging the existing workforce lead is the most efficient path to a competitive incentive package, because the harder asset to build, the workforce system, is already in place.

For biotech site-selection conversations, the implication is direct. Arkansas can offer a stackable package of state tax credits, federally-funded apprenticeship completion incentives administered by the state, dedicated workforce training funding through programs like HIRED, and a streamlined State Apprenticeship Agency pathway. The package competes with peer states even before any modernization of the AEDC tax-credit structure. With modernization, the package becomes regionally distinctive.

National Security and Strategic Positioning

The NSCEB, established by Section 1091 of the FY 2022 National Defense Authorization Act (NDAA), has identified biotechnology as a critical national security domain spanning health security, food security, defense, and supply chain resilience. China has prioritized biotechnology as a strategic national priority for two decades, investing approximately $2.6 billion in public R&D in 2023.¹

In December 2025, NSCEB issued its update on U.S.-China biotechnology competition, concluding that the previously stated three-year window for U.S. policy action is closing faster than anticipated. In 2022, only 5% of pharmaceutical licensing deals with upfront payments of $50 million or more went to Chinese companies. By Q1 2025, that share was 42%, and Chinese drug candidates are projected to account for 35% of FDA approvals by 2040.

State action is now part of the federal posture. The Federation of American Scientists has argued that a top-down federal approach alone will not generate the needed pace of growth, and that regional micro-bioeconomies tailored to local strengths are essential to the U.S. response.²³ The Biotechnology Innovation Organization (BIO) has made the same argument: if states fail to replicate the most successful biotech-focused economic development policies, the U.S. will lose its long-term leadership in medicines and medical technologies,²⁴ among other sectors.

Federal investment follows the state strategy. EDA Tech Hub designations, NSF Biofoundries, BioMADE biomanufacturing grants, and NIIMBL biopharmaceutical manufacturing investments are all routed through regional consortia. BioMADE alone deployed $75 million across 65 projects in 2024 and has cumulatively funded over $170 million in projects since 2021.²³²⁵ Birmingham, Kansas City, Oklahoma City, and others have already secured Tech Hub designations, while Arkansas has not.

For Arkansas, the alignment is natural. The state's agricultural biotech strengths map directly to national food security priorities. UAMS's population-health platform, integrating electronic health records with the all-payer claims database, remote telemetry, retinal artery scans for coronary assessment, and AI-driven virtual nursing, connects to health security. The NSCEB's emphasis on regional biomanufacturing capacity and resilient supply chains creates a framework in which Arkansas's research and agricultural assets become nationally strategic rather than merely isolated state-level programs.

Federal Policy Disruption: The Near-Term Variable

On February 7, 2025, NIH announced a 15% cap on indirect cost (IDC) reimbursement, applicable to existing and new grants. The policy is currently enjoined; the order was upheld on appeal in January 2026, and Arkansas was not a party to the 22-state attorneys general lawsuit challenging the cap.

Were the cap to take effect, projected institutional impacts (per institutional disclosures, February 2025) would include:

UAMS: estimated $10 million-plus annual loss. The current IDC rate at UAMS is 37%, supporting building maintenance, utilities, and grants administration. Total non-Arkansas funding to UAMS is approximately $173 million annually.

Arkansas Children's would lose a substantial portion of its $20.3 million in NIH funding.

UA Little Rock: In FY 2024, UALR had $505,265 in direct grant expenses from NIH plus NIH flow-through from UAMS, with an average IDC recovery rate of 30 percent. The 15% cap would have reduced the first-half FY 2025 IDC recovery by $41,327.

Beyond the IDC cap, broader FY 2025 NIH grant policy changes include a slower obligation pace, a new centralized grant review process announced in March 2025, multiyear award funding policy changes, and an August 2025 GAO determination that HHS violated the Impoundment Control Act by withholding NIH funds. Total FY 2025 NIH spending on awards exceeded the FY 2022 to 2024 average despite fewer total awards, but the FY 2026 obligation pace remains slower through Q1.⁴

Federal policy uncertainty does not change the Arkansas thesis; rather, it strengthens it. A state that has built more research and ecosystem infrastructure than its current company creation pipeline can fill is the right candidate for state-level investment in the front end. The federal environment is increasing the urgency and need for state-level action.

A Path Forward for Arkansas

Arkansas does not need to start from zero. It needs a coherent strategy to connect existing strengths and close the specific gaps revealed by the data. The state's research base, agricultural infrastructure, and workforce systems are ahead of its tax-credit structure and its company-creation pipeline. The actions below are sequenced to close that asymmetry. These seven suggested actions merit close consideration.