The future of the Life Sciences Industries - Marguerite Larkin
For many, the life sciences industry in Ireland was seen as an industry that had weathered the storm of recession quite well; no significant bankruptcies or government bailouts to talk about, continued investment in the sector albeit at lower levels – including government funding, and more and more students entering life sciences in third level institutions. However, the drive to cut costs combined with a lack of liquidity in the capital and debt markets is impacting on the level of investment in R&D and innovation – the pulse of the life science industry.
Marguerite Larkin, Head of Life Sciences at Deloitte Ireland comments: “Irish subsidiaries of large multinationals are facing increasing competition from within their own organisations for financial resources, and the threat of emerging markets is forcing them to cut costs and work more efficiently in order to compete.”
However, as our recent global Deloitte report ‘The future of the life sciences industries’ highlights:
“It will be companies that can sustain their focus on innovation who will be the eventual winners. Therefore it is vital that Irish subsidiaries of multinationals respond by competing aggressively for new investment, R&D spend and new product development. Irish indigenous and mid market companies should focus on collaboration with both similar companies within the industry and larger players as joint ventures, alliances and outsourced R&D agreements become more prevalent.”
Key to this is the significant challenge of attracting funding for new product research as many of the institutional and venture capital funds investing in Ireland are looking for projects and products that can provide an early return on investment.
One of the other factors influencing the location of innovation projects is the tax regime and other supports for innovation in a particular country. In recent years, a number of improvements to Ireland’s tax regime to support R&D and innovation have been implemented, which is positive as the competition is constantly evolving.
A successful and dynamic life science industry is an important element to Ireland’s recovery, and in order to bolster our standing in the international industry, it is clear from this report that the focus in Irish companies firmly needs to be on innovation.