Life sciences in small states

Posted by healthblogger on 04/11/12

There is a clutch of small states within the European Union. There are many more small states outside the EU.

TAMPA, FL - JULY 13:  John Winskas, a student ...

Small states? (Image credit: Getty Images via @daylife)

Much can be learned from them, as at least within the EU, some seem more robustly managed and economic productive than their larger debt-laden counterparts.

Healthcare systems are often seen as requiring some degree of economy of scale. This in part is a function of how prevalent diseases are, such that in some small countries they would have one case in 2 years, rather than one case per million of population. Healthcare technologies can be incredibly pricey; for instance, a proton therapy facility will run between €100 and €200 million to set up. Healthcare buildings and research infrastructure are expensive to build and run. Health professionals can be expensive to train and employ and are generally globally mobile.

Associated with investment in healthcare within the EU, we find that almost every region or member state has life sciences, in some form, in their top 5 or so areas of national priority. Life sciences is challenging and demanding, and requires high degrees of global visibility and connectivity to other researchers. Commercialisation of life sciences in Europe is generally appalling; the EU’s research budget focuses on research, not translation and there is precious little to help good ideas bridge the ‘valley of death’ where unfunded good ideas go to die. Financing for life sciences developments consume vast quantities of risk capital, some of which will be unlikely to return any value for a decade or more.

Many EU countries try to avoid downside risks of failure by punishing it, rather than creating opportunities to learn. Countries that encourage risk taking, and make it easy to start and close down companies, with associated flexible labour practices, will outstrip protectionist fearful countries. While many countries fear unemployment, they fail to encourage job creation, which is an economies way of moving work around. Life sciences is one such area that requires particular flexibility owing to the nature of the work.

I recently had the privilege of working with colleagues in one of the EU’s small states, to help develop a life science strategy. National excitement included the construction of a new bioscience research and commercialisation centre (partly funded by the EU, thanks for that). The University is active across its faculties in life sciences areans, and with the College are both keenly extensively in high quality training of health professionals. Local industry is building on past successes in life sciences. The country has a well-developed and well-financed healthcare system.

The main lesson to small countries building life science (or any research-based commercial capacity for that matter) is that setting priorities is more important the smaller you are, as you can’t do everything. That means that some people may be disappointed that they are not on the short list of first projects. It means, too, that infrastructure projects are precious, as they are enablers of future potential — the longer term vision must be sustainable, as getting it wrong can be expensive — research buildings don’t make very good hotels.

Some thoughts:

  1. build on what you already are doing well as that is evidence you have the expertise, networks and working practices in place
  2. keep in mind that life sciences is much, much more than drugs; progress may be quicker in other areas, such as informatics, telecommunications, engineering, materials science, physics, chemistry, agriculture, etc.
  3. you can’t sensibly do life sciences with a weak university, so this may entail some difficult and hard rethinking of priorities and some sensible review of research productivity
  4. you can’t sensibly do life sciences without a teaching hospital; the academic health science centres in the US account for over 80% of productive life sciences research, so think about reorganising your own infrastructure to enable closer collaborations and alignment between university and hospital; this may, by the way, raise real issues for government if the teaching hospital(s) is state run
  5. you can’t sensibly do life sciences without understanding the logic of ‘bench to bedside’; productive work lies in translational research and solving clinical problems; this can challenge academe, which rewards the production of papers and volume of research funding for career progression; in life sciences, solving problems is paramount; understand what the Grand Challenges in life sciences are and see which one(s) you can focus on
  6. you’ll need to consider the economic developments that come with building a life sciences sector as you’ll need to energise high net worth individuals as angel investors to help start and run the small businesses that you’ll create; I’d discourage too much public sector hiring as it disincentivises university graduates from pursuing entrepreneurial careers (there is good global evidence that this can be a problem, so don’t make that mistake); best role for government is ensuring a flexible corporate start-up environment, a non-punitive bankruptcy regime, sensible taxation of start-ups, and seed funding; it might also be a good idea to give away all that publicly owned intellectual property;
  7. finally, the good news is that size doesn’t matter for innovation; there is no correlation between the size of a country and the ability of the country to innovate; many very large countries have clumsy policies that disincentivise and frustrate.

I wrote a paper looking more generally at healthcare systems of small countries (which includes a few remarks on life sciences). Paper on Overview of Small Health Systems

If these issues stir you to think more about life sciences and / or the challenges of smaller states, do make a comment.

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Mike Tremblay on innovation, life sciences & health. Click here to learn more.



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