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State of LS Tools Survey Results

In mid-April, we discussed how despite the presence large amounts of negativity in the life science tools market, things actually appeared to be getting better. To follow that up, we conducted a brief 6-question survey last month to determine if people within the sector felt similarly and try to gauge if companies were preparing for better times or worse times ahead.

The survey was open from May 1st through May 31st. 22 respondents completed the survey. One respondent’s set of responses was removed from the survey due to not responding in the affirmative to the qualifying question which asked respondents if they worked within the life science tools and services market. Based on IP, 14 respondents were from North America, 6 were from Europe, and one was from Asia.

The questions (aside from the qualifying question) and responses are below:

1) Complete the following statement: “Thus far in 2012, my company’s sales have _____.”

2) Complete the following statement: “Compared to the last quarter of 2011, I feel _______ about the life science tools market”

3) Compared to the first half of 2012, how much does your company intend to spend on the following functions in the second half of 2012?

More Same Less
R&D 33.3% 57.1% 9.5%
Marketing 38.1% 47.6% 14.3%
Sales 57.1% 33.3% 9.5%

 

4) Which of the following is presently true about your company?

Additionally, two respondents left comments at the end of the survey. One noted “The market seems stable at the moment. We are mildly optimistic about the future.” The other stated “There are significant cuts in the research budgets.” The latter statement allows for some confusion as to whether “research budgets” referred to mean the academic research budgets or the budgets for internal R&D, although use of the plural leads us to believe the respondent most likely meant academic research budgets.

We find these results very interesting. While year-to-date performance in the respondents’ companies tends towards under-performance, perceptions compared to the previous year are roughly flat but companies are hiring and will be spending more. This could be due to any of multiple factors. For example, companies could be re-hiring and increasing budgets as a rebound from previous, overly conservative budget cuts. In other words, companies may have planned for a situation that was worse than the present, and therefore even though the present situation may not be good, hiring and increased spending have become necessary. Another common macroeconomic cause for increased hiring is decreasing workforce productivity. Additionally, some companies may increase spending in response to increases in spending at competitors in order to “keep up with the competition.” This discrepancy could also simply be a flaw in the survey, or perhaps a real difference in perception between the overall attitudes of life science tools companies and individual employees. There are many possible explanations, and we simply do not have enough data to evaluate all of the possible causes. All are free to draw their own conclusions.

Regardless, while the responses about company performance and the perception of the overall life science tools market are tepid, we are encouraged by the trend towards hiring and increased spending, and hope that companies rightfully see a reason to continue to invest in future growth.

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