BioWorld International Correspondent

LONDON - The race between publicly funded regional development agencies to build new biotech clusters could lead to expensive failures and damage UK biotechnology as a whole, according to a parliamentary inquiry into the standing of the sector.

Instead of creating new clusters, "we should be primarily concerned to reinforce the success of our most internationally competitive locations," says the study by the House of Commons Trade and Industry committee.

Too many regions of the country have targeted biotechnology as an industry to cultivate. The risk is that not only will money be wasted in trying to force into existence local biotechnology companies, but rivalry between regions could undermine the strength of existing clusters, says the committee's report, published last week.

As the majority of public funding for start-ups and small companies is channeled through the regional development agencies, that is a significant criticism of UK government policy.

During its inquiry, committee members visited biotechnology clusters in the UK, U.S. and Germany. They concluded that the most successful ones, such as Boston, San Francisco and Cambridge, UK, have developed as a result of a coincidence of factors, rather than as the result of deliberate design or public policy.

Clusters can be hindered by obstructive regulatory or planning regimes, but the extent to which they can be created by design is less clear. While it is possible to identify the factors involved in successful clusters, that does not provide a blueprint for establishing biotechnology elsewhere, says the report.

The UK has the second largest biotechnology sector after the U.S., but many other countries are investing heavily to develop biotech sectors.

The report highlighted shortcomings of the UK industry, including a shortage of management and technician-grade skills, the variable quality of university technology transfer offices, and a lack of biomanufacturing facilities, where the committee believes the government should be providing greater support to maintain the UK's position.

The report also recommended a review of company law, to see if investors could be given greater protection from the activities of animal rights activists. That would be in line with legislation introduced last year to protect directors of companies involved in animal testing from direct action by animal rights groups.

While it believes animal rights activism could put foreign companies off moving to the UK, the committee praised the regulatory regime in fields such as stem cell research, saying the government has struck the right "ethical balance." That is a source of real competitive advantage to the UK and must not be undermined by European Union moves to introduce more conservative legislation, it said.

The UK BioIndustry Association gave evidence to the committee and welcomed publication of the report. "The committee's report is a useful snapshot of the industry and highlights a number of important issues," said David Chiswell, chairman of the BIA.