Pharma leads on radical plans to save on energy and boost R&D

Ayming’s 4th International Innovation Barometer survey suggests that a larger proportion of pharma companies have opted for radical changes to counter the energy price rise than have firms in other sectors.

With the World Bank having predicted increases of as much as 50%, more than eight out of 10 firms from the sector revealed they had already taken action. More than one in three (36%) described their measures taken as ‘radical’ – a higher proportion than any other surveyed sector. 

The report questioned 846 senior executives, owners and R&D directors across 17 countries, including European nations, the USA, Canada, China and Singapore. This year’s sample is also more than 40% larger than the previous figure for the previous year. 

After the World Bank warned that energy intensive businesses would suffer most from cost rises, the report reveals that 41% of respondents became more focused on energy efficiency, with 30% seeking new suppliers or renewable forms of energy.

Ayming UK Director: Innovation Incentives Njy Rios stated: “Reducing your energy consumption can be really expensive, but the crisis has flipped that on its head. Now, the cost of doing nothing outweighs the cost of investment. In that way, the energy crisis is a natural catalyst for green action and sustainable innovation.”

However, the need to pursue greater efficiency and trim costs severely has actually enhanced R&D spending commitments by a sizeable minority. Some 36% of respondents stated they will increase investment next year.

The pharmaceutical sector already leads in terms of local innovation, says Ayming, with 54% opting to do so. By contrast, across all sectors the average take-up is just 44%. 

Mark Smith, partner at Innovation Incentives at Ayming UK, warned that further action was needed imminently. He remarked: “The rise in energy costs is so significant that, in a matter of weeks, some businesses have gone from a reliable profit to losing money. You can’t simply wait and hope for costs to go down.”

However, he warned that the Government would need to do more to effect a speedy energy transition, given that industry remained concerned about a lack of incentives and increasing cost. 

In addition to  R&D credits, subsidies and grants, the report suggests governments should extend fuding eligibility to any project reducing a company’s carbon footprint.

“So not just technical R&D but straightforward re-organising [such as] localising manufacturing. That will provide immediate benefits both to the economy and environment,” said Smith.