Most Attractive Pharma R&D Location in Europe

www.global-arena.com August 7, 2012 1


Executive Summary

Location matter to business. Framework conditions, including market, talent and infrastructure factors affect business decisions when it comes to R&D center site selection. Recent reports and the PwC Global CEO Survey 2012 show that in particular talent related aspects are becoming more and more critical.

Despite a skilled labour force, high quality of life and a state of the art research Infrastructure Europe is hit hard by restructure plans closing or relocating pharmaceutical R&D centers in favour of US or Asian locations. As part of its Go-global solutions Global-Arena.com’s interactive analysis to the most attractive locations for pharmaceutical R&D centers location in

Europe unveils the comparative advantages of 19 European economies:

•  The United Kingdom, France and Germany offer the most attractive business environments for pharma R&D centers in Europe

•  The UK in particular offers an attractive environment, with above average scores on all location factors

•  Smaller EU countries such as Switzerland, Denmark, The Netherlands and Sweden rank high on specific aspects


Global Consolidation, Restructuring and Global Competition for Talent •  Fierce global competition the pharmaceutical industry causes industry

consolidation, rethink R&D strategy and reconsider global footprint •  Rising disposable income and health insurance schemes offer expansion

opportunities in Asia •  Lack of skilled labour causes global competition for talent • When it comes to relation or expansion a 360-degree real-time view and

performance monitoring of the market, business environment and local and global talent supply, including comparisons of tax systems is needed


Overall Attractiveness Ranking of European Countries for Pharmaceutical R&D

4%

7%

12%

18%

30%

30%

32%

38%

50%

54%

54%

57%

59%

60%

65%

75%

94%

94%

98%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Latvia

Estonia

Hungary

Portugal

Norway

Czech Republic

Ireland

Finland

Austria

Belgium

Denmark

Sweden

Italy

Netherlands

Spain

Switzerland

Germany

France

UK


Key Findings

•  The United Kingdom, France and Germany offer the most attractive business environments for pharma R&D centers in Europe. All three show competitive conditions in terms of market, talent and accessibility factors

•  The UK in particular offers an attractive environment, with above average scores on all location factors

•  Besides the biggest populated EU countries, Switzerland rank high due to its opportunities for collaboration with universities

•  Smaller EU countries such as Denmark, The Netherlands and Sweden rank high on specific aspects

Austria

Belgium

Czech Republic

Denmark

Estonia

Finland

France

Germany

Hungary

Ireland

Italy

Latvia

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

UK

Compe22on and Mass Tax Incen2ves Industry-‐University Interac2on Talent Supply World Class Knowledge Qualitz of Life Interna2onal Connec2vity Quality of ICT Infrastructure Capabili2es


Ranking Component: Competition and Mass

Data Series Used • Company information on locations of European R&D centers of listed pharmaceuticals in the Forbes 200 Pharmaceuticals • EU Cluster Oberservatory data on cluster size (number of companies)

Analysis • France, the UK and Germany offer of all included European countries the most attractive environment when it comes to a dynamic business environment. These countries are host to the most multinational pharmaceutical R&D centers and have the biggest pharma clusters. • Compared to the bigger EU countries, Switzerland ranks also significantly high on these aspects

18%

18%

19%

20%

21%

23%

24%

27%

31%

34%

41%

44%

44%

71%

79%

84%

95%

96%

98%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Latvia

Norway

Finland

Portugal

Estonia

Sweden

Czech Republic

Austria

Denmark

Ireland

Hungary

Belgium

Netherlands

Spain

Switzerland

Italy

Germany

UK

France


Ranking Component: Tax Incentives

Data Series Used • OECD data on:

• Direct government funding of business R&D projects • Indirect government support through R&D tax incentives

Analysis • When it comes to providing a financial supportive environment for business R&D projects, France ranks on top in Europe. The government offers a direct support of 15% tax reduction, combined with an indirect tax incentive of 23% for R&D projects • Latvia, Switzerland and Italy are the least attractive in government support and incentives for R&D

10%

10%

13%

22%

22%

28%

32%

37%

42%

49%

54%

62%

64%

66%

70%

73%

76%

78%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Italy

Switzerland

Latvia

Estonia

Finland

Germany

Portugal

Hungary

Netherlands

Denmark

Norway

UK

Ireland

Spain

Austria

Sweden

Belgium

Czech Republic

France

www.global-arena.com August 7, 2012

8

Ranking Component: Industry-University Interaction

Data Series Used • INSEAD and WIPO Global Innovation Index item on industry-university research collaboration

Analysis • Of the countries included Switzerland offers the most attractive R&D environment in terms of opportunities for the industry to collaborate with universities •  Finland, the UK and Sweden follow

3%

3%

13%

15%

21%

28%

34%

35%

55%

58%

61%

72%

74%

74%

79%

86%

88%

89%

91%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Latvia

Italy

Spain

France

Estonia

Hungary

Portugal

Czech Republic

Norway

Austria

Ireland

Netherlands

Belgium

Germany

Denmark

Sweden

UK

Finland

Switzerland


Ranking Component: Talent Supply

Data Series Used • Eurostat data on number of PhD’s in Life Sciences

Analysis • A sustainable talent supply is becoming more and more a critical success factor for companies. The biggest populated EU countries such as the UK, Italy and Germany offer the most attractive environment since they host the largest domestic stocks of highly skilled labour in life sciences • However, talent is mobile and countries like Switzerland, with a relative low domestic supply, attract many EU talent with its high quality of life and significantly higher salaries

23%

24%

26%

26%

27%

27%

27%

30%

32%

33%

34%

34%

34%

34%

80%

84%

92%

97%

99%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Latvia

Estonia

Norway

Denmark

Hungary

Finland

Netherlands

Switzerland

Belgium

Sweden

Czech Republic

Austria

Portugal

Ireland

Spain

France

Germany

Italy

UK


Ranking Component: World Class Knowledge

Data Series Used • QS World University Ranking for Pharmacy and Pharmacology data on:

• Number of listed universities in top 200 • Total score on academic ranking

Analysis • The UK and Germany rank on top on proximity to world class knowledge institutes in Pharmacy and Pharmacology • The UK is host to 25 listed universities in this area, with Cambridge, Oxford and Imperial College scoring top 10 position in the global ranking

19%

19%

19%

19%

19%

24%

33%

34%

35%

38%

39%

39%

51%

59%

64%

82%

89%

98%

99%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Estonia

Hungary

Latvia

Norway

Portugal

Czech Republic

Netherlands

Denmark

Sweden

Finland

Ireland

Austria

Belgium

Spain

Switzerland

Italy

France

Germany

UK


Ranking Component: Quality of Life

Data Series Used • Lonely Planet data on number of restaurants, shops and activities • UNESCO data on number of natural and cultural heritage sites • Yale University Environmental Performance Index • WHO data on number of homicides • Numbeo data on cost of housing and local purchase power

Analysis • Countries such as Germany, Italy and France offer the most most attractive talent environment with regards to the quality of life. These countries offer a favourable environment in terms of entertainment, healthy environment, security and cost of living • Austria, Switzerland, Sweden, Spain and the UK follow

1%

8%

14%

21%

25%

34%

35%

40%

42%

49%

49%

75%

76%

76%

77%

77%

89%

91%

92%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Estonia

Latvia

Belgium

Hungary

Portugal

Ireland

Finland

Denmark

Norway

Netherlands

Czech Republic

UK

Spain

Sweden

Switzerland

Austria

France

Italy

Germany


Ranking Component: International Connectivity

Data Series Used • Flight Connectivity Index data on number of international flights

Analysis • Germany, France and the UK rank on top in terms of international air connectivity. For international frequent flyers these countries offer the most international flights in Europe • Compared to the biggest EU countries, The Netherlands ranks high on this aspect too

9%

14%

14%

18%

19%

24%

26%

29%

29%

35%

53%

58%

67%

68%

83%

83%

94%

95%

96%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Estonia

Ireland

Latvia

Norway

Finland

Sweden

Hungary

Czech Republic

Portugal

Denmark

Austria

Switzerland

Spain

Belgium

Italy

Netherlands

UK

France

Germany


Ranking Component: Quality of ICT"

Data Series Used • World Economic Forum Global Information Technology Report items on:

• Mobile network coverage rate • Secure internet providers • International internet bandwith

Analysis •  Denmark, Switzerland, and the UK scores highest on aspects of quality of ICT • Of all included EU countries The Netherlands offers the most attractive business environment when it comes to international internet bandwith

5%

7%

7%

26%

30%

31%

33%

34%

35%

43%

50%

60%

63%

77%

79%

85%

93%

93%

94%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Latvia

Portugal

Hungary

France

Czech Republic

Austria

Italy

Spain

Ireland

Germany

Estonia

Belgium

Finland

Sweden

Netherlands

Norway

UK

Switzerland

Denmark


Ranking Component: Infrastructure Capabilities

Data Series Used • World Economic Forum Global Competitiveness Report items on Infrastructure:

• Roads • Railroads • Airport • Available airline seat kilometers

Analysis •  With regards to the infrastructure capabilities countries such as France, Germany, Switzerland, the UK and Spain offer the most attractive business environment: these countries all offer a state of the art road, rail and air infrastructure allowing people to travel easy

4%

7%

8%

14%

17%

25%

25%

46%

59%

59%

60%

64%

70%

76%

81%

83%

86%

92%

92%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Hungary

Estonia

Latvia

Italy

Norway

Czech Republic

Ireland

Portugal

Belgium

Sweden

Austria

Finland

Denmark

Netherlands

Spain

UK

Switzerland

Germany

France


Have a look yourself

Looking for the most attractive location with the most competitive R&D business environment?

Click here to visit the interactive analysis and to adjust the sliders and to learn more about our Go-global Enterprise Location Planning services


Appendices •  About Global-Arena.com •  Data sources


Global-Arena.com Global-Arena.com is the leading secure online matching platform that brings together companies, investors and business locations worldwide. Global-Arena.com offers innovative digital services and gives them a data advantage to save cost and time. With it’s Go-global solutions Enterprise Location Planning and Economic Development Planning Global-Arena.com is able to provide companies and governments an integrated 360-degree view and comparative advantages analysis of the market, business environment and talent supply by: •  Analysing and comparing the attractiveness of business locations in support of its clients growth strategies •  Searching and analysing growth, expansion and relocation opportunities worldwide •  Visualising scenarios of business and policy impacts based on real time economic statistics, trends and forecasts

To learn more about how Global-Arena.com can support your site selection or location promotion processes, visit our website www.global-arena.com or contact:

Peter Storm CEO [email protected] www.global-arena.com


Our Approach: From Long to Short List


Data Sources used per Location Factor Market Factors Sources Talent Factors Sources Accessibility

Factors Sources

Compe22on and Mass Company website informa2on on biotech R&D sites of the listed Pharmaceu2cals in the Forbes 500 Biggest Companies EU Cluster Observatory data on the number of pharmaceu2cal enterprises

Talent Supply Eurostat data on number of PhD’s in Life Sciences

Interna2onal Connec2vity Flight Connec2vity Index data on number of interna2onal flights

Tax Incen2ves OECD data on: • Direct government funding of business R&D projects • Indirect government support through R&D tax incen2ves

World Class Knowledge QS World University Ranking for Pharmacy and Pharmacology data on: • Number of listed universi2es • Academic score

Quality of ICT World Economic Forum Global Informa2on Technology Report items on: •  Mobile network coverage •  secure internet providers •  interna2onal internet bandwith

Industry-‐University Interac2on

INSEAD and WIPO Global Innova2on Index, item on industry-‐university research collabora2on

Quality of Life Lonely Planet data on: • Number of restaurants • Number of shops • Number of ac2vi2es UNESCO data on cultural and natural heritage sites Yale University Environmental Performance Index WHO data on number of homicides Numbeo data on costs of housing and local purchase power

Infrastructure Capabili2es World Economic Forum Global Compe22veness Report 2011-‐2012 items on infrastructure quality: •  Roads •  Railroads •  Airports •  Available airline seat kilometers

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Most Attractive Pharma R&D Location in Europe