Headwinds for R&D a reality
Strained public purses and regulatory barriers continue to put pressure on R&D investment in Europe, and emerging economies are gaining a greater share of this investment worldwide.
For life science companies in the Eurozone, the challenge is to invest wisely in R&D activities – to combat some of the other significant challenges facing the industry – while keeping costs contained and becoming more competitive.
Although the Treaty of Lisbon target of assigning three per cent of EU gross domestic product (GDP) to research and development activity by 2010 was not met (largely due to broader economic factors), it remains one of five key targets in the Europe 2020 strategy.
Governments and businesses know that R&D investment is a clear determinant of the overall strength of the pharmaceutical market, as shown by the following graph comparing R&D investment in the EU with that of the US and Japan. However, even though some individual countries are investing heavily in R&D activities namely Finland (3.87% of GDP in 2010), Sweden (3.42%) and Denmark (3.06%)—the concentration of investment is disparate and inequitable across the region.
Eurozone life science companies are facing constraints in some local markets given the large variations in investment across the region. Lifting the longer-term outcomes for the industry partly depends upon more effective and innovative R&D investment decisions.
However, it no longer appears that governments alone can change the dynamics associated with R&D investment across the region, so companies themselves must focus on finding innovative solutions to meet the R&D challenge and boost competitiveness. Among these solutions must be innovative approaches to accessing R&D talent that has traditionally been concentrated in specific locations (where investment is high).
Better management of the R&D talent supply chain will require new collaborative models of research and access to a global talent network that can deliver knowledge and insight across geographical boundaries.
The headwinds facing R&D investment in the traditional strongholds of Life Sciences (the Eurozone and the U.S) are just one factor in many reshaping the industry. To find out about the other major trends, see the full report here: Making Life Sciences a Magnet for Talent