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September 29, 2005

Canada's Biotechnology Industry

TAPED - CBC Radio 1 (Toronto) - 29 September 2005 - 7:20 AM - 8:10 minutes

CBC Radio 1: Biotechnology, it’s a sector that recognizes no national borders. And Canada needs to realize that if we want a piece of the action and this still small but rapidly increasing industry. Trefor Munn-Venn is principal research associate with the Conference Board of Canada. He’s just released a report on Canada’s current record in fostering biotechnology. Good morning.*

TREFOR MUNN-VENN (principal associate-researcher, Conference Board of Canada): Good morning Robin.*

CBC Radio 1: How are you this morning?*

MUNN-VENN: Great, thanks.*

CBC Radio 1: Good. Ah, well world leaders seem to be pinning a lot of hopes on biotechnology. I’m trying to get a sense of exactly what we’re talking about. What difference would biotechnology make, in say, a given area?*

MUNN-VENN: Well this is, this is the hot question. I think people are really trying to wrap their arms around where biotech can really make a difference. And maybe the best analogy is actually the kind of difference we’ve seen from the Internet. Fifteen years ago, no one had heard of it, today we all have email and we’re all online all the time, using our mobile phones, and our BlackBerries. And what we called E-business a few years ago, is just business today. Biotech is poised to have the same kind of effect. So we can see the governments are betting heavily, as you mentioned, because they see biotechnology as a, as a new source of growth. They see it as a mechanism that’s going to create new companies, that’s going to create new employment, that’s going to attract new investment. Because they, they, they see it as a, as a way to for example, address health care costs that are rising in countries where, you know, you’re got a demographic that cued toward an aging population. And Canada’s included in that area. So there are some who say “Well, Canada we have a large trade deficit as it relates to health care costs today. Wouldn’t it be interested, and isn’t there a great opportunity to use biotechnology to see if we can reduce that trade, that trade deficit and turn it into a trade surplus?”*

CBC Radio 1: So how would biotechnology do that, say, if we stick with the health care sector, for example?*

MUNN-VENN: Sure. I mean in some ways there are whole theories of new diagnosis methods that are, that are emerging, as well as new treatments that are tackling major diseases. And so we can see it being applied to areas of uh, of uh... anaemia, diabetes, and you know, as well as treating HIV/AIDS. You know, in other areas we can see how biotechnology can hold promise in terms of addressing shortages of food and water that people are anticipating. You know, there’s an expectation that the global population is going to grow to about 9 billion by 2050, so with that comes real concerns about you know “Gee, do we have enough food to feed that kind of population? Do we have enough clean water to actually make sure that, you know, that we can sustain that, that level of population globally?”*

CBC Radio 1: Now in reading your report, you seem to be saying that the government business sector and academic sector have done a respectable enough job to day, but the stakes are going up globally, and we’re facing some real challenges if we want to stay competitive.*

MUNN-VENN: Absolutely. You know, Canada actually has done a, done a great job. And when we go back through time we can see lots of breakthroughs in biotechnology that have come from Canada, or from Canadian scientists. And we’ve seen investments in the past that have been quite respectable, but in many ways the game is changing now as this greater recognition occurs that this is that new, that new springboard for growth for, for countries. We see the investments, uh, we see the investments growing, and now we start to say “Well, how, how well positioned is Canada to compete in, in that kind of context?” And that’s where we start to get a little bit more concerned. So while we’re quite proud of heritage, we’re, we’re a little concerned about our, our future in this respect. So if we look at it from a, from a corporate perspective to start, you know Canada only has about 500 biotech companies, and the vast majority of them, you know maybe about half of them, are, are really quite small, usually just a few people with, with a promising idea. And these are important, and we need them. But they don’t have tangible revenues yet. They’re not making major contributions yet on the business side, and you know in many ways they have a, they have a bit of a tenuous future. You know, about ten companies, ten of those 500 companies account for 70 per cent of the market capitalization of all of our biotech activities.*

CBC RADIO 1: And what’s happening in other countries? How are their businesses set up?*

MUNN-VENN: It really varies from country to country. I mean, we’re always quick to compare ourselves to the United-States, and you know, they’ve got about, about three times the number of companies that we have. But their, their sales are just through the roof. You know, where Canada has sales maybe around 3 or 4 billion dollars, uhm, the US (inaudible) over $60 billion in, in revenue. And maybe the most useful way is, is to think about it from a market-capitalization perspective. Again, so in Canada, the public value of our biotech companies is about $18 billion. It’s about the same in the UK, but in the US it’s about $400 billion, it’s just so much larger, the scale is enormous.*

CBC RADIO 1: What about access to skilled workers, who have to be, uh, key component to this equation, I would think?*

MUNN-VENN: Yeah, I would say this is perhaps one of the most important areas that, that Canada has to deal with, but it’s also one of the most important areas that all countries are, are trying to deal with. And there are really two areas: first is biotech requires very serious scientific capabilities. This is deep science, this is complicated science, this is world-leading breakthrough science. So we need the talent to do the R&D in Canada that’s going to develop those ideas, and then help take those to market to transform those ideas into new products and services. But we also need that talent in order to reach out into the world. We know the science is complex, so no individual, no company, no country will ever have a monopoly on the knowledge as it relates to biotechnology. So it’s absolutely essential that Canada have the people who can reach out into that global knowledge pool , that can tap into the best minds, the best labs, and the best companies in order to bring ideas home as well in order to transform those.*

CBC RADIO 1: And once you’ve got the people, you need state-of-the-art facilities in order to house them and let them work. Do we have that? And there, uh, globally are there any people on the cutting edge of this?*

MUNN-VENN: Uhm, we do, we do have some. I, I think our concern is maybe it’s a little bit sprinkled across the country. And perhaps a good comparison would be Singapore. Uhm, one of the things that’s very exciting to other countries about biotechnology is that it’s not... you don’t require extensive natural resources in order to be a major player. This is a, this is a talent game. For countries like Singapore, and Japan, and South Korea, this is a real opportunity for them. So in Singapore they’ve established something called Biopolis, which is a bit futuristic sounding, but it’s a, it’s an exciting idea where they have built an enormous state-of-the-art facility to attract the world’s best scientists and best companies to come and locate in Singapore in order to develop their, that industry in those capabilities. And when they launched Biopolis, they made it absolutely clear that biotechnology represents the future of the economy for Singapore. So they’re betting heavily, and you know, one of the challenges for the researchers, for the scientists is: because the science is so complex they do require state-of-the-art facilities and equipment, and if they’re not constantly being updated and upgraded, then they’re going to look for opportunities where they can pursue their science in a context where those things are in place.*

CBC RADIO 1: What reaction have you had to your report so far?*

MUNN-VENN: Our sense is we’ve, we’ve nailed it here in terms of capturing the picture of where Canada is today, which was really our goal because a lot of the discussion around biotechnology has been centred around the promises and the hyperbole and the hype, and it makes it very difficult to make investment decisions, to make, to make business decision, and to make policy decisions unless the facts are clear. So we think this has been quite successful from that perspective.*

CBC RADIO 1: Thanks a lot.*

MUNN-VENN: My pleasure Robin, thanks.*

CBC RADIO 1: Bye now.*

MUNN-VENN: Bye.*

CBC RADIO 1: Trefor Munn-Venn is principal associate-researcher with the Conference Board of Canada.*

T.

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