R&D outsourcing in hi-tech industries. A research study.

The challenges of research and development (R&D) productivity within the pharmaceutical industry are well documented. One response over the last few years has been a race to large-scale strategic clinical outsourcing deals.

The pharmaceutical/biotech industry has the highest levels of R&D outsourcing across hi-tech industries, with its outsourcing growth rate outstripping internal investment. Some large pharmaceutical companies suggest that 40% or more of their R&D spend will be outsourced in the near future and that clinical operations functions will eventually be outsourced entirely.

However, our work in clinical development suggests that significant problems with outsourcing relationships remained, and that other hi-tech industries may be more mature in R&D outsourcing approaches.

As pharma races towards large scale clinical outsourcing deals, we research how customers and suppliers rate the performance of their relationships, and we find out what can be learnt from R&D outsourcing in other hi‑tech industries.

Summary of respondents

Although our main focus was clinical outsourcing within the pharmaceutical industry, we conducted 16 interviews in analogous product development functions within the world’s leading aerospace & defence, hardware, software, and telecommunications companies. Overall, 71 individual face-to-face recorded interviews were conducted in 42 companies across 10 countries covering both customers and suppliers.