1. Establishing a Life Sciences R&D Centre in the Scottish Central Belt A cost/quality comparison (Based on information from the Financial Times fDi Benchmark tool – June 2011)

2. Competitiveness of Scottish Central Belt Value for Money Overall Attractiveness Quality of the Location Annual Operating Costs Life Science R&D in Scottish Central Belt? Large Size of Industry in Life Science Strong Track Record in Life Sciences Availability of Highly Skilled Staff High Quality Business Environment Flexible Labour Market Highly Competitive Labour Costs Contents

3. The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by the Financial Times (FT) fDi Benchmark compared the Scottish Central Belt with the leading locations globally for Life Science R&D Centres based on an analysis of over 55 quality factors and 10 cost factors A key emphasis was placed on: - Presence of industrial cluster – the size of BioPharma industry, track record and R&D capabilities; and - General business environment – regulatory environment, operating risk, taxation and economic growth and stability - Costs to employ laboratory specialists and scientists Other factors including labour availability and quality, accessibility and the living environment were also assessed Benchmarking Study

4. The fDi Benchmark Matrix shows the trade off between cost and quality across the 5 selected locations for the Life Science R&D Centre profile. The average cost and quality score is 100 for the selected locations. Source: fDi Intelligence, from the Financial Times Ltd fDi Benchmark Matrix The ‘ideal’ quadrant is the top left (high quality/lower operating costs)

5. Cost FactorUsage Amount Property Total Occupancy cost (in town office rent)3,000 m² Weighting Model OverviewWeight Presence of an Industrial Cluster50 Labour Availability and Quality20 General Business Environment15 Living Environment10 Infrastructure and Accessibility5 Employee Type Profile Head count R&D / Engineering Head of Research and Development1 Laboratory Specialist17 Laboratory Technician15 R&D Team Leader4 Scientist10 Administration Facilities/Office Services Specialist3 5 Project Profile Overview

6. The matrix is based on the weighting and cost model for the Life Science R&D Centre profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs. The results indicate the different location solutions for the investor as follows:  the Scottish Central Belt offers higher quality at lower cost than the average of all the selected locations  Boston and Munich offer higher quality but at higher cost  Copenhagen and Rotterdam offer lower cost, but at lower quality The Operating Cost value is in GBP - United Kingdom Pound Location Qualitative Score Operating Cost Index Operating Cost Value Boston (MA)128.4133.04,608,589 Copenhagen93.891.13,158,947 Munich110.6113.63,937,999 Rotterdam46.779.02,737,827 Scottish Central Belt120.583.32,886,411 Source: fDi Intelligence, from the Financial Times Ltd fDi Benchmark Matrix

7. The location attractiveness index shows the overall attractiveness of the 5 selected locations for the Life Science R&D Centre profile. The ratio of quality to cost is 50:50 Source: fDi Intelligence, from the Financial Times Ltd Location Attractiveness Index

8. The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:  The top location offering the highest quality for a given level of cost is the Scottish Central Belt  the Scottish Central Belt also offers an above average level of quality and good value for money as its relative quality is higher than its relative cost Source: fDi Intelligence, from the Financial Times Ltd Cost Quality Competitiveness

9. The annual operating cost calculation for Life Science R&D centre is based on the following primary input costs: Labour Cost - The average cost across the selected locations for Life Science R&D centre is GBP 3,465,954 - The greatest cost saving between the selected locations is GBP 1,870,762 per annum - The location with the lowest operating costs is Rotterdam In terms of the individual cost factors, the location with the lowest costs is: - Labour Cost: the Scottish Central Belt - Property: Rotterdam The values in the chart below are in GBP United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd LocationLabour CostProperty Boston (MA)3,658,046950,542 Copenhagen2,446,628712,319 Munich2,876,3951,061,603 Rotterdam2,197,275540,551 Scottish Central Belt1,648,3931,238,017 Cost Competitiveness

10. The quality competitiveness assessment is based on the weight model for the Life Science R&D Centre profile which assesses each location across the following location factors: - General Business Environment - Labour Availability and Quality - Presence of an Industrial Cluster Infrastructure - Accessibility and Living Environment The average score for the selected locations is 100. The location with the highest quality score is Boston In terms of the individual quality factors, the location with the highest score is: - General Business Environment: Copenhagen - Labour Availability and Quality: Boston - Presence of an Industrial Cluster: Boston - Infrastructure and Accessibility: Munich - Living Environment: the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd Location General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment Boston (MA)162673411 Copenhagen20233579 Munich11166779 Rotterdam1210 4 Scottish Central Belt162565411 Quality Competitiveness

11. The quality competitiveness breakdown for General Business Environment for the Life Science R&D Centre profile is shown below The location with the highest overall score for General Business Environment is Copenhagen In terms of the individual quality criteria within General Business Environment, the location with the highest score is: - Economic growth and stability: Boston - Operating risk: the Scottish Central Belt - Taxation and incentives: Copenhagen - Access to finance: Boston - Regulatory environment: Copenhagen Source: fDi Intelligence, from the Financial Times Ltd Location Economic growth and stability Operating risk Taxation and incentives Access to finance Regulatory environment Boston (MA) 1.294.762.424.202.86 Copenhagen 0.642.889.193.533.57 Munich 0.882.332.103.342.63 Rotterdam 0.502.412.424.053.05 Scottish Central Belt 0.456.372.633.642.89 General Business Environment

12. The quality competitiveness breakdown for Labour Availability and Quality for the Life Science R&D Centre profile is shown below The location with the highest overall score for Labour Availability and Quality is Boston In terms of the individual quality criteria within Labour Availability and Quality, the location with the highest score is: - Overall size of labour market: Boston -Tightness and competition for labour: the Scottish Central Belt - Experienced industry-specific staff: the Scottish Central Belt - Flexibility of labour regulations: Copenhagen Source: fDi Intelligence, from the Financial Times Ltd Location Overall size of labour market Tightness and competition for labour Experienced industry- specific staff Flexibility of labour regulations Boston (MA) 13.413.966.262.41 Copenhagen 3.554.2311.233.73 Munich 4.962.277.870.99 Rotterdam 2.474.652.051.06 Scottish Central Belt 5.614.8912.591.80 Labour Availability and Quality

13. The quality competitiveness breakdown for Presence of an Industrial Cluster for the Life Science R&D Centre profile is shown below The location with the highest overall score for Presence of an Industrial Cluster is Boston In terms of the individual quality criteria within Presence of an Industrial Cluster, the location with the highest score is: - Size of industry: Munich - Track record: the Scottish Central Belt - Research and Development Capabilities: Boston Source: fDi Intelligence, from the Financial Times Ltd Location Size of industry Track record Research and Development Capabilities Boston (MA) 16.7719.6136.13 Copenhagen 7.9318.448.83 Munich 43.8313.2810.11 Rotterdam 6.580.003.21 Scottish Central Belt 24.8936.174.22 Presence of an Industrial Cluster

14. The quality competitiveness breakdown for Infrastructure and Accessibility for the Life Science R&D Centre profile is shown below The location with the highest overall score for Infrastructure and Accessibility is Munich In terms of the individual quality criteria within Infrastructure and Accessibility, the location with the highest score is: - Access to major overseas markets: Munich - Quality of utilities: Rotterdam - Quality of ICT infrastructure: Copenhagen Source: fDi Intelligence, from the Financial Times Ltd Location Access to major overseas markets Quality of utilities Quality of ICT infrastructure Boston (MA) 2.260.870.62 Copenhagen 4.120.961.60 Munich 4.971.120.81 Rotterdam 1.401.181.37 Scottish Central Belt 2.250.870.61 Infrastructure and Accessibility

15. The quality competitiveness breakdown for Living Environment for the Life Science R&D Centre profile is shown below The location with the highest overall score for Living Environment is the Scottish Central Belt In terms of the individual quality criteria within Living Environment, the location with the highest score is: - Cost of living: the Scottish Central Belt - Attractiveness for international staff: Boston Source: fDi Intelligence, from the Financial Times Ltd Location Cost of living Attractiveness for international staff Boston (MA) 4.965.63 Copenhagen 4.065.34 Munich 4.114.96 Rotterdam 5.864.41 Scottish Central Belt 6.014.66 Living Environment

16. To realise the potential, please contact: Scottish Development International 150 Broomielaw, Atlantic Quay Glasgow G2 8LU Scotland, UK T +44 141 228 2828 F +44 141 228 2089 www.sdi.co.uk Worldwide offices in: Americas, Europe, Middle East, Africa and Asia Pacific