How Can Biotechnology Companies Manage Growth and Mitigate Risk in a Global Market?
Matthew Szuhaj, Director, Consulting Strategy and Operations Practice, Deloitte (Biotech Location Guide 2008)
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Biotech companies require a robust and
reliable infrastructure for every aspect of the value chain.
Availability of sufficient electrical and water capacity may create a
more challenging search for a potential location. While emerging
countries tend to lag in overall infrastructure availability and
quality, established biotech hubs may also face utility challenges. For
example, Ireland has determined that the nation's current electric
capacities cannot fully meet the demands of the growing manufacturing
industry. As a result, plans are in place to increase the overall
electric supply, improve the transmission network, and thus open up
more locations to future investors.
Being a knowledge-based
industry, biotech companies are not only in need of a location that can
provide a deep talent pool, but also a location that can attract
outside talent. According to third-party surveys, the availability of
qualified engineers is as high in a populated country such as India as
it is in comparatively smaller nations such as Switzerland or Singapore
(IMD World Competitiveness Yearbook 2005 and 2007). This suggests that
quality of life and amenities are vital factors in attracting talent.
As a result, Switzerland and Singapore, while not as populous as India,
are able to attract talent to meet their labor demands.
any major investment, operational, financial, and managerial risks in
each potential location need to be thoroughly evaluated. A sound and
well thought out strategic plan that addresses the key value-chain
drivers is paramount in making an expansion or location decision. There
is no single dominant location that attracts expanding biotech
companies. Every location has its advantages and challenges; however,
the evaluation of these factors is solely dependent on a company's
philosophy and business strategy.
The successful growth and
establishment of an effective global footprint is a challenge that all
companies must face. As competition increases and biotech companies
evolve, the global footprint will evolve to reflect the changing market
demands, operating conditions, and costs of prospective global
locations.Matthew Szuhaj is
the life sciences industry leader for Deloitte Consulting's Global
Expansion Optimization practice. He has 16 years of experience in
domestic and international site selection and development, specializing
in global strategy, real estate and site evaluations, infrastructure
review, and operating costs/conditions analysis and has worked on
numerous life sciences projects throughout North America, South
America, Europe, and Asia.
Olaf Babinet and Jovana Trkulja of
Deloitte Consulting LLP, Global Expansion Optimization practice, also
contributed to this article.
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