Steve Turley, Managing Director of Lundbeck, has been re-elected Chair of the European Medicines Group (EMG), the UK voice of pharmaceutical companies based in continental Europe.

Robin Bhattacherjee, General Manager of Actelion, was re-elected vice-Chair of the EMG; and Mike Sumpter, CEO of Servier Laboratories, was elected Treasurer.

Issues highlighted at the EMG’s twelfth AGM included the impact of NHS reform on European-based companies and European perceptions of the UK as a pharmaceutical market and research base.

The EMG’s 15 member companies are Actelion, Almirall, Bayer, Boehringer Ingelheim, Ferring, Lundbeck, Menarini, Merck Serono, Norgine, Novartis, Novo Nordisk, Roche, Sanofi, Servier and UCB.

Steve Turley (pictured) commented: “We have members ranging from the UK’s biggest pharmaceutical companies, through biotechnology specialists to emerging organisations. Yet we all share common challenges and can benefit from being able to view these through a European-focused lens.”

“How the implementation of the NHS reforms affects European-based companies is a key issue this year,” noted Robin Bhattacherjee.

“Upwards of 60% of the medicines our members have introduced in the last decade have not been subject to a NICE health technology appraisal, so... local decision making in the CCGs about the use of these remains a major focus for EMG.”

Mike Sumpter noted: “Globally the UK is viewed as a tough market where innovative new medicines aren’t adopted as readily as similar economies.

“We want to work closely with our NHS stakeholder partners to demonstrate that the UK and the NHS is worth investing in.”

Lundbeck is based in Denmark, Actelion in Switzerland and Servier in France; all three companies have major UK operations.

An open letter to the European Medical Association (EMA) calling for all clinical trial results to be published has been signed by 53 trial participants.

The fact that half of clinical trials are withheld from publication by their industry sponsors is a “betrayal of our trust”, the letter said.

However, the ABPI argued that clinical trial results contain “commercially confidential information” whose publication could harm investment.

The letter is part of the growing campaign for an end to industry control of medical trial data, fuelled by the ‘Tamiflugate’ scandal.

A petition with 8,000 signatories, including the Cochrane Collaboration and the Medical Research Council, calls for the inclusion of all clinical trial data in a public register to be mandatory.

According to a 2010 study by the National Institute of Health Research, half of all clinical trials are never published, and those with results supporting the use of a drug are twice as likely to be published as those with negative findings.

The Commons Health Select Committee has backed the call for a legal obligation on pharmaceutical companies to share all trial data.

The letter from 53 clinical trial participants, some of whom are seriously ill, said that the right of companies and researchers to withhold results is “dangerous and expensive” and “holds backs good medicine”.

“It is a betrayal of our trust in clinical trial regulation and the trust of the families of those patients who volunteer for trials having had a terminal diagnosis,” the letter added.

The ABPI insisted, however, that trial protocols and results are “commercially confidential information” whose publication “could undermine investment in research and development of future medicines.”

Private health providers are set to take a fifth (£20bn) of the NHS market by 2020, according to corporate finance consultant Catalyst.

CCG commissioning and the new ‘any qualified provider’ rules, combined with the shift to community-based care, will greatly increase the opportunities for the private sector, the Catalyst report says.

Catalyst predicts a major increase in M&A activity within private healthcare, with growing interest from overseas investors in NHS assets and businesses from other sectors seeking to enter the market.

Justin Crowther, Catalyst’s Director and co-author of the report, said that NHS commissioners “are increasingly using the skills and capital of the private sector” – for example, “to turn around underperforming hospitals, operate GP surgeries, deliver community services or create centres of excellence in areas such as pathology”.

The report points to the “landmark contracts” recently awarded to Circle, Virgin Care and Serco as a sign of the growing trend.

In particular, it notes the growing opportunities for private sector providers of primary and secondary care, accelerated by “the removal of barriers” through the new ‘any qualified provider’ rules.

Catalyst also predicts that the shift of healthcare to community settings will open up £2bn of business for the private health sector by 2020, while commissioning support services will create another £1.3bn of opportunities.

In all, it predicts that private health providers will command £20bn of the NHS market – 20% of the whole – by 2020.

New research shows that SME growth provides the best prospect for economic recovery in the UK. But, as private equity firm ECI notes, finding the cash to reach out to global partners and markets can be a critical hurdle.

With continued pressure on governments across the Western world to reduce their expenditure, together with sustained macro-economic uncertainty and a tightening of bank funding, times are not necessarily easy for the average healthcare company – which often relies on the public purse for reimbursement and debt funding for growth. One might therefore expect the short-term outlook for growth to be somewhat muted, despite the backdrop of positive longer-term demographic drivers of demand.

Hence it is interesting that a recent survey of UK SME businesses by ECI Partners, a UK-based midmarket private equity firm, has found executives to be generally positive about growth prospects over the next 12 months, with 74% of respondents anticipating headcount growth and 60% expecting double-digit turnover growth.

The results met with a warm response from the Government, with Mark Prisk, Minister of State for Business and Enterprise, saying: “It’s good news that despite a tough few months, nearly three-quarters of the SMEs surveyed by ECI are looking to recruit over the next year and half expect to see substantial profit growth in that period. Up and down the country, it is Britain’s SMEs that are driving our economic recovery.”

Reaching out

This year, the survey conducted each summer by ECI Partners gained responses from a total of 246 chief executives from UK growth companies from a range of sectors with turnover between £10m and £200m. The results paint a positive picture against the gloomy economic backdrop of the Eurozone crisis and sluggish UK economy, and suggest that there remains growth potential amongst SME businesses – which account for around a third of UK private sector employment.

Steve Tudge, a Managing Director of ECI, commented: “Despite the barriers to growth, which are principally cited as a weaker macro-environment and funding constraints, we continue to be optimistic about the prospects for good mid-market companies.”

Executives see the key growth drivers to be increasing international sales – with Europe and the USA remaining the dominant international markets, though India and China are becoming more important – and organic growth through investment in sales and marketing and new product development. Over 40% of companies are also planning to increase their use of overseas suppliers to improve their margins.

Internal cash flows are viewed as the most likely source of funding for this growth, though around half of respondents say they are likely to seek bank debt within the next 12 months (despite continued complaints about its cost and due diligence requirements) and around 40% are also likely to look at private equity backing. Fewer than 10% of companies see the public markets as accessible, perhaps reflecting the recent volatility and liquidity issues associated with the AIM market.

Healthcare respondents are less bullish about high growth than their peers in other sectors, and are noticeably less positive about growth than they were last year. This no doubt reflects, in part, the political uncertainty surrounding the current UK healthcare reforms and the public sector spending constraints that are impacting on the health and social care sectors.

Despite this, companies remain more confident of raising growth financing – and of raising it from private equity firms, with over 50% saying that was a likely consideration over the next year.

Financing growth

What does all this mean for SME healthcare businesses in the UK? The sector certainly faces challenges in responding to Government spending cuts, which are tending to put pressure on margins if not always on volumes.

However, opportunities for growth remain amidst these challenges, particularly for companies who are able and willing to venture beyond the UK in order to seek new customers and cheaper suppliers.

Of course, this internationalisation can put a strain on smaller businesses, which may lack the scale to fully support an international infrastructure. Private equity groups with experience and expertise in this process can potentially offer support to management teams in this position – whether by making introductions, sharing best practice or simply financing the required infrastructure.

There are significant sums of capital available for investment from the UK private equity industry, and there remains an appetite to invest in market-leading healthcare businesses. Thus private equity should be considered seriously as an option by management teams in the healthcare industry who are looking to fund growth to help their companies succeed in the current economic environment.

ECI is a private equity group that has been investing in mid-market growth businesses for over 35 years. It invests across sectors, with a focus on UK and Irish companies. Healthcare companies in its current portfolio include a primary care provider (Harmoni), assisted living specialists (Premier Bathrooms, DLP) and medical software companies (Clinisys, Ascribe).

France is Europe’s biggest importer and exporter of medical devices. However, current reforms are driving cost reduction and efficiencies. Medtech Business in association with Espicom takes a look at the French market for medical technologies.

France is one of the top five medical device markets in the world, accounting for around 3.9% of the global market.* Within Europe, the market ranks behind Germany and is a similar size to that of the UK.

The country has a well-developed healthcare system, combining public hospitals with commercial clinics that are the main providers of elective surgical treatment. While the public sector is the largest purchaser of most diagnostic and therapeutic equipment, the private sector is the dominant purchaser of surgical equipment and supplies.

The high level of healthcare expenditure (11.8% of GDP) and the substantial health deficit are major concerns that have prompted various reform programmes aimed at curtailing costs and improving efficiency in the healthcare system. For this reason, the medical market is only likely to see moderate growth, rising from US$8.3 billion in 2011 to US$9.8 billion by 2016.

Despite several high-profile investment programmes, France continues to lag behind its European neighbours in some high-technology fields, most notably imaging and radiotherapy equipment. A second five-year cancer plan has now been launched which aims to increase the numbers of scanners.

With flagging domestic production in several sectors the French medical device market is increasingly reliant upon imports, which now account for around 80% of consumption. However, many imported products are re-exported to other countries.

 

The market in 2011

In 2011, the French medical device market (see Figure 1) is valued at US$8,280 million. Consumables is the largest product category, accounting for 20.9% of the overall market, followed by diagnostic imaging (19.8%).

Espicom estimates that the medical device market will grow at an average annual growth rate of 3.5% between 2011 and 2016 – bringing the total market value to US$9.8 billion by 2016.

Orthopaedic and prosthetic devices are expected to continue to be the most dynamic sector of the market, with growth forecast to be more than double the rate for the overall market. Conversely, diagnostic imaging is forecast to have the lowest growth during the 2011–16 period.

 

Predictions for market segments

Figure 2 shows Espicom’s predictions for the major segments of the medical device market.

1. Consumables. The market for medical consumables is estimated at US$1,729 million. The consumables market grew at an annual rate of 5.1% in US dollar terms between 2006 and 2010. Imports supply the greater part of the market. Espicom estimates the consumables market will continue to grow by an average of 3.5% over the next few years.

The wound care products market is forecast to grow at an average annual rate of 2.9% in US dollar terms during the 2011–16 period. Syringes, needles & catheters has been the fastest growing sector of the consumables market and will continue to be, with a CAGR of 4.1% to 2016.

2. Diagnostic imaging apparatus. The market for diagnostic imaging is estimated at US$1,636 million. The market grew at an annual rate of 2.8% between 2006 and 2010. France lags behind its European neighbours in the diagnostic imaging field, though the second cancer plan aims to increase provision of MRI, CT and PET scanners.

Imports supply the greater part of the market, though their market share is lower for radiation apparatus due to the strength of the domestic manufacturing industry. The USA and Germany are the major sources of supply. Espicom estimates that the imaging market will grow by an average of 2.1% between 2011 and 2016.

3. Dental products. The market for dental products is estimated at US$859 million, equal to 10.4% of the total medical device market. The dental products market grew at an annual rate of 4.2% between 2006 and 2010. It is forecast to grow at an annual rate of 3.5% over the next few years, taking the total to US$1,020 million by 2016.

4. Orthopaedic & prosthetic devices. The market for orthopaedic & prosthetic devices is estimated at US$1,336 million, equal to 16.1% of the total medical device market. The orthopaedic & prosthetic devices market grew at an annual rate of 9.2% between 2006 and 2010.

Imports have seen particularly high growth in recent years, though a corresponding increase in exports in this sector indicates that not all imported products are destined for the domestic market. The majority of orthopaedic imports are supplied by Switzerland and the USA.

The orthopaedic & prosthetic devices market is forecast to grow at an annual rate of 6.1% in US dollars over the next few years, taking the total to US$1,794 million by 2016.

5. Patient aids. The market for patient aids is estimated at US$1,131 million, equal to 13.7% of the total medical device market. The patient aids market grew at an annual rate of 4.5% between 2006 and 2010.

French imports of patient aids far exceed the value of the domestic market due to a high level of re-export activity, particularly for pacemakers. Switzerland and the USA are the leading suppliers of portable aids, whilst the USA and China are the major sources of supply for therapeutic appliances.

The patient aids market is forecast to grow at an annual rate of 3.9% over the next few years, taking the total to US$1,367 million by 2016.

 

Imports

The value of French medical device imports has recorded a steady rise over the past decade, reaching US$10.4 billion in 2008 before falling back to US$10.3 billion in 2009.

Imports of consumable items amounted to US$1,780.6 million in 2009. Imports fell by 1.0% over 2008 in US dollar terms (though they increased in euro terms). Syringes, needles, catheters & cannulae are the largest subcategory.

Diagnostic imaging imports totalled US$1,564.0 million in 2009, equal to 15.2% of the total. This was the weakest performing category in 2009, with a fall of 16.4%.

Imports of orthopaedic & prosthetic devices were worth US$1,549.1 million in 2009, equal to 15.1% of total medical device imports. This was the fastest growing category in 2009, with a rise of 26.6%. All three subcategories – artificial joints, orthopaedic appliances and other artificial body parts – recorded strong growth.

Patient aids are the largest import category, with imports worth US$2,624.1 million in 2009, equal to 25.5% of total medical device imports. Pacemakers accounted for 54.7% of imports in this category in 2009, but also accounted for more than half of patient aid exports.

The leading suppliers of French medical imports in 2009 were the USA, Switzerland and Belgium, with the UK ranking eighth as a supplier with imports worth US$288,964 (2.8% of the total).

 

Exports

In 2009, medical device exports registered a 3.0% fall in value to US$9.2 billion, having recorded steady growth in previous years with a CAGR of 6.8% for the 2005–2009 period.

In 2009, 69.5% of all French medical device exports were sent to the rest of the EU, with the Netherlands taking a 17.6% share, followed by Germany with 14.4%. The UK took 6.6% of French medical device exports.

Outside Europe, the leading destination is the USA, which accounted for 9.1% of exports. The USA is the leading destination for French exports of diagnostic imaging apparatus.

Next month, Medtech Business will look at the medical technologies market in Germany.

This article is based on information from Medical Market Outlook reports published quarterly by Espicom Business Intelligence. *All figures are in US $. For further details of the 66 markets covered, please visit www.espicom.com/outlookm1

VistaMed’s investment of €7.2 million in R&D and product expansion will create 79 jobs, nearly doubling its workforce.

The Irish company designs, develops and manufactures catheters and complementary medical devices, exporting to the UK, Europe, US, South America and India.

Paddy Mulholland, Managing Director of VistaMed, said that the company “has continued to develop its capabilities and today we offer a comprehensive design development and manufacturing of innovative catheter solutions”.

The company’s investment is supported by the government through Enterprise Ireland.

Currently, 93 people are employed by VistaMed at its facility in Leitrim.

Abbott Laboratories has revealed plans to separate into two companies, one focusing on diversified medical products and the other in research-based pharmaceuticals.

The new medical products company will contain the company’s current portfolio and retain the Abbott name with the unnamed research-based business including its current portfolio of proprietary pharmaceuticals and biologics.

Miles D. White, Chairman and CEO, Abbott, says the split is a “significant event” in the history of the company whilst “strengthening our outlook for strong and sustainable growth”.

Abbott says the research-based company, which raised almost $18bn in annual revenue, and the diversified medical products firm, with approximately $22bn in annual revenue, will become global leaders in their respective industries.

The research-based arm will include all branded generic pharmaceutical, devices, diagnostic and nutritional businesses. Abbott says it will have a sustainable portfolio of brands, including Humira, Lupron, Synagis, Kaletra, Creon and Synthroid, as well as a pipeline of innovative R&D assets.

Developed markets are expected to generate the majority of the company’s revenue with a sustained portfolio and advancing pipeline having the potential to deliver “accelerating revenue” in the future, Abbott says.

Its new diversified business will include established brands from its four main divisions: pharmaceuticals, nutritionals, diagnostics and vascular devices, where it says it is now the global leader in interventional cardiology.

Abbott believes it will be one of the “largest and fastest” investment opportunities with nearly 40% of sales coming from high-growth emerging markets.

Miles D White will continue as Chairman and CEO of Abbott with Richard A Gonzalez, currently the Executive Vice President, Global Pharmaceuticals, taking on the positions of Chairman and CEO of the unnamed company.

“The research-based pharmaceutical company will be a leader in its industry with a strong and sustainable portfolio of specialty medicines and a promising pipeline of future products,” said Mr. Gonzalez. “This business has been delivering market-leading performance and is well positioned for future success.”

Nanotechnology holds the key to a new generation of medical devices and diagnostics. Mike Fisher of the Nanotechnology KTN looks at how miniaturisation is changing the face of healthcare.

Over the past decade there has been significant interest in the promise that micro and nanotechnology holds for life sciences.

An estimated 40% of US nanotechnology venture capital is being allocated to life science start-ups – and over 2008 and 2009, according to a study carried out by Lux Research, healthcare and the life sciences saw an increase in investment of 42%, while other areas such as manufacturing and materials saw a decline.

Europe has a number of leading biotechnology companies, as well as world-renowned R&D facilities. Traditionally the emphasis of these companies has been exclusively on biotechnology – but more recently the lines between biotechnology and the electronics industries have become blurred, creating a new and exciting field of new applications and markets using techniques acquired in the semiconductor world.

The electronics industry has been transformed by the strategy that ‘smaller is better’, and using these same techniques and applying them in medical and pharmaceutical contexts has opened exciting new market opportunities. The next level of miniaturisation, into nanoscale dimensions, is a booming area of R&D with significant funding being invested worldwide.

Mobile diagnostics

Using miniaturisation, medical diagnosis equipment can now be used outside of the lab: in doctor’s surgeries, remotely, and even on mobile phones. The applications are endless.

Imagine a world where all you need is your smart phone to detect any disease through blood analysis, without the need for costly and lengthy analysis in the lab. That could be real in five or ten years’ time.

Ten years ago the ‘lab-on-chip’ was a concept without a viable market entry point, but now point-of-care diagnostic systems are starting to show clear benefits in disease detection and cancer therapy.

By using these applications to analyse samples of blood, interstitial fluid, urine and saliva, medics are able to use minimally invasive techniques to obtain quick results that are easily collected, with minimal stress and discomfort to patients.

Using miniaturisation in diagnosis means that the size and cost of equipment can be reduced dramatically. Sensors can be made available at the point of care, in many cases providing a diagnosis while the patient is with the doctor. Providing early diagnosis means that the right treatment can be given early, avoiding complications caused by delays.

Micro and nano diagnostic devices can also provide closed-loop systems that continuously monitor patients and respond immediately to physiological changes. This is particularly important in the intensive care unit, where simple parameters such as oxygen levels can be critical.

In the future, as medical systems become fully integrated with semiconductor technology, we can expect lab-on-chip devices that measure information on disease markers, cell count or DNA-RNA from a very small quantity of blood or other biological fluid sampled by pain-free needles, and ways to receive and transmit real-time information from sensors located inside the human body.

With applications such as point-of-care diagnostics already emerging with huge benefits to patients, there is no doubt that the next generation of healthcare technology will be enabled by the use of miniaturisation.

Taking a simple and effective concept from the semiconductor world has already delivered a dramatic effect on medical diagnostics and is now moving into drug discovery, creating new and exciting applications across a wide variety of markets.

Chain reaction

Getting these applications to market has been hindered by a lack of potential investors and early adopters willing to take a leap of faith. However, there are now a significant number of international companies developing these new application technologies, as they have begun to see the clinical effectiveness offered by nanotechnology and miniaturisation.

The current interest in the use of miniaturisation in the life sciences has been driven by the many advances this new concept promises. Individuals, companies and funding bodies are looking for ways to invest in this newly commercialised technology. To ensure success, nano-companies need to secure support from venture capitalists and other funding bodies, which can be difficult in the current economic climate.

However, despite the advanced developments in miniaturisation in the life sciences, the industry is still relatively new and there are a number of gaps in the supply chain that prohibit products from getting to market in an effective manner. It is crucial with any new technology to ensure that all parts of the supply chain interact and keep each other informed of developments and capabilities.

One of the Nanotechnology KTN’s main remits is to analyse this supply chain, determine where the gaps are and encourage companies to recognise the commercial gains that can be reaped from bridging them.

Connecting members of the supply chain with one another means that academics, research specialists, industrial practitioners and funding sources can meet to discuss ideas and business opportunities, thus ensuring the developments in this application of nanotechnology continue.

Clearly, many of the applications in these new markets are novel and as a result have yet to be fully developed and become economically viable. In the quest to make these technologies and applications available to a wider market, clinical efficacy and value to the healthcare payer are ultimately the deciding factors.

Increasingly, products need to be cost-effective – and the materials used to produce each device represent a significant part of the cost. It can be expected that as the use of miniaturisation in life sciences becomes more widespread, the associated costs will reduce and the applications will expand much more widely.

Given the economic benefits it promises, it is inevitable that the use of miniaturisation in the life sciences will continue to be adopted and supported.

Mike Fisher, PhD, is Theme Manager – Life Sciences & Healthcare at the Nanotechnology Knowledge Transfer Network (KTN).

Andrew Witty, GSK Chief Executive, has said the company is eyeing up new investments in the Indian pharmaceutical market.

In an interview with The Times, Mr Witty outlined plans to purchase assets of up to £2bn as it looks to increase its presence in one of the world’s largest emerging markets.

But Mr Witty ruled out any large-scale takeovers was as the company already has an “enviable” brand in the country.

Glaxo currently employs 5,000 people in India with a turnover in the country of more than £1bn.

The Indian pharmaceutical market in the country was recently reported to reach $55bn a year by 2020. In 2009, the market was worth around $12.9bn.

GSK is not the first company to invest in the Indian market. Sanofi recently announced a deal to acquire Universal Medicare’s over-the-counter unit in the country. India’s The Economic Times also reported that Takeda is in takeover talks with the generic drug manufacturers Cipla and Lupin which are based in the country.

A highly-skilled workforce is a must in today’s competitive business environment. But as many companies slash their budgets in the relentless pursuit of efficiencies, is employee training becoming yet another victim of austerity?

Companies that fail to invest in talent will undoubtedly learn the hard way that this is a short cut to failure. Chris Ross presents a crash course in the current market for training and development.

There are mixed views on whether companies’ training and development activities are taking a hit in the current global economy. Recent mid-year analysis in the US revealed that global spend on training this year has been around 7–9% higher than in 2010. But Training 2011, a study by UK market intelligence company Key Note, presents a different trend.

The report estimates that spending on off-the-job training by UK private and public sector employees fell by 3.2% in the year to April 2010 – and that spending on external trainers dropped by around 17% in the same period. The study reports that training investment most likely dropped further by around 2.5% up to April 2011, but forecasts a slight recovery of 1.5% by April 2012. These are worrying times.

Companies are desperately seeking to increase their capabilities as the markets in which they operate are changing; but to drive real growth, continued investment in talent is essential. The Chartered Institute of Personnel and Development (CIPD) says that whilst organisations will undoubtedly expect people to do more with less, they should not expect employees “to want to do more with less learning and talent development.”

Learning and Talent Development 2011, the CIPD’s annual survey report, revealed that resources and budgets for learning and development had decreased in two-fifths of organisations in the past year, whilst a third of companies had reduced their headcount.

The study showed that although most businesses have a training budget, in most cases these have not only suffered cutbacks, but are also expected to cover a broad range of activities and costs. Unsurprisingly, the majority of budgets cover items such as external courses and conferences (93%), hiring external consultants and trainers (83%) and books/training manuals (81%).

But for two-fifths of the organisations surveyed, the training budget is also expected to cover fixed costs and salaries for in-house trainers. Clearly, the battle to upskill the workforce is being played out in the most testing of circumstances.

 

The employment market

The employment market is certainly creating challenges for employers and candidates alike. Unemployment is rising as organisations continue to reduce their workforces – but those companies that are hiring are finding that many job applicants are not sufficiently skilled and are therefore unsuitable for employment.

Conversely, in a stagnant job market, those who are in employment appear reluctant to move. Talented individuals are staying put. But is enough being done to nurture and develop them? Or are they too likely to stagnate as opportunities fail to emerge?

Likewise, less talented but generally reliable employees –the ‘safe pairs of hands’ that populate every organisation – are in many industries failing to receive adequate skills development, leading to an uncomfortable paradox: they are safe in their roles, but as their markets evolve they are not ‘fit for purpose’ to perform them.

In difficult times, the need for increased investment in human capital is significant. Training and talent development is a major priority for businesses large and small. In a market characterised by growing shareholder expectations and shrinking operational budgets, what are the options for training and developing the workforce?

Learning and Talent Development 2011 says that most companies are continuing the 2010 policy of “switching to more cost-effective development practices”. This has seen organisations reduce their use of external training service providers and instead increase in-house development programmes, internal knowledge-sharing events and coaching by line managers. In addition, the use of e-learning solutions continues to grow.

Technology-led learning tools are becoming increasingly popular across Europe. Training today, training tomorrow, a present-day analysis of learning trends across Europe by Cegos Group, says that uptake of solutions such as ‘serious games’, mobile learning and online learning has grown considerably. This, it says, is driven by an emerging younger demographic in the workplace, and widespread corporate objectives to reduce costs yet maintain productivity.

Learning solutions that are delivered in a medium that is more familiar to this emerging user-group, and that mirror the new “social, global and mobile environment”, are not only easier to integrate into employees’ daily activities, but are also considered more engaging and effective. According to Cegos Group’s 2011 survey, half of those trained in Europe have used informal learning tools such as videoconferencing, wikis, blogs, forums and podcasts.

 

Old school still rules

So the rise of e-based learning solutions is tipped to continue. But, despite rhetoric to the contrary, not at the expense of traditional learning tools. Face-to-face training remains popular – external courses, seminars and conferences continue to play a valuable educational role.

In heavily knowledge-based and technical industries such as life sciences, traditional methodologies remain both popular and effective. In medical markets, despite the obvious growth of e-learning tools, tried-and-tested lecture-style learning still appears to be the preferred option, with many participants choosing it as their favoured route for CPD.

The CIPD study shows that external conferences and events are rated as being among the most effective learning methods for leaders, potential leaders and middle management. Despite this, more than a third of companies (34%) have reduced their use of external events in the past year.

In other areas, classroom-style lectures are being replaced by individual one-to-one sessions that enable more individualised, targeted training. There has been significant growth in activities such as coaching and mentoring, which are being recognised as important tools to encourage individual accountability and nurture talent.

According to the CIPD survey, coaching takes place in more than four-fifths (86%) of companies polled, with its main objectives being to support performance management, prepare people for leadership roles and assist learning and development.

A third of companies employ coaches, while two-fifths hand responsibility for it to line managers. Only one-fifth use external consultants for coaching. Group training – such as team coaching sessions and collaborative workshops – is evolving to become more interactive, customised and flexible – giving facilitators the opportunity to adapt training quickly, based on employee feedback and needs.

 

The need for speed

Speed is emerging as a key consideration in companies’ training and development strategies. Businesses are becoming more impatient. They want their employees to develop quicker and to become more proficient and productive faster than ever before. Such corporate impatience is, in fact, often mirrored by learners themselves. Employees want the fast track to success and, where it exists, will choose the crash course over longer-term learning.

As a result, multimedia and web-based training tools have seen a real surge in uptake. The benefits are clear, but the approach is not without its challenges. The dropout rate in self-monitored online training is apparently high, with too many participants failing to complete courses.

Developers need to work hard to ensure that online courses are engaging and exploit the opportunities for interactivity and connectivity that the medium provides. Critics claim that too many courses appear little more than traditional training manuals that have been uploaded to an online format.

Clearly, as the global business environment continues to evolve in challenging times, training models and methodologies are having to adapt to meet changing needs. The emergence of collaborative, interactive and dynamic learning tools, enabled by rapid advances in technology, have opened up new opportunities for training and development – but it only really completes the circle of learning solutions available to the market.

Training is, after all, demand-driven and should be designed to meet the varying, and often individual, needs and tastes of its end users. As such, training managers should continue to consider the full suite of learning tools open to them – in dialogue with learners and their line managers, to find the most effective solutions to meet organisations’ and individuals’ objectives.

Undoubtedly, however, the biggest demand from a business perspective is to nurture a skilled, talented and engaged workforce. To do this, companies must continue to invest in training and development, rather than chip away at training budgets for short-term efficiency gains.

The potential long-term impact of that approach is a disengaged, unmotivated and unproductive workforce that is not fit for purpose. And that really would be learning the hard way.

Data in this article have been sourced from Learning and Talent Development 2011, the Chartered Institute of Personnel and Development’s annual survey report. This is available for download from the CIPD website. Training today, training tomorrow, an analysis of learning trends across Europe and global comparisons, is available for download from the Cegos website.