The Vancouver Biotechnology Cluster
Report to ISRN, May 2004
J. Adam Holbrook, P.Eng.,
Centre for Policy Research on Science and Technology,
Simon Fraser University,
Vancouver, BC, Canada
© Adam Holbrook, 2004
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
A collaborative effort
Graduate students:
N. Crowden
M. Felczak
C. Hickton
M. Petrusevich
S. Reibling
M. Salazar
K. Warfield
N. Weiner
Support from:
SSHRC (grant #412-20001002)
Canadian Water Network NCE
DFAIT Scholarships program
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Biotech cluster study information
•
50 interviews completed: 23 biotech/biomed firms, 7 government
agencies, 7 CROs/CMOs, 5 venture capitalists, 5 law firms and
consultants, 2 research institutes, 1 industrial association; limited to the
Lower Mainland of BC
•
Cluster statistics: 90 privately owned firms, 12 CROs, 3 CMOs, 6 clinical
trial organizations, 7 venture capitalists, 8 government organizations, 3
not-for-profit organizations, 3 research institutes
•
Other statistics: 43 private firms develop pharmaceutical, therapeutics
and genomic products for human health care, more than 100 develop
medical devices, bioinformatics, nutraceuticals, diagnostics, and
agriculture and aquaculture products.
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Biotech cluster “buzz” in Vancouver
•
Smaller than Montreal or Toronto clusters but more bioscience “stars”
(Queenton and Niosi)
•
Role of location/ lifestyle clearly a contributing factor: 85% of firms affirm
that their location is due founders being from Vancouver, who have close
relationships with universities and labs
•
Young and small firms; inspiration - QLT created in 1981 - largest
privately owned biotech firm in Vancouver - 300 employees
•
Spin-off firms created between 1995-2001 and still active in summer
2003: 14 out of UBC, 5 out of SFU (Clayman & Holbrook); biotech firms
account for half of all spin-offs.
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Barriers to cluster and firm development
•
Difficulty finding and attracting qualified employees
•
Lack of “local” upper level management personnel and drug
development expertise; 60% of firms find it difficult to replace key people
from local pool; perhaps due to relative youth of biotech cluster
•
Competition with US and Eastern Canada due to economic
disadvantages associated with Vancouver (remote location, high taxes)
•
Gaps in the value chain: contract research organizations (CRO) in the
region are service providers mainly to US firms but not local firms
•
Too many one-product/technology firms; not enough money to support
new companies; VC concentrated in already existing companies, keeping
them alive
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
The garden analogy
•
The soil is UBC (mainly but not solely)
•
Seeds are ideas from faculty and students which germinate in the soil,
watered by federal research funding
•
The plants grow, fertilized initially by more money from VC and angel
investors, and then by alliances and partnerships with big pharma
•
There is some cross-pollination (key people, BC Biotech)
•
Few plants mature and go to seed
•
Generally when blooming the flowers are picked by passers-by (big
pharma) and taken home.
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Necessary vs. sufficient cluster conditions
•
What are the necessary and sufficient conditions that support the
formation of a biotech cluster in Canada? Are these region specific?
What are the competitive advantages of BC?
•
Necessary (common features): university, labs, government agencies,
private firms, human capital (?)
•
Sufficient (conditions for continued existence): at least one private firm
with a global reach (Porter), active/interventionist public sector,
manufacturing resources, existence of civic association (?), reinvestment of profits in local firms
•
Potential test – Catastrophic loss of a node/actor - can a cluster survive
without certain nodes?
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
BC biotech cluster characteristics
•
No vertical integration, and little horizontal integration, but 63% of firms
recognize there is a cluster even if loosely connected
•
Some companies affirm that they are not part of a network of related
firms, since each work in a specific technological niche
•
Friendly and collegial biotech community, even though there are few
commercial relations between firms.
•
In general Vancouver biotech industry do not manufacture commercial
products, its product is intellectual property itself
•
Firms compete for money, but not for local talent, nor market which is
global
•
Firms are able to attract highly qualified personnel from outside the
province and the country (in-migration) – around 70% have a PhD degree
from outside BC
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
The structure of the cluster
•
BC Biotech Association is the glue that keeps these firms together,
providing networking opportunities for members in the industry, for
newcomers is the medium to know the community, and for consultants
and lawyers key for making contacts
• Most of those interviewed mentioned the importance of the BC
Biotech Association
•
Driving forces: research at UBC, existence of venture capital and angel
investors
•
What anchors firms in Vancouver: lifestyle, weather, scenery, social and
historical roots in the city
•
Vancouver does more with less: relatively high level of biotechnology
commercialization despite a relatively low level of research funding
(VEDC, 2003)
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Biotech across Canada
• What are nation-wide commonalities of Canadian biotech
clusters?
• Are there major regional differences in biotech clusters?
• Should there be regional biotech policies?
• What is the role of human and social capital in determining
regional differences in biotech?
• Are manufacturing facilities needed in every cluster?
• Do Canadian biotech firms have adequate
negotiating/bargaining abilities in the global market?
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Clusters in BC/Vancouver
• What are the commonalities of BC/Vancouver clusters?
• Are there major structural differences among the clusters?
• What are the determinants of these clusters?
• What should a BC regional innovation policy be?
• What is the role of human and social capital in the formation
and maintenance of clusters in BC?
• What is the role of civic associations in the creation and
development of clusters in BC? How should governments
participate
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
The future: Research questions for ISRN
• The role of human and social capital in creating Canadian
clusters
• The role of public sector institutions in the Canadian
innovation system
• Innovation and intangible outputs - services and intellectual
property
• Innovation and the enhancement of Canadian civil society
• The development of innovation policy
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology
Future research questions on innovation
systems in Canada
• How should the national innovation system allow more
provincial/local steering?
• In-depth studies of local (metropolitan) innovation systems
• International innovation and knowledge networks: the role of
Canadian firms and clusters
• How to take advantage of the particularities of the Canadian
innovation system: a nation of networks (programs,
institutions), public policy networks, inter-institutional
linkages and alliances (local, regional, national and
international level)
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SIMON FRASER UNIVERSITY
Centre for Policy Research on Science and Technology