Biotechnology in Germany
Multinational Business Management
Lucie Avenel – Marie-Claire Burgat – Shiho Kamei - Wilson
Kao
C...
Macroeconomic environment of
Germany
Political structure
 Parliamentary democratic federal republic:
Federal Republic of Germany.
 Federal President of Germa...
Legal System
 Constitution: Basic Law for 16 states.
 Five codes at the core system, civil, civil
procedure, commercial,...
Political and legal structure
The politic and legal
environment basically is
riskless.
The low grades for Labor
Flexibilit...
Germany’s economic and
financial variables
 The GDP of 2012 is 0,6%, but Germany remains the richest
country of Europe an...
Germany’s economic and
financial variables
 During the last 10 years the ratio between wages in Germany
and China countri...
• Situation: Cross-boarder with 9 countries
• Distribution: Hambourg, Berlin, Munich, cities along the Ruhr
Social and cul...
Population
 81 millions inhabitants
- 14th most populous country in the globe
 The fertility rate of 1.4 children per mo...
People characteristics
 One of the highest level of education
- Number of youths entering universities has more than trip...
Technology
 HIGH INVESTMENT RESEARCH AND DEVELOPMENT:
• Increase its investment in research and development: In
2010, pub...
Technology (cont.)
DENSE, MODERN AND POLYCENTRIC TRANSPORT
NETWORK
 Due to its central position in Europe
 Largest Germa...
Porter’s Diamond Model:
Biotechnology in Germany
What is Biotechnology ?
Biotechnology
“The application of science and technology to living organisms, as well as parts,
pr...
Industry Structure, Rivalry and
Firm Strategy
 Market Size
◦ Germany biotech market had total
revenue of 4,465 million in...
Industry Structure, Rivalry and
Firm Strategy
46.50%
4.50%
10.40%
34.70%
3.90%
Main areas of activity in dedicated
biotech...
Industry Structure, Rivalry and
Firm Strategy
495 496 501
531 538
56
91 92
114 125
0
100
200
300
400
500
600
2006 2007 200...
Industry Structure, Rivalry and
Firm Strategy
Research
Developm
ent
Validation Sales Total
Other
countries
with research i...
Related and supporting
industries
 Integrated Clusters
◦ As many as 25 industry relevant clusters of
various sizes; large...
Related and supporting
industries (cont.)
 Research and Education
◦ 63 Universities, 26 Technical Colleges, 104
non-acade...
Related and supporting
industries (cont.)
 Financing and Capital: most of funding sources
come from venture capital and g...
Multinational Business Activity
 Boehringer-Ingelheim
(Pharmaceutical)
◦ Net Sales: 32% in Europe, 46% in
Americas, and 2...
Government - Programs
 BioRegio competition of the Federal Ministry of
Education and Research (BMBF) (1995)
◦ Provide imp...
Government – Intellectual
Property
 SIGNO: Protection of ideas for commercial use
◦ Helps universities, small and medium-...
Government
Policy Environment
Government
Policy Environment
Demand Conditions
 Red biotechnology / medical
◦ Large and aging population: GDP health
spending, Germany is 4th (11.6%)
...
Demand Conditions
 Green Biotechnology / Agriculture
◦ Important consumption of biotech animal
feed
◦ Development of Gene...
Factor endowment
 Communication
infrastructure
 Long established/start-up companies.
Industry Government and Research
ar...
Factor endowment
 Skilled labor & technology know-how
 Establishment of broad research
platforms:
Universities/Organizat...
Labor Cost
Technology know-how
 Best Patent Record in Europe - 2nd to US globally; European leader in
patents: 100 over UK and Franc...
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Biotechnology in germany_-_presentation_final

  1. 1. Biotechnology in Germany Multinational Business Management Lucie Avenel – Marie-Claire Burgat – Shiho Kamei - Wilson Kao Celia Lao – Alain Truche – Adrian Tsai – Jeff Shusterich
  2. 2. Macroeconomic environment of Germany
  3. 3. Political structure  Parliamentary democratic federal republic: Federal Republic of Germany.  Federal President of Germany: Joachim Gauck.  Chancellor: Angela Merkel.  Major political Parties: Coalition of the Christian Democratic Union (CDU), the Christian Social Union (CSU); and the Free Democratic Party (FDP).  Political Attacks on Foreign Companies and Industries. Ex: Boeing and Airbus.
  4. 4. Legal System  Constitution: Basic Law for 16 states.  Five codes at the core system, civil, civil procedure, commercial, criminal, and criminal procedure.  As a part of the European Union, Germany must obey all the laws set in place by that organization.
  5. 5. Political and legal structure The politic and legal environment basically is riskless. The low grades for Labor Flexibility is due to the employment and labor laws are strongly employee based, and commonly referred to as “employee protection law”
  6. 6. Germany’s economic and financial variables  The GDP of 2012 is 0,6%, but Germany remains the richest country of Europe and the 4th richest of the world in terms of GDP (PPP)  The most dynamic country as far as finance in concerned: the European Central Bank is in Frankfurt  Prices level Sources: www.tradingeconomics.com , The Economics magazine
  7. 7. Germany’s economic and financial variables  During the last 10 years the ratio between wages in Germany and China countries went from 10–1 to 4-1, 2 reasons:  Chinese workers wages are growing  German government decided to decrease the minimum wage allowed because of the increase of unemployment rate  And transportation costs are low if you want to enter the European market because Germany is geographically in the center of European Union Global Times
  8. 8. • Situation: Cross-boarder with 9 countries • Distribution: Hambourg, Berlin, Munich, cities along the Ruhr Social and cultural situation
  9. 9. Population  81 millions inhabitants - 14th most populous country in the globe  The fertility rate of 1.4 children per mother ⇒ estimated decline of population by about 4 million Growing aging population ⇒ shortage of skilled workers  91% German - Majority of immigrants are from Turkey - Italians, Greeks and the Serbs  Middle class society
  10. 10. People characteristics  One of the highest level of education - Number of youths entering universities has more than tripled since 1950 - Trade and technical schools are among the world's best  Attitudes - Hard workers - Planning - Formality in works - Work and personal lives are rigidly divided  Culture Dimensions - Low Context Communication - High Power Distance - Individualism - High Uncertainty Avoidance - Achievement  Open to new technologies and product
  11. 11. Technology  HIGH INVESTMENT RESEARCH AND DEVELOPMENT: • Increase its investment in research and development: In 2010, public and private sectors spent a record 70 billion euros, amounting to 2.82 percent of GDP • Employ 506 000 persons in R&D and 299 000 scientists & scholars • Various forms of research locations: universities, companies and institutions run by federal or state authorities. • Several research areas: Environment and Energy / Health and Safety / Interdisciplinary Technologies / Communication and Mobility / Future and Society • Technology centers: Potsdam, Berlin, Franckfurt, Dusseldorf
  12. 12. Technology (cont.) DENSE, MODERN AND POLYCENTRIC TRANSPORT NETWORK  Due to its central position in Europe  Largest German airports are Frankfurt Airport and Munich Airport. “MADE IN GERMANY”  “Germany is the most inventive country in terms of patents after the United States and Japan” based on the OECD’s 2009 Science, Technology and Industry Scoreboard  German innovations have shaped today’s world and promoted progress: exemples… GREEN TECHNOLOGIES  Leadership position in the field of sustainable production technologies.  "Green Production Technologies" campaign
  13. 13. Porter’s Diamond Model: Biotechnology in Germany
  14. 14. What is Biotechnology ? Biotechnology “The application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services.” Green Biotechnology: Agriculture • Plant and food Red Biotechnology: Medicine • Medical and pharmaceutical for humans and animals White Biotechnology: Industry • Industrial manufacture with biotechnical procedures, environmental protection productive processes
  15. 15. Industry Structure, Rivalry and Firm Strategy  Market Size ◦ Germany biotech market had total revenue of 4,465 million in 2010, a compound annual growth of 1% between 2006 and 2010 ◦ Medical/healthcare sales provided most lucrative, totaling 3,138 million, equaling 70% of total biotech market in 2010 ◦ Anticipates CAGR 7% for five year period, and drive market to 6,260 million by end of 2015 Source: http://www.marketresearch.com/Market Line-v3883/Biotechnology-Germany- 6555038/
  16. 16. Industry Structure, Rivalry and Firm Strategy 46.50% 4.50% 10.40% 34.70% 3.90% Main areas of activity in dedicated biotechnology companies health/medicine agricultural biotechnology industrial biotechnology non-specific services bioinformatics Market Segmentation
  17. 17. Industry Structure, Rivalry and Firm Strategy 495 496 501 531 538 56 91 92 114 125 0 100 200 300 400 500 600 2006 2007 2008 2009 2010 Number of dedicated biotechnology companies Number of other biotechnology- active companies source: biotechnologie.de Number of Biotech companies
  18. 18. Industry Structure, Rivalry and Firm Strategy Research Developm ent Validation Sales Total Other countries with research institutes 712 315 180 6 1112 228 with biotech companies 214 193 21 141 551 178 with industrial partners 199 204 25 340 732 343 with other organizations 22 21 34 26 103 20 0 200 400 600 800 1000 1200 Cooperations of dedicated biotechnology companies along the value chain source: biotechnologie.de
  19. 19. Related and supporting industries  Integrated Clusters ◦ As many as 25 industry relevant clusters of various sizes; largest are around Munich, Berlin, the Rhine Neckar triangle , Frankfurt and Cologne. ◦ Bioregions provide access to an outstanding scientific environment, excellent infrastructure, ready access to capital, experienced management, and highly trained personnel.  Examples ◦ BioM (Bavaria) manages the biggest cluster in Germany ◦ Health-Capital (Berlin): cooperation between industry, politics, and research
  20. 20. Related and supporting industries (cont.)  Research and Education ◦ 63 Universities, 26 Technical Colleges, 104 non-academic research institutes, 9 sites for state departmental research ◦ R&D expenditure in 2010:  Ranked 3rd out of 25 for total expenditures (OECD)  Ranked 1st for expenditures by the public sector (OECD)  Supporting industries ◦ Pharmaceutical: 63% of revenues from exports ◦ Medical devices: 62.5% of revenues from exports
  21. 21. Related and supporting industries (cont.)  Financing and Capital: most of funding sources come from venture capital and grants
  22. 22. Multinational Business Activity  Boehringer-Ingelheim (Pharmaceutical) ◦ Net Sales: 32% in Europe, 46% in Americas, and 22% in Asia, Australia and Africa.  MediGene ◦ operates in Europe and U.S. ◦ First biotech company in Germany to have revenues from marketed products  Morphosys ◦ 97% of Revenue comes from outside of Germany Source: company annual reports
  23. 23. Government - Programs  BioRegio competition of the Federal Ministry of Education and Research (BMBF) (1995) ◦ Provide impetus  BioIndustry 2021 ◦ Initiative that supports strategic partnerships between science and industry  Health and Research Framework Program of the Federal Government (investment of about 5.5 billion Euros)  KMU-innovativ initiative ◦ Aims to provide technology transfer  Go-Bio measure ◦ Aimed at validation and start-ups  BioPharma competition
  24. 24. Government – Intellectual Property  SIGNO: Protection of ideas for commercial use ◦ Helps universities, small and medium-sized enterprises, people intending to set up in business and inventors to secure and commercialize their innovative ideas ◦ It supports 24 patent and commercialization agencies  Sample Agreements for Research and Development Cooperation ◦ Help with the drafting of joint projects involving companies and universities or research institutions ◦ Contribute towards reducing legal and administrative expense associated with cooperation projects  Law on Improved Enforcement of Intellectual Property Rights ◦ Facilitates the battle against product piracy and strengthens intellectual property rights.
  25. 25. Government Policy Environment
  26. 26. Government Policy Environment
  27. 27. Demand Conditions  Red biotechnology / medical ◦ Large and aging population: GDP health spending, Germany is 4th (11.6%) ◦ Internal market of highly sophisticated wealthy consumers ◦ Life expectancy: from 81,5 years in 2000 to 82,7 years in 2009 ◦ Increase of chronic illness that needs medications ◦ Favorable healthcare system ◦ Central position of Germany in Europe
  28. 28. Demand Conditions  Green Biotechnology / Agriculture ◦ Important consumption of biotech animal feed ◦ Development of Genetically Modified Food in companies  White Biotechnology - Concern towards environment - Development of green energy - Advance in green technology in Germany
  29. 29. Factor endowment  Communication infrastructure  Long established/start-up companies. Industry Government and Research are pulling in one direction  Medical biotech company revenueincreased by nearly 20 percent for the period 2007 through 2010.  25 Industry Clusters: Lab to Market Place: Environmental stimulation – support and competition among clusters on regional, governmental and industrial expertise.  Swiss IMD's second best Infrastructure Bio-regions
  30. 30. Factor endowment  Skilled labor & technology know-how  Establishment of broad research platforms: Universities/Organizations with strong international connected growth searching for investors.  1.02B in research expenditure  343 Universities and 330 Research Institutes cooperating with companies for new products  Public R&D: 5.5B – Health Research Framework: Ex. 1000 Biotech Applications  50 National Universities: Life Science/Bio Med Engineers  48,000 Natural Science and Mathematics; 21,000 Medicine Students – with 9,000 obtaining biology degrees; 5,300 in Chemistry, 2,300 in Pharmacy  Germany has proportionally more natural sciences graduates than the US or Japan.  World Class Education System with 84% higher education over OECD
  31. 31. Labor Cost
  32. 32. Technology know-how  Best Patent Record in Europe - 2nd to US globally; European leader in patents: 100 over UK and France; 4th Leading Nation in Triadic Patents  Molecular Diagnostics: Largest IVD Market in Europe; Regenerative Therapies; 1B in Heart Research Sector  Comparatively not the best technological know-how in the industry (bottom 7)

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