Economic shifts and surges have become the norm for the life sciences industry. Small to medium-sized companies are becoming dominant in the marketplace, while large companies are reorganizing in response to generic competition and new geographic focus. The 2014 Life Sciences Cluster Report explores key challenges for the industry, top real estate and facilities trends for industry companies and global regions to watch for emerging market opportunities. To learn more and download the complete report, please visit: http://www.jll.com/cluster-report

1. Life Sciences Cluster Report
2014

2. Global Trends Spotlight
• Global trends are stimulating significant
changes to space needs
• Mid-tier companies and specialty players are
prompting a majority of new demand. They
are experiencing overnight growth and highly
variable needs in response to promising
products and treatments
• As further overhead cost cutting is required
for Big Pharma and mid-tier players grow
beyond their current capabilities, the
prospect of outsourcing strategic facility
functions will become more attractive
1

3. • Asia has surpassed both North America and
Europe in overall PCT applications Global
innovation share shifts
• As of 2012, the top five countries accounted for
74.0% of all PCT applications
• Emerging clusters with highest levels of PCT
growth are also the least collaborative
1. Geographic shifts in innovation
• Mature North American and Western
European countries among the most
collaborative nations on PCT applications
• The U.S. maintains the highest percentage
of the working population with bachelor’s-
type degrees, but loses its lead when only
the younger generations are considered
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4. • Building blocks of development
- Investment in R&D
- Higher-education institutions
- Physical infrastructure
- Foreign direct investment
- Technology transfer
- Effective government regulation
• Changes in labor productivity differ greatly
between developing and developed economies
2. Transferring technology from bench to marketplace
• Barriers to entrepreneurship have declined
in most countries and more established
global clusters; however they remain high
among emerging life sciences clusters
• Corporate statutory tax burdens are highest
among Japan and the U.S., however these
countries also have some of the best
regulatory systems and high political and
transparency rates
3

5. • European nations post flat growth while
developing nations continually post year-over
year increases in Gross Expenditures on
Research and Development (GERD)
• China, Brazil, Russia, and India are expected
to outpace the overall global total for year-
over-year increases in GERD
• 10 countries account for 80.0% of global
R&D spend
3. Global funding perspective
• While businesses contribute the most to
R&D spend for most countries, the
contribution ratios of this, and other funding
sources, vary widely
• Since businesses are the biggest source of
R&D funds, the broader economy and
investor confidence levels can have a major
impact on funds appropriated for R&D.
Confidence in biotech has returned, with a
banner year for life science IPO activity in
the United States
4

6. • Decision makers are now open to outsourcing
functions in critical and highly regulated space
• For decades, the yellow line designating a
critical/regulated area has served as an actual
and symbolic boundary for IFM providers
Advancements in the IFM world are breaking
down some of the barriers to entry
• From 2010 to 2020 nearly 2 million life scientist
and engineering jobs are expected to open
4. Efficiency, compliance & facility trends
• The ManPowerGroup’s annual global
survey of 38,000 employers in 42 countries
revealed that 35.0% report difficulty in
filling jobs
• The difficulty filling Life Sciences jobs may
potentially lead to rising costs and prevent
getting the job done in time and on budget
5

7. Americas
• Region is unique in that it is comprised
of some of the most and least
established life sciences clusters
across the globe
• U.S. and Canada have mature and
deep-seated industry presence
• Most growth opportunity lies in
expansion and development of
operations in Latin America
6

8. Top 5 U.S. clusters
1 2 3 4 5
Greater Boston
Area
San Francisco
Bay Area
San Diego
Metro Area
Raleigh-Durham
Metro Area
New Jersey/
NYC/
Westchester
Metro Area
7

9. EMEA
• Region continues to witness strong competition from the
emerging markets across the globe
• Increasing expenses on R&D, rising healthcare spending
and development of European clusters is expected to
sustain growth of the sector in the near future
• Europe continues to offer a conducive environment for life
sciences companies mainly due to its:
- Technological leadership
- Manufacturing know-how
- Laws toward protection of intellectual property (IP)
- Availability of skilled workforce
8

10. APAC
• Strong growth facilitated by strong
demographic trends
• Market potential in Asia has attracted
major international players to the region
and spurred on a flurry of M&A activity
• Improvement of public health coverage in
a number of markets
• Asian pharmaceutical market continues to
be exceptionally varied
• Innovation and R&D continue to gain
momentum outside of the well-established
Japanese hubs
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11. © Copyright 2014 Jones Lang LaSalle
How did your city stack up?
The Global Life Sciences Cluster Report tracks geographic shifts in life
sciences innovation, operations and facilities investments, including
analysis of countries and cities most actively investing in their life
sciences sectors. It includes a ranking of the top U.S. life sciences
clusters, as well as analyses of life science hotspots around the world.
Take a deeper diver into this research and download the report
comprehensive, 143 page report today.
Have questions about your real estate needs in the Life
Sciences industry?
Contact Roger Humphrey: Roger.Humphrey@am.jll.com