Rubén Henríquez, PhD. Academic Director of the Master´s Degree Program in Biotechnology Management at IE Business School
3 December 2007
The biotech sector in Spain is advancing in leaps and bounds, but there is still one thing it has to work on: funding projects.
The Spanish biotechnological industry sector sees the growing efforts made by the state to promote R&D in biotechnology as a positive move. There is, however, a tendency to invest most of the public money available in promoting basic research, which takes place largely in state-run institutions that depend on the government or regional authorities. If Spain’s economic situation is anything to go by, promoting this basic research, which is now reaching higher productivity levels, is good for the country. In addition to this aid for mainly academic research, there are several government subsidy programmes that now offer direct support for entrepreneurial projects, including the CDTI’s NEOTEC programme, and the various initiatives designed to foster scientific parks and bioregions. Unfortunately, this is not enough.
In its annual report, the Spanish association of biotechnology enterprises, ASEBIO, insists that it remains optimistic for the biotechnology sector for 2006, despite its being down on the previous year. The main cause for any reduction in optimism is attributed to the difficulty so many companies experience in obtaining funding.
This is the sector´s main problem: implementing projects which, in this field, are usually high-risk and which require investors to wait a long time to see R&D converted into revenue from sales. In order to meet these challenges, over the last 25 years the sector (mainly in the United States) has invented new ways of turning progress in R&D into transactional assets of varying levels of liquidity.
These strategies, based on transactions involving rights to patents, are essential for obtaining the finance companies need to generate a return on products and services with high added value. The key to leveraging R&D results lies in developing a strategy of interrelation between R&D, the market and finance. This strategy will be effective insofar as it generates a portfolio of high-value patents and brand names and focuses the development of the business on the basis of these intangible assets, which is often where the value of an emerging biotechnology enterprise lies. The capacity of the management teams of these emerging enterprises and the financial seed and venture capital sector to realise the value of the project is as critical for the sector´s survival as the R&D teams´ capacity to generate new inventions and discoveries.
Spain is strengthening its capacity for innovation in biotechnology, mainly through the creation of a pool of highly qualified human resources. Various international indexes confirm its quantitative and qualitative growth, and the fact that we are no longer far removed from the leading world powers. The difference between this capacity for research and the scant capacity shown in the past for turning it into results that make more direct contributions to the national and world economy is a complex phenomenon.
Undoubtedly, this inability to realise the economic potential of this national asset will be replaced in the short term either by Spanish workers that receive the necessary training or with experienced personnel from other countries that our emerging economy will unquestionably be capable of attracting. Accordingly, one symptom is the appearance of various studies by experts in business management that coincide on the need for specific strategies for this sector (e.g. the book Science Business, by Prof. Pisano of Harvard University). In response to the challenges posed by biotechnology, we are beginning to see business management programmes that respond to the growing demand for training focused on the sector, such as the new Master in Biotechnology Management programme that IE Business School will launch in 2008.
Undoubtedly, the few enterprises that are moving forward despite the conditioning factors laid down by the Spanish scenario to date deserve all our admiration. These enterprises have successfully completed the difficult task of putting together management teams that are capable of turning research into innovation. These enterprises are the clearest proof of the fact that the future holds the opportunity to witness how this sector will overcome the lack of critical resources in the short term and then evolve exponentially to take up its position among the most important in Europe and the world.