Betting on Biotech

Betting on Biotech: Innovation and the Limits of Asia's Developmental State

Joseph Wong
Copyright Date: 2011
Edition: 1
Published by: Cornell University Press
Pages: 216
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  • Book Info
    Betting on Biotech
    Book Description:

    After World War II, several late-developing countries registered astonishingly high growth rates under strong state direction, making use of smart investment strategies, turnkey factories, and reverse-engineering, and taking advantage of the postwar global economic boom. Among these economic miracles were postwar Japan and, in the 1960s and 1970s, the so-called Asian Tigers-Singapore, South Korea, and Taiwan-whose experiences epitomized the analytic category of the "developmental state."

    In Betting on Biotech, Joseph Wong examines the emerging biotechnology sector in each of these three industrial dynamos. They have invested billions of dollars in biotech industries since the 1990s, but commercial blockbusters and commensurate profits have not followed. Industrial upgrading at the cutting edge of technological innovation is vastly different from the dynamics of earlier practices in established industries.

    The profound uncertainties of life-science-based industries such as biotech have forced these nations to confront a new logic of industry development, one in which past strategies of picking and making winners have given way to a new strategy of throwing resources at what remain very long shots. Betting on Biotech illuminates a new political economy of industrial technology innovation in places where one would reasonably expect tremendous potential-yet where billion-dollar bets in biotech continue to teeter on the brink of spectacular failure.

    eISBN: 978-0-8014-6337-2
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xvi)
  4. Introduction: Betting on Biotech
    (pp. 1-15)

    Since the 1990s, Korea, Taiwan, and Singapore have poured billions of dollars into the commercial development of biotech. Biotech and life sciences industries more generally have been hailed as the next “star” and “pillar” industries in what are already very advanced economies, and the aspirations of those economies are not modest. Korea aims, in the near term, to be one of the world’s top biotech producers. Taiwan looks to develop small but world-class life sciences firms that can generate economic value as integral parts of the global biotech value chain. And Singapore imagines itself one day as a global, and...

  5. Chapter 1 From Mitigating Risk to Managing Uncertainty
    (pp. 16-42)

    Industrial development and diversification are about taking risk. Encouraging the growth of industry in new and unfamiliar sectors is always risky. It invariably involves costs, and the rewards are uncertain. Yet it is important to consider different kinds and levels of risk in industrial upgrading. Some endeavors are relatively less risky than others. Some bets are safer than others. Potential payoffs differ as well, and the expectation of any payoffs at all is uncertain. Generally speaking, higher-risk propositions yield higher rewards, though the likelihood of success is much lower. Science-based industries and the prospects of science-based industrialization are the riskiest...

  6. Chapter 2 Reorganizing the State
    (pp. 43-80)

    The postwar economic miracles in Korea, Taiwan, and Singapore were facilitated by the developmental state’s strategic capacity and willingness to coordinate the allocation of resources in order to mitigate risk. By mitigating the risks of industrial upgrading, the state encouraged otherwise risk-averse entrepreneurs to develop new industrial competencies and competitive advantages in global markets. This chapter looks at the state in the specific context of biotech innovation and examines the extent to which earlier patterns of state intervention and state organization have endured in the current era of knowledge-based industrial development. The short answer is yes and no.

    On the...

  7. Chapter 3 Organizing Bio-industry
    (pp. 81-112)

    Commercializing biotech is an extraordinarily complex process. It involves the generation of new knowledge in the upstream and the translation of knowledge into usable technological applications that bear market value. Marketable novel technologies need not be just cutting-edge knowledge but also include innovative business models and market savvy, as well as patient, creative, and entrepreneurial investment. The commercialization process encompasses a broad range of different actors and activities, all of which must be integrated in productive ways. Technical and economic uncertainties of biotech innovation, however, complicate this process. Commercializing biotech, as once described to me, involves many moving parts that...

  8. Chapter 4 Manufacturing “Progress”
    (pp. 113-139)

    In late 2007, I gave a talk in Taiwan on the development of commercial biotech. By then, Taiwan’s drive to upgrade into biotech had been in full gear for nearly two decades, and Taiwan’s aspirations in the sector had become a central part of the discourse about the island’s economic future. I began my talk by recounting a recent biotech investment deal that had been spearheaded by the government, one that seemed, at least from a technical perspective, to be based on a promising drug candidate. I suggested that it was by all industry-insider accounts a sound, if not spectacular,...

  9. Chapter 5 Regulatory Uncertainty
    (pp. 140-164)

    This chapter focuses on a very specific dimension of commercial biotech development—regulation—and the ways in which the state in Korea, Taiwan, and Singapore has both contributed to and attempted to manage regulatory uncertainty. Regulatory considerations are an important aspect of the biotech innovation process, and the extent to which regulatory certainty, predictability, and clarity are achieved go a long way toward determining commercial returns and health care outcomes. By regulation I mean the enforced standards of appropriateness that govern a broad range of market and premarket activities, including R&D, technology commercialization, and market access. Regulation is simply an...

  10. Conclusion: Beyond the Developmental State
    (pp. 165-190)

    The race is on. Ever since the rediscovery in the 1970s of the biological heuristic, which prompted the faint and distant hope for a new generation of cutting-edge health technologies, the world has focused tremendous attention on the promise of commercial biotech. And this preoccupation with biotech, broadly defined, has been truly global in scope. Rich countries expect innovative life sciences to be the next foundational pillar of the knowledge economy. Poor countries see biotechnology as the technological harbinger of low-cost medical miracles, alleviating their dependencies on expensive first-world drugs.¹ It was initially believed, naively, that all it would take...

  11. Index
    (pp. 191-200)