Steady development: The industry has reached profitability, but government funding is still important
London, United Kingdom (PRWEB) July 01, 2013
The Biotechnology industry is fast becoming a prominent part of the UK life sciences scene, alongside pharmaceutical and medical technology firms. The convergence of these three technologies is making it ever more difficult to identify the boundaries between them. The Biotechnology industry relies heavily on third-party financing, so the economic downturn has brought significant problems. Dented business confidence made private financiers skittish about investing in risky research and development (R&D) projects. This has dampened growth, but not contained it. According to IBISWorld industry analyst Robert Scotton, “Britain's ageing, ailing population wants advanced treatment options to ward off the natural decline of the body and the Biotechnology industry has managed to draw in persistently high levels of private investment to investigate this area.” Advancements in biotechnology could help industry and agriculture become more efficient and more sustainable.
The government's prioritisation of biotechnology has further bolstered revenue. As a result, in 2013-14 the Biotechnology industry is expected to generate £7.8 billion in revenue, up 2.1% on 2012-13. This means that, over the five years through 2013-14, revenue has grown at a compound annual rate of 3.9%. Despite this, the industry is likely to be only moderately profitable as it struggles to finance heavy R&D investment using royalties and product purchase receipts.
Growth is likely to accelerate over the next five years through 2018-19 as the economy recovers and access to private capital grows. The ageing population and increasing incidence of health decline are anticipated to stimulate demand for biopharmaceuticals, reduce opposition to new treatments and draw capital to the industry. Scotton adds, “Government programmes to support the industry and encourage private sector investment are expected to provide further help.” The growing focus on sustainable and environmentally friendly bioenergy and industrial biotechnology advancements promises to bolster returns.
The Biotechnology industry is comprised predominantly of small to medium-size enterprises and therefore the level of market share concentration is low. The four largest firms in the industry are estimated to have a combined market share of just 7.3%.
For more information on the Biotechnology industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Biotechnology applies scientific and technological principles to living organisms, parts, products and models in order to gain knowledge and produce biotechnology products and services. Biotechnology companies mainly specialise finding in medicinal, industrial or agricultural applications for their expertise.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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