If you ask a life sciences chief executive to gaze into a crystal ball, he or she will tell you there is good reason to be optimistic about the future. Or so a new survey would have us believe.
All 38 executives who participated in the survey reported that they are confident about what lies ahead; 79 percent are convinced their products will remain relevant for the next few years; and 97 percent are certain that they are staying on top of coming trends.
What might explain such a bullish view of the world? Well, chief executives, “by their very nature, tend to be optimistic people and the industry is coming to terms with its challenges,” said Alison Little of the KPMG consulting firm, which conducted the survey last April and released it on Tuesday.
This may be a case, however, of seeing the world through the proverbial rose-colored glasses.
Why? At the same time these chief executives are so upbeat, a whopping 89 percent also confessed they are concerned they will not be able to increase market share. And 74 percent expect top-line growth of between just 2 percent and 4 percent over the next three years.
We wonder if their investors know how they feel about such prospects.
In any event, the rank-and-file drug, biotech, and device companies may have reason to be optimistic. None of the chief executives foresee any net job losses over the next three years. That’s right — none. Instead, 76 percent expect headcounts to grow between 6 percent and 10 percent during that time, and 79 percent predict a slight 5 percent increase in the number of employees over the next 12 months.
What kind of jobs, exactly, are going to be filled? The survey did not provide this level of detail, but a KPMG spokesman told us the openings “tended to be much more technical in nature,” with a concentration in production, quality assurance, clinical work, and information technology.
Marketing was not mentioned, despite the industry emphasis on promoting products, although those dollars could still be spent by hiring firms to pitch doctors and consumers. In fact, increased spending on marketing and advertising was tied with facility expansions as the area where most of the chief executives expect to spend their resources over the next three years.
To fuel their hopes, these companies will need to grow, of course. So where will the growth come from? Well, 37 percent of the chief executives were convinced that new customers will generate growth, while 29 percent look toward new products instead. Another 24 percent are counting on new markets, and 11 percent believe new channels will save the day.
Interestingly, pricing was not cited. Why? KPMG did not ask whether pricing will motor growth, which is unfortunate, given that so many companies have relied on outsized price hikes — or simply big price tags at product launches — to bolster their bottom lines. As a result, the chief executives were given a pass about the most controversial issue of the day.