Roundtable Discussions

Research and Development: Potential Driver of Egypt's Pharmaceutical Industry

Date : 9/12/2012

Speakers : Iman Al Ayouty (ECES)

In today’s knowledge-based economy, research and development (R&D) is key to driving output and productivity, particularly in R&D-intensive industries like pharmaceuticals. Although to date the pharmaceutical industry in Egypt has been a modest contributor to manufacturing value added (5%), exports (3%) and employment (4%), it has the potentials for further growth, especially from the knowledge perspective. International experience indicates that a 29% growth in India’s pharmaceutical firms’ R&D expenditure was associated with a 15% growth in industry sales over the period 1995-2007. Today, India is an important player in the global market for generic drugs and active ingredients.

This roundtable discussion highlighted the main findings of ECES research regarding the micro and macro factors behind modest R&D performance in Egypt’s pharmaceutical firms. At the micro level, an R&D strategy is evidently lacking, with firms leaning heavily towards development as opposed to basic or applied research. Moreover, there is virtually no collaboration either with other firms or with universities in research. At the macro level, public R&D expenditure remains meager, and the public R&D system lacks good governance. As such, the discussion aimed to draw relevant policy implications for placing Egypt on the new, long-sought growth trajectory.