The global report is scheduled to be released next week.
In 2005, a Nasscom-McKinsey report had made a similar observation by estimating that 75% of fresh engineering graduates in India are not directly employable.
The forthcoming E&Y report on Biotech pegs the current size of the industry in India at $4 billion, growing at a CAGR of 19% over last five years. Of this, the biopharma segment roughly constitutes 60% of the total biotech industry. Witnessing a 21% year-on-year growth, the biopharma industry is valued at $2.3 billion in 2010-11. This roughly forms 15% of the pharma industry.
Despite growing in double digits, this sector is not free of challenges specially for those firms which are focusing on innovation, reckons E&Y. Many of these firms are facing funding constraints as the investor community has shied away from investing in early stage ventures.
The government, on its part, has introduced several schemes to fund biotech start-ups. As an incentive for in house R&D, the government also provides 200% weighted tax deduction, which has been extended till 2017 in this years budget. However, given the large development timelines, cost and risk of biotech research, these funds and incentives are not enough to drive innovative biotech research in the country, the report says.
The report identifies factors such as lack of funding, trained manpower and infrastructure as roadblocks, which, it says, have limited the technical competencies of Indian biopharmaceutical industry in terms of target identification, functional genomics and biological lead discoverysome of the key early steps in new drug discovery.India is already facing stiff competition from China, Korea, Singapore and, more recently, Malaysia, in terms of attracting investments from foreign multinationals in biotech sectors.
These countries have managed to attract such investments due to better technological and scientific competence, better infrastructure, tax and duty exemptions, and easier regulatory procedures as compared to India, the report concludes.
Globally, the growth in revenues of public companies in the four established biotech hub countries the US, Europe, Canada and Australia reached double-digit territory for the first time since the start of the global financial crisis touching $83.4 billion in 2011 (a 10% increase from 2010 on a normalised basis), the report says. After slashing research and development spending in 2009 and increasing it modestly by 2% in 2010, the research and development spend in the industry grew by a decent 9% in 2011.However, longer-term sustainability remains a challenge.