What Is The Favorite Place Of Multinational Pharmaceutical Companies: How Is Ireland Closed?

Over the past ten years, Ireland has invested 10 billion euros in the new biopharmaceutical production facility, which has enriched and consolidated the industrial chain so that the small island far north of the North Atlantic will stabilize its course in the global biotechnology wave in the next ten years.

IDA Ireland is the helm of the ship.

One of the data that IDA likes to talk about is that Ireland is one of the preferred locations in the world for traditional biopharmaceutical manufacturing. The world's top 10 pharmaceutical companies and 13 major medical device companies have production bases in Ireland. The attraction comes from multiple factors, including supervision, low taxes, geopolitical advantages, talent pool and pharmaceutical industry chain.

Behind this is the embodiment of the strong Irish government pushing effect: since the IDA was formed in 1949 for 70 years, from the encouragement and support to the export oriented industries and enterprises in Ireland, to the highly focused foreign direct investment (FDI) business, nearly 230 thousand Irish people are employed by multinational companies. About 2/3 of the company's tax revenue is attributable to FDI. IDA accounts for about 67% of the total Irish exports. In 2017, the proportion of pharmaceutical and chemical exports accounted for 24%.

"In 1958, Leo pharmaceutical company of Denmark came to Ireland, the first foreign investment company in Ireland, and FDI has been developing since then." "At the moment, we have the manufacturing base of the world's top ten pharmaceutical companies, mainly dealing with multinational companies that are doing international business," said Tommy Fanning, IDA biopharmaceutical and food chief, in an interview with the twenty-first Century economic report last month. Other countries will also have some institutions attracting foreign investment, but there are no special departments responsible for the pharmaceutical industry. This is an important difference between us and other countries. "

Ireland has never been a research and development center in the global pharmaceutical industry chain, but it is a powerful link in manufacturing. Ireland is the strongest in terms of process development rather than product development. Our pharmaceutical industry began to develop from small molecules to macromolecular biopharmaceuticals, and to prepare for future gene therapy. Tommy concluded, "Ireland's factories have been very good at commercializing products in the shortest possible time, which is Ireland's greatest strength."

Highly dependent on FDI

Ireland is an island country with a population of less than 5 million and a land area of only 70 thousand square kilometers. At the same time, Ireland has the fastest growing economy in the euro area, with its geopolitical dividend from the European continent and the North American market. According to the IMF world economic outlook, Ireland's GDP growth rate reached 6.8% in 2018.

Ireland's economy is highly dependent on foreign direct investment (FDI), which is deeply embedded in the global value chain. One of the most obvious impacts is its creation of employment opportunities: according to IDA data, 8 out of 10 new jobs come from FDI.

Many multinational companies have entered Ireland for decades, and have become part of their communities. In 2017, TNCs spent 19 billion 200 million euros in Ireland, including 11 billion 700 million euros in salary and 5 billion 700 million euros in capital investment.

At the same time, these countries have also become an important exporter of Ireland. In 2017, IDA accounts for 67% of the total exports. The main markets are the European Union and the United States. The main export areas are pharmaceutical and chemical industries, electronic services, business services, financial services and insurance, food and beverages, and medical equipment.

The development of agriculture, animal husbandry from the first industry to the present parallel development of finance, science and technology and medicine implies the adjustment of the Irish government's industrial structure to its country. This direct push is the establishment of IDA. Founded in 1949, IDA was first affiliated with the Irish Ministry of industry and commerce. Its original duty was to motivate, support and develop the export oriented industries and enterprises in Ireland, covering local investment, foreign investment and start-up companies. At that time, under the background of economic and trade protectionism and import restriction, this work was in the opposite direction.

In 1958, policy changes. Through the first plan of economic expansion, it aims to achieve Ireland's economic expansion, encourage foreign direct investment and promote export trade. In 1969, IDA became a self sponsored state sponsor. In 1973, Ireland became a member of the European Economic Community, the later European Union. In 1994, according to the government's assessment, the investment and development board (FDI) was divided into three independent institutions and focused on upgrading and developing high-quality FDI in Ireland.

In the 2015-2019 year, IDA set up a global plan for foreign direct investment. At the time of its 70th anniversary establishment, Irish business, enterprise and innovation minister Heather Humphreys announced that in 2018, IDA attracted 265 investments, 171 from North America (+7%), 70 from Europe (+25%), and 24 from China, India and other growth markets (+14%). FDI has brought 229057 jobs to Ireland, an increase of 19% over the same period last year, and also a major source of revenue in Ireland, accounting for 66% of the company's revenue.

In turn, this is one of the most important reasons why multinational companies chose Ireland in the first place.

12.5% of corporate income tax is the most enticing condition for Ireland as a profit government. Similarly, income tax is 17% in Singapore and also very competitive in Europe: Czech, Poland and Britain are 19%, Finland, Iceland and Russia are 20%, Denmark, Norway 22%, Holland, Austria and Spain are 25%, Germany and France are 30% and 31% respectively. In addition, all R & D expenditures can receive 25% R & D tax credits on the basis of grants.

Talent closed loop

IDA promotes foreign direct investment in Ireland through professional consulting and value-added services, and the initial entry of Irish multinationals for tax preferences has laid the foundation for the development of IDA's key areas, such as biomedicine, financial services and information and communications.

But it is not enough to stay and continue to attract these thousands of miles away from the capital.

"Ireland has done a lot of work to try to provide suitable infrastructure for multinational companies. These companies also need stable trading environment, especially when there are many uncertainties in the global environment." "The more important thing is that we invest heavily in the education system, and free and open systems and life science courses offer many choices to people who want to enter the pharmaceutical industry," Andrew Vogelaar10, head of the IDA growth market, including China, said in an interview with the twenty-first Century economic report.

IDA believes that the quality of education systems and graduates is a major part of Ireland's attractiveness to FDI. Compared with the past ten years, the 2018-2027 year plan of higher education capital budgeting has almost doubled three times. In the total employment of companies supported by IDA, pharmaceuticals are the biggest areas, with a total of 29989 in 2018, an increase of 6.6% over the same period last year.

The fundamental driving force behind any innovation process is the related human factors. In order to promote the investment in biopharmaceutical industry, in 2011, the Irish government and IDA invested in the establishment of NIBRT, a national institution for the cultivation of biotechnology talents.

"Nibrt was founded after many large pharmaceutical companies collaborate with IDA after 2000, and biopharmaceuticals have become the mainstream type of enterprises in Ireland. If Ireland wants to own its own pharmaceutical manufacturing industry, it needs to ensure that it continues to provide talents in this area. In an interview with the twenty-first Century economic report, Killian O Driscoll Driscoll, director of Nibrt project, said that IDA invested funds at the beginning of its establishment. "We are an alliance of government, industry and universities. It began to design and build in 2009, and was formally operated in 2011. Now we have found the operation mode and become a self-sufficient commercial organization.

According to the data from Killian, in 2018, Nibrt trained 4300 trainees and completed 100 courses over 18200 school days. "The most popular course is introductory introductory course in biology medicine, every month, and the background of training staff is from pharmaceutical, finance and business." Nibrt itself has 70 employees and collaborate with universities. In fact, in twenty-first Century, the economic report reporters visited Ireland last month to see that Nibrt is located near the national University College of Dublin.

The cost of training, that is, most of Nibrt's revenue comes from pharmaceutical companies, Killian said. "Students also attend training at their own expense, such as those who need to take part in the master's program. About 60% of the courses are customized training for enterprises. We will also carry out some training programs for undergraduates and masters. The total price of all training courses in a day is 700 euro.

The data from Nibrt show that from 2016 to 2020, there will be 8200 potential vacancies in the Irish pharmaceutical industry, which include biopharmaceutical engineers, scientists, inspection and maintenance, and business skills. A biopharmaceutical productivity and production annual report and survey shows that the factors limiting the development of biopharmaceutical development by 2021 are limited capacity (60%), drug review and approval (37.1%), unable to employ experienced new technology and production personnel (30.7%), unable to retain technical personnel (29.3%), unable to employ experienced new R & D talents (25%), and lack of supervisory staff (10.7%).

"We are doing business internationally, accounting for 90% of international customers, and training courses on cable." Killian introduced a training cooperation project with the Guangzhou municipal government. "There are also businesses in South Korea, Australia and the United States, and training for enterprises of different sizes. Next, we will start the project of cell and gene therapy, about operability and how to better invest in production training. We are still exploring the stage, which requires a high standard, but it is also the future development direction of the industry. It needs supervision and training personnel with high skills. "

Many pharmaceutical companies mentioned this in their interviews. Swiss pharmaceutical giant Novartis is one of the first multinational pharmaceutical companies to set up factories in Ireland. At the end of October and twenty-first Century, the economic report reporter visited Kirk, Novartis Ringaskiddy Limited (NRL), the second largest city in Ireland. It once belonged to Sandoz, the predecessor of Novartis.

"We are in a strong group of large numbers of peers, and it is easy to share talents." "In the past twenty years, many pharmaceutical companies have grown and developed in Ireland. Many graduates choose such companies and continue to develop their careers," said Shane Relihan, general manager of Novartis Ringaskiddy in an interview with the twenty-first Century economic report. "You will find that there are many Irish people in multinational pharmaceutical companies all over the world."

Another part of the system is transformation between industry, University and Research Institute. In 2004, Ireland set up the Tyndall Research Center, relying on University College Cork, which aims to support the industry and academia to push the research to the market. During the visit, Carlo Webster, senior director of strategic business development at Tyndall, presented a monitoring instrument used in the biopharmaceutical reaction tank to the twenty-first Century business reporter. "The biopharmaceutical process is very unstable, and we want to bring it to market," she said.

Risk and balance

In formulating the next five year plan, IDA pointed out that in recent years, rapid change in all walks of life has led to more and more demands for employees' comprehensive quality and professional skills, and the number of low skilled jobs is gradually decreasing. The trend is driven by technological change, cost competitiveness and regulatory level.

Back in the beginning, Ireland's investment in the euro area in the past ten years is behind the growing demand for biopharmaceutical market. In 2015, Ireland's biopharmaceutical exports amounted to 54 billion euros, the seventh largest pharmaceutical and pharmaceutical exporter in the world.

According to EvaluatePharma data, from 2010 to 2024, biotech will increase from 18% to 32% in global sales of prescription drugs and OTC drugs, and revenue will grow from $129 billion to $388 billion. In the top 100 of the world's sales, by 2024, biological drugs will be tied to small molecule drugs, with revenues of $178 billion and $179 billion respectively.

This means that the demand for global biopharmaceutical production capacity is getting higher and higher. Killian believes that the shortage of biopharmaceutical skills is becoming more serious, including increased global demand for production capacity, mainly monoclonal antibodies, new requirements for the manufacture of new therapies (such as cell and gene therapy), diversification of advanced manufacturing technologies (such as digitization and data analysis), the increasingly sophisticated skills required for biopharmaceutical production, and the need for strong cooperation between industry, academia and government.

According to the CPhI Industry Report 2018, by 2022, the global demand for biopharmaceuticals is expected to exceed 4300 kL, and the growth rate of 5 years is nearly 14% (2300 kL in 2017). By 2022, the distribution of capacity will shift more to CMO (21%) and hybrid companies (14%) than to self built factories (65%).

On the other hand, because of the high reliance on FDI, once the global situation is unstable, the Irish economy is too large and too risky.

"We need diversified investments, and we need to win more businesses from the Asia Pacific region, such as China, Japan, Australia and so on. To this end, we have set up a new team to take charge of all regions outside Europe and the United States. " Andrew explains the importance of FDI regional diversification to Ireland. "It is very important to maintain good development relationship with two countries in China and the United States. Despite some uncertainties, Ireland can act as a bridge between the two countries. Just like some American companies will take Ireland as a springboard to enter the Chinese market, and some Chinese companies will be listed in Ireland through Ireland.

Another external risk factor is the continuing uncertainty in the global political and economic environment, including the increase in protectionist sentiment between Britain and the major trading blocs, which may affect investment decisions and disruptive technology in 2019.

Britain's Euro forecast will have a negative impact on the Irish economy and slow down Irish economic growth. But in the twenty-first Century economic report reporter's visit, many people mentioned that this is another development opportunity for Ireland. Ireland will become the only country in the European Union to use English as its mother tongue after the European departure from the EU. IDA believes that Ireland has become a popular location for many enterprises to continue to serve the EU customers. Up to now, more than 80 investment projects have been approved in Ireland and 5300 jobs have been created.