Robert WellsHead, Biotechnology UnitOslo, Norway11 October 2011

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Life Sciences for Health and Innovation: An OECD Perspective

1961: 19 western countries and 75% of world’s GDP

OECD + RUSSIA + BIICS

> 80% of world’s GDP 64% of world’s population

World population in 2030

Source: Salim Sawaya, based on medium variant of the UN Population Division’s “World Population Prospects: The 2006 Revision Population Database”

Biotechnology at the OECD

• Committee for Scientific and Technological Policy (CSTP)

• Working Party on Biotechnology (WPB)• Biotechnology Unit

– Biomedicine and health innovation– Biotechnology for sustainable (Green) growth– Converging Technologies (syn bio)– Knowledge Management (incl. intellelctual

property)– Marine Biotechnology

5

CHANGING NATURE OF SCIENCE AND INNOVATION

6

Innovation is key to growth... Contributions to labour productivity growth, 1995-2006, in %

* Investment in intangibles and multi-factor productivity growth account for between two-thirds and three-quarters of labour productivity growth.

-1

0

1

2

3

4

5

6

Intangible capital MFP Non-ICT capitalICT capital Tangible capital Labour quality

Science is increasingly international….

8

Canada

Korea

ItalyNetherlands

Switzerland

India

BelgiumSweden

Russian Federation

Poland

Australia

Brazil

Spain

United States

Germany

France

China

Japan

United Kingdom

1998 2008

Canada

Korea

ItalyNetherlands

Switzerland

India

BelgiumSweden

Russian Federation.

Poland

China

Japan

Australia

Brazil

Spain

United States

Germany

France

United Kingdom

Source: OECD (2010) Measuring Innovation: A New Perspective

New global players have emerged …

Contributions to growth in global R&D, 1996-2001 and 2001-2006(in billion constant US PPP and %)

37%

16%

23%

15%

7%

13%

10%

13%

11%

30%

12%

13%

0

20

40

60

80

100

120

140

160

180

1996-2001 2001-2006

Other non-OECD (2)

China

Other OECD (1)

Japan

EU-27

United States

Note: (1) Australia, Canada, Iceland, Korea, Mexico, New Zealand, Norway and Turkey (2) Argentina, Brazil, India, Israel, Russian Federation, Singapore, South Africa, Chinese TaipeiSource: OECD.

The financing of R&D has changed over time

• Business financing of R&D has taken on greater importance as innovation has become more important for firm performance – high-tech industries have grown in particular.

• Government’s share has declined and other national sources (notably non-profit institutions) have become more important sources of R&D financing.

Financing of R&D, 1981-2005

10

Some implications for R&D financing

Firms have started to finance R&D in universities to access basic research.

At the same time, governments are funding less business R&D through direct support.

11

0

1

2

3

4

5

6

7

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Share of higher education R&D financed by industry

0

5

10

15

20

25

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

Share of business R&D financed by government

Direct and indirect government support to business R&D (BERD), 2008

As percentage of GDP

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

% Costs of f iscal incentives Direct government funding of BERD

Source: OECD, NESTI 2009 R&D tax incentives questionnaire, based on national sources, some of which may be preliminary.Note: Countries with a non-shaded bar provide R&D tax incentives but the cost of these incentives is not included yet (waiting to receive estimates).

But public investment remains key…

0

20

40

60

80

100

Slo

vak

Rep

ublic

Chi

nese

Tai

pei

Hun

gar

y

Arg

entin

a

Po

land

Est

oni

a (2

002)

Chi

na

No

rway

Icel

and

Cze

ch R

epub

lic

Sp

ain

New

Zea

land

Mex

ico

(200

3)

Cyp

rus

(200

2)

Slo

veni

a

Italy

(200

6)

Rus

sian

Fed

erat

ion

Fra

nce

Den

mar

k (2

005)

Aus

tral

ia (

2006

)

Ro

man

ia

Aus

tria

Po

rtug

al

So

uth

Afr

ica

(200

6)

Uni

ted

Sta

tes

Isra

el

Sw

itzer

land

(20

04)

Irela

nd (

2006

)

Sin

gap

ore

Jap

an

Ko

rea

Chi

le (

2004

)

% Higher education Government

Basic research performed in the public sector, 2007Percentage

Innovation involves national and international collaboration

Co-ownership of Innovation is growingBetween Businesses and PROs…

numbers of co-owned patents

Science and Innovation Profile of Norway

STI Policy Mix: No One Size Fits All

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(indexed on 1980=1.0, Annex 1 ratification countries)

Policy can induce greater innovation

Patenting in climate mitigation technologies relative to all sectors

Innovations in biotechnology Reliance of patents on science citations

(biochemistry papers cited by pharmaceutical patents)

57.7

64.8

48.6

58.8

30.7

58.9

81.9

9.0

6.3

11.7

21.7

18.4

28.0

6.6

17.6

22.7

15.4

10.4

9.8

6.0

4.3

3.9

5.4

14.3

8.4

14.1

13.3

7.6

0% 20% 40% 60% 80% 100%

United States

Japan

United Kingdom

Germany

France

China

Korea

Higher education Government Industry Non profit

Hospital Other NA

Battelle Report on the Value Derived from the Human Genome Project – May 2010

1.The economic and functional impacts generated by the sequencing of the human

genome are already large and widespread. Between 1988 and 2010 the human

genome sequencing projects, associated research and industry activity—directly and

indirectly—generated an economic (output) impact of $796 billion, personal income

exceeding $244 billion, and 3.8 million job‐years of employment.

2. The federal government invested $3.8 billion in the HGP through its completion in

2003 ($5.6 billion in 2010 $). This investment was foundational in generating the

economic output of $796 billion above, and thus shows a return on investment (ROI)

to the U.S. economy of 141 to 1—every $1 of federal HGP investment has

contributed to the generation of $141 in the economy.

3. In 2010 alone, the genomics‐enabled industry generated over $3.7 billion in federal

taxes and $2.3 billion in U.S. state and local taxes. Thus in one year, revenues

returned to government nearly equaled the entire 13‐year investment in the HGP.

4. Overall, however, the impacts of the human genome sequencing are just

beginning—large scale benefits in human medicine, agriculture, energy, and

environment are still in their early stages. The best is truly yet to come.

5. The HGP is arguably the single most influential investment to have been made in

modern science and a foundation for progress in the biological sciences moving

forward.

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Key Recent OECD Biotech Instruments and Policy Reports

• Guidelines on the Licensing of Genetic Inventions (2006)

• Guidelines on Quality Assurance in Molecular Genetic Testing (2007)

• Guidelines for the Operation of Human Biobanks and Genetic Resource Databases (2009)

• The BioEconomy 2030 (2009)• Policy Reports on Knowledge Networks and

Markets in Life Sciences and Collaborative Mechanisms in Intellectual Property in Life Sciences

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Ongoing OECD Work in Biomedicine and Health Innovation

• Innovative Governance in Biomedicine– “Berlin Workshop” (2010)– Policy Report on Biomarkers (2011)– Planned work in Alzheimer’s/dementia

• Report on Personalised Medicine and Global Health

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Contacts: www.oecd.org/sti/innovation

www.oecd.org/biotechnology

Robert.wells@oecd.org

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