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October 06, 2011

Catalyst for growth

The pharmaceuticals industry is re-wiring itself. Gone - literally in the case of Pfizer at Sandwich - are the days of magnificent isolation, of company R&D labs that are a world unto themselves. Instead, we are getting a networked approach. Pharma firms are trying to immerse themselves in a sea of brilliance. Partly that external inspiration and insight lies in academia, partly in smaller biotech firms. It is both globally dispersed and concentrated in clusters. And in practical terms, some of the important re-wiring looks like this:

   Photo 2

This is an independent hi-tech "incubator" on GSK's Stevenage campus, its global R&D HQ, that I visited recently. It is intended to support small, innovative firms. The attractions for outfits that can show they are interesting enough to get in are substantial:

• bang next to the GSK R&D buildings - literally a 5 minute walk office-to-office

• lab services already plumbed in

• access to shared expensive kit and common services like server rack space

• potential for access to really, really expensive kit within GSK

• financial support for kit you still need to buy from the Technology Strategy Board

• offices, labs, office-cum-labs, meeting rooms etc all in a modern building that is going to have some quite groovy spaces (for example, a bubble is going on those curved spars you can see in the picture)

• networking, networking, networking.

If you are a biotech start-up, or thinking of becoming one, it is hard to imagine a better deal. Meanwhile, next door is the other half of the Stevenage Bioscience Catalyst - an "accelerator" building with bigger spaces to support innovative firms that are ready to expand and want to fit out their spaces to their own specifications. It doesn't take a lot of faith to believe that Catalyst is going to have a lot of firms phoning up 01438 768551 and asking for a spot. It opens its doors next month.

But at the policy level there is a problem. It looks like this:

Photo-field

This is the big empty field behind the Catalyst buildings. It is available for further development, for expansion of Catalyst and strengthening of the cluster. But where is the money going to come from?

The Catalyst operation has been built with contributions from GSK, the Wellcome Trust, the TSB and the East of England Regional Development Agency. The first three are still around. But the RDA is dead. What is more, there is no replacement for the hi-tech funding RDAs used to do. Michael Heseltine's Regional Growth Fund is spending all its money on other stuff.

Without the RDA's cash, Catalyst would not have been built. It is as simple as that. And if we want to bridge Britain's longstanding gap between its brilliant science base and companies and capital that are looking the other way, then we are going to need to spend more money on things like Catalyst, not less.

When the Coalition killed off the RDAs last year, it also killed off hundreds of millions of pounds a year in investment into the UK's knowledge economy. Maybe there were flaws with the RDA structure. Maybe they made mistakes. But terminating all this kind of state involvement in our hi-tech infrastructure is an even bigger mistake. Even when, especially when, we are having to cut other spending to rein in the deficit, as mainstream economists at the OECD, IFS and elsewhere all argue. Without it, we are not going to get the hi-tech growth that both our country and our politicians need.

[BTW the man in the hat in the first picture is GSK's Malcolm Skingle. Thank him for getting Catalyst built where it should be - right on GSK's doorstep.]  

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Comments

Another illustration of the complete lack of strategic thought in the government's savings plans. Cutting anything that pays for itself is pointless, ipso facto, but its going on across the science and technology sector.

in fact Hesseltine's RGF hasn't spent anything yet - as I understand they haven't even completed due dilligence on first grant...

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