I recently came across the book The New Players in Life Science Innovation by Tomasz Mroczkowski, in which he discusses the role of emerging economies in the global biosciences industry. Of course, in the topsy-turvy economic world we find ourselves in today, countries such as Brazil, China and India are taking leadership based, in part, on their growing economic strength.
How then would a small nation enter the biosciences industry as a novice? What would it need before it could start to develop its own indigenous biosciences industry? Is this even possible without the billions of dollars that is being spent by the aforementioned countries? Are there indeed minimal requirements necessary for the creation of a sustainable biosciences ecosystem, and, if so, what would they be?
If Mroczkowski had written his book 30 years ago, Singapore would have been given a whole section. In economic difficulties and with almost no bioscience infrastructure (although it had already started to make headway with textiles, fuel, and IT), Singapore was able to grow one of the most impressive bioscience ecosystems ever created, becoming a global industry leader with the highest per-capita gross domestic product in Asia outside Japan. The reasons for Singapore’s incredible success is the subject of heated debate, but two factors stand out – its proximity to large and growing markets (China, S. Korea, etc), and its early development of a government-backed bioscience ecosystem to support companies including services, manufactures and, critically, cash.
In large complex economies it is often easy to overlook the enormous advantages that are present simply as a factor of scale. Yes, some economies of scale are straightforward to understand, so it is obvious that the larger the internal market the easier and cheaper it is to reach, and therefore the better margins one can create.
However, as an entrepreneur within a small nation and part of a smaller internal market, the creation of a biosciences ecosystem from scratch is far from straightforward and forces the consideration of the different needs and attributes of bioscience companies.
Clearly, there are generic characteristics that apply to any ecosystem. The most important of these factors are simply “food”, “fuel”, and “space”. In economic terms and from the perspective of a dynamic, young ecosystem, which in my opinion still describes biosciences, then “food” describes a reliable supply of useable innovation; for “fuel” the ecosystem must have access to driving entrepreneurial energy deriving from innovative bioscientists as well as a constant supply of investment cash from biotech-savvy investors, and for “space” there needs to be a supportive environment, both political and economic, allowing embryonic ventures to grow and develop before being released into the economy.
However, these components of a nascent bioscience ecosystem on their own will only be able to maintain a self-limiting bioscience economy. To develop and sustain a high-growth, scalable, bioscience economy there must also be a reliable and economical route to global markets. This is a vital component that requires innovation in terms of business models and in terms of applying government assistance to reach external markets.
These six key factors are described in the simple diagram at the top of this post. In the proximity of these factors a new bioscience venture may at least be assured of a fair crack of the whip and will have a fighting chance, if their product is of sufficient quality and if there is a real need for whatever they are selling.
It is in everybody’s interest if our bioscience revolution continues to expand into more and more parts of our lives, and becomes a standard component of the economies of all countries. If this is to occur, then even current peripheral markets such as the Caribbean with 42 million consumers, or the many growing economies in Africa will need to find ways to build these ecosystems from the bottom up.
There is no reason to suppose that entrepreneurial energy is any less available in these new entrant countries than in today’s industry leaders. Similarly, innovation is not simply a function of wealth and the size of the research base (although it is a very important advantage to have). So, assuming that the market’s appetite for bioscience products will continue to develop in these countries, as it will globally, the limiting factors may boil down to be political will, economic conditions, and access to start-up and development cash. All three can be influenced by government and all three can each be significantly affected by supportive fiscal policies and legislative structure.
Let us hope that as many of these smaller emerging countries as possible have a growing bioscience initiatives in their policies and have a clear view of what needs to be done to become the next Singapore.