Ursula Drost, Managing Director, Business Consulting Network International

August 31, 2010. Europe has experienced a new cross-industry trend in recent years that, depending on the form it takes, goes by the name of either sustainability, corporate responsibility management (CR) or corporate social responsibility (CSR). The vagueness of terms may be a sign, that we’re dealing with trendy buzzwords, which may or may not conceal much actual meaning. But, these terms only appear new to Europe, which partly explains why European companies are having a hard time finding people with the requisite expertise to develop and implement integrated sustainability concepts.

Pharmaceutical companies face tremendous challenges amid rising costs for research and development of new drugs and a declining number of new market-ready medications. The competition is further heightened by new market players and generic drug manufacturers. The latest reports give an idea of how turbulent the times are:

Organon, the second-largest maker of contraceptives, has been largely split up in recent years due to two takeovers by large U.S. corporations. Organon will lose its entire research sector along with half the 4,500 jobs at its headquarters in Oss in the Netherlands. The original owner, Akzo Nobel, first decided to focus on chemistry and sold Organon to Schering-Plough. Schering-Plough then merged with Merck & Co. in 2009. Merck & Co. is expected to shed some 15,000 jobs around the world.

U.S. Justice Department Looks at Big Pharma
The United States Department of Justice is investigating pharmaceutical companies as part of an anti-corruption initiative. Investigators are looking into entertainment expenses, licensing agreements, donations and consulting fees. So far, they have contacted Glaxo SmithKline, Pfizer, Bristol-Myers Squibb, Eli Lilly and Merck.

Sanofis-Aventis Eyes Genzyme
Despite last year’s scandal involving contaminated drugs, no less than three pharmaceutical companies are interested in buying Genzyme: Sanofis-Aventis, Pfizer and Johnson & Johnson. The reason: from the start, Genzyme focused on developing medications to treat rare, genetically determined diseases. The development is so cost-intensive that generic drugs are not feasible.

Generic Drugmaker Stada Seeks Buyer
Stada is offering itself as the last chance for pharmaceutical companies to enter the German market, the second-largest after the U.S. Teva just acquired its competitor Ratiopharm for €3.6 billion.

Introducing the third dimension is intended to greatly simplify the increasingly complex user interface of smartphones, with their utterly endless apps and customization options. Mobile phone manufacturer Nokia and U.S. chip maker Intel plan to develop 3D software and virtual worlds for cell phones. A new research center in Oulu, Finland, is dedicated to studying the technical possibilities for displaying the remote party in 3D.

Nokia and Intel combined their two Linux-based operating systems into a version called MeeGo, designed to serve as a platform for new product developments. The first tablet PC running on MeeGo is to be presented at Berlin’s IFA consumer electronics trade show in early September. This would be a strategically important success over rival Apple.

Solar Millennium Postpones Interim Report

Solar Millennium, the German solar power plant developer that made headlines for alleged accounting tricks, postponed the publication of its latest quarterly figures. A revised publication deadline of September 13 was announced. The Bavarian company, a stakeholder in the German industry’s desert power initiative, covers the entire value chain from project development and financing to the ownership and operation of solar thermal power plants.

Solar Module Manufacturer Solon Still in the Red

Solon, the German manufacturer of solar modules, is still in the red despite the boom in the photovoltaic industry. CEO Stefan Säuberlich attributes this to inherited problems, however, and anticipates balanced operating income and expenses in 2010.

Bosch Solar Energy Continues Growth Trend

Bosch Solar Energy AG has inaugurated the first phase of the new production facility for crystalline solar cells in Arnstadt, Germany. The new production facility will create additional capacity for 10,000 cells per hour—or some 90 million annually. Some 1,100 new jobs are expected. Bosch plans to invest about €530 million in the Arnstadt site by 2012. Bosch Solar Energy AG plans to nearly triple its nominal capacity for crystalline solar cells to some 630 megawatts and move forward aggressively on its growth trajectory.

France Cuts Solar Subsidy in September—Sunny Forecasts in U.S., China, India and Japan

A new setback for the solar industry: After Germany cut its subsidies, now France intends to lower the price it pays for solar power. Several French newspapers are reporting cuts of 12% effective September 1. Les Echos also reports that the government plans to limit the subsidy to 500 megawatts starting next year. After the German cuts, France was considered a ray of hope for the photovoltaic industry. Cutbacks are also planned in the key solar power countries of Italy and the Czech Republic. The stock prices of solar companies plunged on August 24. Meanwhile, the photovoltaic markets in the U.S., China, India and Japan offer new growth potential.

Lull for Wind Energy

Denmark’s Vestas, the global leader in wind energy, shocked the markets when it reported €119 million in net losses. The wind energy sector is still reeling from the effects of the financial crisis, which made it more difficult to secure financing for wind farms around the world. Postponed orders from Germany, the U.S. and Spain—three of the most important wind energy markets in the world—were a severe blow to Vestas. German competitors such as Nordex and Repower complain of similar difficulties but managed to avoid slipping into the red.

The wind energy business in Europe is sluggish. Some markets, such as Spain, have rolled back subsidies for this type of renewable energy. The German market is stagnating at best. The industry association is predicting a volume of 38,000 megawatts of installed capacity on the worldwide market, less than last year. The reasons: The construction of offshore wind farms is coming along more slowly than expected. Many European countries prefer to first put their budgets in order. New drilling and extraction technologies in the U.S. have yielded much greater volumes of cheap natural gas than was available just a few months ago. That makes gas power plants more attractive to investors than wind farms. The United States is the largest single market for wind power, with 22% of the installed worldwide capacity in 2009. Germany and China each has a 16% share, Spain has 11% and India nearly 7%.

Renewable Energy as a Revenue Source for Hard-Hit Cities

A recent study finds that the strong growth in energy production from wind and solar facilities has brought more and more revenue to German cities. The first systematic study estimates that renewable energy in Germany accounted for €6.6 billion in regional added value in 2009. Many regional energy providers, having invested large sums to switch to renewable energy under the terms of the original timetable for phasing out nuclear power in Germany, are calling upon the federal government to abandon its plans to relax this timetable and keep nuclear power plants online longer.