Booming Biotech

The German biotech industry is still a driving force for the country?s economy. That?s the opinion of research minister Edelgard Bulmahn, based on Ernst & Young Consulting Group?s latest biotechnology report for Germany. Titled "New Chances," the Biotech Report 2002, presented in Berlin earlier this month, describes a generally positive climate for Germany?s biotech industry. The study surveyed core biotech companies that exclusively develop or apply new biotechnology methods.

Ernst & Young?s Dr. Julia Schüler, a health sciences industry specialist, conducted the survey. "The key data look positive", she says. "Overall, 2001 has been a year of growth for Germany?s biotech industry. The total turnover has increased by a third," and in reaching ? 1.045 billion, has "broken the ? 1 billion mark for the first time." At the same time, R&D expenditure has increased by 71% and reached a new record of ? 1.2 billion, exceeding the industry?s total turnover, Schüler reported. The number of jobs in biotech R&D rose by 37%, now totalling 7858, while the core industry as a whole created 3735 new jobs, an increase of 35% on 2000 figures, bringing the sum of biotech employees to 14,408.

After years of unlimited growth, other figures indicate the consolidation of the biotech sector. Although the number of employees rocketed again, fewer start-ups were founded. Their number rose only 10%, to 365, last year. Alfred Müller, a member of the Ernst & Young Executive Board, commented: "This trend clearly shows that Germany?s biotech industry is growing up and becoming more sophisticated." Another key figure supports this statement: In contrast to other sectors, venture capital for biotech was equal to previous years, even after the new economy bubble had suddenly popped.

There are good reasons for this continued growth, says Müller. "Existing weaknesses have been eliminated. Existing laws that were debilitating the biotech industry have been changed," he points out, and "the so-called 'red' biotechnology, which focuses on medical applications, is generally accepted and praised by the Germans now."

Bulmahn was content with the figures: "We have been able to improve our position as a top-notch biotech country. With targeted innovation incentives, the federal government has been able to create jobs and growth." Schüler was rather less ebullient: "Germany has a strong midfield in the biotech sector, but compared with the United States or the United Kingdom, we are lacking top companies," she warns. Compared to an average German biotech company, an average U.S. company is three times larger, and its turnover is higher by a factor of six. Even in comparison with its European competitors, Germany could do better: The average UK biotech company is twice as large with three times the turnover.

The German government is trying to promote more growth. Of all European countries, Germany provides the best public financial support for the biotech industry, according to Bulmahn. Over the last 3 years, project funds have been doubled and are now worth ? 125 million annually. The biotechnology framework funding programme will add another ? 860 million over the next couple of years. A wise investment, it seems: Estimates suggest that the number of jobs in the biotechnology will increase five-fold over the next 7 to 10 years.

Given these prospects, biotechnology is an attractive prospect for early-career scientists. But here the study throws up a surprise. According to companies questioned in Bavaria, Baden-Württemberg, and Northrhine-Westfalia, the "availability of highly qualified researchers" is "not a problem." Only between 6% and 16% of the companies admitted having "great trouble" finding researchers while between 23% and 40% stated that they have a serious problem finding technical assistants. But "this was just a sample taken at a few biotech companies," Schüler told Next Wave. "Overall, the tendency that researchers are desperately sought by the companies still remains." Interestingly enough, the sample was taken in regions that are at the forefront of German biotech. The Munich region, especially, is considered a European hot spot for biotechnology--with this reputation, it may be easier to recruit scientists here than in other regions.

Because of the shortfall of scientists, the Federal Ministry of Education and Research ( BMBF) has launched several initiatives over the last couple of years to boost their numbers. These include the BioRegio initiative, aimed at establishing a "competence network" in biotech, the BioFuture competition for young scientists, and BioChance for small biotech start-ups. Bulmahn expects the national competence centres created over the last 3 years to take a leading role in European research with the start of the 6th Framework Programme early next year, further increasing the international reputation of biotechnology research in Germany.

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