Brussels, 29 Jun 2005
Report From The Commission To The European Parliament, The Council, The Committee Of
The Regions And The European Economic And Social Committee
Life Sciences And
Biotechnology ­ A Strategy For Europe Third Progress Report And Future Orientations
{SEC(2005)850}
1. INTRODUCTION
In January 2002, the Commission adopted a Strategy for Europe on Life Sciences and Biotechnology1, consisting of two parts ­ policy orientations and a 30-point plan to transform policy into action. It sets out what is needed from the Commission and the other European Institutions, while also recommending actions for other public and private stakeholders.
The Commission intends to report regularly on the progress made. The Commission adopted its second progress report on 7 April 2004, which highlighted the progress made but also pointed out delays in some areas2.
This Communication is the third such response. As last year, this report is supported by a Commission Staff Working Paper, which provides detailed information on the implementation of the action plan.
2. LIFE SCIENCES AND BIOTECHNOLOGY IN THE REFOCUSED LISBON AGENDA
In its report to the Spring European Council3, the Commission advocated refocusing the Lisbon agenda on actions that promote jobs and growth in a manner that is fully consistent with the objective of sustainable development.
The life sciences and biotechnology industry may have an important role to play in this refocused Lisbon strategy and, therefore, could contribute greatly to increasing Europe's share of the global high-tech marketplace. Life sciences and biotechnology have the potential to be leading areas of science, industry and employment over the coming decades. As well as increasing prosperity with more and better jobs, life sciences and biotechnology may have the potential to improve our quality of life through innovative medical applications and a better environment. As a leading edge technology, life sciences and biotechnology can contribute to the modernisation of Europe's industrial base.
The Commission has now decided to commence a process of reflection on the role of Life Sciences and Biotechnology in the renewed Lisbon Agenda. Understanding how the adoption of modern biotechnology in the various production sectors can contribute to the objectives of the European policy strategies on economic growth, sustainable development and environmental preservation is a recognised need.
Therefore, following the request of the European Parliament, the Commission has undertaken to carry out a study into, and conduct a cost-benefit analysis of, biotechnology and genetic engineering, including genetically modified organisms, in the light of major European policy goals formulated in the Lisbon strategy, Agenda 21, and sustainable development.
The purpose of this study is twofold. First of all, an evaluation of the consequences, opportunities and challenges of modern biotechnology for Europe, in terms of economic, social and environmental aspects, is important both for policy-makers and industry. The study would therefore constitute the primary input to the above-mentioned reflection. Secondly, this kind of independent study should help to increase public awareness and understanding of life sciences and biotechnology.
Priorities for future actions
The Commission will
carry out an independent study aimed at providing a comprehensive assessment and cost- benefit analysis of the consequences, opportunities and challenges that applications of modern biotechnology present for Europe in terms of economic, social and environmental aspects,
draw on both the study and an in-depth assessment of the progress achieved since 2002 to update the Community Strategy on Life Sciences and Biotechnology in good time for the 2007 Spring European Council.
3. OVERVIEW OF POLICY DEVELOPMENTS AND PRIORITIES FOR ACTIONS
3.1. Harvesting the potential
3.1.1. Competitiveness of European biotechnology sector and related industries
In general, 2004 seems to have been a year of consolidation rather than growth for European biotechnology.
There was no significant change in the number of companies in this field in Europe and in the US. This seems to indicate that both the US and European biotechnology sectors have reached a similar state of stability (or stagnancy).
According to a recent comparative study4, the European biotech industry, with approximately the same number of companies as in the American sector, employs nearly half as many people, spends one third as much on R&D, raises three to four times less venture capital and has access to four times less debt finance. Nevertheless, the US industry generates only about twice as much revenue as the European sectors.
According to the same study, the financing gap is probably the biggest single barrier to European competitiveness in biotechnology. That said, it is not the supply of seed financing or early venture capital that is holding back European biotechnology. The main obstacle seems to occur later in the business cycle. After a few years, at the time when Europe's companies ought to be taking off, most of them appear to run out of money.
Given the emergence of new competitors, particularly in the Asia-Pacific region, some justified concerns exist as to the long-term competitiveness of the European biotech industry, although currently Asian competitors are still less mature that their European counterparts.
In order to address this issue the Commission has adopted a proposal for a Competitiveness
Brussels, 29.06.2005 COM(2005) 286 final
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