Germany: Biotechnology

1. Germany: Biotechnology Dario Volpe Maximilian Quehl Alexander Kern Charlotte Longepe

2. Introduction • AN OVERVIEW OF GERMANY • THE BIOTECH CLUSTER • WHY THE BIOTECH CLUSTER DEVELOPED IN GERMANY • CLUSTER COMPARISON WITH INDIA

3. AN OVERVIEW OF GERMANY

4. INFO • Federal Republic of Germany • Population: 81,757,600 • Language: German + foreign language • GDP per Capita: $40,511 • Bundesländer: 16

5. Main events • 1948 – Replacement of Reichsmark with Deutschemark • 1949 – Tax Law Adjustments Act -> Tax breaks for capital creation • 1948 to 1960 – Average annual growth rate of 15% • 1948 to 1955 – Several tax reforms • 1951 – European Coal and Steel Agreement • 1960 – Most exports were manufacturing goods (Made in Germany)

6. Main Events • 1960 to 1970 – Influx of Gastarbeiter and Undervalued Deutschemark • 1966 – The Council of Economic Experts lead by Karl Schiller • 1973 to 1989 – Slowdown of economy • 2001 – Introduction of the Euro making exports cheaper • 2003 – Implementation of Agenda 2010

7. The European Union “The big winner of the Eurozone is German industry…the view of the German industrialists is that … it makes us relatively more competitive within the Eurozone. [The German economy] “has boomed to such an extent that Germany can afford to pay off the debts of Greece, Ireland and Portugal and should do so to preserve its export markets in those countries.” “Germany’s strong export orientation stems from the openness of its economy, its long-standing manufacturing traditions and its competitiveness in global markets.”

8. Agenda 2010 • Easing of employment protection • Reduction of operating labor costs • Special education programs for young people • Increase education spending by 25% within five years • Investment of 4 billion Euros to promote all-day schools (Germany at the bottom half of OECD countries)

9. Germany Biotech Diamond Model Strategy, Structure & Rivalry Government Demand Conditions • Investor friendly environment • Flexible Labor regulation • Subsidies • Direct involvement • Large high and middle class • Demand for innovative products • High demand for Bio products • Strong Green movement • High competitiveness of sector • Small to medium size businesses Related & Supporting Industries Factor Conditions • Universities • Venture Funds • Big established international players (Bayer & BASF) • High education • Location • Infrastructure • Technology available

10. The Biotech Cluster

11. definition • A field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bio products.

12. sub-categories • Bio instruments - INTAVIS Bioanalytical Instruments AG • Protein Engineering - SloningBioTechnology • Plant Biotechnology - BASF Plant Science • Neuroscience - ElektaNeuroscience • Diagnostic and Analysis - AmplexDiagnostics GmbH • Drug Discovery - Graffinity Pharmaceuticals GmbH • Life Science Service - Millipore GmbH

13. Where in Germany

14. Numbers

15. Numbers Source for all tables labeled Numbers and Where in Germany: www.biotechnologie.de

16. Why the Biotech cluster developed in Germany

17. Governmental policies • Strong governmental support • foster entrepreneurial business models in high-technology sectors • effective institutional framework • Strategy • integrate the specification of biotech products in public procurement • coherent certification schemes for market transparency • financial instruments and supports to increase investments into research, technology development and innovation • communication for benefits of bio-based products to users • Advantageous incentives and favourable taxes • government-owned banks providing generous co-financing options • specific loans at a preferential interest rate => million of Euros of subvention

18. Federal institutions • Powerful Ministries financed by the federal Government • Actions: • fund center of innovation • support functioning/developing of programs in regions • monitoring innovation in their fields • promoting up-and-coming scientists projects • competitiveness issues with other economies

19. Academic Support • Center of Innovation => bio innovations coming from discoveries in universities and research centers • Organization • Working in hand with private companies • Financing mainly by the federal states • Benefits • High reputation both internationally and within Germany • Gatherings of bright scientists stimulates innovations • Bring outstanding researches (ie Max Planck 17 Nobel Prize Laureates since 1954)

20. Academic Support • German Universities • Competitive Advantage • Provide high level of excellence • 60 public universities conducting research in the life sciences • Locations coincide with major BioRegions • Policies • “Excellence Initiative” strengthen cutting-edge research and competitiveness • Train scientists for an entrepreneurial and business career • Build links between academia/industry

21. Bioregion Programs: Linking Up Biotechnological Competences • Nb of Biotech companies jumped: • 25 bio-regions > 500 young companies • Winning region benefited from gvt supports + funds • High participation rate and notoriety> followed by all Landers • Long term benefits • boost a dynamic innovation process • give birth to several other initiatives => formed alliances, optimize and coordinate regional activities in the interest of German biotechnology

22. Private Initiatives • Long-term perspectives investments • largest VC destination (in 2007: 300million€/140million€ in UK) • Capital Risk Initiatives = helped 1/3 biotech companies • Corporation sponsoring ie BASF, Deutsche Telekom, Siemens • Channelled through • Research centers/Bioregions • University partnerships/Specific programs => huge source of funding > helped concretely start-ups • “Bio-Venture” • Integrate biotech research inside company own R&D supply chain • ie Merck bought Swiss company Serreno

23. Key competitive elements • Comprehensive logistics infrastructure • Integrates transport networks, IT, communications systems • Constellation of complementary medium size companies • Increasinginnovations & Patents development • nb of product candidates x2 • 1995 =200 patent // 2005 = 559 applications • Internal motivation drive • cultivate and leverage entrepreneurial spirit • contagious innovation goals between biotech cluster actors • World notoriety and recognition: Bio Europe Submit based in Germany

24. Reasons for the Biotech cluster development in Germany Successful set of policies • qualified + specialized experts financial + dynamic support Attract Biotech investors Stimulate innovation

25. CLUSTER COMPARISSON with INDIA

26. India Background • Poor infrastructure including ports, railroads, and streets • Ports performance is low • Electric system is in a poor state • Population of 1.1 billion • Governmental spending and high education • Yearly 50.000 IT and 360.000 engineering students graduate • Policies to facilitate R&D • IT, Telecommunication, Biotech

27. India – Patent Applications Source: Trading Economics, 2011

28. India Biotech Diamond Model Strategy, Structure & Rivalry Government Demand Conditions • Investor friendly environment • Low tax areas • Labor regulation • Growing middle class • High agricultural demand • Water treatment • Medical treatment • Property Rights • Patent Rights • 5 year development plan Factor Conditions Related & Supporting Industries • High education • Invite foreign specialists • Create Special economic zones • Universities • Venture Fund • Incubators