At the time of this writing, most experts are predicting that some type of a recession or even depression in the global economy will occur. The question is not when this will happen, which many believe will be anytime within the next 10 years, but what we, specifically clinical researchers, can do to protect ourselves from the market corrections forthcoming.
In a recent podcast interview I conducted with Chris Sauber on my Random Musings From The Clinical Trials Guru podcast, we discussed this upcoming recession and shared some strategies of what contract clinical research associates, employee clinical research associates, and clinical research site owners can do to make themselves more immune to the financial meltdown headed our way. While no one will ever be truly immune to a global recession, there are some practical things you can do now to reduce the pain that you will feel later. The most important 3 take aways from this article will be to: 1.) start saving cash now, 2.) gain experience across as wide of a range as possible within the clinical research industry, and 3.) Diversify whether you're an individual CRA, a research site, a consultant, or a CRO.
Start Saving Now!
I know, not the most sophisticated advice out there, and certainly not the most popular according to most financial advisors pushing stocks and mutual funds. In my opinion, we should all be living well below our means for the next few years so that when the market does indeed correct itself, we can acquire stocks, real estate and entire businesses for nickels on the dollar. The problem with this (and all other) market crash is that only those individuals with a significant amount of liquid cash will be able to participate in the forthcoming fire sale of assets. If you can recall the Great Recession of 2008, banks were not giving loans out to start businesses, buy real estate or increase your line on your credit cards. The people that were sitting on cash however, well they were able to enjoy one of the best buyer's markets in recent history. Make sure that you are an active participant in the next fire sale by living below your means and saving. As a side note, for you biotech founders, we are currently in the biggest biotech bubble anyone has ever seen. This easy money won't last forever. It will be time to get very practical very quickly and find revenue streams to pay for the research and development when the financing inevitably runs out. This will be an opportune time to consider an equity partnership with a specialized CRO like my own and save precious resources.
Gain A Wide Variety Of Experience- Don't Specialize
When I started out in the clinical research industry back in 2005 (pre- Great Recession) my research clinic and myself personally were highly specialized in psychiatric disorder studies. This worked out terrifically for us from 2005-2008 and then the bottom fell out. Studies were being halted and cancelled overnight, employees were let go, and I had to scramble to pivot my company's expertise. It took me from 2009 to 2012 to add different therapeutic specialties to my pipeline but we eventually transitioned into a multi therapeutic research company that specialized in general medicine trials in addition to central nervous system disorders. I know we all have our preferences for what types of studies we like to monitor, or what types of trials we are good at conducting for our clinics, but the wider you can go in this upcoming market, the more options you will have, and the more immune to the downturn you will become.
Very similar to the above (#2) but even further diversification. If you are currently a CRA, you should set up a research clinic on the side, or open an independent consultancy where you provide quality assurance services. In this scenario, not only should you look to learn how to monitor different therapeutic indications or phases, you should also look to create multiple streams of income by having side businesses that just might serve as a lifeboat during the next economic downturn. I did a video on how CRA's can start research clinics here, and also have a page where you can learn everything you ever wanted to know about starting a clinic here.
Conversely, if you are a research site owner, not only should you broaden your site's capabilities of which types of trials to conduct, you should also consider diversifying by learning a new craft such as being a CRA (I would recommend an independent contractor part time position as I currently have). Not only are you adding another revenue stream for yourself (save what you earn!), but you are also learning new things that you can directly translate back into your research clinic. Learning how to be a CRA when you are currently a site owner could be a great way to pick up extra income and learn new skills. Check out my CRA Academy for more information on how to go about doing this.
The point of this blog post is not to be an alarmist or a prognosticator. As a matter of fact, this recession may not come for another 10 years, but the longer our economy continues to be artificially propped up, the harsher the correction will be. Now is the time to prepare for the next downturn so you can come out on the other side in a better situation than you were prior to the recession.
Here is the podcast interview with Chris Sauber in it's entirety, and don't forget to subscribe to my podcast.