Europe’s research and development (R&D) ecosystem is undoubtedly evolving. Many of the key aspects that define R&D in the region are changing, from funding and patent law to competitive pressures and business practices. These changes are converging to create a new set of challenges, threats and opportunities for R&D-driven organizations. What are the key changes, and how will the industry respond?
Funding cuts have arguably been the most news-grabbing issue in recent months, and a source of significant worry for Europe’s scientific research community — particularly the decision to cut $2.4bn from the EU’s flagship research program, Horizon 2020. The debate has been particularly heated in the UK, where industry stakeholders have campaigned against expected spending cuts in the government’s upcoming spending review. Even the UK’s biotech sector, which has enjoyed an investment boom in the past year, is at risk. In contrast, the US aims to increase its National Institutes for Health budget by almost $9bn over the next five years, and infrastructure investment has fostered thriving research hubs in Boston and San Francisco. China is pushing even further ahead, surpassing the US in attracting foreign investment into R&D; the country’s publicly funded R&D is also on the rise — so Europe could be seen as a shrinking R&D center as others invest to grow.
Patent volumes have been taken as proof that the US and China are racing ahead of Europe. A forthcoming unitary patent system for Europe may help to turn the tide by cutting the costs of filing and defending patents, but even then there are associated risks. Losing a patent under the new system will mean losing exclusivity throughout Europe, rather than an individual country. However, the US also faces a new IP challenge, with the Trans-Pacific Partnership agreement bringing a considerably shorter period of exclusivity on biologic drugs. Trade bodies have rightly warned it may have a sizable negative impact on investment and the development of breakthrough treatments: R&D organizations may not be able to recoup their investments.
Finally, Europe also faces a looming skills crisis. Research from the European Commission highlighted the growing threat of a mismatch between need and availability of skilled scientists, researchers and engineers. Demand for human capital is rising sharply, and the region could require an additional 16 million highly qualified people between now and 2020. Just as industry is looking more to academia to tackle R&D research projects, it may well be key to unlocking the talent challenge, too. Beyond this, other obstacles for Europe remain. Could the answer be overcoming a timid approach to risk? It is, according to Anne Glover, who recently stood down as the EU’s chief scientific advisor — though the EU’s fragile political system may limit any desire for a less risk-averse approach.
Time will tell whether Europe can remain at the top table of global R&D, but one thing is clear: technology and different thinking will play a key role. European research organizations and academic bodies that embrace intelligent new technologies to bring speed, simplicity and accuracy to the way they work together, will give the region the best chance of success in the long run.
Paul Denny-Gouldson is VP of Strategic Solutions at IDBS.
