Can Canada's biotechnology cluster sustain itself?

---

BioTalent Report

The labour market
• Full time employment: 8 out of 10 companies have fewer than 50 full-time employees.
• Outsourcing: 55% of all companies outsource some skills or tasks, regardless of the company size. It seems as though IP and manufacturing/production are the principal functions outsourced.
• Contract workers: Atlantic Canada (38.5%); West (19.1%); Quebec (19.1%) have the highest proportions of contract workers.
• Vacant positions: Roughly a third of companies have unfilled positions with most of those in preclinical research/R&D (51.9%); marketing, sales and communications (27.9%) and manufacturing/distribution (26%).

Skills and training
• Skills shortage: More than one third of companies are currently experiencing a shortage of skills.
• Training: 88% of employees pay for training, companies with zero to five employees outspend more on training than larger firms - nearly $3 to $1.
• Recruitment and retention: Top three challenges are lack of candidates with required skill sets/experience (55.6%); insufficient capital/resources to recruit appropriate candidates (34.1%) and competition for qualified candidates (32.8%).
• Future challenges: The greatest HR challenges in the next three to five years will be ‘skills related’.

The biotechnology sector
• Longevity: Has been active in Canada since 1911 - not a new endeavour.
• Significant expansion: 77.2% of growth in number of biotechnology companies in Canada over the past 20 years.
• Cross-sectoral makeup: Majority of companies self-identify as being cross-sectoral and inter-disciplinary.
• Regional distribution: Biotechnology companies are active in every region of Canada - not in isolated pockets.
• Concentration on biotechnology: Companies surveyed spend an average of 70% of their budgets on biotechnology-related activities.
• Revenue challenge: 28.1% of pharmaceutical companies generate revenues of less than $50,000 per year.

The path to commercialization
• Focus on R&D: Large companies are less likely to focus on R&D than smaller firms; 23.5% of companies with six to 20 employees have three or four products/services in R&D.
• Stages of development for primary and secondary products: R&D 59.1%; clinical/field trials and regulatory 24.7%; production/manufacturing 20% and commercialization/marketing 46.5%.
• Regional variance: From region to region, fairly similar numbers of products and services are in development.
• Product/service breadth: 25.2% of companies focus on one to two products (across all stages of development).

IN DEPTH FINDINGS

BioTalent Canada considers the report to be a comprehensive, benchmark-establishing labour market information (LMI). In fact, it is the only report of its kind in the country. The findings of the report are meant to help the country’s biotechnology industry identify its areas of need and begin planning strategically to ensure a successful future.

The report goes into great detail on a number of findings, such as where biotechnology is happening today? Of all the provinces, Alberta saw the most prolific growth in biotechnology companies in the period between 1998 and 2007. Twenty-one of its 33 firms were established during that decade. Other regions also experienced rapid expansion over the past 10 years - namely the Atlantic region, Quebec and the West.

As far as revenue goes, the report came to the conclusion that with a greater proportion of companies generation less than $1 million per year in revenues, and with the R&D majority of those lower-revenue companies engaged in R&D, an important goal for the country must be to drive innovations further along the path to market, toward commercialization and greater profitability.

Meeting human resources needs will prove to be another critical factor in the success of biotechnology companies, both large and small throughout Canada. A considerable majority (81.2%) of biotechnology companies in Canada have fewer than 50 full time employees and 44.1% of them have fewer than 10. Approximately 12% of the country’s biotechnology workforce is made up of contract workers. In the Atlantic region, the proportion is much higher. There are in fact 38.5% of employees that are hired on contract in that region, presumably due to the availability of a project-based government innovation fund that fosters contract work.

Employers went on to indicate that contract workers are hired to perform all occupational functions, although not typically at senior management or executive levels of supervisory or professional capacities. One of the least common roles assigned to contract personnel is clinical research, likely because it is so often outsourced. In fact, clinical research is the least hired-for occupational function for either contract or full-time employees - at 9.7% and 31.6% respectively.

One of the more alarming findings of the report was about the skills shortages in the country. Throughout the bio-economy, 34.4% of companies are dealing with skills shortages. A skills shortage occurs when current employees do not have the full repertoire of skills their company requires (and thus different from a staffing shortage, which pertains to the need to fill vacant positions).

It is thought that this may have to do with the educational preparation candidates are receiving before entering the field, or a lack of prior professional or laboratory experience. This deficiency in what BioTalent Canada has termed the ‘experience quotient’ poses challenges to Canadian biotechnology companies, given that nine out of 10 have fewer than 500 full time employees and relatively little in the way of financial and human resources. Being schooled in a particular scientific discipline is different than training for a career in a science-related business.

Another area companies expressed concern and challenges was in the area of recruitment and retention. Companies stated that 32.5% have vacant biotechnology positions to fill. Larger companies seem more likely to have unfilled positions than smaller companies.

This could have to do with the entrepreneurial milieu of such firms, in which each member of the small core team is expected to ‘wear many hats’. The fact that smaller companies have fewer positions to fill is not necessarily a reflection of need though. Smaller companies do not always have the resources to create positions, although they wish to do so. Preclinical research, marketing and related jobs and manufacturing positions top the list of needs areas across the board. They may or may not be supervisory or professional positions, but are seldom at the senior management or executive level.

Canada’s biotechnology companies seem to feel strongly that better salaries and benefits and more flexible work conditions are among the most important strategies for attracting and retaining qualified professionals, who can in turn lead them down the road of commercialization. Another highly important strategy in dealing with this challenge is cooperation with educators to design programs that prepare graduates appropriately for biotechnology careers.

REPORT CONCLUSIONS AND
RECOMMENDATIONS

To fulfill the promise of its innovative visions and bring new, globally competitive biotechnology products and services to market, Canadian companies must have the means to attract, develop and retain skilled, experienced workers. It is those workers and their skills that will draw the investment companies require. HR needs capital; capital is attracted by strong HR.

Canadian biotechnology companies have said clearly that they feel the country lacks a sufficient pool of skilled, experienced workers. Within their own organizations they are cognizant of a skills shortage, externally they to not see an abundance of job-ready candidates.

The sector requires a strategic, systematic approach be taken to meeting its HR needs, one that actively involves all stakeholders - companies, governments, associations, educational institutions and job candidates.

For more information on the report, or to view the report in its full format, visit www.biotalent.ca.