BioWorld International Correspondent
VIENNA, Austria - "Biotechnology will be the industry of this century," Mary Harney, deputy prime minister of Ireland and minister for enterprise, trade and employment, said in an opening session of the first Cordia-EuropaBio Convention, which began here Tuesday.
"With more than 1,000 companies and more than 10,000 researchers, the biotechnology industry is poised to play a key role in the European economy." In Ireland's case, she said, biotechnology already accounts for 12 percent of the country's manufacturing and nearly 37 percent of the gross value added in manufacturing. For a Europe seeking economic growth, biotechnology is a vital sector, she said.
Harney said that Europe and the European Union have a lot of work to do to reach the goals for building competitive economies, which the EU governments set at a summit in Lisbon, Portugal, in 2000. "Europe needs sound finances, lower taxes that promote work, and openness to global markets, especially in relation to immigration. To meet the Lisbon targets, the EU must address [human resources] issues, research, finance, technology transfer, clustering, networking and more."
Beginning in January, Harney will hold the rotating chairmanship of the EU council on competitiveness, a group of ministers whose portfolios include trade, industry and business issues. Harney said she would lead the council to bring stakeholders together and establish a code of best practices for commercializing academic research. "To boost innovation, we need to bring the government people into greater contact with entrepreneurs," she said.
The themes of looking beyond national perspectives and taking a Pan-European approach echoed the organizers' intentions for the conference. Many European biotechnology conferences center on the market in a particular country, drawing international participation as a byproduct. Key goals of the first Cordia conference were to begin with a broad European approach and build a conference that emphasized the whole rather than the parts. Organizers said the conference drew more than 1,500 registrants from more than 32 different countries. Companies, regional development agencies and scientific groups accounted for more than 170 exhibitors at the Vienna Conference Center. The program reflected nearly equal emphasis on business, political and scientific topics, with strong representation from the European Commission and national governments along with CEOs and venture investors.
"Europe is not on the verge of catching up with the United States," said Philippe Pouletty, vice chairman of EuropaBio, president of France Biotech and a founder of Truffle Venture. "In fact, it is possible that by 2020 China will overtake Europe in research-driven industries." In biotechnology, Pouletty noted that in 2003 total European investment likely was to be only 6 percent of total investment in the United States. Even among smaller and newer companies, which Europe has more of than the U.S., venture investment was likely to reach only 25 percent of American investment for 2003.
Pouletty cited four areas in which changes would improve Europe's biotech position: image, academic research and investment, tax and regulatory environment, and the overall financial environment. He added that to reach the goals that Harney spoke about, European governments and companies would have to make significant strides in all four areas. "For example, to reach the goal of having research and development investments equal to 3 percent of GDP by 2010, current spending would have to increase by 12 percent annually," he said.
Pouletty praised a current initiative of the French government to offer eight-year tax holidays to companies with fewer than 250 employees and whose expenditures on research and development are greater than 15 percent of their total. "That would mean no capital gains tax for investors, no taxes on corporate profits and no social or labor contributions, which are particularly high in France," he said. The French parliament is expected to vote on the initiative within two weeks. Pouletty added that EuropaBio is recommending this approach in all current and pending EU countries.
"Finally," Pouletty said, "to compete globally Europe needs a powerful stock market so that companies will have access to amounts of money that cannot be raised privately." In his view, the single market is poorly served by the current system of fragmented public markets, and Nasdaq is not a realistic option for many European companies that would like to go public. "If the governments will harmonize regulation," Pouletty told BioWorld International, "there would be a lot of pressure from bankers, investors and companies for a common platform. The location of a market is not important; it could be an electronic platform. But with common rules the LSE, Euronext and the German markets could achieve a Pan-European solution."
Minister Harney agreed. "Of course [the markets] are private institutions," she told BioWorld International, "but if the governments can harmonize the rules, this could stimulate innovation overall."