It’s this focus on sales, investment and increasing commercial capabilities that will drive the year on year growth of the industry and make life sciences once of the country’s most important sectors.
The insights were gathered from small and medium sized enterprises across the country through its annual survey designed to better understand the key priorities, challenges and skills needed in the community. Respondents were from a range of subsectors including Pharma Services & drug discovery, MedTech, Industrial Biotechnology and Animal Health, Aquaculture & Agritech.
When asked what the single biggest priority for the organisation was in 2019 and beyond, the most common response amongst life sciences enterprises in Scotland was to accelerate sales performance. Over half of the companies that took part said their biggest priority was to grow the sales revenues from existing products and services or to prepare for a successful commercial launch of a new product. A further 16% reported that the most important thing to their business in 2019 and beyond was to find the right partner or joint venture in order to scale the business.
The extent of the ambition raises a number of challenges for small life science enterprises and the survey uncovered four key areas that businesses are looking to develop in order to achieve their commercial goals.
Securing investment and funding for research remains front of mind for many life science enterprises and continues to be a critical success factor for the sector. The ambition has been raised in this respect too – for those businesses looking to secure funding beyond 2019, over a quarter reported that they were aiming to secure over £1m of investment in order to achieve their growth ambitions.
Identifying and engaging the right clients was reported as one of the most important challenges on which businesses are working. Furthermore, in order to generate the right client base, businesses reported they needed to increase their presence in the national and international market. This is a particular challenge when the team is small, and any budget is ring-fenced for technical research and product development.
Whilst the survey results showed there is little concern around finding the right scientists for product research and development in Scotland, finding the right people for commercial capabilities was one of the challenges reported. This is a clear reflection of how integral the sales performance and commercial strategy is to life sciences enterprises in Scotland.
This year’s survey has shown a shift from a focus on scientific skills to developing both technical skills and commercial skills in order to keep up with a fast-moving market. In fact, the most common skills development needs reported in the survey were related to commercial capabilities. When asked what the team’s two most important skills development needs were, increasing sales and business development effectiveness and marketing strategy development were the top responses. Half of the respondents also reported that technical skills to develop IP and keep up with a fast-moving market were vital to the business.
The key strengths that exist in the sector continue to provide value to life sciences enterprises located in Scotland. Nearly three quarters of the companies that took part in the survey said that their business had benefited from the quality of talent and world leading research emerging from the Scottish Universities. Two thirds attributed their success to the guidance, expertise and funding they had received from the support agencies and innovation centres in Scotland. The Biohubs and incubators across the country also add great value to businesses with a quarter reporting they had benefited from the support and networks that come from being based in locations such as BioCity, Edinburgh BioQuarter and The Clinical Innovation Zone.
Nearly a fifth of respondents reported that had benefited from the unique healthcare infrastructure and the opportunity to collaborate with NHS Scotland. In fact, the appetite for collaboration and networking across the whole of the sector including the NHS, academia and industry remains an important strength in Scotland with a quarter of businesses claiming that their business had benefited from this culture.
The survey uncovered the specific implications life sciences enterprises expect Brexit to have on their business. As a truly international sector, some of the most common concerns were related to the impact Brexit may have on employing high calibre scientists, leaders and commercial teams from across Europe. Plus, nearly 30% of respondents operate in a regulated market governed by EU laws or trading bodies and were concerned about the impact on operations.
In addition, nearly half the respondents reported they were concerned there will be less funding available with an additional 26% specifically concerned that there will be complications accessing venture capital from Europe.
Half of the respondents rely on either exporting to or importing from the EU. For the life sciences enterprises that export to the EU, they reported concerns that there will be delays in their ability to ship. Similarly, for the companies that import from the EU there were concerns about delays and stock shortages and the impact this could have on a small business.
However, there were some companies (nearly 20%) that had identified new opportunities provided by Brexit. For some, their main competitors are from the EU and the UK market had begun to look for more local contractors in order to maintain the supply chain. Others reported that they export to or collaborate with organisations in the US, Asia and the Nordics and that Brexit was likely to provide new opportunities for these relationships.
Both the 2019 and the 2018 survey highlighted an appetite for networking and collaboration across the sector. Companies in Scotland’s life sciences industry recognise the unrivalled opportunities they have to work with academics and NHS researchers to develop and commercialise innovations that add value to society. They are supported by a unique ecosystem of enterprise agencies, innovation centres and Biohubs and the support and physical infrastructure they provides the sector is clear. It’s this foundation and the momentum being generated by the SMEs in Scotland’s life sciences sector that will drive success and realise the ambition of start-ups, scale-ups and the sector as a whole.
For Scotland’s life sciences industry to reach its ambitious target of increasing turnover to £8bn by 2025, it’s crucial that the whole sector grows. Life Sciences Scotland aims to support the growth ambitions across the sector by providing information, news and events that support and inspire your business.
Source: Life Sciences Scotland