Blog posts

Meet the CSEP Team Series: Prof James Moore Jr

Can you tell us a bit about your background and how you became involved in the CSEP project on the UK MedTech sector?

I trained as a mechanical engineer and then pursued a PhD in biomechanics. Specifically, looking at the role of blood flow in disease development and treatment. That led me into inventing and developing cardiovascular implants. I was part of a few start-ups early in my career and continue to develop devices. Most of my research and development efforts these days is focused on the lymphatic system. For example, we are developing a device to prevent/treat lymphoedema in the arms of breast cancer survivors (lymphamotus.com). I teach medical device entrepreneurship and fluid mechanics in the Department of Bioengineering at Imperial. All this provided some good background to get involved in CSEP to analyse the UK MedTech Sector.

What inspired your involvement with CSEP? 

The potential to have a positive impact on the UK MedTech sector is exciting, and my main motivation for working at CSEP.  It is a strong but under-appreciated sector of the UK economy, so there is a lot of potential already.

What drew you to take on the challenge of analysing the UK MedTech sector, and how did that experience shape your perspective on the intersection of technology, business, and policy?

I was fortunate to be invited to lead the analysis of the UK MedTech sector back in 2020.  That work was generously supported by Lord Sainsbury.  I had to climb quickly up the learning curve on economics!  Along with others at Imperial that did reports on the BioPharma and Telecomms sectors, those projects led to the establishment of CSEP.  I am intrigued by the vision to have technical and business experts collaborate to improve productivity and societal benefit.  The MedTech activity has led to the formulation of a strategy to grow the entire HealthTech* sector, written in collaboration with the Association of British HealthTech Industries.  That is the first strategy document produced by CSEP, and I look forward to seeing more strategies being developed for other sectors.

*HealthTech refers to technologies that might enable anyone to monitor or improve their health, whereas MedTech refers to the subset of those technologies that claim medical benefit and therefore require regulatory approval.

Could you share some of the major inspirations that have guided your career and intellectual interests?

My career has benefited from the influence of many scientific discoveries, technological developments, and even other musicians.  It’s difficult to name a single one but a fantastic book that combines all these interests is “This is Your Brain on Music” by Daniel Levitin.

What are your interests outside your work?

Music is my main hobby.  I’ve wanted to be a musician since I was about 10 years old, so you could say that I am still trying!  I play several instruments and sing in two different bands.  One is a group of biomechanics profs that has been playing at conferences for over 20 years.  The other is our departmental band that plays at functions like the Christmas party.  It’s all good fun.  I’m also working on an album of mainly original music.  Otherwise, I used to play Ultimate Frisbee competitively.

Meet the CSEP Team Series: Dr Arianna Gentilini

Can you describe your research journey and the key themes that define your work in health economics and public policy?

I am a Research Associate in the Economics and Public Policy department at Imperial College London, jointly affiliated with the Centre for Sectoral Economic Performance (CSEP) and the Centre for Health Economics & Policy Innovation (CHEPI). I completed a PhD in Health Policy and Economics at the LSE, where my dissertation examined how patient organisations shape pharmaceutical innovation and access. Methodologically, that work combined quantitative analyses with qualitative evidence to capture how incentives, information, and advocacy intersect across the R&D and reimbursement lifecycle. I also interested in how governance processes can be embedded within the pharmaceutical sector, particularly around transparency requirements and where they fall short. My research has been published in The Lancet Oncology, Social Science & Medicine, Value in Health, and BMJ Open, and I continue to collaborate with colleagues across disciplines to address policy-relevant questions in this space.

Your work bridges health economics and innovation policy—how are you currently exploring the role of emerging technologies, like AI, in shaping pharmaceutical R&D productivity and access to medicines? 

I am currently working in a CSEP–funded programme on pharmaceutical R&D productivity that analyses how technology adoption and market structure shape drug development performance in the UK life sciences sector and internationally. I am also supporting a European Commission–funded project, called Hi-PRIX, which investigates how incentives for innovation can be aligned with equitable and timely patient access to effective medicines. A particularly interesting aspect of this agenda is the opportunity to explore the rapidly evolving AI tools landscape in the pharmaceutical sector, for example, evaluating how different AI tools are being integrated across target identification, trial design, and evidence synthesis, and what this implies for productivity. The sector is experiencing a period of rapid change, and I feel it is extremely important to think how the research we produce can be translated into recommendations that regulators and policymakers can act on to improves people’s health.

Your work touches on several aspects of the pharmaceutical sector. Can you tell us about the key themes or focus areas of your research, and how they inform policy and practice in health economics?

My work spans three interlinked strands: (i) pharmaceutical innovation and R&D productivity, including the drivers of success and attrition across the pipeline; (ii) regulation and health technology assessment (HTA), with an emphasis on evidence standards, uncertainty, and value for money; and (iii) the commercial determinants of health, particularly how market power, pricing practices, and strategic behaviour shape access and affordability. I am especially interested in how emerging biomedical technologies and stakeholder incentives interact to determine which medicines are developed, how they are evaluated, and how quickly patients can access them.

How do you see your role contributing to CSEP’s mission?

CSEP’s mission is to generate sector-level insights that inform policy and practice. My contribution is to bring an applied empirical toolkit, econometrics, document and text analytics, and policy evaluation, to help diagnose bottlenecks in drug development and to understand which policy levers are most likely to improve innovative output and patient access. I also enjoy collaborating across disciplines and supervising junior researchers, which helps grow CSEP’s capacity to deliver timely, policy-relevant research.

In what ways do you hope your work at CSEP will contribute to improving how health systems balance innovation, affordability, and access to medicines?

First, to deepen the evidence base on how technology, organisational capabilities, and market design impact biopharma productivity in ways that are compatible with affordability and equitable access. Second, to strengthen the bridge between research and implementation by working closely with partners in government and industry so that our findings inform regulation, HTA processes, and funding models. An additional benefit of being at CSEP is exposure to diverse methodological approaches across sectors. For instance, AI-enabled techniques employed by colleagues analysing firm-level data in the aviation sector have proven directly transferable to one of our pharmaceutical projects, which I believe is a great example of how cross-sector collaboration advance research.

Meet the CSEP Team Series: Dr Joachim Taiber

We’d love to hear a bit about you — could you share your background and professional experience?

My name is Joachim Taiber and I was born and raised in Germany.

All my academic training was performed in Switzerland at ETH Zurich where I studied Mechanical Engineering and Computer Science resulting in a PhD degree for technical sciences. After my studies I spent some time in a software start up in Zurich and then joined BMW Group in Munich to work as an automotive engineer. This career path led me to work in the US to engage in the development of an automotive engineering campus in South Carolina where BMW was a key investor which resulted in an academic engagement with Clemson University as a research professor. As a spin-off from working at Clemson University I led the development of the International Transportation Innovation Center (ITIC) which is an automotive proving ground for connected, automated and electrified vehicles. The center became the founding member of the International Alliance for Mobility Testing and Standardization (IAMTS) which I developed in the role of a managing director which brought me back to Europe as the organization is headquartered in Vienna. Imperial became a member of IAMTS which helped to develop the relationship to work with Dyson School of Engineering. I joined Imperial first as visiting professor in 2024 and became a advanced research fellow at CSEP shortly after where I am responsible for automotive affairs.

What are you working on right now, and what part of your work do you find most exciting?

I just completed working on the Automotive Sector Study and truly enjoyed learning more about the UK’s role how it could engage in transforming the future of mobility.

What drew you to work at CSEP, and how do you see your role contributing to its mission?

I was attracted by the opportunity to leverage my knowledge in the sector and contribute to its future in collaboration with colleagues that share my passion for mobility.

I’m particularly motivated by the chance to engage in mobility-related projects that create added value for the UK and its people as key source for innovation.

What do you hope to learn or gain from your time here?

I am eager to learn as much as possible for the excellent research and academic environment and help build meaningful relationships with industry and academic partners to work on transformative projects.

Do you have a favourite paper, study, book or project that has influenced your career path so far?

The Feynman lectures on physics.

Meet the CSEP Team Series: Dr Nigel Steward

 

Welcome to the CSEP team! Could you tell us a bit about yourself and your professional background?

I have recently joined the CSEP team after spending 36 years in industry where I worked in the fields of R&D, Energy and Climate Change, Supply Chain, and Technical Capability building, as well as Operations Leadership and Management where, I ran global businesses in Technology Transfer and Equipment Manufacturing, Electrode manufacturing for the aluminium industry, and Copper and Diamonds production. I am a Materials Scientist by training and studied for my degree and doctorate here at Imperial.

What projects are you working on currently and what part of your work is most exciting for you right now?

At CSEP we have been studying the HealthTech, Aerospace, Fine Chemicals, Telecom, Cyber Security, Automotive, BioPharma, Clean Energy, Data Centre, AI Assurance, and Insurance sectors. What I find exciting is learning about these sectors that are very new me, the new breakthroughs that are being made in technology, and business models and the market disruptions and opportunities that they bring. What I especially enjoy is learning from the brilliant academics and business leaders all over the country who are making these things happen. If all this wasn’t enough what brings the greatest satisfaction is seeing our business-led, sector growth strategies come to life and be delivered. Our first sector strategy plan has been created with the HealthTech Sector in collaboration with the Association of British HealthTech Industries (ABHI) and we have recently had success in seeing one of our growth actions being implemented. Making a difference in the world is what is most exciting.

What attracted you to working at CSEP?

When I retired from industry earlier this year, I was looking for something to do where I could put my skills and experience to good use for a greater good. The role of CSEP is to see how science, technology, market and business model disruptions can be used to find new growth pathways and competitive advantage for key sectors of the UK economy, all with the overarching goal of stimulating more growth for the UK economy. The work is very much aligned with the UK Government’s Industrial Strategy goals and aligned with my own goal of contributing to society in a meaningful way.

What specific research topics or areas are you most passionate about?

What I have always been most passionate about is learning and discovery and implementing what I have learned to make the World a better place. The work at CSEP offers these possibilities in bucket loads!

 

Is the UK biopharma sector at risk of sleepwalking into decline?

James Barlow


For years, the UK has traded on its reputation as a “life sciences powerhouse.” This narrative isn’t entirely false: we have world-class universities, our basic science is strong, and the NHS provides a unique testbed for clinical research. Yet behind the rhetoric, the biopharma sector is facing real and immediate challenges.


Global pharma companies – including Merck, AstraZeneca and Eli Lilly – have recently announced plans to pause or withdraw R&D and manufacturing investment from the UK. Promising British start-ups are often sold overseas before they can scale. Access to innovative drugs is often slower than comparable countries.


Unless government and industry change course, the UK risks becoming a country that generates world-class ideas and early-stage companies but leaves others to capture the economic and health benefits. Innovative drugs will take longer to reach NHS patients. Manufacturing jobs and investment will migrate abroad. The narrative of “life sciences powerhouse” will become a hollow slogan, masking a reality of decline.


The reasons for Big Pharma falling out of love with the UK have partly been framed in terms of a “Trump effect”, the emphasis on domestic manufacturing, and partly on an uncompetitive drug pricing regime in the UK after changes to the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS).


The UK’s difficulties don’t exist in isolation. Across Europe, the biopharma sector is losing ground. Public R&D spending on pharma is less than half that of the US, and private investment is just a quarter of American levels. Regulation is slower and more complex: median approval times for new medicines are nearly 100 days longer than in the US. Fragmented access to health data makes it harder to run efficient trials or fully exploit AI in drug development. The Draghi report has already highlighted Europe’s need to unlock secondary health data and accelerate digitisation, yet progress is slow. Meanwhile, the US continues to dominate private capital flows and China is rapidly translating R&D into patents and new biopharma products.


The UK’s self-inflicted weaknesses


But the UK is not just sharing Europe’s malaise – it may also be amplifying it through its own domestic weaknesses. Several structural issues make the UK a less attractive place for biopharma investment:


1. Start-up strength, scale-up failure.
The UK outperforms its European peers in early-stage funding. But when it comes to growth capital, the pipeline runs dry. Company valuations are low, making the USA a more attractive location for scaling. Promising small UK biopharma firms are often acquired by overseas investors, most commonly from the USA. In short, the UK funds the cost of discovery; others reap the rewards of commercialisation.[1]


2. Clinical trials – a squandered advantage?
The NHS’s voluminous health records could be a global asset for clinical trials. Instead, trial capacity is limited, recruitment slow, and approval pathways often cumbersome. Some other countries are easier and faster places to run trials. What should be a UK strength is in reality a weak spot.


3. Pricing that discourages investment.
The UK is very good at securing low drug prices for the NHS. But from an investor’s perspective, the pricing model looks increasingly hostile. The VPAS is seen as punitive by global pharmaceutical companies, compared to similar schemes in other countries. Companies don’t see a fair reward for their R&D risk and the UK risks being deprioritised as a launch market for new drugs.


4. A complacent narrative.
Successive governments have promoted the UK as a global life sciences powerhouse. While it is true that our science remains competitive, the long-term indicators are less encouraging. Patent filings, research output, and overall R&D intensity show that China and other emerging players are catching up fast.


What needs to happen now


Global pharma companies are not sentimental. They will locate their R&D and manufacturing where conditions are most favourable. Switzerland offers stability, the US offers capital depth, China offers scale and political backing. In contrast, the UK’s science base is still strong, but the downstream environment – scaling finance, trial efficiency, regulatory predictability, and pricing – does not match. Put simply, the UK is no longer seen as offering the right balance of opportunity and reward.


We still have assets worth fighting for, but this requires political will. Policymakers must:


• Continue to improve the environment of drug trials. This includes ensuring NHS data is more readily accessible to help provide real world evidence for R&D and virtual trials.
• Support scale-ups, not just start-ups. Provide the right tax and investment landscape to build deeper pools of growth capital so that UK firms can mature into global leaders, rather than being sold abroad.
• Reform drug pricing. Be bold – move beyond penny-pinching and embrace value-based pricing models that align rewards with outcomes.
• Face reality. Stop hiding behind “life sciences powerhouse” rhetoric and treat life sciences as a strategic national priority.


The remedies aren’t just the responsibility of government alone. The biopharma sector can’t simply sit back and wait for policy changes – it needs to:


• Be more ambitious. Aim to scale from a UK base rather than defaulting to acquisition as an exit.
• Engage proactively with the NHS. Build the evidence base for adoption as innovative technologies are being developed and not after they have been launched; work with clinicians to overcome the system’s inherent risk aversion.
• Tell the value story better. Demonstrate clearly how new drugs save money and improve outcomes, not just what they cost.


A wake-up call


If we keep congratulating ourselves on our science while ignoring the cracks in our industrial base, we will drift into decline. Biopharma is too important to the UK’s economy and health system to be allowed to wither. The choice is clear: act boldly now or accept second-tier status tomorrow.

 

This blog draws on recent interviews James gave to Nature and CNN’s Marketplace Europe about the state of the UK and European health tech industry.


CSEP’s work on the biopharma and health technology sectors


We have published reviews of the competitiveness of the UK’s biopharma (Biopharmaceutical_Sector_2024_Brochure_Nov2024.pdf) and health technology (348-IMP-Public-Affairs-3-reports_Medtech_AW_DIGITAL_SINGLES_Sept23.pdf) sectors, with recommendations for business and government. In collaboration with the ABHI, we have developed a UK healthtech sector strategy, available here: Lores_Screen_View_Only_HealthTech_Report_Oct2024_v4-FINAL.pdf


CSEP is currently investigating the R&D productivity of UK biopharma and whether this has changed in recent years as new technologies such as AI have become more widely used. Another project is investigating the “long tail” of around 500 smaller biopharma companies and their potential for growth. These projects will be completed in 2026.

 

[1] More information on the slippage in the UK’s scientific performance and on the challenges faced by small biopharma companies seeking to grow can be found in the CSEP blog “From biopharma innovation to biopharma impact: Can the UK compete globally in 2025?”

UK HealthTech Roadshow Unites Industry, Academia, and Government to Shape MedTech’s Future

The government has placed growth at the heart of its mission and in June of this year
published its Industrial Strategy. One important issue raised by the Industrial Strategy is
the need to better understand the relationship between national sector strategies and
the regional areas where firms are located.

The high-level Sector Plans identified the most important city regions and clusters for
the given sector. In addition, regional authorities are developing ambitious Local Growth
Plans which are supposed to dovetail with the Industrial Strategy Sector Plans. These
local plans need to tackle the critical issues that are constraining growth across sectors
including poor transport connections, skills shortages and housing.

If a sector is to drive growth, it will need to scale up across the regions which means
there needs to be some consistency across locations. For example, there should not be
a diFerent export strategy for HealthTech firms in Yorkshire compared to those in
Scotland; there needs to be one national export strategy for the sector. However,
national sector strategies will have to consider the advantages and disadvantages faced
by each location which will impact multiple sectors. Hence it is critical that national
sector strategies dovetail with regional strategies to support growth across multiple
sectors rather than generating a host of competing strategies which has sometimes
been the case across the UK.

With that in mind, a nationwide series of regional roundtables, jointly hosted by the
Association of British HealthTech Industries (ABHI) and the Centre for Sectoral
Economic Performance (CSEP) at Imperial College London, has brought together
leaders from industry, academia, and government to address the challenges and
opportunities shaping the UK’s £13.5 billion HealthTech sector.

Spanning events in Edinburgh, Oxford, Manchester, and Cardiff, the roadshow
highlighted the sector’s economic strength, innovation potential, and pressing need for
structural reforms to boost productivity, manufacturing, and global competitiveness.

 

A Sector with Global Potential – and Persistent Barriers

According to CSEP’s research, the UK HealthTech industry employs more than 150,000
people and contributes £13–15 billion in Gross Value Added (GVA) annually—on par
with the biopharma sector, despite receiving 15 times less research funding.

University spinouts in HealthTech rival those in pharmaceuticals, underscoring the
sector’s innovation eFiciency.

However, productivity per employee lags global leaders such as Singapore and
Denmark, and the UK remains a net importer of medical technologies. Much of the
country’s manufacturing capacity has migrated overseas, particularly to the US and
Switzerland, limiting domestic economic returns.

 

Three NHS Strategic Shifts Driving Urgency

Speakers, including ABHI’s Richard Phillips and Imperial’s Professor James Moore Jr.,
stressed that NHS sustainability hinges on three strategic shifts:

1. Care closer to home and in the community
2. Digital transformation
3. A stronger focus on prevention

Delivering on these priorities will require rapid adoption of innovative health
technologies—an area where the UK has historically excelled in invention but lagged in
deployment.

 

Policy and Investment Reforms Proposed

Daniel Green, a MedTech entrepreneur and policy adviser, outlined a set of cost-neutral, sector-specific proposals to stimulate growth:

• Expand SEIS/EIS limits for life sciences, raising the SEIS cap from £250,000 to
reflect the capital intensity of MedTech ventures.
• Reform EMI share schemes so tax benefits remain valid after employees leave,
accommodating long development timelines.
• Enhance R&D tax credits for UK-based clinical trials to reverse the UK’s decline
in global rankings (from 4th to 10th).

Attendees agreed these reforms would improve access to capital, attract talent, and
encourage companies to conduct trials domestically.

 

Local Insights from the Regions

• Edinburgh: Participants called for better alignment between NHS priorities and
HealthTech innovation, with a focus on health equity and sustainability.
• Oxford: Discussions stressed the UK’s need to match its scientific strength with
faster adoption and value realisation in the health system.
• Manchester: Stakeholders showcased integrated health data initiatives and the
CityLabs innovation hub, which has created over 800 jobs and £150m in GVA.
• Cardiff: Former Welsh Economy Minister Vaughan Gething urged embedding
innovation as a core NHS function, with empowered local leadership and clear
priorities.

 

ABHI’s Role as the Sector’s Voice

ABHI, representing over 400 members (80% SMEs), acts as a bridge between industry
and policymakers, advocating for regulatory clarity, market access, and international
trade growth. Its trade missions span the US, Middle East, and beyond, helping UK
firms access new markets and align with global regulatory standards.

 

Next Steps – From Discussion to Delivery

The roadshow’s findings will feed into a collaborative HealthTech strategy co-authored by ABHI and CSEP, focusing on government policy reform, industry scaling
commitments, and academic innovation pipelines. Attendees were urged to provide
feedback to refine the roadmap.

“This is about more than funding requests,” Moore emphasised. “It’s about a shared
commitment—industry, government, and academia each playing their role—to make
the UK the best place in the world to develop, scale, and export health technologies.”

Using Sector Evidence and Expertise to Improve Medical Technology Regulations, Achieve Better Health Outcomes, and Grow the Economy: CSEP and the UK’s Life Sciences Sector Industrial Strategy

The Centre for Sectoral Economic Performance (CSEP) is a new institute based at Imperial College and funded by the Gatsby Charitable Foundation. CSEP strives to contribute to the UK’s Economic Growth by employing rigorous academic research, the latest scientific and engineering knowledge with bottom-up business informed analysis to create innovative, meaningful and actionable sector strategies to create growth in jobs and economic value add.

CSEP analysis has shown that the UK’s HealthTech sector is one of the country’s hidden gems. The UK HealthTech Sector contributes £13.5 Billion of Gross Value Add (GVA) to the UK economy annually and, since 2016 has grown at a compound annual growth rate (CAGR) of 19%. Wages, turnover and exports associated with the sector have also grown over the 2016-2020 period at CAGR’s in the 14-19% range. Working in partnership with the Association of British HealthTech Industry (ABHI) and the broader HealthTech businesses community, an industry led strategy to further grow the sector has been created. The sector strategy contains a 6-point delivery plan, with clear actions, timelines and goals that ABHI with CSEP support have been executing this year. Roadshows have been held up and down and across the country to share the strategy and to seek further refinements and guidance from the sector.

This year, following the publication of that strategy and subsequent engagement with multiple departments across Whitehall, including briefings to policy teams and roundtables with decision-makers, it was heartening to see the Government in its landmark Life Sciences Sector Industrial Strategy incorporate three of the report’s key recommendations.

1) utilisation of the NHS as a strategic innovation partner

2) provision of greater export support for HealthTech SME’s

3) streamlining regulation and market access.

Of particular importance was the regulatory streamlining where there is an urgent need to reform the UK’s processes for regulating, approving and adopting medical technology and this was a key component of the CSEP/ABHI report. These changes will ensure that NHS patients will have access to the best life-saving technologies as soon as possible, and they also eliminate the need for duplicate approval process that introduce delays and additional costs to the sector and drive an accelerated growth of the HealthTech sector in the UK.

However, though significant and ambitious, and a welcome step from Government, demonstrating its commitment and intent with regards to the Life Sciences sector, the Life Sciences Strategy is just a roadmap. CSEP and ABHI are now engaging with Government and its relevant policy teams, as well as industry more broadly, to support the development of the implementation of the Sector Strategy and its specific proposals. CSEP researchers and academics are in regular dialogue with policy officials to provide evidence and expertise to inform the practical, real-life application of the changes that Government wants to see and will continue to carry-out cutting-edge research into the sector to monitor trends and performance metrics.

Together, these strategies signal a new era of collaborative, sustainable, and inclusive growth — where HealthTech doesn’t just treat illness, but powers national prosperity.


Authors: Dr. Nigel Steward and Professor James Moore, in collaboration with ABHI

From biopharma innovation to biopharma impact: Can the UK compete globally in 2025?

Author: Professor James Barlow

In 2024, the UK dropped out of the top ten countries in global manufacturing rankings.[i] The decline reflects long-standing structural weaknesses that stretch back decades, including a lack of coherent industrial strategy and inconsistent policies, inadequate adoption of innovation and productivity-enhancing practices, and insufficient investment in workforce training. These have left many of our manufacturing industries without a solid foundation for global competition. Compounding these challenges, geopolitical shifts have also led to other countries overtaking the UK – Russia’s surge in defence industry spending, a manufacturing boom in Mexico spurred by Chinese investment seeking to bypass US tariffs, and Taiwan’s continued dominance in semiconductor production.

Innovation without impact

Does this matter? According to a widely held narrative, the UK lies at the global scientific frontier in key technologies such as life sciences and advanced computing. Yet, the UK often struggles to translate this cutting-edge research into commercial success, limiting its ability to produce world-leading companies. There are also concerns that even the belief in the UK’s scientific performance may be misplaced. Recent research[ii] on some of the priority technologies described in the UK’s 2021 National Integrated Review (engineering biology, AI, and quantum computing) concluded that while the UK performs reasonably well despite low investment, there are real questions about our ability to remain competitive in the long term. Addressing this will require attention to the level, focus and nature of science funding in the UK. But it also requires an ability to turn scientific breakthroughs into companies that grow into global players.

Life sciences: opportunities to unlock growth

A case in point is life sciences, where the UK is recognised for its strengths. Much of this science feeds the biopharma sector, where the UK has two of the world’s largest companies, AstraZeneca and GSK. However, growth in biopharma gross value added (GVA) has stalled and the UK has fallen behind other competitor countries in international rankings.[iii] Moreover, much of our pharma manufacturing capacity has been transferred abroad and the environment for conducting clinical trials has been problematic for several years.

The potential for future growth in the sector is there. The Government’s proposed industrial strategy prioritises life sciences, including biopharma innovation. The UK could leverage its AI capabilities and the NHS’s extensive health data to accelerate drug development and enhance the flow of research breakthroughs into commercial applications. As well as AstraZeneca and GSK, around 500 smaller biopharma companies—three-quarters of which demonstrate measurable research output—indicate a strong foundation for growth.[iv]

A critical question is whether the UK can translate its scientific strengths into GVA for the UK economy. Small companies with promising products are often acquired by US and other foreign investors. While UK biopharma companies outperform their European peers in securing early-stage funding, they raise less late-stage growth financing. This makes it preferrable to seek acquisition by a large pharmaceutical company or possibly an IPO in the USA, where the average IPO size is significantly higher than in the UK.[v]

Between Q3 2023 and Q3 2024, there were 130 mergers and acquisitions (M&A) in the UK pharmaceutical sector, valued at $15 billion, with most involving foreign buyers. [vi] This activity is not inherently detrimental – it can bring capital and global collaboration opportunities – but it also raises concerns about the UK losing control over innovative assets, intellectual property, and the ability to independently drive growth. There are also risks of job relocations and profits being redirected overseas. The volume of

M&A activity signals the need for a strategy that ensures the UK retains the economic benefits of its life sciences innovation.

Delivering an industrial strategy

The Government’s proposed industrial strategy offers some hope. We welcome the framework provided by the overarching eight sectors set out in the Green Paper. We also believe that it is right to concentrate on sectors – such as biopharma – rather than technologies, as productivity growth is a function of how technology is used by firms to generate value. The approach provides a clear departmental sponsor for each sector.

However, two dangers risk the industrial strategy being blown off track:

  • First, a limited understanding of the nature and dynamics of industries which are rapidly evolving because of technology innovation and changing markets. The eight sectors are very broad, comprising ecosystems of players spread across different industries. It is important that the next phase of the industrial strategy captures the distinctive features of each sector – the configurations of players and technology innovations that shape them. Some industries also form part of larger sectors that might currently be small in terms of their overall contribution to the UK economy but have significant growth prospects or the potential to drive growth elsewhere in the economy. These should not be neglected. Understanding the changing dynamics of sectors and ensuring that strategies are well-crafted (and industry-led) will increase the likelihood that they deliver the growth that is needed.
  • Second, there are dangers that the ambitions of the industrial strategy are undermined by other policies. Fifty economists and other experts recently warned that easing post-2008 rules designed to prevent excessive risk-taking, and giving the Financial Conduct Authority a remit to promote growth in financial services, could harm efforts to stimulate the wider economy.[vii] Research suggests that once a country’s financial sector grows past a certain point, it can lead to productive investment being crowded out [viii], misallocation of resources [ix], and undue influence by a powerful financial sector on policymaking. Studies [x] suggest that large financial sectors have negative effects on economies when private credit is the equivalent of at least 100% of GDP – in the UK, this averaged 160% since 2000. For businesses, especially SMEs such as the biopharma companies discussed earlier, a tangible outcome is that there has long been a shortfall in investment to finance their growth.

Being ‘open for business’ should not mean blindness to the consequences of losing control over promising UK technology companies. Ensuring there is coherence in both industrial and financial policy will be key to success in the growth agenda for the UK economy.

About Centre for Sectoral Economic Performance (CSEP) at Imperial College London.

The goal of CSEP is to help improve the competitiveness of the UK economy and drive economic growth by bringing together the UK’s leading experts from science, technology and business. Since we started work last January, we have begun an ambitious programme of research and engagement with industry and government to co-design strategies for our key industries. Amongst our activities for 2025, we will be launching new reports on the UK’s aerospace, automotive, data science, telecoms, and tidal energy sectors. We are continuing our research on productivity in the biopharma sector and running a series of regional events to develop a health technology industry strategy.

 

 

[i] UK manufacturing seen ‘chronic underinvestment’, but Labour’s industrial strategy could be a ‘beacon of hope’

[ii] Paul Nightingale, James Phillips. Is the UK a world leader in science?

[iii] The UK Biopharmaceutical Sector 2024. CSEP, October 2024.

[iv] The UK Biopharmaceutical Sector 2024. CSEP, October 2024.

[v] McKinsey. The UK biotech sector: The path to global leadership. 2021.

[vi] GlobalData – Deals Database.

[vii] Response to Financial Services Growth and Competitiveness Strategy Call for Evidence.

[viii] For example, by focusing on short-term returns and financial metrics such as dividend payouts rather than productivity-enhancing investment.

[ix] Because financial institutions engage in extracting value from the economy rather than creating it.

[x] By the International Monetary Fund and Bank for International Settlements. See Positive Money.

Supporting the UK’s strengths in aerospace will unlock growth

Author: Professor Rafael Palacios

The UK is one of five countries in the world with the capability to build its own aeroplanes. As an island nation we rely on aerospace more than other countries. So aviation technology here has always developed at pace. We have the third largest sector in the OECD by market share, after the US and France and a healthy pipeline of startup ranging from nanosatellites to large lighter-than-air vehicles. And the operations of companies like Rolls Royce, BAE Systems and Airbus stand as symbols of the sector’s future potential.

The pressure to accelerate development in aviation

Today, the defining challenge for the industry is net zero and producing the technical solutions and new business models to make net zero flight a reality in the second half of this century. There is no realistic future without flight. So the aviation industry is under enormous pressure to accelerate the development of sustainable fuels and more fuel-efficient aeroplanes, and to ramp up investment to support the pace of technological progress.

Transitioning to net zero will also mean defining new ways of working. To electrify road transport, consumers must shift their perspective to buy electric cars. But the way fleets are financed in aviation is business-to-business and much more complex. So transitioning to net zero flight will only happen if the UK government intervenes positively, introducing the economic incentives to create new business models, with companies reacting to that policy environment.

Aerospace regulation can drive growth and competition

In other words, the way to reduce the environmental impact of aviation is regulation. It cannot be left to the market. The UK’s Aerospace Technology Institute and industry-led Jet Zero strategy demonstrate that both government and business accept this. Defining a regulatory pathway to net zero is a key focus of work supported by the Centre for Sectoral Economic Performance, with policy recommendations that will help drive economic growth and competitiveness in the UK’s aerospace industry.[1]

Britain can make major gains in aerospace

We can be confident that the UK can make major gains in the sector in the coming decades. Aerospace engineering and innovation in the UK is thriving, whether it’s the Wing of Tomorrow made at Airbus or Rolls Royce producing the largest ever jet engine.

The UK is also pioneering new types of air travel, such as battery-powered air taxis. Imagine hopping on an air taxi from Heathrow to Gatwick to make a connecting flight or to finish your journey on the right side of London, avoiding road traffic and emissions. Vertical Airspace in Bristol is working on making that journey a reality.

Working towards new forms of sustainable aviation

The UK is rich with innovation in this area. Last November saw the flight100 project led by Virgin Atlantic, where a team of experts from Imperial and the University of Sheffield analysed a flight from London to New York to see if sustainable aviation fuel can be used with existing infrastructure while reducing carbon emissions. For these larger aircraft, it’s likely we will need to combine hydrogen with CO2 obtained from carbon capture to make e-fuels, a new form of sustainable aviation fuel.

These fuels are still very expensive, and in the medium-term we expect these fuels to be produced from biomass. Meanwhile, as we move to a hydrogen economy for uses where electric power is not possible, companies including ZeroAvia are developing hydrogen propulsion for smaller aircraft used in regional aviation. Given the UK’s expertise in AI and data science, we also need to see more innovative work applying these capabilities to accelerate development.

Partnership is essential for progress

There are also some areas with exciting potential, like the work Google and American Airlines have done to show that flying slightly different routes can reduce the climate impact of contrails. These trap large amounts of heat that would otherwise have left the earth’s atmosphere, and which might account for up to 35% of aviation’s global warming impact. Satellite analysis found the experiment reduced contrails by 54%, while only burning 2% more fuel.

We need to see more of this kind of strong partnership between academia, industry, government and finance. Our report will also show how we can put the right policy mechanisms in place to support this collaboration, from R&D and net zero to the business environment and access to investment. In the coming decade we have a golden opportunity to build, protect and capitalise on the UK’s aerospace capabilities. But we will only do this if we have a clear direction, informed by this research.

Professor Rafael Palacios is Director of The Brahmal Vasudevan Institute for Sustainable Aviation, a collaborative research centre at Imperial College for blue-sky thinking towards environmentally friendly aviation. He is a Professor in Computational Aeroelasticity as Deputy Head of the Department of Aeronautics in the Faculty of Engineering. He has been a consultant for Facebook and Airbus in the design of solar-powered aircraft. He is an Associate Fellow of the American Institute of Aeronautics and Astronautics, and a Fellow of the Royal Aeronautical Society.

The Centre for Sectoral Economic Performance at Imperial College London investigates how to improve the competitiveness of the UK economy and drive economic growth. It is a joint initiative between Imperial’s Faculty of Engineering and the Imperial College Business School, bringing together the UK’s top engineers, scientists and economists with the UK’s science and technology industries to co-design globally competitive strategies for major global challenges such as net zero.

[1] https://www.imperial.ac.uk/sectoral-economic-performance/

 

Partnerships between universities and industry will make UK AI a success

Author: Dr. Juan Bernabé-Moreno, Director of Scientific Research in Europe, IBM

As IBM’s Director of Scientific Research in Europe, I know what a huge opportunity the AI Revolution represents for the UK economy. But translating that potential into economic growth and scientific progress requires close collaboration between technology companies and universities. That’s why I was delighted last month to sign a Memorandum of Understanding (MoU) between IBM and Imperial College London, committing us to work together over the coming years on the application of AI technologies to global problems including climate change.

AI is one of the UK’s best opportunities for growth

No technology has ever advanced as quickly as AI. Already it has begun to revolutionise every sector in every country. The UK is well positioned to perform well in this incredibly competitive market, boasting some of the world’s most advanced computer technology and a great deal of high-quality, centrally-held data. Many of the world’s leading experts in AI and its applications work at British universities. In addition, the UK’s regulatory framework allows for significant space for innovation.

But the UK is not yet making the most of its strengths. Industry and academia are not working closely enough together, which slows down innovation in an area where the UK needs to move fast.

By bringing IBM and Imperial together, the MoU marks a major step towards turning the UK’s enormous potential in the field of AI into success.

To apply the power of AI we must first understand it

The MoU’s primary goal is to pool our engineering, computing, and machine learning resources to address climate and sustainability challenges. Our generative AI technologies are developing so quickly that not even we can foresee the full extent of their possible applications. That’s where we value the partnership with institutions like Imperial.

You only need to look at the number of successful spin-outs Imperial generates to see what a practically-minded institution it is. Imperial students and researchers start with problems, then work out ways to solve them. In our climate and sustainability efforts, IBM will provide cutting-edge technologies, and Imperial will provide students and postdoctoral researchers will find ways to apply them to solve specific problems.

Let’s say, for example, that we wanted to map the areas of the UK most at risk of flooding because of extreme weather events. IBM would provide Imperial with foundation models which are trained on satellite images, climate forecasting and a myriad other relevant data. An Imperial team would fine-tune that model into a specialist model for flood detection, which they would then share with IBM.

Collaborations like this are how IBM, Imperial, and the UK more broadly will make major gains in AI over the coming years, generating jobs, economic growth, and – most importantly – solutions to the existential challenges the world faces.

Collaboration beyond our partnership

But AI is too important a technology to be in just a few hands. So the MoU between IBM and Imperial also formalises a shared commitment to collaboration and openness beyond our partnership in all our future work on AI.

IBM and Imperial will work together with our AI Alliance partners to define industry-wide frameworks for everything from hardware and application to policy making and regulation. Imperial produces some of the most advanced research and policy thinking on the ethics and implications of AI, while IBM bring industry experience. Together, we will be a powerful voice for ethical practices in AI on the world stage.

To that end, the MoU also commits IBM and Imperial to participate together on EU projects. Earlier this year, the UK rejoined Horizon Europe: the EU’s key funding programme for research and innovation aimed at addressing global challenges and driving economic growth. By joining forces, IBM and Imperial can place climate, sustainability and AI at the centre of Horizon’s agenda.

I am confident that the work IBM and Imperial do together over the coming years will contribute to making Britain a true world-leader in AI. This MoU would not have been possible without the work of Imperial’s Centre for Sectoral Economic Performance to identify the sectors where the College can make the most difference. It is a testament to Imperial’s entrepreneurial problem-solving spirit, and something I would like to see embraced across higher education.

Dr. Juan Bernabé-Moreno is the Director of IBM Research in Europe. He leads three labs in Ireland and the UK, working on cutting-edge science and technologies in the areas of artificial intelligence, quantum computing, multi-cloud, and semiconductors. Dr. Bernabé-Moreno is also responsible for the Accelerated Discovery Strategy for Climate and Sustainability, leading a team of researchers across seven global research labs to explore how the convergence of AI, quantum computing and hybrid cloud can accelerate the discovery of sustainability and climate solutions. He holds a PhD in Computer Science from University of Granada and is the recipient of several patents.

The Centre for Sectoral Economic Performance at Imperial College London investigates how to improve the competitiveness of the UK economy and drive economic growth. It is a joint initiative between Imperial’s Faculty of Engineering and the Imperial College Business School – bringing together the UK’s top engineers, scientists and economists with the UK’s science and technology industries to co-design globally competitive strategies for major global challenges like net zero, economic competition and technological disruptions.