Regional science policy and the growth of knowledge megacentres in bioscience clusters

BioTechNet, responsible for a number of early and mid-stage start-up biotechnology
firms. However, such is the relatively precarious nature of the funding needed for
such businesses that, in reality, it is impossible to posses all the skills required of
intermediaries such as those found in US megacentres like Boston in one incubator or
even one small university city. Thus issues of funding, from seedcorn to business
angel to full-blown venture capital, legal questions, ranging from incorporation to
patent defence, management issues like in-licensing and out-licensing, development
of supply chain linkages or milestone payment agreements with ‘big pharma’, and
more mundane questions of property acquisition as companies grow and leave the
incubator, are all dealt with by a single incubator manager.

Interestingly, through a research partnership with such well-found innovation
intermediaries as BioM in Munich and GenoPole in Paris, it is clear that comparable
difficulties apply in their cases too. That is, finance may not be such a problem as
finding appropriate expertise. For even though it is said that Munich had some thirty
venture capitalists in the seven years after BioRegio, the German Federal
government’s regional biotechnology commercialisation initiative, such is the
newness of most of the twenty or so new biotechnology firms that special early-stage
management expertise and support is a greater weakness than investment finance
(Kaiser, forthcoming). As will be seen below, Munich is now assessed as being
Europe’s leading high technology cluster, at least in ITC if not biotechnology. But
while it has a few mature biotechnology firms kike MediGene and MorphoSys, most
of its start-ups are in their infancy, heavily dependent on public venture finance, and it
is unclear how viable many are were they to be wholly reliant on even the protected
regime by which most biotechnology firms survive without showing profitability.

This compares rather unfavourably with the picture of relatively healthy research-led
networking painted by Orsenigo et al (2001) where collaborative relationships among
firms and research institutions initiated from the US are shown to be diverse, capable
of including linkage with some of the above-mentioned European firms, and
sophisticated enough in knowledge management of the revolutionised ‘rational drug
design’ methodologies consequent upon the revolution in molecular biology
(Henderson et al., 1999) for ‘big pharma’ to seek entry to the networks rather than

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