Joseph Wong

 

On his book Betting on Biotech: Innovation and the Limits of Asia’s Developmental State

Cover Interview of March 07, 2012

The wide angle

While I was doing field research during the 1990s for an earlier book, Healthy Democracies, I came across a great deal of government and industry documents focused on the imperatives of health care cost-containment and thus the need for advanced Asian economies to develop their own health technology development capabilities.

It was around the time that places such as Taiwan, Korea and Singapore were moving into the biotechnology sector. Government and industry began investing hundreds of millions of dollars per year into the sector. R&D spending in the life sciences in East Asia was among the fastest growing in the world. They were also setting lofty goals for themselves.  For instance, the Korean government proclaimed that Korea’s bio-industry sector would be a top-seven global producer by 2010. The President of Taiwan declared biotech as one of Taiwan’s future pillar industries. Singapore identified biomedical industries to be a future star industry. These rich Asian economies were increasingly hollowed-out by manufacturing competitors in Southeast Asia and China. They had to bet big on biotech. And they did.

When I started my research for this book—which, in the end, comprised over twenty trips to the region, more than two hundred interviews, and thousands of pages of government and industry reports—I expected, as many others did as well, to see a robust and growing biotech industry sector in Taiwan, Korea and Singapore.  After all, these economies had beaten the odds in the past and had developed from being relative basket-case economies in the 1950s into serious global competitors in several technology sectors by the 1980s. And they had invested so much into biotech.

What I found, instead, was actually relatively slow growth in the sector, increasing impatience, and few biotechnological strides. I found the general public to be losing its appetite for the expensive uncertainties of biotech innovation and cutting-edge innovation more generally. And to the extent that there were economic returns from biotech, most were in low value-added activities, rather than the once expected high value-added gains in R&D.

What this tells us, or should remind us, is that innovation is a very uncertain enterprise.  It is very expensive.  It takes a long, long time; failures need to be normalized; blockbusters are few and far between; and that in biotech it is an uncertain path from lab bench to market.

So, when governments talk about innovation and making it in the innovation economy, as they all do it seems these days, I think they really need to first ask themselves if they are prepared to endure such long-term and expensive uncertainties.  Economically, betting on biotech is costly; politically, it can be disastrous.