In 2024, the global biotechnology market was estimated to have a value of USD 1.55 trillion and was projected to reach approximately USD 5.71 trillion by 2034, demonstrating growth rarely seen in any industry. Much of the industry’s focus is on pharmaceuticals, but biotechnology now reaches deep into many industries and aspects of day-to-day life. For instance, agriculture, green energy, food technology, and materials science have all been impacted by innovations in biotechnology.
Yet alongside the enthusiasm is a sobering reality. Biotechnology is an exceedingly expensive field, with labour and capitalisation costs dwarfing those of many other high-tech industries.
The case for renting over building in biotech
While there are other major costs, laboratory expenses have emerged as among the most expensive aspects of running a biotech venture. Outfitting a biosafety-compliant wet lab demands not just space, but also costly hardware, consumables, software, and expert maintenance. Small startups can seldom absorb these costs, and even comparatively well-endowed operations can quickly consume limited venture capital before research even begins.
These challenges are why the concept of shared wet labs has taken off. In Singapore, the concept of having wet lab space for rent has proven to be a major hit, as they’ve greatly lowered the barriers to entry in the biotech research space. The country has been at the forefront of this model, and has already established itself as a go-to hub where biotech startups from around the world can plug into state-of-the-art wet lab facilities. Here’s why so many of the world’s nascent biotechs are renting labs in Singapore:
1) Reduced initial capitalisation costs
The most immediate benefit of shared wet labs is the elimination of upfront capital expenditure. Outfitting a private lab and earning Biosafety Level 2 (BSL-2) certification, for example, can be prohibitively expensive, often running into the millions of dollars. Shared facilities allow multiple ventures to come together to shoulder those costs, providing compliant space without the serious financial strain.
2) Access to specialised equipment
Precision laboratory equipment is extremely expensive, and only a very small minority of early-stage firms can afford to purchase tools like mass spectrometers, sequencers, or bioreactors. Some shared labs can provide biotech startups with these essential tools on a rental or pay-per-use basis, helping founders allocate more resources to productive research rather than procurement.
3) Flexible space and service models
Even with a detailed business plan, startups may still struggle to predict their exact needs in the first few years. The pay-per-use framework for facilities and equipment at shared wet labs offers a straightforward solution, allowing startups to use as many or as few resources as their situation dictates. This can be an especially crucial advantage during a venture’s unpredictable early years.
4) Lower operational overheads
Maintaining a compliant lab can be just as expensive as starting one. Indeed, the cost of consumables, equipment maintenance, and even sample management can generate high recurring expenses that can overwhelm small teams or degrade the quality of their research. Shared labs spread these important costs across multiple tenants, keeping day-to-day overheads manageable for everyone.
5) Easier access to diverse talent
As mentioned, biotechnology has implications in multiple industries. At a basic level, it’s also highly multidisciplinary. When you put talented biotech professionals from different fields in one space, collaboration and innovation inevitably follow.
In Singapore, a noted biotech hub in Southeast Asia, this network effect is amplified by many labs’ proximity to universities, hospitals, and multinational pharma companies. For startups, this fertile environment makes it much simpler to recruit skilled talent and form valuable partnerships.
6) Faster time to market
Shared wet labs can cut out the bottlenecks created by building a compliant laboratory from the ground up, shortening the time to begin research and find breakthroughs. In industries where product development cycles can already stretch for years, saving even a year can be enough to edge out the competition.
7) Better investor confidence
Venture capitalists and grant providers are generally quite wary of pouring funds into high fixed-cost ventures. Startups that plan to use shared labs in their proposals can be a green flag for investors looking out for fiscally prudent founders.
8) Levelling the playing field for global biotech
Perhaps the most significant impact of shared labs is how they’ve democratised access to biotechnology, taking it away from governments and major pharmaceutical conglomerates and putting it within the reach of talented innovators. Founders from developing regions or non-traditional backgrounds can now enter the field without being held back by legacy politics or infrastructure costs.
Lowering costs means raising opportunities
Shared labs offer a pragmatic solution to longstanding issues in bleeding-edge research. With the support of some forward-looking governments and private entities, they have already lowered capitalisation costs and helped promising but underfunded startups get their foot in what was once a closed door. Such initiatives as Singapore’s Biopolis exemplify this model, showing how even cities can empower entrepreneurs by providing a hospitable infrastructure and an innovation-minded community.