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The Covid-19 pandemic has so completely disrupted the global economy, health systems and our daily lives that we are all reeling. Much of the economy is clearly in trouble, but what about the life sciences innovation industry?
We wanted to get some sense of what the future holds, so we reached out to our network to collate the general mood of the market. We gained some useful insights to share but we also wanted to put some metrics around our findings.
At the start of April 2020, we conducted a prospective sentiment survey, asking 54 entrepreneurs across 16 European countries how they feel their business will be impacted in three key areas – R&D, finance and workforce. We targeted smaller start-ups (headcount less than 20) who represented over 95% of respondents.
The full report can be downloaded HERE ... but this is a high-level look at our findings.
Which Sectors Are Most Optimistic?
Our results show a distinct difference between digital/tele-health businesses, as most optimistic, compared to medical devices as the least.
There appears to be a couple of driving factors. Firstly, companies that rely on physical locations for R&D e.g. animal studies or engineering labs, have been heavily impacted by the lockdown, whereas computer-based research can be carried out remotely.
On the demand side, companies in digital and tele-health are well positioned to take services off-site, and in fact, the need to do so has accelerated the uptake of their solutions. Tele-health in particular has seen a large increase in sign-ups. IT software solutions can also be rapidly re-purposed to meet the needs of the market in a crisis – hardware, less so.
Which European Ecosystems Are Most Optimistic?
Here our results show a wide variation in sentiment across Europe. Scandinavia and Benelux were the most bullish with Ireland showing particular pessimism.
The northern powerhouses have strong and established ecosystems and have been generally less affected by Covid-19 than southern countries. The UK is less optimistic than might be expect - possibly a combination of ongoing Brexit concerns plus a general anxiety about the projected spread of the Covid-19.
Size Does Matter
We also noted a correlation of optimism between size (and probably, therefore, maturity) of businesses.
Impact on R&D vs Finance vs Hiring
There is a clear pattern in April 2020 regarding which of these factors is most impacted. Headcount and hiring intentions are least affected, with most respondents reporting a 'wait-and-see' policy. R&D, in pockets, was immediately affected for those that cannot attend their place of work to carry on research.
Concerns around financing is clearly the greatest cause of pessimism with anecdotal evidence that the flow of private money is already being restricted, though public money less so – particularly for projects directly related to Covid-19.
Will Sentiment Improve or Deteriorate With Time?
Our result showed that the life sciences innovation sector is perhaps ‘alert but not alarmed’ – at least in the first 2 weeks of April 2020. That said, this is a fast-changing situation. It is notable (and measurable) that sentiment dropped between the first and second week of the survey. Will this trend continue?
Our intention is to repeat the same survey at the start of May 2020, and your participation is most welcome.
The best way to keep track of follow-up surveys and results is to join our LinkedIn ‘Covid-19 Life Sciences Business Sentiment Survey’ Group. Here you can access the full report, engage in discussion and receive notification of future surveys.