The Star, October 20, 2007

Biotech or bust

By ERROL OH
errol @thestar com my

SOMEWHERE in The Big Book of Public Service DOS and Don’ts, there must surely be a line or two discouraging heads of government and government-linked bodies from issuing dire prognoses for the Malaysian economy. If indeed there were, Datuk Iskandar Mizal Mahmood has skipped that part.

The CEO of Malaysian Biotechnology Corp Sdn Bhd (BiotechCorp) is convinced that our prosperity will soon be jeopardised if we persist with the Old Economy ways. It is a message he is anxious to get across to everybody, more so the local business community.

(BiotechCorp) is wholly owned by the Minister of Finance Inc and is placed under the purview of the Science Technology and Innovation Ministry)

He argues that the country’s GDP growth will start to sputter in less than a decade as long as it relies heavily on traditional sectors such as property and manufacturing.

This is because amid globalisation and mounting competition, Malaysia will find it increasingly difficult to attract investments and expand exports. Says Iskandar “So where is our competitive advantage?”. Technology is our competitive advantage. Innovation is our competitive advantage.

“If our companies do not open their minds to what technology and research and development (R&D) can do, and how we can use technology to scale up to the next level, I worry for my children”.

That sounds dramatic, but such a notion is neither new nor endemic to Malaysia. From his office bookshelves Iskandar pulls Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.

It is a recent report by an A-list committee set up by the United States’ National Academies, which are billed as “advisers to the nation on science, engineering and medicine”, to figure out how the US can enhance its science and technology so as to stay competitive in the 21st century.

To Iskandar, the report is an unshakeable testament to the urgent need for Malaysians to appreciate innovativeness as an economic strength.

Chaired by Lockheed Martin Corp ex CEO Norman Augustine, the committee acknowledges that the rest of the world is catching up with the US in science and technology.

“Some will argue that this is a problem for market forces to resolve but that is exactly the concern. Market forces are already at work moving jobs to countries with less costly, often better educated, highly motivated workforces and friendlier tax policies,” the report points out.

“Without a renewed effort to bolster the foundations of our competitiveness, we can expect to lose our privileged position. For the first time in generations, the nation’s children could face poorer prospects than their parents and grandparents did”

The case for biotechnology

Nobody can accuse the Malaysian Government of ignoring the importance of science and technology. There have been many initiatives to address this aspect, and one of these is the plan to make biotechnology a key component of the country’s development strategy.

Prime Minister Datuk Seri Abdullah Ahmad Badawi launched the National Biotechnology Policy in April 2005.

At the event, he said: “Biotechnology will not only drive improvements in the quality of life of Malaysians; it will also propel the creation of knowledge and innovation in the country, crucial elements in our quest to climb up to a higher value-added stage of development.

“With the application of biotechnology, we can unlock additional value in traditionally strong sectors such as plant commodities and manufacturing. We can create substantial value in new and upcoming sectors such as healthcare, nutraceuticals and industrial bioprocessing”.

The policy charts a 15-year course that will ultimately see Malaysia as a global biotechnology and R&D hub by 2020. A policy is only as good as its execution, and that is primarily an assignment for BiotechCorp, which was established to spearhead the development of Malaysia’s biotechnology sector.

There are targets in place. The aim is for biotechnology to contribute at least 5% to the country’s GDP by 2020. The plan also includes having 100 new biotechnology companies that will create 280,000 jobs

The centrepiece initiative is the BioNexus Network, “a web of biotechnology companies and organisations that leverage on existing facilities, infrastructure and capabilities of universities and research institutions throughout Malaysia”. So far, 39 companies have obtained BioNexus status.

Malaysia has identified three focus areas in biotechnology – agricultural, healthcare and industrial.

BiotechCorp’s website broadly defines biotechnology as “any technique which uses living organisms to make or modify products, improve plant or animal productivity or to develop micro-organisms for specific use”.

However, Iskandar prefers to make it simple: “Biotechnology is merely an enabler. It s just a science or a technology that allows us to come up with products and services”.

Of more significance is the idea that if Malaysia succeeds in biotechnology, this smoothes the way for the country’s transition to the knowledge economy.

The potential is great because biotechnology can touch our lives in just about every facet - from food to healthcare and medicine from the ecosystem to industrial processes.
For example, it leads to drug discoveries, higher crop and meat yields, new materials and a cleaner environment.

“The pervasiveness of this technology is of utmost importance. When it’s pervasive enough, it reaches people in two ways – there’s economic and societal impact,” Iskandar explains.

Why Malaysia?

There is no doubt that biotechnology is hot. Malaysia is not the only country that is looking to ride on the high-growth industry.

The US has benefited from a head start and is home to several of the world’s leading biotechnology clusters.

However, other developed countries have narrowed the gap. Among the chasing pack are Canada, Britain, the Netherlands, Sweden, Finland and Japan.

The battle for biotech dollars among the newcomers is even more intense in our region. As always, on sheer size alone, China and India cannot be dismissed, but the ones that have been noticeably aggressive are Singapore, South Korea, Taiwan, Hong Kong Australia and New Zealand.

Clearly it takes a lot to stand out in the crowd, particularly when vying for investments from multinational biotechnology players.

Companies that have BioNexus status enjoy certain tax incentives. There is also a bill of guarantees the spells out a set of privileges.

Yet, these alone cannot possibly counter the strategy of say, Singapore, which has reportedly spent huge amounts of money to lure big-name scientists to the island republic to kick start its biotechnology dream.

Malaysia, Iskandar says, has the edge when it comes to biodiversity human capital and operating environment.

The wide variety of plants and animals here is a selling point, but while is more crucial to the development of the Malaysian biotechnology industry is the largely untapped lot understanding of the properties of these flora and fauna.

“Starting from now, there’ll be lot of emphasis on utilising this knowledge and bringing it to the market.” says Iskandar.

He adds that the fact that biotechnology companies from India and China are interested in coming to Malaysia shows that the country has sustainable human capital to supply the industry.

“It’s almost unbelievable. But do talk to some of these companies,” suggests.

BiotechCorp augments this competitive advantage with training a mentoring programmes for graduates entrepreneurs and other industry participants.

He also corrects the perception that Malaysia lacks depth in R&D. He points out, “We have so many good research institutes and universities. I’m actually quite taken aback by the criticism thrown at them, that the have not been producing good sciences.”

Another important consideration for biotechnology companies inventing abroad is that they will not be hampered by bureaucracy and inefficiency. They expect both the Government - in Malaysia, BiotechCorp acts as a one-stop agency - and the private sector to have a firm grasp of their business and to provide speedy assistance.

Banking on BioNexus

Inevitably, the efforts to build the biotechnology industry in Malaysia are likened to the nation’s push to embrace ICT (information and communications technology) beginning in late 1990s.

It may not be a fair comparison, but there are distinct similarities.

Both are about rapidly evolving technologies that are reshaping the world and its economies. BiotechCorp is regarded as the equivalent of the Multimedia Development Corp, while BioNexus is a mirror of the Multimedia Super Corridor (now known as MSC Malaysia) project.

Top international names in the respective fields have been invited to be members of advisory bodies to provide guidance and networking opportunities.

The basic objectives are the same - if the projects take off in a big way, Malaysia will accelerate into the Information Age.

Hence, if MSC Malaysia is seen as an under-performer, it is natural for people to be sceptical about Malaysia’s ambition to be a biotechnology power.

Iskandar has heard this many times before. He considers it a good thing that there was the MSC experience to draw on during the formulation of the National Biotechnology Policy.

He recalls, “We already had a template. So where are the pitfalls? How could we do things better? We needed to hit the ground running and we needed to do it fast. So we looked at MSC, made comparisons and improvised.”

Although promoting foreign direct investments is one of its priorities, BiotechCorp places equal emphasis on developing homegrown capabilities.

The idea is for the multinational corporations (MNCs) to provide that spark for local biotechnology entrepreneurs.

“With BioNexus, we are more fixated with quality rather than quantity. This is not about a lottery,” Iskandar explains.

“We want the foreign companies to be a catalyst for the ecosystem. This is another thing we have learnt from studying the MSC. We want to build an ecosystem rather than relying on first bringing in the big MNCs. We want build local industries from the very beginning.”