The Austrian life sciences sector on the upswing - Life sciences as lifesaver and employer in Austria
In this regard, the figures clearly speak for themselves, as they have for so many years. The life sciences sector in Austria encompasses more than 900 companies, and accounts for a substantial share of the Austrian economy. In 2017, it generated record revenue of € 22.4 billion for the first time, comprising 17 percent revenue growth from the previous figures of 2014. Moreover, life sciences is an important employer in Austria, with more than 55,000 employees, up 7.4 percent from the comparable level of 2014.
A top industry in a top-notch environment
The business location has emerged as a top international player, both from a scientific as well as a business perspective. This is also shown by the comparative figures from Germany. The revenue generated by Austrian biotech firms in 2017 was almost 60 percent higher than three years earlier, whereas revenue in Germany "only" rose by 32 percent. Austrian biotech companies are also particularly strong when it comes to investments in research and development. On a per capita basis, Austrian biotech companies invest 40 percent more in research and development than their German counterparts.
The Austrian firms are also very research-intensive. As a whole, the life sciences sector invested more than € 1 billion in 2017 (€ 1.25 billion to be exact). This comprises close to 23 percent of the entire expenditures (€ 5.46 billion) for corporate research in Austria in 2017 (aws Life Science Report, 2018).
Government support measures are needed, particularly in the early development phase, in such a research-intensive sector like life sciences, which also features very long product cycles. This assistance aims at preventing market failure. The boom in the Austrian life sciences sector is based on fertile ground provided by public funding programmes over the last 20 years. One of the most important programmes is aws LISA - Life Science Austria, an initiative offering customised support to life sciences startups in every development phase. Since 1999, more than one hundred companies have been financed in their early phase thanks to more than € 63 million in funding provided by aws LISA Life Science. In addition to monetary funding measures such as LISA Preseed and Seed Financing with a volume of up to € 1 billion, the aws LISA programme offers customised and competent consulting as well as support in internationalising business operations.
Nevertheless, there is still a whole range of other support options for life sciences companies in Austria. Life sciences project ideas leading to the establishment of companies are provided with the tools to implement commercially scalable business models on the basis of the international business plan competition aws BoB - Best of Biotech. Startups from an academic environment are also given special support in the early phase of corporate development via the incubators funded by the aws AplusB-scale up programme. In addition, life sciences companies in growth phases can take advantage of financing by the Venture Capital Initiative, founder and SME funds as well as guarantee and loan instruments. The funding provided along the entire value chain is complemented by consulting and patent funding.
Alongside these specific measures, the most important prerequisite is creating an optimal environment along the entire value chain in the life sciences sector. This includes excellent conditions for competitive, top-notch research at universities and non-university research institutes as well as efficient support given to scientific talents and entrepreneurs. In the field of life sciences, the transfer of scientific findings is a particular challenge in the early, application-oriented R&D phase. For this reason, a Translational Research Centre was established in Austria in 2019 to transform promising ideas from basic research into commercially viable product candidate.
In addition to financial initiatives, the business location of Austria has also benefitted from close ties with academic research, outstanding medical practices, internationally recognised experts and an active startup scene. The number of life sciences companies has climbed close to 27 percent compared to five years ago- The overwhelming majority of these firms are startups. Combined with effective public support, an ideal environment for an efficient transfer of knowledge has been created for innovative companies.
As previously mentioned, public funding is important, especially in the early phase of launching innovative life sciences companies. Austria is well positioned due to the support measures implemented by aws. The aws LISA programme as well as the five Austrian life sciences clusters enable the linkage of all major stakeholders in the sector e.g. scientific institutions, startup networks, business angels, venture capitalists, the stock exchange, large companies as well as healthcare facilities insurance companies and sector-related service providers. This close networking and short distances definitely comprise a major advantage for the Austrian life sciences sector. Moreover, aws LISA has become an international brand which is present at trade fairs and conferences across the globe.
Digitalisation as a driver of innovation
At the same time, digitalisation has become a significant driver of innovation, especially in the field of medical engineering. Most recently, the coronavirus has provided added impetus to the enhanced digitalisation of the life sciences sector. This development in the direction of digital applications has been clearly perceptible for years. In recent years, the field of medical engineering has witnessed a veritable boom in the field of e-health and telemedical applications. 36 percent of the companies are already active in this field. Half of all startups over the last three years operate in the digital health sector.
The rapidly spreading digitalisation in all areas of life sciences opens up enormous opportunities. Computer programmes serving as intelligent algorithms will increasingly provide assistance in identifying the right therapy, treatment or medication for the particular patient. Expert knowledge of various origins is accumulated. For example, this know-how along with big data analyses can help physicians to make the "right selection". Learning algorithms help to analyse X-ray images in a standardised and objective manner within just a few seconds. Software will support doctors in examining patients. There is a diverse range of potential applications for digital technologies in the health sector.
The Austrian life sciences sector has emerged as an important player in global competition over the last few ears. Last but not least, the current pandemic has provided innovative startups and researchers in this economic sector to show what they are capable of. The Austrian life sciences sector promises to continue having a successful and exciting future.
Find out more about life sciences in Austria.