The UK government recently published its 10-year strategy for life sciences, declaring the sector “one of the great drivers of growth in the twenty-first century.”
For many years, life sciences has been pinpointed as one of the world's most valuable and important industries. With it playing a pivotal role during the Covid-19 pandemic, coupled with digitisation broadening the horizon of new possibilities, the future of life sciences is brighter than ever.
As the sector enters an exciting growth phase, there’s a growing acknowledgement that several barriers need to be overcome in this new post-pandemic world. Here, we explore the plans outlined in the government’s Life Sciences Vision strategy and some of the challenges that must be tackled for it to become a reality.
The report states that the provision of skills is “essential to delivering better health outcomes, building the UK’s health resilience, as well as boosting productivity and driving forward areas of strength in life sciences, including genomics, clinical trials, and artificial intelligence.”
According to the Science Industry Partnership, the life sciences sector has the potential to create around 133,000 jobs through replacement and growth by 2030. Along with skills in bioinformatics, clinical pharmacology, regulatory science, engineering and material science, complex manufacturing and advanced therapies, the sector requires digital, computational, statistical literacy, translation and commercial skills.
It’s no secret that the life sciences sector faces significant skills shortages, with Brexit exacerbating the issue. Prior to the UK leaving the EU, freedom of movement meant businesses could freely hire EU workers. Now, the new immigration system means life sciences businesses require a sponsor licence to broaden the pool of available talent.
As part of an eight-point plan, the UK government report highlights the Global Talent visa as key to ensuring a free flow of global life sciences talent across Europe. Additionally, it details efforts and incentives to attract talent, including boosting the proportion of the apprenticeship levy recovered by life sciences from 24% to surpass the national average of 31% and driving up the provision of apprenticeship training in the sector.
Collaboration remains key when it comes to tackling skills shortages. For life sciences to fulfil its growth potential, government, industry and academia must come together to establish the career pathways, development opportunities, transferable skills and rewards that will entice both new and established talent into the sector.
Access to Finance
Across Europe, there’s a number of initiatives that look to create attractive locations for starting and growing a life sciences business, such as the UK, Netherlands, and Germany. With key growth a target for many, access to finance is key. However, innovation in the sector is often a long-term, capital-intensive process, meaning organisations are heavily reliant on long-term investment to grow.
The Life Sciences Vision report acknowledges that there’s currently a shortage of this type of capital, particularly at the later stages. So, while there’s a robust pipeline of entrepreneurs and SMEs, those ready to scale are hindered. It’s led to a reliance on overseas investment, with the US becoming the primary source of capital.
There’s a sizable disparity between access to finance in countries such as the UK and the US. For example, since 2016, there has been an increase of 201% in the average size of private capital raised in the US VC markets, compared to 61% for the same period in the UK. It presents an issue for some life sciences locations as companies seeking finance from the US are more likely to move or relocate a portion of their operations stateside to be closer to investors.
It’s not the only reason some firms are booking a one-way trip across the Atlantic. The report states that life sciences businesses going public on the Nasdaq will, on average, net a valuation 20-30% greater than on London’s public markets.
The government has outlined a series of interventions to improve the availability of capital, including £200m in funding through the Life Sciences Investment Programme. An additional £800m commitment has been made through the UK-UAE Sovereign Investment Partnership, with plans to establish a scale-up task force to help life sciences companies start, grow and scale up in the UK.
Building a Diverse Workforce
It’s no secret that building diverse workforces is high on the agenda for many life sciences companies. Whilst gender diversity is fairly equally distributed, with 45% of females at companies surveyed by BIO currently in roles at life sciences organisations.
However, representation of ethnic diversity stands lower at 32% for total employees, with a bigger disparity at executive and board levels - 15% and 14% respectively.
BIO highlights that diversity and inclusion in the life sciences are still in the early stages, with the numbers showing progress in some areas, but there is definitely a stark need to improve. Building a diverse workforce, or lack thereof, could indeed prove to be a barrier to growth for life sciences companies; as a diverse workforce attracts a wider talent pool, and is proven to increasing customer satisfaction, being unable to offer employees a diverse workplace may be a key block to the growth of an organisation.
There are over 2,000 life sciences manufacturing sites across the UK alone. While seemingly impressive, this represents a significant reduction over the last twenty-five years. Since 2009, production volumes have fallen by 29%, and over 7,000 jobs have been lost.
The government and sector’s ambition is to drive a renaissance in UK manufacturing over the next decade. The report outlines a levelling up agenda, with plans to develop new and existing manufacturing centres across the UK.
Such plans for an increased manufacturing presence are compounded with an already high demand for life sciences facilities, which has been growing steadily over the past decade. Furthermore, the Covid-19 crisis has heightened the need for increased research and diagnostic capabilities.
Such is the demand for new real estate assets that the sector faces a construction bottleneck. In addition, plans for life sciences facilities are becoming increasingly complex. The pandemic has altered the traditional working environment and accelerated digital transformation, which, in turn, has changed the nature of certain roles in the sector and called for skills not previously on the agenda before 2020.
To add an extra layer, considerations must be made to create spaces with a low carbon footprint. This is a particular challenge when developing life sciences buildings, which are notoriously energy-intensive. Not only will modern construction and redevelopment of existing spaces require greater levels of investment than ever before, but any SMEs and entrepreneurs looking to enter the field will likely pay a premium to rent space, which could prove to be a barrier.
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