Biopharmaceuticals:Priority Sector Report

The Biopharmaceuticals emerging industry is the result of an evolution of the traditional pharmaceutical industry that emerged in the late 1800s, mainly based on chemical production. The industry has incorporated the more recent emergence of biotechnology developed on living cells and molecules, stemming from key innovations in the 1970s and 1980s. Today, the global biopharmaceutical industry is a momentous driver of scientific advancement, and the source of innovative medicines addressing a wide range of human health-related needs around the world. Europe’s employment in Biopharmaceuticals is at 2.4 million people, which is the lowest figure among the emerging industries. However, both wages and gross value added are significantly higher than in other industries (by 50%) and then in the overall economy (by 90%), suggesting very high levels of productivity. In 2016, the average wage in Biopharmaceuticals was 50 800 euros with specialised clusters showing a 7% wage premium over other locations. From 2011 to 2016, the employment has grown 0.6% and the wages 0.9% per year on average – the growth rates having been higher in specialised clusters than in other locations. Biopharmaceuticals have already started undergoing significant changes because of the demographic shifts. Population ageing, in particular, creates opportunities of new products and service development and applications in the biopharma field. Constantly-rising healthcare and elderly care costs force nations to rethink the healthcare model and invest more in health-supportive activities to prevent lifestyle-related diseases. Consumers and patients will have a more participatory role in healthcare. New tools are needed to support a healthy lifestyle and to add more personalized, preventive and predictive actions in the healthcare system. There is also a need to optimize the healthcare process at all levels. The core of Biopharmaceuticals employment lies in Southern and Western Germany, Belgium, Ireland and Israel. Most of the strong regions in the industry are located in these countries as well as in Denmark, France, Italy, Norway, Spain, Sweden and the United Kingdom. The strongest ones, holding the maximum of 15 Cluster Stars, are located in Belgium, Norway, Sweden and the United Kingdom. The regions specialised in Biopharmaceuticals perform well in a number of economic indicators. As one can imagine, labour productivity is on a high level. These regions have numerous products and processes, and marketing and organisational innovators, and score high on high-technology employment. Labour force participation rate as well as digital engagement are on a high level. On the other hand, compared to other emerging industries, both start-up and scale-up rates are relatively low among these regions with specialised clusters. However, the regions with specialised clusters locate a much higher rate of global frontier and high growth firms and rapidly growing start-ups than other locations. The SME performance in Biopharmaceuticals is especially high in countries like the Bulgaria, Romania, Latvia, Lithuania with strong hot spots in a number of European capital regions. The most innovative, global frontier, firms are much more concentrated on a small number of areas. Those can be found in Belgium, Northern Italy, the United Kingdom and in capital regions such as Stockholm, Wien and Copenhagen