Ahead of the long-awaited Industrial Strategy for life sciences, RSM UK calls on the government to  address challenges around capital, talent and access to markets if the UK’s life sciences sector is to become an industry leader on the global stage.

The UK’s life sciences sector comprises over 6,800 businesses, generating more than £100bn in turnover in 2021/22. The sector relies heavily on the UK’s research and development (R&D) scheme as a form of funding, with the pharmaceutical industry accounting for 18% of all UK R&D in 2022 – the highest of any product area.

Despite this, its ranking on the Global Innovation Index slipped from 4th to 5th place in 2024, suggesting its competitive advantage is being eroded. Access to labour also remains a challenge, with the number of apprenticeships started in the life sciences sector falling 9% to 1,240 in 2022/23.

Laragh Jeanroy, partner and co-head of life sciences at RSM UK, said: “There are three major areas that need to be tackled in the life sciences sector: capital, talent and access to markets. The UK’s strengths lie in supporting life sciences businesses during the early stages of their lifecycle, being home to world-class universities plus a generous R&D tax regime. But once these businesses start to see rapid growth, access to funding becomes much more challenging. It’s at this stage that businesses start to look elsewhere to grow, and the UK loses out.

“The UK also falls short in its ability for life sciences businesses to take medical advancements and new medicines to market. The UK’s healthcare system holds a large and valuable data set, but can often feel disparate in how its run, largely due to NHS trusts working in silos. This lack of a joined-up approach, combined with complex and bureaucratic processes and poor infrastructure means the commercialisation of new products can be extremely difficult.”

Graham Bond, partner and co-head of life sciences at RSM UK, added: “The sector needs a major boost in funding, not small-scale initiatives that don’t scratch the surface. The government’s plans to unlock pension funds will open a new avenue of funding for growing life sciences businesses as well as the overall UK economy, but this needs to be fast-tracked. It’s also crucial that grants and programmes such as Horizon Europe are fully harnessed and made easily accessible for businesses.

“However, the success and growth of life sciences businesses won’t be possible without the right talent, which starts with attracting and upskilling ambitious and talented individuals. The government’s plans to reform apprenticeship funding and remove level 7 and 6 degree level apprenticeships from the framework could be detrimental to the sector. Therefore, we’d encourage a serious rethink of this approach and for these apprenticeships to be kept under the Growth and Skills Levy for the sector, given its importance in driving economic growth which is at the heart of the Industrial Strategy.”