Good afternoon ladies and gentlemen. I am delighted to be here for the official opening of Peakdale Molecular's new purpose-built 40,000 sq ft research facility and global headquarters.
Your record since you began only 10 years ago has been very impressive and it is an excellent example to other SMEs, which work, or aspire to work, with the biotech and pharmaceutical sectors, of what can be achieved in a relatively short time.
You have successfully capitalised on the growing demand from biotechnology and pharmaceutical companies for novel compounds for use in drug discovery. Your record of innovation has been recognised through a DTI funded LINK project granted to Imperial College, GlaxoSmithkline and Peakdale that was successfully completed last year. This illustrates one of Peakdale's core competencies – the ability to commercialise chemistry that is relevant to the pharmaceutical industry. The result is this £3m facility employing 30 chemists in 5 laboratories.
Your work supports drug discovery in the biotech industry which in Europe alone is expected to be worth over ?100 billion by 2005. The number of people employed in biotech and associated companies could be as high as three million, as we attempt to catch up with the US industry - currently eight times the size of Europe's.
And Britain leads Europe: three quarters of the biotechnology drugs in late-stage clinical trials in Europe are produced by British companies. But things don't stop there. The UK's research-based pharmaceutical industry is second only to the United States in the number of best selling drugs discovered and placed in world markets. The UK pharmaceutical industry employs 60,000 directly - and one third of those employees are in R&D. In fact, all the major global pharmaceutical companies have a presence here. So you have no shortage of potential customers.
The next challenge will be to be one of the fastest growing contract chemicals companies in Europe.
I am delighted also that you have chosen the North West for the site of this new venture because you have both the skilled personnel and the business environment here to build on the outstanding achievements of the last decade, and your investment will strengthen the impressive cluster in life science activity that already exists in the North West.
To help us, as a country, look ahead, I recently set up an Innovation Growth Team for the Chemical Industry, under Byron Grote the Chief Executive of BP Chemicals. This is formulating a vision of what the future chemicals industry in the UK might look like and how we might get there. It has been looking at four main areas: innovation; the reputation and regulation of the industry; skills and competences; and the industry's customers and markets. It will be reporting later this year.
I am also very aware of the potential problems that could be caused by the EU Chemical Directive, which is currently being redrafted if some parts not re-thought. The Government recognise the burden that this could impose on industry and is aware of the implication for your sector and SMEs. We are working hard to make it a practical and less costly piece of legislation, which will not stifle innovation, and we will shortly be producing a statement on the UK position in order to make it clear how we think the Directive must be improved.
The Government is committed to raising the level of scientific excellence in order to generate higher levels of sustainable growth and productivity. In 1997/98 the Science Budget was £1.3billion and in this year's Comprehensive Spending Review the Science Budget will grow by an average of 10% a year in real terms and will reach £2.9billion by 2005/6. We have made this step change in funding because we want to attract and retain high quality people and ensure that the UK science base matches world-class standards and is properly equipped to support companies such as Peakdale Molecular.
The UK has an excellent record of scientific research. With only 1% of the world's population, the UK funds 4.5% of the world's science and produces 8% of the world's scientific papers. We are also the most cost effective nation for scientific research in the world.
In today's global economy, we cannot compete on the basis of low labour costs and cheap materials. We must compete on the basis of our knowledge, skills and creativity. We have also encouraged knowledge transfer from universities to industry by introducing schemes such as University Challenge (which provides seed corn funding to universities), Science Enterprise Centres (which provide access to entrepreneurial skills to undergraduates and graduates in science and engineering), and the Higher Education Innovation Fund (which provides funding to universities to encourage them to do knowledge transfer). And today, British Universities are becoming increasingly entrepreneurial. We are also becoming increasingly more innovative, in 1999-2000 there were 199 spin-off firms from UK universities compared with average of 70 a year in the previous 5 years.
Peakdale Molecular is exactly the sort of innovative, high growth, high tech company we need to encourage in this country to take advantage of our world-class science and engineering base.
Peakdale Molecular is a good example of British innovation at its best and it gives me great pleasure to open the new facility.
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