Ireland remains key location for life sciences investments

By Dave Shanahan, Global Head of Life Sciences, IDA Ireland

Even though it is roughly the same size as Indiana, Ireland has made its mark on the global life sciences stage as a result of its commitment to a robust science, technology and innovation strategy. Significant investments in both attracting the life sciences industry to the country and growing its existing resources have resulted in a thriving knowledge-based economy that supports innovation and scientific advancement. Despite a difficult economic environment, Ireland’s exports have shown significant resilience as the high tech sector continued to exhibit strong growth in 2010, with much of that growth driven by pharmaceuticals.

The life sciences industry in Ireland consists of approximately 170 companies employing some 45,000 people and generating circa. €44 billion in exports - representing circa. 30% of total exports from Ireland. Ireland is home to 9 of the top 10 pharmaceutical companies in the world, and 6 of the top 10 global blockbuster drugs are currently manufactured in Ireland. As a testament to Ireland's track record in supporting innovation, a number of companies operate multiple sites comprising API manufacturing, formulation, fill and finish and global services. Significant investors include Abbott, Pfizer and Merck with some 25 sites attributable to their operations exporting globally and providing advanced manufacturing to support new product development and introduction. Recently, Ireland has secured more than $5 billion in investments from leading life sciences companies. These foreign investments, as well as a growing domestic sector, are supported by a high level of government funding through Science Foundation Ireland (SFI), IDA Ireland and Enterprise Ireland, which provide supports from basic research, to multinational/indigenous company collaboration and on to advanced manufacture and sale.

Ireland's small geography and increasingly capable academic science base is now supporting industry collaboration in continuous crystallization, process development, modeling and process analytical technologies. Ireland retains a focus on "green synthesis" and notable advances have been supported in company clean energy practices making pharmaceuticals cleaner and cheaper to manufacture.

Companies investing in Ireland recognise its business friendly environment with strong pharmaceutical and biotechnology expertise. Government policy makers and enterprise agencies work closely together to ensure that Ireland provides for the requirements of potential overseas investors.  Ireland's universal corporate tax rate of 12.5% is easily understood, highly competitive and integrated in international tax agreements across the world. This favorable economic and fiscal environment is highly supportive of the Pharmaceutical sector, with one of the strongest infrastructures supporting intellectual property development and management, as well as state funded 25% tax credit on eligible R&D spending.

One of Ireland's key advantages is its young, skilled and educated workforce. Some thirty six per cent of the population is under twenty five years of age and forty percent of twenty five to thirty four year olds holding a third level college degree. Ireland's favourable employee demographic will continue for the foreseeable future especially with a high birth and replacement rate over the past decade.

Because developing and maintaining a skilled life sciences workforce is a major priority for the government, companies establishing roots in Ireland can count on long-term commitment and an increasingly talented workforce who are innovative and adaptable. Ireland's competitive position has greatly improved since 2007, with steep falls in operating costs in construction, energy, utilities and consistent falls in wage costs in the economy. Inflation is projected to lag the EU average for some years to come. The national financial recovery protects Ireland's corporate tax arrangements and future low price inflation provides ever improving competitiveness which allows companies operating from Ireland manage costs as the global economy recovers and wage and cost inflation grows in other competing locations.

Ireland also has a strong commitment to Research, Development and Innovation (RD&I) funding. Through its Strategy for Science, Technology and Innovation, the Irish government provides funding and support to fuel innovation across industry, research and education, comprising a $6 billion investment that is doubling the number of PhD graduates and supporting greater commercialization of ideas, increasing translational research activity and supports enterprise R&D. For example, recognizing that biopharma is restricted by skills shortages and technical bio-processing challenges worldwide, the Irish government established a National Bioprocessing Research, Education, Training and Service Institute (NIBRT). NIBRT is designed to deliver a substantial trained workforce with the highest levels of skills across the spectrum of bioprocessing activity to local industry. Ireland's efforts are paying off, as it is now the number one location outside the US for significant development and manufacturing in Biologics.

Further, Science Foundation Ireland has invested more than $1Billion since its foundation ten years ago in advanced research supports providing more than 1,000 scientific researchers who collaborate with industry across domains from life sciences to clean energy. The SFI Strategic Research Clusters (SRCs) encourage collaboration with industry around strategic areas of research. Ten SRCs within the life sciences space account for more than 30 industry partnerships with a diverse range of international companies.  World-class research institutes and third level institutions work with industry partners on tightly-focused RD&I programs, many in the Life Sciences and ICT sectors, where Ireland has in-depth expertise.

Ireland's efforts to build a strong academic foundation in science and its encouragement of strong business and academic collaborations have made Ireland a global competitor for investment from multinational companies. Ireland's dynamic RD&I sector is driven by an exceptional level of collaboration between industry, academia, government agencies and regulatory authorities. As a testament to its role on the world stage, in the recently released Ernst and Young Globalization 2010 Index Rankings, Ireland ranked as the second most globalized economy in the world. The Globalization Index measures and tracks the performance of the world's 60 largest economies in relation to separate indicators in five broad categories: openness to trade; capital movements; exchange of technology and ideas; movement of labor and cultural integration.

For companies wishing to locate in Ireland, IDA Ireland is available to provide financial support, and is particularly supportive of companies that focus on research and development, high end manufacturing and global service activities. With a pro-business environment, a robust R&D culture, supportive government and a young educated workforce, Ireland is well-positioned to support the life sciences industry, whether it is a development stage life sciences business or a leading multinational company.

About

Dave Shanahan is responsible for attracting multinational investments to Ireland in the areas of Pharma, Biopharmaceuticals, Medical Technologies/Devices, Food and Healthcare Services. He spent 20 years in multinational Pharma with positions in Johnson&Johnson, ICI, AstraZeneca and Pfizer. He has also worked as a CEO of a Healthcare Start up and consulted for international Pharma and Biotech.