The Bio-Health Industry in Denmark - Erhvervsstyrelsen

The ChallengeThroughout the world the bio-health industry is one of the fastest growingand most wealth creating industries today. The potential of this industryis substantial in job creation, innovation and growth. However, on a globalscale competition is fierce. The growing bio-health industry is geographicallyclustered in certain countries and regions and many strive to attractthis rich source of taxable wealth.The challenge for Europe – and Denmark – is huge. Today America is wellahead of Europe and the gap increases. US public expenditure in bio-healthresearch is rapidly growing. Even though 2000 was the best year yet forEuropean biotechnology, the USA increased its lead. While Europe has nowmore biotechnology companies than the USA, Europe produces fewer products,employs fewer people and has less finance to develop the industry.Moreover, still more European bio-health companies place investments inthe US where business conditions are judged to be more favourable.Europe has to develop a thriving bio-health industry if the goals ofeconomic competitiveness set at the Lisbon meeting in 2000 are to befulfilled. Recognising this the Commission of the European Union hasprepared an overall life sciences and biotechnology strategy for Europe,which was agreed upon by the EU ministers at the Barcelona Summit inMarch 2002.The life sciences and biotechnology strategy will only be realised if themember states and regions take the right decisions.Denmark – particularly Medicon Valley – has a strong potential to becomeone of the leading bio-health regions in Europe in the fields of medicines,biotechnology and medical devices, including IT and electronics. OtherDanish regions will benefit from growth in Medicon Valley. Thus, Denmarkas a whole can benefit from an increasing European focus on biotechnologyat the same time as Denmark can contribute substantially to fulfillingthe European objectives.The Bio-Health Industry in Denmark 3

BenchmarksThe following set of benchmarks is proposed in order to establish amonitor to measure the progress towards the vision in 2010 so correctiveaction can be taken if targets are not met.• Wealth creationThe value added per employee in the Danish bio-health industry must atleast be at the same level as the value added per employee in thebio-health industry in competing regions/countries.• Job creationThe rate of job creation in the Danish bio-health industry shouldsurpass the rate of job creation in the bio-health industry in competingbio-health regions/countries.• Labour supplyHighly skilled labour at all levels relevant to the Danish bio-healthindustry should be available at least by the same volume as to thebio-health industry in competing countries/regions.• ExportsThe growth rate in Danish bio-health industry exports must exceedthe growth rate in bio-health industry exports of competingregions/countries.• EntrepreneurshipThe new company growth rate in the Danish bio-health industry mustoutreach the new company growth rate in the bio-health industry incompeting regions/countries.The Bio-Health Industry in Denmark 5

10 Key Recommendations1. Building on existing cluster strengths• All bio-health regions are dependent on geographically close interactionamong industry, universities and hospitals. The Danish bio-healthstrategy must acknowledge and build on regional competencies alreadyobtained. In Medicon Valley, the successful results of the past decadecalls for an expansion of the bio-region in terms of labour supply,research co-operation, technology transfer, capital market and infrastructure.To ensure future growth the Vision Round Table recommendsincreasing investments in R&D and infrastructure in Medicon Valley.Regulatory barriers for work force mobility in the region should beremoved. In other Danish regions, local competencies in universities andcompanies should be further developed in various and potentiallyprosperous niches of the expanding bio-health industry by combining,e.g., electronics, medical devices and information technology withhealth care.• Due to Denmark’s size it is necessary to strengthen internationalco-operation between regions, especially concerning labour supplyand research. It is vital to have brain circulation with other countriesto ensure a critical mass of highly skilled personnel. Special attentionshould be given to the potential for collaborations within theScandinavian-Baltic region.2. Competitive public funding of world class research• Research investments are long-term investments that should not beneglected in the light of short-term fiscal problems. Investments mustbe targeted on the excellent researchers and research groups – and notevenly spread.• In comparison to the competing countries/regions Denmark haspreviously been a late arriver when it comes to research investments. Itis therefore important that public research investments are deployedearlier in new scientific fields that rest on existing pillars of strength.The Bio-Health Industry in Denmark 7

Multidisciplinary research combining biotechnology with other technologiessuch as, e.g., nano-, information- and materials technologiesshould be a high priority investment area.• Danish universities compete not only with each other but also with thebest European and other foreign universities. Research investmentsshould therefore be based on assessments of the capacity of the universitiesto excel in science and education. Universities should compete forresources in order to ensure excellence in research teams.• The future Danish research priorities for the bio-health area should bemore aligned with the EU 6th Framework Programme in order to attractmaximum funding.3. More industrial co-financing of public research• Industry should increase co-financing of research projects, GraduateSchools of Research etc. at public institutions of industrial interest.• The public sector should support industrial co-financing by developingmodels for co-financing of a simple and transparent character whilesafeguarding the independence of research.4. Modernising university management• University management must be strengthened. University managersholding key university positions should have the necessary managementtools, i.e. ability to prioritise resource allocation, including the tools topromote successful projects. University management structure shouldbe changed, so the governing board of the university has a majority ofexternal members.• New research investments should favour universities with a dynamicand efficient university management system. The funding system forresearch should be simplified once the university management ismodernised at all universities. The existing two-tier system for allocationof research funds (i.e. through universities and through ResearchCouncils) should be maintained.The Bio-Health Industry in Denmark 8

5. Strengthening the partnerships between industry andresearch institutions• The partnerships between universities, hospitals and the bio-healthindustry on research, joint training and competence development mustbe further strengthened. The Industrial Ph.D. Fellowship Programmeshould be promoted as a simple and efficient mechanism of technologytransfer. Other simple mechanisms for co-financing Ph.D.s should alsobe explored, for instance co-financing through Graduate Schools ofResearch.• In order to strengthen the commercialisation of patents investmentsin Technology Transfer Offices should be made at all universities. Suchoffices constitute potential new sources of revenue for the universitiesand thus represent a strategic tool for university managements.Technology Transfer Offices should be professionalised as they are inUSA. Technology Transfer Offices should therefore be established inco-operation with organisations that have competencies in this field,e.g. foreign firms.• A model for sharing the benefits of inventions, devised so as to giveincentives to all stakeholders, should be introduced at all universities.Such a model should ensure that both the inventor and the departmentreceive a substantial part of the profit.6. Expanding the supply of skilled labour• It is vital for the continued progress of the bio-health Industry to havean adequate supply of a skilled work force at all qualification levels. Atthe present the bio-health industry feels a shortage of skill supply invarious fields, e.g. Ph.D.s. Crucial skills at graduate and Ph.D. level arechemistry, biochemistry, bioinformatics, physics, engineering, datamanagement pharmaceutical sciences and clinical development.The Bio-Health Industry in Denmark 9

9. Flexible public regulation in product development• A flexible and fast working public regulatory system for the developmentof medicines and devices is a fundamental framework conditionfor all bio-health clusters. It is therefore important that Denmarkmaintains and develops a public regulatory system covering all aspectsof the development and approval processes (ethical committees,reimbursement and marketing approvals etc.), which is among themost efficient in Europe.• With regard to the approval of medicines and products transparency ofprocedures, good review ability and willingness to give informal opinionare decisive factors for industry. The Danish Medicines Agency shouldsecure solid basic expertise in the fields of toxicology and clinical trialsand the field chemistry, manufacturing and control (CMC). Furthermore,the Danish Medicines Agency should develop world class expertisein other selected areas in partnership with research institutions andprivate companies in order to operate on an increasing competitiveEuropean market for approval of medicines and products.• The three university hospitals’ Good Clinical Practice procedures shouldbe harmonised in order to secure the best conditions for mobility ofresearchers and students.10. Well-informed public perception• A well-informed public opinion is an important condition for the furtherdevelopment of the bio-health industry. The responsibility for thedissemination of information rests with the public sector as well asthe private sector. The ongoing government initiative to promote opennessand debate on bioethics is important and should be continued.Furthermore, the government should inform, stimulate and qualify thedebate in new areas of ethical interest. Companies should contribute byenhancing transparency and by informing the public on ethical issues.Finally, the ethical discussion should not be confined to biotechnology. Itis the application of biotechnology – and other technologies – and notmerely the technology in itself that may give rise to ethical questions.The Bio-Health Industry in Denmark 12

August 2002National Agency forEnterprise and HousingDahlerups PakhusLangelinie Allé 17DK-2100 København ØTel. (+45) 35 46 60 00www.ebst.dkErhvervslivets HotlineTel. (+45) 35 46 66 66The Bio-Health Industry in Denmark 13