2017 witnessed a meteoric surge in capital raising by life science companies, with the amount of money reaching those companies increasing twofold or even more. The number of companies that were set up grew accordingly, with the medical software sector capturing a respectable share.
*based on IVC data
We would expect that the increased capital being raised would largely reflect the demand for skilled professionals in the field as well as their salary.
Although the academic profile of key figures in the medical field is higher than any other sector (with this list headed by biological researchers, many of whom have Ph.Ds) and despite the large majority of the world’s population benefitting in one way or another from medical advancements, the financial return for those involved in the field does not correspond with the level of its importance or the investment made in it.
The sector most affected is biology (I include in this category all disciplines from molecular biology, biochemistry, immunology, etc.). In order to reach senior managerial positions in pharmaceutical companies, a Ph.D., preferably from a prestigious institution, is requisite. Individuals with Bachelors Degrees perform menial tasks while people with Masters Degree can ask questions but decisions will always be made by researchers who hold the Ph.D..
The medical device sector requires a more modest academic profile. People with Ph.Ds will be extremely welcome but those holding Bachelors or Masters Degrees are sufficient to perform any substantial administrative task. Digital medicine is a young discipline in the medical devices sector, one that has been evolving in recent years, particularly due to the high return on investment required in said companies. The personal qualities of those engaged in this profession are extremely similar to those involved in the hi-tech market.
Recently released soldiers can come up with a brilliant idea and either during the military service or beforehand, who specialized in software development, can be employed in or even set up a successful company. Unit 8200 alumni are snatched up by hi-tech companies and their level of academic training serves as an indicator for the salary they will receive. At the same time, released soldiers who served as medics or laboratory assistants will not be employed in any junior position in biotech or pharmaceutical companies.
The financial consideration for those engaged in the life science disciplines is completely unrelated to the degree of investment required by those engaged in the field.
|Biotechnology / Pharmaceuticals||Medical Devices (Hardware / Biomedicine)||Computer Sciences – Hi-tech|
|Immediately after completion of a Ph.D.||10-14||15-20||27-38|
|Project Manager (10 years’ experience after completion of a degree)||18-25||25-35||30-40|
|Manager / VP of Development (Management of a group of up to 10 employees)||25-35||35-40||45-55|
|Manager / VP of Development (Management of a group of 50 or more)||45-55||50 - 60||55-80|
|Director General following raising of $M 1||35||35-40||35-45|
|Director General of a Company in Development following raising of over $M20||35-45||45-60||55-75|
|Director General of a Company that sells up to $M10||45-55||50-60||55-75|
|Director General of a mature sales company of $XM10||55+||60+||60+|
To explain the data above, I examined the employee supply. Is the life sciences market flooded with employees? The average time to close a position in 2011-2 vs. 2016-7 can be a good parameter.
|Position||No. of days 2011-2012 to close average position||No. of days 2016-2017 to close average position||Percent of Change|
|Hardware / mechanical engineer and Multidisciplinary Project Manager (must specialize in medical device development)||97||122||25%|
|RA Regulation Manager||113||134||19%|
The table clearly reveals a significant shortage of skilled medical engineers, and particularly in QA, which showed indications as early as in 2012 of a severe shortage of professionals, a shortage that is growing more severe.
When demand for employees exceeds supply, and the financial resources are available, a significant rise in salary can be expected. Yet niche data reveals a lower rise in salary in the life science sectors than in various hi-tech companies.
This paradox can be explained by the nature of the sector: anyone who considers medication or a medical device as being equally important as an application will apparently not work in the field. Life science companies provide employees with added value in the form of a sense of calling and the immediate appreciation of the technology’s contribution to the end user. Those who choose to work in life sciences consciously accept a lower salary than they would have earned in hi-tech and are willing to earn even less if the contribution is greater.
We can address the data and send hundreds and thousands of biologists to professional retraining in software or leverage the human advantage in an industry in which demand and supply for employees is balanced. This can be done by grants and tax exemptions for pharmaceutical / biotechnology companies to set up their development centers in Israel (just as Ireland successfully managed to transform itself into a state-of-the-art technology development center), a significant increase in the scientists’ budget for life science companies, in the creation of a business model that encourages transactions with foreign investors, and pursuant to the development centers remaining in Israel.
The author is a Partner and Co-Manager Nisha Executive. Nisha Group is a Is a Member of Israel Advanced Technology Industries (IATI).