Claims of life science companies fleeing abroad is a myth according to survey
Av “It does not mean that the situation is picture perfect, but we need to get the analysis right to be able to take the right measures,” says Ylva Williams, CEO of Stockholm Science City, which generated the data.
The aim of the survey was to give us a snapshot check of the veracity of the perception that Sweden is a hothouse for good ideas but that companies are constantly being acquired and leaving the country.
Therefore, all 740 life science companies that were registered in the Stockholm, Uppsala and Södermanland regions in 2009 were examined. The result showed that 10 years later, 231 of them had disappeared. However, this was not due to a mass move abroad from the investigated regions.
Over half of the 231 missing companies had been put into liquidation, while others had been moved within groups or could not be traced, whereas only 11 of the companies had emigrated. And of these, only two had been actually acquired and had moved abroad (see fact box below).
So, if people typically say that conditions here are so poor that companies are emigrating, are they wrong?
“According to our survey, it is not true that they are emigrating, but the conditions may still need to be improved,” says Ylva Williams.
“The numbers speak for themselves, but it is still interesting to see that more foreign companies invest in innovative Swedish companies and let the research remain in Sweden than there are companies that are acquired and leave Sweden.”
Ylva Williams believes that the notion of corporate flight within the field of life science may originate in an attempt to analyse why Sweden no longer produces any new global pharmaceutical companies as we did in the past. However, she believes that it is not due to companies being acquired but to the industry’s structural change.
“Our problem is that the companies are small and that they are not growing. I think that they may start too early, and the initial funding is way too modest. Furthermore, the question is whether they have the right management from the start or whether the researcher finds it too hard to let go of their “baby”. Many of the companies have sprung from academia and are run by the researcher, perhaps for too long, instead of an early introduction to professional management.”
According to Ylva Williams, another problem is that the companies often start from an academic idea that is too narrow and there is no plan from the beginning for how the company should broaden its operations and take the next step.
“However, I think that the gold that Sweden has is exactly this ability to innovate and to create these companies. Many of the companies receive foreign investment and remain in Sweden, and the funds that come into Sweden are reinvested here by the entrepreneurs.”
Facts: This many companies have moved
740 life science companies were registered in Stockholm-Uppsala-Södermanland in 2009.
In 2019, 231 of them had disappeared.
141 of the companies had gone into liquidation.
58 had been moved within the same group.
21 there was no information about.
11 had made an exit.
Of these 11 companies, 2 were foreign global companies that another foreign company acquired.
In 3 of the cases, it was foreign companies that acquired Swedish companies but let the research remain in Sweden.
Another 3 of the cases concerned Swedish companies that were acquired by other Swedish companies.
In 1 case, it was a Swedish company that was acquired by a foreign company but then bought back by the Swedish owner.
2 companies had been acquired by global companies and no longer had any operations in Sweden.
Source: Stockholm Science City
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