Health Economyin Northern Germany

and the Baltic Sea Region:what is in for the regions?

Using Nordic-European synergies in co-operation

Conference Smart Growth – Smart Specialisationin the BSR

Malmö, Sweden 5-6 April 2011

Wolfgang Blank, BioCon Valley GmbH & ScanBalt fmba

Trends …

SteelRailway

ElectronicsChemistry

PetroindustryAutomobile

InformationComputer

Life SciencesPsychosocial

health

1900 1950 1980 2000 2010

Opportunities & challenges:• Scientific progress (stem cell research,

molecular biology, diagnostics)• Growing health awareness• Ageing society• Stability of social health care systems

Source: NY Times, 2008Source: NY Times, 2008

Source: Der Spiegel, 2008Source: Der Spiegel, 2008

Source: HBSC Survey 2005-2006, Currie et al. (2008).

Life style

2005-06

Bildquelle:www.keinfastfood.de

Demographic development

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North Eastern Germany Located in between

metropolitan areas Berlin, Hamburg, Copenhagen

Population approx.1,8 million (= Hamburg)

Area approx. 23.000 km ² Approx. 80 inhabitants /km ² Rostock largest city

(200.000 habitants) Maritime countryside with

more than 1.000 km coast line and more than 1000 lakes

Schwerin

GreifswaldRostock

Comparison Germany vs. Mecklenburg-Vorpommern

14,917,5

20,122

10,6

16,9

22,3

26,5

1989 2002 2012 2020Year

0

5

10

15

20

25

30Ratio (in %)

Ger M-V

Development of senior population 65+

Quelle: Stat. Landesamt M-V, 2003, Prof. Hoffmann© ICM EMAU 2006

„YoungestFederal State“

„EldestFederal State“

Age-related diseases in M-V

Comparison 2002 vs. 2020

© ICM EMAU 2006

Men Women

Diabetes Type II+ 20% (8.800)

+ 1% (500)

Coronary diseases, ...+ 48% (1.600)

+ 32% (900)

Stroke + 53% (700) + 27% (550)

Cancer+ 36% (1.750)

+ 13% (550)

Dementia + 67% (11.500)

From challengesto opportunities

Average age:

71 yearsAverage age:

71 years

Dürer´s mother, 1514

Nordic VIP´s, ~ 2010

„Healthy“ Ageing

Each second,today born girlwill havethe opportunityto celebrateher100th birthday!

Senior workforce Vita Needle Inc. 95% of staff senior

citizens (part-time) Average age 73 Some examples:

Rosa Finnegan,93, 9 years

Bill Ferson,86, 17 years

Dick Tompkins,78, 2 years

„Retirement is a dirty word“

Vita Needle Inc. 95% of staff senior

citizens (part-time) Average age 73 Some examples:

Rosa Finnegan,93, 9 years

Bill Ferson,86, 17 years

Dick Tompkins,78, 2 years

„Retirement is a dirty word“

http://www.vitaneedle.com

The Burden of An Ageing PopulationHealth Care Spending in Germany

Re: German igsf 2005

1.032

794

657

1.111

1.703

2.826

4.197

5.371

858

679

957

1.340

1.732

2.493

3.658

4.903

Age

1

10

20

40

50

65

75

90

From „burden“ …

… to „profitable business models“

35,60 37,12 38,7340,42 42,20 44,08

1998 1999 2000 2001 2002 2003

Turnover in Bln. € of theWell-being Industry in

Germany

0,95 Health& Literature

3,66 Pharmaproducts/Cosmetics

4,06 Health & Food

6,60 Massages,Physiotherapy

11,07 Health & CuresHealth & Vacation

17,74 Fitnes & Sports Course of baths

50

40

30

20

10

0

Bln €

OthersOthers

JapanJapan

Europe Europe (without (without

Germany)Germany)

USAUSA

GermanyGermany

10%

20%

16%

43%

11%

20062006Total VolumeTotal Volume

260 Bln €260 Bln €

Re: Frankfurter Allgemeine Zeitung, 01.07.2006

World market of Medical Technology

It is a huge market …

… … with a highwith a highInnovation rate !!!Innovation rate !!!

North Eastern Germany Located in between

metropolitan areas Berlin, Hamburg, Copenhagen

Population approx.1,8 million (= Hamburg)

Area approx. 23.000 km ² Approx. 80 inhabitants /km ² Rostock largest city

(200.000 habitants) Maritime countryside with

more than 1.000 km coast line and more than 1000 lakes

Challenges:- No big industry- Remote location within Germany- Limited financial resources- Demographic development

Schwerin

GreifswaldRostock

„Public Private Partnership“

© BioCon Valley® GmbH · Greifswald / Rostock 15

Capital CompanyLand Mecklenburg-Vorpommern ~51%

BioCon Valley e.V. ~27%Financial institutions ~20%

BioCon Valley GmbH

Non profit association~160 members (companies, universities, research institutions, service providers,

hospitals, hotels, ...)

BioCon Valley e.V.

Bundle forces and Stimulate cooperation between

research & industry Promote regional/ international

cooperation

• Prevention/Health promotion• Health Tourism• Silver economy

(Successful ageing)• Rehabilitation

• Food &nutrition

Sectoral focus

• Blue (marine) biotechnology• Green biotechnology

(agriculture, nutrition)• Red biotechnology• Medical technology• White (industrial) biotechnology

16© BioCon Valley® GmbH · Greifswald / Rostock

Employees in health economy

Main SectorAmbulante / inpatient medicare

Administration, chemist‘s, health and spa business, self-help

Pre- service and supply industrie(handcraft, medical technology, pharmaceutical industry, ...)

Sub sectors and boundary area of the health care

61.745

13.279

5.790

5.444

86.258~ 15% of MV employeeswork in/for health sector!

17© BioCon Valley® GmbH · Greifswald / Rostock

MV in comparison (Wifor)

© 2010 WifOR | Dr. Dennis A. Ostwald | Healthcare Industry: Growth and employment driver? 12 | 18

2. Health Care Industry as a growth and employment driver?Ranking of the federal states of Germany (impact of the GVA)

Rank 2006

GVA in %2006

Rank 1996

Differences1996-2006

Mecklenburg-Vorpommern 1 13,7 1 +2,7

Berlin 2 13,4 4 +3,0

Sachsen-Anhalt 3 12,9 5 +2,5

Thüringen 4 12,8 2 +2,0

Brandenburg 5 12,2 6 +2,0

The impact of the HCI is especially in economically underdeveloped

regions very high.

Source: Destatis, 2009; BA 2009; Berechnung: Wertschöpfungsansatz, WifOR, 2010.

Turnover MV: ~ 3.5 – 4 Bio. €

MasterplanHealth Economy MV 2020

© BioCon Valley® GmbH · Greifswald / Rostock 19

Health CarePrimary sector

Life Sciences(Biotech, Pharma,

Medtech)

HealthyAgeing

Health servicesHealth tourism

Food and nutrition

Healthy ageingMasterplan Health Economy MV 2014 - 2020

© BioCon Valley® GmbH · Greifswald / Rostock 20

Quality of life

Work &productivity

Health & wellbeing

Education & Culture

Living environment& mobility

Stable health care systems affecting a population of approx. 85 Mio. people

More than 5 Mio.Employees in health careand related industries

Critical mass of innovative universities with world class basic science with a general strong focus on life sciences

Well educated, skillful and motived human ressources

Strong health care/pharma/ medtech industry with more than 2.000 companies

Life sciences and HealthMode 3 clusters

Co-location clusters

Scientific fountains

Mode 3 clusters

Co-location clusters

Scientific fountains

Key drivers inKey drivers inHot spots inHot spots in

Regional hot spots in life science

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ScanBalt 10

ScanBalt 13

Stockholm

Boston

London

0,8-1

0,6-0,8

0,4-0,6

0,2-0,4

0-0,2

high

low

ScanBalt CompetenceRegion LSHM-CT-2004-503406: Benchmark analysis on quantitative and qualitative data

Cooperationbetween regions

„Competence hubs“

„Competence hubs“

„Competence Satellites“

„Competence Satellites“

„Competence Satellites“

„Competence Satellites“

„Competence Satellites“

„Competence Satellites“

ScanBalt catalyzer for interactions:Exchange of human capital, knowledge, innovation; EU FP7 proposals, joint projects; strategy development; …

European Strategyfor the Baltic Sea 4 challenges

(main focus areas) environmental sustainability, prosperity, attractiveness and safety / security.

10 horizontal actions 15 objectives (priority areas) > 80 flagship projects

FlagshipScanBalt

Health Region

Flagship project„Baltic Sea Health Region“ Long title: “Set up cross-sectoral reference projects

for innovation in health and life sciences” Objectives:

… promotion of public health on a high level … exploitation of modern life sciences … innovations in science, technology and social science Baltic Sea Region as a model for

providing the basis for a knowledge-based economy and for implementing a shared strategy

Lead Partners: BioCon Valley (Germany) Lithuanian Biotechnology Association (Lithuania) ScanBalt and ScanBalt Academy

BSHR is an open structure, partners

welcome!

BSHR is an open structure, partners

welcome!

Political governance usually distributed in different ministries

Reimbursement schemes or business models vary between social systems and privately financed health systems

High market pressure for innovation in very different areas from high tech products to innovative but low tech services

Actors from separate sectors with differentcommunication and business cultures

Cross-sectoral

communication and

actions urgently

needed

Cross-sectoral

communication and

actions urgently

needed

Challenges

Action lines

Install communication & governance platform and start a sustainable, „directed“ (bottom up resp. top down) and cross-sectoral consultation process– Prio. 7 BSR Stardust („Innovation“)

– Prio. 12 Northern Dimension („Health“)

– Prio. 8 ICT for Health („ICT“)

Initiate transnational strategy development process based upon regional consortia and interests

Initiate and support project consortia in common areas of interest

Create a macro-regional model for transnational cooperation in the strategically important area of health and life sciences

ScanBalt & Healthy Ageing

• Participation in Active for Life - Project– Establish cooperation platform– Align regional strategies for ageing and wellbeing

• ScanBalt Position Paper on Healthy Ageing– From Biological Fundaments to Clinical Solutions– Basis research, Population research,

Development of products and processes, Public private partnership models

– Developmental focus areas eg. Ageing Brain, Healthy food and nutrition, Technologies for Ageing people, Healthy Ageing at work, E-health

What is in for the regions?

1996 2006

Source: WifOR 2010 (www.hci-compass.com ); Database: BA, 2009; Fed. Statistical Office, 2009.

Importance of Health care related industries concerning employment

Health and structural fonds2007 - 2013• Total Structural funds 347,8 Bio. €

– Convergence (Phasing out) 282.8 Bio. € 81,5%

– Competitiveness 55.0 Bio. € 16,0%

– Territorial Cooperation 8.7 Bio. € 2,5%

• Investments in health– Direct health investment 5 Bio. €

1,4%

– Indirect health investment ??

– Not health investment ??

21. – 24. Sept 201121. – 24. Sept 2011

10. ScanBalt 10. ScanBalt Forum Forum

„„10 Years ScanBalt 10 Years ScanBalt BioRegion – BioRegion – Towards a Balanced Towards a Balanced Regional Development and Regional Development and Smart Specialization in the Smart Specialization in the Baltic Sea Region”Baltic Sea Region”

Thank you !Thank you !

Thank you !Thank you !

Global interview projectConference 2010 Göteborg, www.omep2010.orgBy courtesy: Bo Samuelsson, Göteborg

Current Impact

Biotech Workforce

Human Capital

Risk Capital

R&D Input

„scientific fountain“

„co-location“

„mode-3“

North-West Russia Biotech

North Poland Biotech

Kalmar BioScience

BioTeam-South

Latvia Biotech

MedCoast Scandinavia

Medicon Valley

Bio Turku

BioCon Valley

Lithuania Biotech

Estonia Biotech

ScanBalt –a string of competency clusters

HelsinkiStockholm

[Berlin][Hamburg]

MV in comparison (Wifor)

© 2010 WifOR | Dr. Dennis A. Ostwald | Healthcare Industry: Growth and employment driver? 13 | 18

2. Health Care Industry as a growth and employment driver?Ranking of the federal states of Germany (impact of the employment)

Rank 2006

Emp. in %2006

Rank 1996

Differences1996-2006

Berlin 1 15,8 1 +2,0

Mecklenburg-Vorpommern 2 15,1 2 +2,1

Sachsen-Anhalt 3 14,6 7 +2,2

Brandenburg 4 14,2 9 +2,2

Schleswig-Holstein 5 14,1 3 +1,2

The same conclusion can be made for the employment.

Source: Destatis, 2009; BA 2009; Berechnung: Wertschöpfungsansatz, WifOR, 2010.

Health and structural fonds2007 - 2013

• Health expenditures in all EU countries range from 4.9 to 10.7% of GDP

• Described in strategic reference framework and operational programmes– „Direct“ and „indirect health investment“

• E.g. health infrastructure, e-health, inpatient care, access to healthcare by vulnerable social groups, emergency care, medical equipment, screening, health and safety at work, health promotion and disease prevention, education and training for health professionals

– Non health sector investmentwith potential health gain

Health & wealth “Health Economy” sector provides more jobs and

generates more income than many “traditional” sectors, like automotive, agriculture or food industry.

Health Economy is a pillar of knowledge-based society, which allows the Baltic sea region to compete with Asia and the US.

Investment in health fosters long term growth and sustainability of economies.

Health Economy has proven to reduce the negative effects of the economic crisis and prepare for a time after the crisis.

Flagship Strategy• Mission:

“Set up cross-sectoral and transnational reference projects for collaboration and innovations in health and in life sciences in order to promote public health on a high and sustainable level and to make Baltic Sea Region a globally leading and prosperous meta-region within health.”

• Draft of strategy paper,to be published at ScanBalt Forum 2010 in Tallinn

Action lines

Install communication & governance platform and start a sustainable, „directed“ (bottom up resp. top down) and cross-sectoral consultation process– Prio. 7 BSR Stardust („Innovation“)

– Prio. 12 Northern Dimension („Health“)

– Prio. 8 ICT for Health („ICT“)

Initiate transnational strategy development process based upon regional consortia and interests

Initiate and support project consortia in common areas of interest

Create a macro-regional model for transnational cooperation in the strategically important area of health and life sciences

Growth rate of the health care industry is above-

average compared to the national economy

Growth rate of the health care industry is above-

average compared to the national economy

German-Monitoring:Growth driver Health care industry

GVA growth rate for the national economy and Health care industry

* *

* Database: 2nd respectively 3rd extrapolationof the NA

Ø 3,4% p.a.

Ø 1,9% p.a.

Source: WifOR 2010; Database: Fed. Statistical Office, 2009.

GVA national economyGVA health care rel. industry

* *

In recent years the Health care industry has set up an above-average employment in Germany.

In recent years the Health care industry has set up an above-average employment in Germany.

German-Monitoring:Job driver Health care industry

Growth rate of employment

* Database: 2nd respectively 3rd extrapolationof the NA

Source: WifOR 2010; Database: Fed. Statistical Office, 2009.

Health – share of GDP

Source: OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata).