WHEN Ivo Piest asked to do his medical research placement at a biotech company, the response from his university tutors was not encouraging. “Are you crazy?” they said. “You’re supposed to be at university.”
That was in 1996. Piest is now manager of business development at Galapagos Genomics, a biotech start-up founded jointly in 1999 by Belgian and Dutch partners. But his experience sums up the problem with Dutch biotech in the mid-1990s. Despite having world-class universities, academics’ attitude towards the commercial sector was at best ambivalent and at worst downright suspicious. “Scientists were focused on publishing results in journals, not patents,” says Haifen Hu of BioPartner, an organisation funded by the government of the Netherlands to encourage biotech start-ups.
This anti-entrepreneurial culture, coupled with a less than helpful attitude from government, meant that the Netherlands began to lose the promising start it made in the biotech sector during the 1980s. Other countries surged ahead and, from being a leading player, the Netherlands dropped to seventh place in Europe. Only now is it beginning to claw back the lost ground, thanks to a series of government initiatives since 2000.
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That year, the Dutch government gave BioPartner the task of creating 75 new biotech companies in five years. It has already supported 60 new enterprises by handing out grants to early-stage projects, buying in equipment and other facilities for start-ups and giving advice.
“There was a general feeling that the Netherlands was lagging behind in science, genomics and the applications of genomics,” says Peter Folstar, head of the Netherlands Genomics Initiative. His organisation, set up in 2001 with a five-year budget from the government of €190 million, aims to stimulate basic research. It has set up four centres of excellence on different life-science themes. Although these are based around a network of university labs, their research is not just driven by pure science. It is also focused on social and economic goals. Folstar is targeting bioinformatics in particular. Dutch research in the field has been weak, he says, and companies were finding it difficult to find suitable expertise.
There are enough qualified people in the Netherlands to form the core of a biotech industry. Some 0.17 per cent of the Dutch population have a life-science degree, which puts it on a similar level to the US with 0.27, Britain with 0.22, and Canada with 0.08. But when it came to commercialising ideas, the country performed poorly. In 1993 the country filed 70 patents per million inhabitants, compared with 190 in the US, 220 in Germany and 630 in Japan. But this is improving. In 2000, the Netherlands filed 218 patents per million inhabitants to the European Patent Office alone. Now BioPartner is being even more proactive about encouraging entrepreneurship. Rather than just supporting companies that come to it with ideas, it is actively scouting out potential business ideas in universities.
The vital thing is to give academics entrepreneurial role models, says Piest, so they can start thinking about how they can make money from their work. And many see attitudes changing already. “There is a certain momentum at the moment,” says Folstar.
While biotech companies welcome the new initiatives, many feel the Dutch government could do more. “Investment in the biotech industry is relatively modest compared with other countries,” says Rob Jansson, managing director of the Netherlands Biotech Industry Association, an organisation based in Leidschendam, near The Hague, that lobbies on behalf of the biotech industry.
Others believe that the government is sending out mixed messages. While funding for start-ups has improved greatly, there is little financial support for companies once they have found their feet, says Rein Strijker of Pharming, a pharmaceutical company based in Leiden, the heart of the Dutch biotech industry. What’s more, many companies complain that there are too many restrictions and regulations on research, particularly work on animals and genetic modification. They say the rules slow down research.
These controls have been imposed in part by public request: the Dutch have arguably one of the best national systems for dispelling public controversies such as those over genetically modified foods and xenotransplantation. For GM crops, the argument was hottest in the mid-1990s. Many consumers worried about the power of corporate interests and the environmental impact of the technology. So in 2001, the government held a national debate on “genes and food”, which was led by a committee made up of representatives of stakeholders in the debate.
Its job was to consult with the public and make recommendations to parliament. But it seems that the heat had already gone out of the argument. “There was not a lot of interest in the debate,” says Hu. Broadly, a small majority of people were in favour of biotechnology, but they wanted companies to demonstrate clear benefits to consumers. They also wanted stronger public control over research. So while biotech companies might not like the regulations, at least they know where the goalposts stand, and that they are unlikely to change.
Both the Netherlands and its neighbour Belgium have advantages that favour business. They are near the heart of Europe and have historically prospered as hubs for pan-European trade. This means they have excellent infrastructures, and with a tightly packed, well-educated population it usually is not hard to hire qualified labour. In Belgium, though, there is a shortage of managers experienced at running commercial research.
But biotech is by its nature a global business that needs global talent. Attracting foreigners can be difficult because of the high tax rates in both countries. Companies have to offer a large salary before take-home pay can compete with offers from other countries. In both countries, though, schemes exist to ease the tax burden on foreign employees. For example, in Belgium foreigners don’t have to pay tax on days they spend travelling.
Aside from the attractive career options, both countries have high standards of living. Belgium has the best healthcare system in the world, with the Netherlands a close second, according to a survey last year by London-based World Markets Research Centre. And when it comes to quality of life, Amsterdam and Brussels rank in the top 12 cities in the world, according to New York’s Mercer Human Resource Consulting. Both countries have sizeable expat communities. Belgium in particular has a very strong international feel, being home to the European Commission. “There are so many nationalities living in Belgium that almost everyone feels at home,” says Helyen.
Flanders builds up biotech from scratch
Just like the Netherlands, Belgium has had to work hard to tempt academics away from the lab. It never had the solid biotech base that other European countries built up in the 1980s and so, apart from a handful of established companies, the country is building its biotech industry from scratch. It is catching up fast. In Flanders, the northern, Dutch-speaking part of the country, the number of people employed in biotech has increased by around 39 per cent a year since 1995. This is partly due to an aggressive strategy by the Flanders regional government to promote the industry.
Public attitudes towards biotech are slightly more favourable in Belgium than in the Netherlands. “It’s quite positive,” says Jos Heylen of Tibotec BVBA, a company in Mechelen, north of Brussels, that develops HIV therapies. The nation certainly has the resources on which to base a biotech industry. “There is a good university platform,” says Jean-Christophe Donck at Innogenetics in Ghent, a biotech company in Europe’s top 10.
The country produced pioneering molecular genetics research in the early 1970s. For example, Walter Fiers at Ghent University was the first to sequence a gene and a full genome (a virus). Yet despite a clutch of companies set up in the 1980s, including Innogenetics, Eurogenetics and Plant Genetic Systems, Belgium has never been a major European player. To change this, the Flanders government is pushing to nurture the industry. “There is a receptive ear from the authorities,” says Donck. And since 1995, the Flanders government has doubled its investment in science.
Part of this push is the Flanders Interuniversity Institute for Biotechnology, set up in 1995. This is an entrepreneurial research institute made up of nine university teams and 750 scientists. It promotes cooperation between groups and operates shared facilities and equipment, in micro-array and proteomics research, for example. It also helps to encourage commercialisation. In 2001 it registered 29 patents and signed 22 collaboration agreements with industry.
Another government instrument is the Flemish Institute for the Promotion of Scientific and Technological Research. This supports industrial research and tech transfer, and has a budget of €160 million a year. Part of the strategy is to cluster biotech companies and research institutes together so scientists can share ideas and facilities. The region around Ghent – christened “Biotech Valley” – is the most significant of these.