As many know, I’m Armenian. I was raised in London, lived in the States for twenty years, and moved my family back to London a couple of years ago. This global perspective, coupled with a few years of experience, has provided a unique position to consider the factors that might lead to successfully managing the unchartered and challenging times brought on by the COVID-19 pandemic.
Specifically, I had some ideas about the role Europe is uniquely positioned to play. But I wanted to bounce some ideas around and hear other perspectives—Gwenael Servant, managing director of That’s Nice Europe sprang to the top of my mind as the perfect person to consult. Gwenael is from Brittany, France, and currently lives in Paris. Before joining That’s Nice, he held both scientific and business development positions at Servier.
Haig: The US has cultivated a reputation for innovation and a willingness to make big bets and, by and large, has served the American market well. A large portion of venture capital and other financing makes its way to America, and many, although certainly not all, transformative innovations have been commercialized by American companies—technologies like artificial intelligence and robotics come to mind. This said, there is a great deal of European innovation as well. What are your thoughts on European innovation activity versus commercialization activity?
Gwenael: Recently, I was reading a McKinsey article and was reminded of the tremendous amount of research and innovation developed in European academic institutions. However, in recent decades, our American counterparts, and now Asia, have had more success commercializing discoveries.
This isn’t to discredit the great work done in other places, but Europe needs to achieve more economic success from the truly remarkable work done here.
Europe’s innovation-driven nature has shined during the COVID-19 crisis. The EU Innovation Scorecard assembled by the EU Commission recently reported on the research activities being directed to find ways of managing the coronavirus pandemic. The report highlighted that the EU, with companies like NG Biotech and CureVac, is surpassing the US in COVID innovation efforts and is working to catch up with pandemic innovation leaders like South Korea and Japan.
Some remarkable COVID-era successes have come from Europe. For example, entrepreneur Sir James Dyson of vacuum cleaner fame designed an innovative ventilator in only ten days; Bosch Healthcare Solutions developed a fully automated molecular COVID-19 test; and a Spanish consortium consisting of Consorci de la Zona Franca (CZFB), HP, Leitat, SEAT, Consorci Sanitari de Terrassa (CST), and the Parc Taulí Hospital in Sabadell designed a 3D-printable respirator.
Haig: From my experience, European companies tend to have a lower tolerance for risk. Would you agree?
Gwenael: I definitely agree. While obviously, not all European companies are the same, companies here tend to be more conservative. That said, some European cities have become important technology centers. Berlin, London, Lisbon, Budapest, Dublin, and Amsterdam are just some of the growing European technology hubs. Additionally, the Paris-Saclay hub is combining universities and private companies and was listed high on the Shanghai Ranking. As technology companies in these and other European cities grow, I wonder if European business culture will shift a bit and become more willing to take risks.
Haig: While we are talking about business culture, how does the sales and marketing culture in Europe differ from that of the States? Also, how is the pandemic changing European approaches to business development?
Gwenael: On the whole, European companies are not convinced that marketing can bring a lot of value and ROI to their businesses. Many companies are family companies, or a small group of owner executives run the business; they tend to be quite conservative. I think most European executives think of marketing, especially branding, as something that is valuable for finished consumer products, not B2B. No matter where you are in the world, demonstrating the value of B2B marketing is difficult due to long and complex sales cycles.
That said, Europe’s lack of belief in the value of marketing is different than in the US, where companies tend to be flashier and present themselves more boldly to stand out from their competition. American companies were also much quicker to embrace digital marketing.
A typical American CDMO, for example, will typically spend two to three times more on marketing than a European company of similar size. The European approach is relationship-driven. Business development professionals build their networks over the years by meeting people and developing trustworthy and reliable relationships.
Given the pandemic, we are all traveling a lot less, if at all. The large expositions, and even most smaller conferences, have been canceled for the foreseeable future. Many European companies have talked about expanding their digital marketing efforts; now, there is no choice, and we see a rapid acceleration of the adoption of digital marketing among companies across Europe. I think, out of necessity, European companies will increasingly embrace digital marketing in particular and put their own unique spin on strategies and tactics that the rest of the world might learn from.
Haig: Some pharmaceutical industry conferences went digital this year by necessity. How has that move been received?
Gwenael: Basically, all of the conferences went digital—BIO, CPhI North America, CPhI Worldwide—all have been, or will be, digital. From what I have heard, people are not happy so far. However, this spring, there was so little time to make those changes. Perhaps conference organizers and exhibitors did not have the time to think through the best ways to make those events valuable.
It is kind of funny. People complain about the travel, expense, and the size of big conferences—there are too many people to see, we can’t have serious conversations, and there’s too much noise. However, with everything now digital, events aren’t personal enough. We just haven’t found the right balance yet.
Haig: What do you think the future of global pharma events will be after the pandemic?
Gwenael: I’m not sure we will get back to big events, even after we have a COVID treatment or vaccine. I do think there will be a balance between in-person and digital. There are challenges with both approaches, so we’ll need a balance.
In-person events tend to be expensive and inefficient. Digital events are impersonal, and there are data security and privacy concerns. For example, Zoom was banned for two months from companies in Europe for privacy and security reasons.
Haig: What other movements are impacting European business culture?
Gwenael: Corporate social responsibility (CSR) is a meaningful movement around the world, but I think the movement is particularly strong and widespread in Europe. “EU Green Deal” is just one example of this important trend.
The European Commission defined CSR “as the responsibility of enterprises for their impact on society.” CSR requires integrating social, environmental, ethical, consumer, and human rights concerns into business practices, strategies, and operations.
Many European companies view CSR as their responsibility. Applying CSR is the right thing to do, in my opinion, but I think the social cohesion aspect is really important. Some nations seem to be having a hard time responding to the COVID pandemic in a cohesive manner, and I think a CSR mindset has made the response in Europe a bit more effective.
Haig: How is CSR impacting everyday business operations?
Gwenael: A basic example is looking at all of the waste generated from trade expositions. We have had recycling booths and other materials for quite some time in Europe, but that only goes so far—there’s still a lot of waste.
Even the auto industry is questioning big expos. For the last ten years or so, a major car show has been alternating years between France and Germany, but now they are wondering whether they need the expo at all, given all the promotion they are doing on Instagram and other social media channels.
CDMOs are thinking about the issue a little differently. I think the industry agrees that we do need in-person events. But COVID has required us to give more thought as to whether big expositions are really the best way to manage events in the twenty-first century—the model seems a bit outdated to many.
While none of us know precisely what the new approaches will look like, digital approaches will be an important part of the mix. For example, live or on-demand facility tours could replace some booth visits, and even many initial facility visits. This isn’t related to marketing, but virtual audits have taken place out of necessity due to the pandemic. I think a solid portion of audit activity could be handled virtually, even after the pandemic is over.
This also goes back to CSR. Reducing travel is better for the environment. Trying to conduct business 100 percent remotely is obviously way too much, but I believe we will find a balance over the next two to three years.
Haig: There is a lot of talk about pharmaceutical manufacturing reshoring—manufacturing coming back from China and India to Europe and the US. What do you think?
Gwenael: I think it is a good idea to reshore some manufacturing, but it will take time. First, are people ready to pay more for the same product—perhaps twice as much? Are we going to bring back API manufacturing? The reality is that most of the API manufacturing in China and India use older methods and chemistry we don’t want to use in the EU or US anymore. We can’t just bring those processes back for environmental regulatory and capacity reasons. It will take time to get new facilities online.
Ultimately, we need to apply Europe’s CSR culture to pharmaceutical manufacturing and innovate new ways to make these products in manners that are environmentally friendlier and less dangerous for workers in the facilities, while being cost-effective.
Although process research and development would need to be done to create better ways to manufacture these products, we already have some of the technology, like continuous manufacturing or synthetic biology. Before the pandemic, there was simply little economic incentive to make those moves in widespread manners. I think we will find a balance on this issue as well. EU reshoring will be done with innovation—it’s the best and probably the only way to bring back strong industrial activity that will support EU sovereignty.
Haig: So, European mentality and culture do seem to be well suited to the times. It seems like there are a lot of growth and leadership opportunities.
Gwenael: I agree. I think the times are well suited for the CSR culture that has become quite well entrenched within the European business community. Innovation is alive and well here, as it has been for a long time. We simply need to get better at commercializing our innovations, which I think will happen—the times are calling for it.
Finally, I will say that while every culture has its pluses and minuses—and Europe, of course, consists of many different cultures—Europe’s more measured business culture might be just what the world needs right now. Europeans tend to take things step-by-step and are quite a bit more conservative. If we can pair our steady hand with our innovation talents, I think Europe is positioned quite well.