A new venture in India
Published in the Business Journal – “The Minister”, MOP Vaishnav College for Women
In his book Wealth of Nations, Adam Smith, wrote that “a true wealth of a nation is measured not by how much gold it possesses but by what it can produce”. By this yardstick biotechnology is an unprecedented revolution through which the world’s hunger can be eliminated by creating a new market space, particularly in India.
It is true that information technology has contributed much to India’s economic strength in the 1990s, but if the country is to get its due place in the comity of nations it has to create another market. This is why the Tenth Plan stresses biotechnology-based national development.
Scientifically, the biotech industry has reached a watershed: The human genome has been sequenced, as also that of some microbes and animals. Everyday, scientists learn more about the intricate molecular dance of life and how the process runs wild in disease. The technology to transform these discoveries into life-saving therapies is advancing quickly too. Market creation is the central strategic challenge for India’s new economic liberalization regime. By creating new products, spreading technology, raising productivity, enhancing quality and improving services, business — in the form of new market space — has always been the active agent of progress. It helps make the good things of life available and affordable. That is why management gurus, C.K. Prahalad and Allen Hammond, in their article “Serving the World’s Poor, Profitably” in Harvard Business Review (September, 2002), argue that markets at the bottom of the economic pyramid are a new source of growth for the MNCs. By stimulating commerce and development at the bottom of the economic pyramid, the MNCs can radically improve the lives of billions of people, and help bring in a more stable, less dangerous world. Achieving this goal does not require multinationals to spearhead global social development initiatives for charitable purposes. They only need to act in their own self-interest, for there are enormous business benefits to be gained by entering developing markets. In fact, many innovative companies — entrepreneurial outfits and large, established enterprises — are already serving the world’s poor in ways that generate strong revenues, lead to greater operating efficiencies, and uncover new sources of innovation. Technology, including up gradation and replacement of obsolete ones, will, thus, be crucial to the efforts. Here in lays the potential for biotechnology.
The markets are far more effective at promoting change and innovation than any law or government. Biotechnology has enormous potential as it improves life and may undermine the monopoly of pharmaceutical companies more effectively than any proposed regulation can.
With the slowing of the IT sector, investors and entrepreneurs are zeroing in on new areas. Biotech appears to be the next hi-tech field in which Indian companies can thrive by performing unglamorous services for researchers in the West. Indian already has a large number of biotech firms. With venture capitalists looking for new places to park their money, the number is all set to grow dramatically.
As with IT, the government support for biotech has helped produce a vast pool of cheap, highly-educated researchers. In recent years, the government funded 52 centers across the country to collect data relating to the Indian genotype. Research institutions and universities produce up to 1,000 biotech postgraduates every year.
India has other natural advantages in biotech. The country’s diverse flora and fauna offer a goldmine of raw information. A century ago in Ganga, phages-water-based agents that inject their DNA into bacteria cells were found to be effective against such diseases as cholera and bubonic plague. A Bangalore start-up, “Gangagen”, is re-evaluating the phage therapy’s potential. The Chennai-based ABL Technologies hopes to produce blood-cutting agents from certain seaweeds found in the Bay of Bengal.
Even the nation’s diverse gene pool has rich potential. Clusters of isolated genes can be found within intermarried castes and tribal groups. Also, India’s diabetic’s population — predicted to touch 20 million by the end of the decade — give researchers analyzing genetic links to the disease a wealth of material to work on.
India’s biotech sector received a huge boost from the sequencing of the human genome last year. The mass of raw data that emerged from the Human Genome Project has given researchers many leads to pursue. The work involves finding clusters of patients who are related and identifying common genes responsible for their condition.
The tools and technique of biotechnology allow direct genetic changes in living organisms. Many life forms — such as viruses, bacteria, algae, fungi, protozoa, worms, insects, fishes, mammals and higher plants — directly or indirectly affect humans. Many of these serve as systems for basis and applied biotechnology research.
The developments in applied biotechnology are directed towards economic production of new unconventional biological products for widespread use. India can use biotechnology for higher agriculture yields and providing affordable diagnostics, pharmaceuticals, vaccines and therapies.
One of the most important challenges for India in the coming decades will be harnessing the fruits of biological and biotechnological research for the benefit of mankind.
There are areas which require attention if India is to play a leading role in biotechnology. Till now, only 32 patent applications have been filed, including five in foreign countries. Two US and seven Indian patents have been granted which are very few. Similarly, the technology transferred through biotechnology during the Ninth Plan was only 27.
But the most disappointing aspect is the meager budget for the Biotechnology Ministry and particularly for the basic product-oriented R&D. Basically, a knowledge-based economy is research and development intensive, and huge funds are required for continued product development. The total budget for the Biotechnology Ministry was only Rs 175 crore in the Ninth Plan for 2001-02, and for basic and product-oriented R&D some Rs 75 crore.
Similarly, the total investment in R&D in the Ninth Plan was only Rs 249 crore, while the total Plan budget for the Ninth Plan was Rs 675 crore. It appears that the Government has taken note of the sector’s importance and the proposed fund requirement for biotechnology in the Tenth Plan is more than Rs 2,000 crore, and Rs 900 crore for basic and product oriented R&D.
But even this is not enough compared to the investment made by leading biotech powers such as the US. However, India has had some private initiative in the field. Some important private entrepreneurs are Dr Reddy’s Labs, Hyderabad; Shantha Biotech, Hyderabad; and Ms Kiran Majumdar’s Biotech Company, Bangalore.
Recently Dr Reddy’s Labs received permission from the Drug Controller General of India to market its first biotech product, a genetic form of “filgrastiu”, to treat cancer patients. Similarly, Shantha Biotech is developing six new products, Monoconal antibodies, to counter cancers of the small lung cell, breast, colon and pancreas.
If India is to become a world-player in biotechnology it should tie up with world-class biotechnological labs. In the US, leading universities are funded by the industry to conduct research for development of biotechnology products. India should also encourage the establishment of private sector and autonomous research institutions.
There are some universities in India — the School of Life Science, Jawaharlal Nehru University, Delhi; Madurai Kamraj University, the Tata Institute of Fundamental Research, Bombay; and Indian Institute of Science, Bangalore, along with CSIR Biotech Lab — which do pioneering research in biotechnology. Biotechnology is a vast area having multi-dimensional potential and it is not possible excel in all areas. Therefore, it is imperative to create a niche and develop core competence.
Much also depends on political stability and willingness to take risk. Most important is the contribution of the private sector. Some States, particularly Karnataka and Andhra Pradesh, have taken the lead in establishing biotechnology parks.
The desire to create the new market space and product pervades business today. But while innovation is essential, particularly in biotechnology to boost the economy and society, it is truly a commercial necessity for individual companies. In 1966, Harvard Professor Theordore Levitt argued compellingly that the success of most companies/countries hinges more on imitation than innovation. Being a fast follower, he wrote, is a more dependable strategy than being a first mover.
In biotechnology it is possible to have a carefully developed method of planning innovative imitation. India has to learn how to make and sell things.
Business has to be the dominant institution in many respects usurping the role played by politics and religion. India has to create an environment that welcomes entrepreneurship with open arms. This is a must to foster a dynamic and vibrant market economy.