• WisBusiness

Friday, June 22, 2012

 8:24 AM 

Global competition could change state's biotech landscape

By Mike Flaherty

BOSTON – The theme of this year's Wisconsin display at the world's largest biosciences convention is "Wisconsin is Changing the World." A major report issued this week at BIO International here suggests the reality might be the other way around.

The world may be changing the way Wisconsin's biotechnology industry performs and competes in the future.

A "scorecard" of the world's top 50 nations in bioscience by "Scientific American World View" shows the United States is still the world leader in bioscience research, development, new business start-ups and biotechnology products and sales. But that lead, it concluded, is rapidly diminishing as a number of countries around the world are investing heavily in biosciences to grow their economies.

"The world of bioscience is flat – and it's getting a lot flatter," said Jeremy Abbate, the publishing director of Scientific American Worldview.

And it's not just the traditional competing nations such as Sweden and the Netherlands that are showing increasing strength, he said. China announced its new five-year plan that will invest $600 billion in seven industry sectors, including bioscience research and commercialization.

And that's just one country.

"Biotechnology is one of the strategic sectors that many nations have targeted as part of their economic growth plans," said Joe Damond, senior vice president of international affairs for BIO International. "Larger, more mature countries are looking at biotech for new sources of growth, including India, Brazil and Russia."

The BIO convention itself is evidence of the change, he added, noting the conference started as a small gathering of domestic companies. Today, a third of the 15,000 participants at BIO are from 65 countries. And they're all competing heavily to develop new products, capture market share and attract talent.

Brazil is building 50 research institutions – and that country is already the world's leader in biofuels research and development, for example. China held two full days of sessions explaining to investors and potential partners its plans for biotech in the next five years.

A poll of business executives at BIO this year showed that more than half had been approached during the conference by other countries asking them about moving their operations abroad.

For perspective, the United States' huge bioscience industry still invests about $100 billion a year in biotechnology research and business development, Damond said. And the United States has an enormous, well-funded infrastructure of education, intellectual property protections, investor channels and government assistance in helping move new ideas into commercial markets.

"But it is clear that the rest of the world is aggressively investing in this sector as well," Abbate said. At the same time, it is also clear that the world of venture capital financing is changing in the United States and in Europe.

So while many large countries are targeting biotechnology for investment, the United States biotech industry is struggling for its place among venture capitalists' investment priorities, he noted.

The growth of international competition doesn't necessarily mean that Wisconsin's biotechnology industry is threatened, said Bryan Renk, executive director of BioForward.

"It means we're going to have to continue to work harder to compete," he said. "But for every emerging nation that enters this industry, that's also a market for our products as well."

"As states and regions learn to cooperate, that can help counter foreign competition," said Tom Still, president of the Wisconsin Technology Council. "Also, bear in mind that these consortia can lead to sales and distribution partnerships, as well."

One disturbing trend. Abbate noted, is the behavior change among foreign nationals studying biosciences in the United States. Where they used to study here – and stay to help build the U.S. biotechnology industry, they're now returning home to help build new businesses there. And they're taking their ideas and business contacts with them, he said.

"There will always be an exodus of a certain number of foreign-born scientists, probably even most," Still said. But that's a policy area that should be addressed.

"We need smarter immigration policies to help more of them stay. Every Ph.D awarded here to a qualified immigrant should come with a green card tucked inside. Even those scientists who return home are not lost to us. Many will retain their American ties and relationships."

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