If Ireland isn’t already on the international business radar, it soon will be. The country has become a leading light in Europe thanks to its business-friendly policies, and may soon grow even larger, as it becomes the only native English-speaking country in the European Union.

One of the biggest and most surprising aspects of this success has been the growth of one industry: biotechnology. A unique mixture of policies, factors and good timing has turned Ireland into an epicentre of biotech businesses – and set the country up for prolonged future success.

What is biotech, exactly?

The portmanteau ‘biotech’ might conjure images of horrible sci-fi experiments, like brewing animal-human hybrids in a test tube. The reality is a bit more mundane, though ultimately no less interesting. Biotech is simply the more technical side of pharmaceuticals: in other words, exploring the way plants and organisms work to develop new technologies and treatments.

Much of the current work in biotech is towards gene therapy, gene editing, and the exploration of other processes at the cellular level. By understanding how cells work – how they repair themselves for example, or how they form and multiply – biotech research could help to prevent infectious diseases, treat or cure serious conditions, and tailor medicines to be more effectively targeted and have fewer side effects.

Biotechnology can encompass fields other than healthcare, however. Agricultural biotech produces things like GM crops, which help to feed hundreds of millions of people. Biotech is also pushing the research and development of effective biofuels, helping to recycle renewable biomass into a sustainable fuel source.

The beginning of biotech

Ireland’s marked success in attracting startups and tech businesses has often been pinned as a recent development. The economy struggled through the 2007-08 global financial crisis, but has rebounded since, with growth so strong that it’s been dubbed the ’Celtic Phoenix’.  But the seeds for biotech success were planted some time before the recent revival, in the original ‘Celtic Tiger’ phase.

Manufacturing in the early 2000s was in something of a crisis everywhere – at least outside of Asia. Cash-strapped firms had to find a balance between affordable labour, taxes, rent and the efficacy of exports. There were numerous locations, including several cities in the United States, attempting to lure in biotech firms as a specific sub-sector of the manufacturing industry.

Ireland however was in something of a unique position. A relatively large country with a good standard of living, Ireland was most crucially a part of the European Union. It had close links to some of the world’s largest consumer markets, with a favourable geographical proximity to the UK, France and Germany. For US firms it was a familiar environment, and the closest port of call for air travel to Europe.

The abundance of space made property prices and rent substantially cheaper than many other locations. Perhaps most importantly, the Irish government cottoned on to the industry’s potential at an early stage. In 1998 they formed Enterprise Ireland, a government ministry with the express goal of furthering Ireland’s international business appeal. This led to the development of new policies, and an unprecedented focus on attracting innovative enterprise and startups.

How Ireland got ahead

In the mid 90s, Ireland’s corporate tax rate stood at a hefty 40%. This fell slightly around when Enterprise Ireland was formed, before dropping to the current rate on 12.5% in 2003. Crucially however, Enterprise Ireland immediately lowered the rate for manufacturing firms to 10%. The government also launched a concurrent investment programme, specifically targeted at funding early stage manufacturing firms.

While Ireland didn’t have an abundance of manufacturing and biotech talent at the time, it benefited from EU freedom of movement rules, allowing firms to bring in talent from across Europe with no restrictions. Enterprise Ireland also specifically targeted the massive US Irish expats community to lure them back – simultaneously depriving the nascent US biotech industry.

EU membership also has its own perks. As well as unrestricted trade across the EU – cheaper thanks to fewer NTBs – companies could benefit from EU research & development funding. The EU has also struck deals with numerous countries around the world, reducing trade barriers and lowering tariffs. The Euro also presented a relatively stable and valuable currency, making extra-EU exports a worthwhile endeavour.

Irish biotech today

While the financial crisis had a substantial effect on property markets and consumer spending, this didn’t really affect Ireland’s biotech industry, which thrived on benefits and perks that weren’t going anywhere. As a result, the industry has gone from strength to strength over the past two decades, with manufacturing and research bases spread across the country.

One of the leading lights in today’s biotech scene is the startup Nuritas. A relative veteran at six years old, Nuritas have focused their attention on the benefits of ‘peptides’, short chains of amino acids. Present in all sorts of foodstuffs, peptides are already hailed by many fitness obsessives and bodybuilders as a safe alternative to steroids for muscle gain and repair. Nuritas believe that editing peptides could unlock even more benefits, and aims to apply the process to numerous common goods, helping to prevent disease on a massive scale.

Nuritas is only a small sample of the success biotech businesses have found in Ireland. Over the past 20 years, the number of biotech firms has grown from around 50 to well over 300. Of the world’s 25 biggest biotech and pharmaceutical firms, only one does not have a presence in Ireland (their European offices are in London). Pfizer has no fewer than seven sites in Ireland, while Johnson & Johnson has more than 3000 Irish employees.

Policies and progress

IDA Ireland has played a key role throughout this growth period. A ‘non-commercial, semi-state body’, the IDA is responsible for promoting and sourcing foreign direct investment into Ireland. A large portion of this in recent years has been encouraging expansion by biotech firms; the IDA has claimed responsibility for more than $10 billion in biotech manufacturing investments in Ireland.

The industry has been shored up by Ireland’s growth in homegrown talent. The provision of free university education, a young population and native English speakers have made Ireland a haven for STEM graduates, with Irish universities catering to both Irish and foreign students. Biotech firms can source employees directly from these institutions, and several have set up joint research projects with Irish universities.

This is not to say there haven’t been any issues. Ireland’s opposition to stem cell research has hampered the progress of biotech firms, although stem cell research itself is not explicitly banned as of 2018. This legal grey area does not seem to have unduly affected the industry, though, with Irish biotech employees expected to break the 11,000 mark this year.

Ireland’s biotech industry is still in many ways an ongoing project, and still plays second fiddle to its wider pharmaceutical industry, which comprises 50% of all exports in Ireland. As more and more traditional jobs turn digital and become automated, though, digital and research based industries will become more and more valuable for national economies. Ireland is perfectly placed for future growth and success, and is among the best places to start a biotech business.

Former journalist Katya Puyraud is the co-owner of company formation specialists Euro Start Entreprises. Since 2007 Euro Start Entreprises has helped budding entrepreneurs and expanding SMEs with setting up a company in Ireland, and provides services in more than 30 other countries worldwide.

If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at [email protected] or on Twitter: @SimonCocking

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