New research show that the outsourcing trend is set to drive the analytical laboratory market over the next seven years, however small labs are in danger of drowning in the process.
According to a report published by Frost & Sullivan, the revenue generated by the analytical services market in the US was $603.1m (€471.8m) in 2005, a 2.9 per cent increase from the previous year, and is estimated to reach $743.3m in 2012.
This boost in the analytical market is driven by steady demand from pharmaceutical companies, who are increasingly outsourcing laboratory services to contract research organisations (CROs) and small laboratories to reduce costs
Indeed, the escalating cost of running a laboratory and maintaining cost has become an important factor under consideration by many companies, the report said.
"Increasing cost of labour and stringent control on spending by the pharmaceutical industry has severely affected the growth of the analytical laboratory services market," said Lakshman Koundinya, research analyst at Frost & Sullivan.
However, the report, titled North American Analytical Laboratory Services Market, warns that the industry success may be at the expense of smaller labs, which could end up struggling to compete with market leaders.
Due to scale of economics, larger analytical laboratories have advantages because of the amount of samples being done at very lower cost, which provides them a lead over competitors.
Analytical laboratories use analytical instruments to analyse chemical constituents of a sample, which may be soil, plant, water or parts of human tissues and the only differentiating factor is the area of expertise that is the technical knowledge of scientists and the specialised equipment used.
Common analytical instruments used include gas chromatography, liquid chromatography and mass spectrometry and the major end users for these services include life science and pharmaceutical companies.