1.
BETWEEN LEAPFROGGING & SELF DISCOVERY
THE FUTURE OF THE INDIAN BIOTECH INDUSTRY
SEMINAR ON BIOTECH IN BANGALORE: PAST EXPERIENCES,
FUTURE TRAJECTORIES (SUPPORTED BY UKIERI)
CENTER FOR PUBLIC POLICY
CHIRANTAN CHATTERJEE, IIM BANGALORE

2.
SOME MUSINGS
• Overheard at Bangalore BIO India:
•the Biotech Industry is at $4 billion (some idle questions?)
• What share of that is Biocon’s?
• How much does China invest in biotech R&D?
• Still just a fraction of Global Biotechnology
• So what is the fuss about?

3.
BETWEEN LEAPFROGGING & SELF-DISCOVERY
• Leapfrogging among nations (Krugman et.al 1993) and firms (Fudenberg and Tirole 1985)
 Intuition: Established monopolists may systematically have less incentive to
innovate than potential rivals and thus may in effect eventually cede technological
leadership (a partial equilibrium result).
• Economic Development as Self-Discovery (Hausmann and Rodrik 2003)
 Intuition: Learning at what one is good at in a general equilibrium set-up.

4.
EVIDENT IN MANY FIRMS OSCILLATING IN THIS DICHOTOMY!
(A HYBRID MODEL?)
 Xcyton, Connexios, Suven Labs, Jubilant, Biocon, Glenmark, Advinus, Strand
Genomics among many others….
 What’s next for them?

5.
WHAT’S NEXT FOR THEM?
(REGULATORY AND OTHER CHALLENGES)
BIG PHARMA PATENT
CLIFF
And Many More… Biosimilars
Healthy
Tapping into the Global
respect/collaboration
Networks of Bio-
between institutions
Pharma Funding?
and between firms
Conduit for
Commercializing
Academic Research and
Traditional Knowledge

6.
FROM E PLURIBUS UNUM TO E PLURIBUS PLURIBUM
(WHY IS A STRATEGY PROFESSOR TALKING PHILOSOPHY/RELIGION!)
- Experimentation with organizational forms and firm boundaries.
- Oscillation means patience & patience requires deep reservoirs of faith
- No respite (till there are success stories, as Vijay likes to put it).
- What the GoI should (and should not) do..almost like parenting an
adolescent….

7.
WHAT THE GOVT. SHOULD (AND SHOULD NOT DO!)
(SOME IDEAS FOR CORRECTING MARKET FAILURES, IP MECHANISMS)
 Create a MARKET FOR IDEAS BY FACILITATING INNOVATIVE ENTREPRENEURS more than established
firms? / Operationalizing IP mechanisms for appropriating rents from innovation
 Conduit for COMMERCIALIZATION OF ACADEMIC RESEARCH? Efforts at NCBS/CCMB? Need for
many more…?
 Initiatives like NMITLI could not only fund governmental but INDUSTRY RESEARCH.
 Better HARMONIZATION BETWEEN S&T AND THE COUNTRY’S PUBLIC HEALTH requirements.
 A 3RD PARTY EVALUATOR OF IDEAS, and generation of capable managers, even if founders
have low Entrepreneurial Ability…(reduces dysfunctional firms in the economy, Zingales
(2000)).

8.
TALKING ABOUT ENTREPRENEURS
(VARIATION IN ENTREPRENEUR TYPES, ONGOING PROJECT WITH MOSTAFA, UWO)
 Entrepreneurial Variation:
 Returnee Scientist Entrepreneur.
 Domestic Scientist Entrepreneur.
 Academic Entrepreneur (domestic or returnee coming from an
academic institution).
 Spin-offs: From Traditional Pharma/Larger Bio-tech.
 No relation to Bio-pharma.

9.
TALKING ABOUT THE (AMBIDEXTROUS) SCIENTISTS
(A PASTEUR’S QUADRANT IN INDIA CONNECTING LEAPFROGGING/SELF-DISCOVERY?)

10.
TALKING ABOUT (VANISHING) PUBLIC SCIENCE IN BIO-PHARMA
Comp any Publications Citations
Dr. Reddy'S Laboratories 620 4258
Ranbaxy Laboratories Ltd. 401 2683
Wockhardt Ltd. 214 959
Hindustan Antibiotics Ltd. 203 1211
Biocon 111 446
Suven Life Sciences Ltd. 100 745
Indian Immunologicals Ltd. 97 254
Panacea Biotec Ltd. 95 1068
Serum Institute Of India Ltd. 91 438
Lupin Laboratories Ltd. 74 374
Source: IIMB Doctoral Student Priyanka Shukla’s On-going Research

11.
SOME PRACTITIONER LEVEL THOUGHTS
(AS OPEN QUESTIONS?)
- The Sector/Country needs Scientists who are Good Managers (How? Who
will provide that training on R&D Management?)
- Francis Collins, NIH Director was surprised that the country has no high-
throughput screens yet? (Food for thought?)
- Right combination of INCENTIVES & INSTITUTIONS to tap into the Global R&D
Labor Market (of Indian and non-Indian Origins).
- Why just Bangalore/Karnataka? (A question on diffusion/ecosystem)

12.
TODAY’S SPEAKERS & THEIR KEY POINTS
- Ian: Changed Science Business Model (So is there going to be a Hybrid
Model? Or it is going to be another IT(Services) story?)
- Vijay: Regulatory Paralysis (yes, but how can one make good regulation
without careful economic analysis on the effects of regulation?)

13.
A FINAL WORD ON A BRIGHT ‘FUTURE’
(WITH SOME THOUGHTS FROM SHAKESPEARE)
- Lots of new entrants and start-ups.
- I find a lot of vibrancy in the youth (source of disruption?) about biotechnology.
- Very capable scientists.
- Ecosystems and institutions (still evolving!).
“There is a tide in the affairs of men, which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life is bound in shallows and in miseries.
On such a full sea are we now afloat; And we must take the current when it serves, Or lose our ventures.”
– From Julius Caesar, William Shakespeare.