Dario VolpeMaximil ian QuehlAlexander KernCharlotte Longepe

GERMANY: BIOTECHNOLOGY

AN OVERVIEW OF GERMANY

THE BIOTECH CLUSTER

WHY THE BIOTECH CLUSTER DEVELOPED IN GERMANY

CLUSTER COMPARISON WITH INDIA

INTRODUCTION

AN OVERVIEW OF GERMANY

Federal Republic of Germany

Population: 81,757,600

Language: German + foreign language

GDP per Capita: $40,511

Bundesländer: 16

INFO

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)

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

MAIN EVENTS

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.”

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)

AGENDA 2010

GERMANY BIOTECH DIAMOND MODEL

• High education• Location• Infrastructure• Technology available

• 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

• Universities• Venture Funds• Big established international players (Bayer & BASF)

• Investor friendly environment• Flexible Labor regulation• Subsidies• Direct involvement

Government Strategy, Structure & Rivalry

Demand Conditions

Factor Conditions

Related & Supporting Industries

THE BIOTECH CLUSTER

A fi eld of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fi elds requiring bio products.

DEFINITION

SUB-CATEGORIES

Bio instruments - INTAVIS Bioanalytical Instruments AG

Protein Engineering - Sloning BioTechnology

Plant Biotechnology - BASF Plant Science

Neuroscience - Elekta Neuroscience

Diagnostic and Analysis - AmplexDiagnostics GmbH

Drug Discovery - Graffi nity Pharmaceuticals GmbH

Life Science Service - Millipore GmbH

WHERE IN GERMANY

NUMBERS

Category Employees

Dedicated Biotech Companies

12.973

Involved in Biotech Companies

10.856

Total 23.829

NUMBERS

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

WHY THE BIOTECH CLUSTER

DEVELOPED IN GERMANY

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

FEDERAL INSTITUTIONS

Powerful Ministries financed by the federal Government

Actions: fund center of innovationsupport functioning/developing of programs in regions

monitoring innovation in their fieldspromoting up-and-coming scientists projectscompetitiveness issues with other economies

ACADEMIC SUPPORT

1. 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)

ACADEMIC SUPPORT

2. 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

BIOREGION PROGRAMS: LINKING UP BIOTECHNOLOGICAL

COMPETENCESNb of Biotech companies jumped:

25 bio-regions > 500 young companiesWinning 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

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

KEY COMPETITIVE ELEMENTS

Comprehensive logistics infrastructure Integrates transport networks, IT, communications systems

Constellation of complementary medium size companies

Increasing innovations & Patents developmentnb of product candidates x21995 =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

Successful set of

policies

Attract Biotech investors

Reasons for the Biotech cluster development in Germany

Stimulateinnovatio

n

financial + dynamic support

qualified + specialized

experts

CLUSTER COMPARISSON

WITH INDIA

INDIA BACKGROUND

Poor infrastructure including ports, railroads, and streets

Ports performance is low

Electric system is in a poor state

Population of 1.1 bill ion

Governmental spending and high education

Yearly 50.000 IT and 360.000 engineering students graduate

Policies to facil itate R&D

IT, Telecommunication, Biotech

INDIA – PATENT APPLICATIONS

Source: Trading Economics, 2011

INDIA BIOTECH DIAMOND MODEL

• High education• Invite foreign specialists• Create Special economic zones

• Growing middle class• High agricultural demand• Water treatment• Medical treatment

• Property Rights• Patent Rights• 5 year development plan

• Universities• Venture Fund• Incubators

• Investor friendly environment• Low tax areas• Labor regulation

Government Strategy, Structure & Rivalry

Demand Conditions

Factor Conditions Related & Supporting Industries