What the Modern Industrial Strategy can mean at a local level – (1) Life Sciences
The government is preparing an industrial strategy and it will focus on the sectors which offer the highest growth opportunity for the economy and business. Eight growth-driving sectors have been identified. Mickledore has considered the drivers of change in these sectors and the implication for business support and investment.
What are life sciences businesses?
As ever umbrella terms can muddy our ability to focus on the local businesses and investment opportunities. The life sciences industry encompasses businesses and organisations focused on improving and protecting life through research, development, and manufacturing of products related to health, biotechnology, and related fields.
In terms of growth potential, it is useful to consider the industry in terms of healthcare, medical devices, pharmaceuticals and biotechnology. On this basis, every area of the UK has the potential to grow the sector.
Drivers of change
- Demand is growing. A growing and ageing population combined with the ability to offer a greater array of treatments will continue to drive investment in the sector for the next 20-30 years. The ageing population creates a number of different challenges for society but in terms of economic development the potential is very large both through healthcare provision and in terms of the inputs into the sector.
- Technology is advancing. Whether in prevention, diagnosis, treatment or recovery a combination of big data, genomics and digital technologies are driving change. In many of these areas we are only at the beginning of a revolution in the approach.
- Regulation and delivery is changing. Many of the changes in technology are likely to require different delivery structures and interconnectivity between digital devices and health practitioners. Health data can drive better predictability and prevention but creates ethical questions regarding confidentiality whilst increased personalisation of treatment comes with huge cost implications.
UK Position - opportunities and issues
The UK has a strong life sciences sector and the entire ecosystem which supports it. Many of the largest medical devices, pharmaceutical and biotechnology companies in the world are based in the UK and a handful (such as GSK, AstraZeneca, Smith & Nephew) are UK owned. The UK also has a track record in business start-ups in the sector. Brexit, however, has created a requirement for a separate regulatory approval in the UK from Europe – and in some cases this additional cost compared to the size of the market creates a disincentive for investment.
The unique structure of UK healthcare provision creates benefits and problems. As one of the worlds single largest health customers, the NHS is an attractor for those who can penetrate its labyrinthine structures. Conversely, however, as new healthcare delivery systems require an effective interface between increasingly digitalised providers and the deliverers of care, the traditional transactional approach of NHS procurement may hold back development and therefore investment.
Securing growth and investment at local level
Given the scale of growth required within the sector, every region of the UK has the potential to secure some economic benefits from the sector. There are some local steps which can be taken:
- There is a need to map the health activities undertaken within a local area and especially to understand any clinical strengths or centralised services that are provided. This will require engagement with the relevant parts of the NHS within an area.
- Growth in life sciences is only partly about discovery – in many more cases it will be driven by adapting delivery methods alongside the healthcare system. This is difficult to achieve but will deliver investment opportunities.
- Understand local research and any trials infrastructure and promote this with the relevant companies in the field.
- Recognise that as many businesses in life sciences are likely to be in data analytics as therapeutics in considering the attraction of investment.
- Embrace new delivery structures. It appears inevitable that independent providers of single treatment facilities will continue to grow either as NHS providers or in a private setting and that others providing therapies not routinely or easily available through the NHS will emerge. These represent opportunities for investment.
Conclusion
The term life sciences perhaps confuses the opportunity for growth in this area. Every local area of the UK has the potential to secure some additional investment in activities relating to healthcare. Outside of R&D and manufacturing this has typically been an area left to the NHS, but a stronger joint approach can secure local benefits and employment.
Mickledore is an economic advisory business focused on strategy, investment, business cases and evaluation. We have worked on sector strategies across the UK. For more information or a discussion about specific local circumstances contact Nigel Wilcock at nwilcock@regionaldevelopment.co.uk