Adapting to the new normal in life sciences
Following years of growth and favourable market trends, the global life sciences industry now finds itself facing a ‘new normal’. By any measure it is still a stand-out performer globally, and a key strategic area for the EMEA region. However, markets are changing.
Life science companies must adopt new business models to achieve the following:
- Counter slowing sales growth
- Stem profitability challenges
- Deliver patient outcomes that reflect higher consumer expectations
- Position the industry for future success and innovation
Making these adjustments successfully will come down to individual companies’ ability to find, engage and retain the right people. For the most part, the challenge is about talent and the ability of each organization, regardless of location, to source it. Here are just three key statistics shaping the industry over the next few years:
1. Pharmaceuticals face a future with lower growth: the combined US and Eurozone share of spending will shrink from 61% in 2005 to 44% in 2015. Yet, the world’s pharmaceutical market is growing. It was worth an estimated 614, 583 million Euros in 2011.
2. Generics are on the rise: The number of ‘generic equivalents’ occupying a position in the top 10 prescription drugs in the U.S. increased from 2 (in 1990) to 6 (in 2003).
Life science companies are facing significant market shifts and challenges to their existing business models. The market is growing, but not in the ways it did previously.
The need for new business models (from mass market to niche and targeted) translates into the need for different skill-sets, and new pools of talent across more geographical locations. It also requires companies to change the way they operate, as well as how they engage with the communities they operate within.
If the Life Sciences industry is to become the destination for talent that it simply must become to meet its challenges, it should engage the broader talent community in its mission to deliver better, faster and more personalized health solutions.
The key issues for attracting and retaining talent in the industry are:
- Engaging with talent clusters: R&D and STEM skills have formed regional and local clusters that are often self-reinforcing. Investment in a specific location often leads to more investment, which attracts more talent as well as more competition. Companies need to find ways to access the talent within these clusters and to develop new clusters where required without always needing to compete for the same talent in the same locations. Building their own talent pipeline requires longer-term planning and analysis, and new partnerships.
- Distinguishing between productivity and cost-cutting: Boosting productivity and output must be done through innovative workplace practices. Low staff ratios in critical research and development roles leads to high turnover and higher recruitment costs overall. The need to lower costs is real, but it must be achieved sustainably.
- New skill-sets to open dialogue and improve collaboration: Consumer demands and expectations are changing, and the kinds of skill-sets required must adapt to address these.
- Competition must be balanced with community needs: Clearly, organizations need to maintain competiveness in the industry while improving the ways in which solutions are delivered to communities – competition must not come at the expense of faster, better health solutions, and collaboration across traditional competitive landscapes is critical to addressing this. Addressing community concerns through innovative business models is critical to rebuilding trust and engaging new talent pools (as well as new consumers).