Life science is a growing area of employment in the UK. The UK is a world leader in life science innovation, and in this context, the findings of the latest CNA Hardy Risk and Confidence survey make for interesting reading. For in this sector at least there is some positive Brexit mood music.
Although Brexit brings some serious challenges, most notably in terms of the regulation and funding of clinical trials; the dominance of Britain as a life science destination in Europe has left the sector confident that it can withstand the buffers of our exit from the EU. So, although only 27% of UK executives were confident their business would grow and prosper in May 2019, look ahead 12 months and confidence levels rise by 36%. European life science executives likewise are optimistic for the future with confidence set to rise by 28% as we look ahead to next year.
It seems that firms recognise that because the UK accounts for around a quarter of the EU market, it will, de facto, remain a key contributor to the European life sciences market. It helps that the other life science powerhouse in Europe is Switzerland, which is also outside the EU. This gives the sector a positive template to follow, and one which shows that future success can still be delivered from outside the European trading bloc. Further, the global shape of the sector means that the EU is only a part of every firm’s footprint.
This post-Brexit ‘back to normal’ scenario is boosted by a look at the detailed spending plans of UK life science firms. UK firms plans to increase investment in both permanent and temporary staff, with an expected growth in temp staff of 50% in 12 months. Technology investment in the UK is also expected to hold steady over the coming year. Perhaps most telling of all, is the fact that UK life science firms expect to see growth in income from Europe over the coming year rather than a decrease, a fact which points firmly to an expectation that they will be able to continue to trade profitably with European partners in a year’s time.
Sector is no Pollyanna
This is not to say that the life science sector is a Pollyanna, however. 20% of firms in Europe cite technology as their top risk in May 2019 and 13% cyber. In the UK, with the threat of Brexit looming and no clear guidance on the rules that will govern how the country trades in Europe, one fifth of firms cite regulatory and compliance as their top risk. Looking ahead to a post Brexit world, unsurprisingly those concerns about regulatory compliance remain high both in the UK and Europe. Brexit clearly cuts both ways.
Against this backdrop it is surprising, and somewhat concerning, that supply chain risk was not highly rated by either UK or European businesses in our survey – only 7% ranked it their top risk in Europe and 12% in the UK. As borders harden, it will not just be regulatory concerns that bite, but also the physical supply of goods and materials.
In our complex and inter-dependent global economy, supply chain is the risk that boards overlook at their peril, not least because, close on the heels of failure to deliver comes reputational damage.
Future is positive
Although Brexit creates substantial uncertainty; the combination of world-class expertise, many invested multinational players, strong government backing and a role model in Switzerland are driving rising levels of confidence and enabling UK executives to see Brexit for what it is: a significant but temporary concern that sits within a much more positive long term outlook.
This is a sector with much to recommend it, and it is a pleasure to report that the long-term future looks good for the C-suite in this field, whether within or without the EU.