Contributed by Markus Weisser, Geschäftsführer (Managing Director) at quattro research GmbH.
With only very few natural resources and high wage costs, R & D is the key factor for the wealth and competitiveness of Germany. Here, the pharmaceutical and chemical industries are belonging to the top high-tech areas with a significant economic value. There are a couple of companies with a very long history, going back to the early stages of the industrial revolution. The merger and acquisition activities of the last few decades changed the pharma landscape quite significantly. However, most of the research centers are still located at their places of origin and even some foreign companies operate research sites in Germany. The industry benefits from the excellent research and teaching reputation of the German universities that attract highly skilled scientists and students.
Beside the classical pharmaceutical and chemical companies, Germany has a well-established biotechnology sector with a constant grow in revenue. Most of these companies are focused on sustainability because it is still very uncommon to invest into high-risk projects. Government driven seed founding, private equity and collaborations are typical forms of investment for German biotech start-ups. The general amount of venture capital is low in comparison to the US or UK market. Only very few companies have taken the risk for an IPO during the last few years.
This conservative setting is also reflected in the area of research informatics in life science companies. The (supposed) security and total control by working with in-house datacenters weighs more than the flexibility and the cost effectiveness that a cloud based solution might provide. Mobile devices, sharing of pre-competitive data, software-as-a-service are trends that are discussed in various forms but the actual implementation is very hesitant. Only very few German life science research centers contribute actively to open source projects.
The daily rates of software developers in Germany are higher than the rates of developers from low-cost countries. However, the availability of highly qualified developers and the locational advantages are good arguments against an offshore approach. Most clients prefer good German language skills of all team members and at least periodically face to face meetings. The higher daily rates are normally compensated by good quality of work and a broad expert knowledge. In our experience – and our clients confirm our assessment – , the total cost of development is significant lower with on-site development for software projects where software development skills have to be combined with expert knowledge of chemistry, biotechnology or the pharmaceutical development.