Bernhard Fuhrer
The NEXT Biotechnology
Beyond the Attempts at Cloning Biotech Clusters
Table of Contents
1. Introduction 1
2. An explorative look at biotech clusters 9
2.1 Definition of biotechnology 9 2.2 Technological basics of biotechnology 10 2.2.1 The biotech basics: Chromosomes, genes and proteins 11 2.2.2 'Red'biotechnology 13 2.2.2.1 First generation technologies: Genetic engineering 13 2.2.2.2 Second generation technologies 15 2.2.2.3 Summary 20 2.2.3 'Green' biotechnology ."." 20 2.2.3.1 Agricultural biotechnology 20 2.2.3.2 Environmental biotechnology 21 2.2.4 'Grey'biotechnology 22 2.3 Commercial basics of biotechnology 23
2.3.1 Market competition in healthcare between entrant dedicated
biotech firms and incumbent large development companies 24 2.3.2 Market potential for red biotech 32 2.3.3 Market potential of green biotech 36 2.3.4 Actual performance (market and employment in overall industry)... 38 2.4 Spatial basics of biotechnology: Clusters 45 2.4.1 Preliminary definition of cluster 45 2.4.2 Sources and potential problems of localized biotech statistics 46 2.4.3 Biotech clusters in the U.S. and Europe: Overview 48 2.4.3.1 National biotechnology databases 48 2.4.3.2 Biotech reports 51 2.5 Results of the explorative look at biotechnology and clustering 56
3. Defining the research agenda: Goals of the study, empirical
approach, theoretical framework and research methods 59
3.1 Goals of the study 59 3.1.1 Comparison and evaluation of two European clusters initiatives
and their host regions (case studies: Basel / BioValley and
Paris/Genopole) 60 3.1.2 U.S. - European cluster comparison in order to clarify reasons for
' U.S. development lead (case study: Boston/Genetown™) 61 3.2 Empirical, 'case study' approach 62
3.2.1 Epistemological reasons for the 'unorthodox' sequence of the
case studies 62 3.2.2 Research roadmap 64 3.2.3 Study clusters' fact sheet 64 3.2.3.1 Basel/BioValley 65 3.2.3.2 Paris/Genopole 68 3.2.3.3 Boston/Genetown™ 71 3.3 Theoretical framework and development of empirical questions 74 3.3.1 General reasons for spatial clustering 75 3.3.1.1 Flexible production (commercial factors) 75 3.3.1.2 Innovation economies (technological factors) 77 3.3.1.3 Governance (institutional factors) 79 3.3.1.4 Summary: Commercial, technological and institutional
factors defining the cluster 'factor-trinity' 80 3.3.2 Biotech cluster 'factor-trinity': commercial, technological and
institutional biotech cluster factors 82 3.3.2.1 Commercial factors of biotech clusters 82 3.3.2.2 Technological factors of biotech clusters 87 3.3.2.3 Institutional factors of biotech clusters 89 3.3.3 Result: Cluster-trinity empirical grid 93 3.4 Research methods 95 3.4.1 Experts' interviews 95 3.4.1.1 Difficulties concerning experts' interviews 99 3.4.2 Published sources 102
4. European case studies 105
4.1 Basel / BioValley 105 4.1.1 Part I: The region 105 4.1.1.1 Institutional factors 106 4.1.1.2 Technological factors 131 4.1.1.3 Commercial factors 144 4.1.2 Part II: The BioValley cluster initiative 164 4.1.2.1 Institutional embedding 165 4.1.2.2 Technological embedding 175 4.1.2.3 Commercial embedding 177 4.2 Paris / Genopole 181 4.2.1 Part I: The region 181 4.2.1.1 Institutional factors 181 4.2.1.2 Technological factors 217 , 4.2.1.3 Commercial factors 234 4.2.2 Part II: The Genopole cluster initiative 261
4.2.2.1 Institutional embedding 262 4.2.2.2 Technological embedding 267 4.2.2.3 Commercial embedding 273
5. Comparison of European cluster initiatives and their regions 279
5.1 Comparison of Basel and Paris 279 5.1.1 Institutional factors 279 5.1.2 Technological factors 281 5.1.3 Commercial factors 282 5.1.4 Summary: Basel-Paris comparison according to cluster trinity
factors 284 5.2 Comparison of BioValley and Genopole 286 5.2.1 Institutional assessment 286 5.2.2 Technological assessment :.-. 288 5.2.3 Commercial assessment 289 5.2.4 Summary: BioValley-Genopole comparison according to cluster
trinity factors 290 5.3 Summary: Comparison of European case studies 291 6. U.S. case study 295
6.1 Research questions for U.S. case study derived from results of
European 'clusters' 295 6.1.1 Questions concerning technological factors 295 6.1.2 Questions concerning commercial factors 296 6.2 Boston / Genetown™ 297 6.2.1 Technological factors 297 6.2.1.1 Scope and organization of public R&D investment in the U.S. 298 6.2.1.2 Geographical distribution of R&D investment 310 6.2.2 Commercial factors 321 6.2.2.1 Regulatory environment 321 6.2.2.2 Markets and industry dynamic 329 6.2.3 Summary: Boston / Genetown™ 343
7. Comparison of U.S. vs. European clusters 351
7.1 Transatlantic comparison of technological factors 351 7.1.1 Public European R&D investment 351
x 7.1.1.1 EU common R&D biotech funding 352
7.1.1.2 Member States' funding 353 7.1.2 Reasons for European deficiencies 358
7.1.2.1 Different spending priorities 359 7.1.2.2 Structural issues 361 7.1.3 Attempts at reform 368 7.2 Transatlantic comparison of commercial factors 370 7.2.1 Regulatory environment 370 7.2.1.1 Patenting 370 7.2.1.2 Safety and drug approval 371 7.2.2 Markets 372 7.2.2.1 Capital market 372 7.2.2.2 Product market 374 7.2.2.3 Technology market 376 7.3 Summary: U.S. - European cluster comparison 378
8. Conclusion 381
8.1 Repetition: Summary of case study results 381 8.1.1 Basel / BioValley - Paris / Genopole 381 8.1.2 Genetown™ 382 8.2 Factor trinity cluster model 383 8.3 Cluster categories based on the trinity cluster model 385 8.3.1 U.S. Cluster: Evolutionary innovation cluster 385 8.3.2 European 'clusters': Policy-driven emulation clusters 387 8.4 Policy recommendations 390 8.4.1 Overcoming emulation: 'choice' or 'framework' 391 8.4.2 Mid-term scenario: 'choice' of applied fundamental research in
environmental biotechnology 392 8.4.3 Long-term scenario: Virtual clusters as framework for European
research area 394 8.4.4 Recommendations for Basel / BioValley and Switzerland 397 8.4.5 Recommendation for Paris/ Genopole and France 398 8.4.6 Outlook 399
9. Appendix 401
9.1 Bibliography 401 9.1.1 Scientific books and articles 401 9.1.2 Interviews 405 9.1.3 Company reports and web resources 407 9.1.4 Newspaper and magazine articles 413 9.1.5 Conference contributions 415 9.1.6 Audio-visual materials 415 9.2 List of Interview partners (sorted by case studies and interview date) ..415
9.2.1 BioValley 415 9.2.2 Genopole 416 9.2.3 Boston 417
List of Figures
Figure 1: From cell to proteins: Source: (DEPARTMENT OF ENERGY (DOE) 2003) 12 Figure 2: Biotech sector activity in France in 2000 (legend is
aligned):5ro«rce: (FRANCE BIOTECH 2000 p. 4) 19 Figure 3: Projected world population growth and age structure. Source:
(BOLLER2002) 33 Figure 4: U.S. Healthcare costs as share of GDP 1970-2000: Source:
( P H R M A 2002b) :: 34
Figure 5: Health care costs as a percentage of GDP: International
Comparison: Source: ( P H R M A 2002b) 35 Figure 6: U.S. - Europe comparison 2001: Public biotech bompanies:
Source: (ERNST&YOUNG 2002), OWN Graphic 39 Figure 7: U.S. - Europe Comparison 2001: Total employees in public
Companies: Source: (ERNST&YOUNG 2002), OWN Graphic 39 Figure 8: Estimated jobs in IT and biotech Sector (Germany 1999 / 2000):
Sources: (INFORMATIONS SEKRETARIAT BIOTECHNOLOGIE (ISB)
2003), (DEUTSCHE PRESSE AGENTUR (DPA) 2004) 41 Figure 9: NASDAQ Biotechnology Index compared to Dow Jones Index:
Source: (YAHOO 2004) 42
Figure 10: Spatial distribution of biotechnology institutions in continental Europe: Source: (noted in Graphic), OWN Graphic 50 Figure 11: Spatial distribution of biotechnology institutions in the U.S.:
Source: (BIOWORLD 2003), OWN Graphic 51 Figure 12: Landscape of European entrepreneurial life sciences: Source:
(ERNST&YOUNG, 2000 p.9) 52
Figure 13: BIOSPACE Hotbed Communities: Source: (BIOSPACE 2003) 53 Figure 14: International biotech cluster comparison according to company
size and number of companies: Source: (BOSTON CONSULTING GROUP 2001), (INFORMATIONS SEKRETARIAT BIOTECHNOLOGIE
(ISB) 2003) 55 Figure 15: BioValley Logo: Source: (BIOVALLEY 2004) 65 Figure 16: BioValley: Tri-national View of the Upper Rhine valley: Source:
(BIOVALLEY 1998) 66
