A Call to Improve the UK Life Sciences Sector, Home to Over 6,800 Companies
In October 2024, the UK Government released an Industrial Strategy green paper outlining a 10-year plan for the sustainable economic growth of the country and initiating the dialogue with the public and industry representatives ahead of the white paper release, scheduled for June 2025.
In this green paper, the life sciences sector was identified as one of the eight growth-driving sectors of the UK economy:
The UK life sciences sector is home to over 6,800 companies that generated £100 billion in turnover in 2021/22. Around 18% of the UK's total research and development (R&D) expenditures were attributed to the pharmaceutical industry alone in 2022. However, despite significant investments and progress made in the field, there is a risk that the UK's competitive advantage might be lost as the country's global ranking slipped from fourth to fifth place on the Global Innovation Index in 2024.
In light of these events, advisory firm RSM UK has urged the government to address critical issues in capital access, talent acquisition and retention, and market commercialization to maintain the UK's competitive edge in the global life sciences arena.
Laragh Jeanroy, partner and co-head of life sciences at RSM UK, highlighted three main areas needing immediate intervention: capital availability, talent acquisition, and effective access to markets. Jeanroy emphasized that the UK's strength lies in supporting early-stage life sciences businesses through access to world-class university facilities and generous R&D tax incentives. However, she also noted that companies facing rapid growth encounter significant funding gaps, often forcing them to seek investment opportunities abroad and thereby undermining the UK's economic gains.
RSM also pointed out the UK's shortcomings in bringing medical innovations to market effectively, highlighting (i) the NHS's fragmented way of operating, coupled with (ii) its high level of bureaucracy to be key limiting factors in market commercialisation.
"The UK’s healthcare system holds a large and valuable data set, but can often feel disparate in how it's run, largely due to NHS trusts working in silos. This lack of a joined-up approach, combined with complex and bureaucratic processes and poor infrastructure, means the commercialisation of new products can be extremely difficult"
Graham Bond, partner and co-head of life sciences at RSM UK, also agrees on the central importance of capital availability, stating that a major funding boost will be required to grow the life sciences sector and the UK economy more broadly. He argues that access to pension funds and international funding programmes might be the key to achieving these goals.
"The government’s plans to unlock pension funds will open a new avenue of funding for growing life sciences businesses as well as the overall UK economy, but this needs to be fast-tracked. It’s also crucial that grants and programmes such as Horizon Europe are fully harnessed and made easily accessible for businesses."
With regard to the talent shortage, RSM warned against proposed reforms to apprenticeship funding, particularly the removal of level 6 and 7-degree apprenticeships from the framework. Apprenticeships in life sciences dropped by 9%, reaching only 1,240 in 2022/23, indicating an urgent need for talent pipeline enhancement. RSM strongly recommended reconsidering these reforms, suggesting maintaining high-level apprenticeships under the Growth and Skills Levy due to their essential role in driving innovation and economic growth within the sector.
Cover image: sankai
Topics: Bioeconomy & Society
