Bioentrepreneurship in Japan: Institutional transformation and the growth of bioventures
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Bioentrepreneurship in Japan: Institutional transformation and the growth of bioventures Michael J. Lynskey Date received (in revised form): 7th June, 2004
Abstract
Keywords: biotechnology, entrepreneurship, Japan, institutional change, venture firms
Until recently, Japan had relatively few biotechnology start-up firms and they did not play a significant role in the commercialisation of university research results. This was surprising given the pivotal role ascribed to such firms elsewhere in the commercialisation of biotechnology. However, the system of university–industry collaboration, the management of intellectual property and the role of universities are undergoing significant transformation in Japan. These changes, and others in the financial and labour markets, are proving conducive to entrepreneurship. Consequently, there has been a dramatic increase in the number of biotechnology venture firms hoping to commercialise research results from universities. This paper gives an overview of these institutional transformations in the light of recent deregulation and legislative changes, and describes why ‘bioventures’ are a viable means to commercialise Japanese biotechnology discoveries. Examples are given of such bioventures, based on interviews conducted with the founders and chief scientists of these firms in Japan. Some of the salient characteristics of these firms are illustrated, including their use of university collaboration and ownership of intellectual property rights.
INTRODUCTION
Michael J. Lynskey St. John’s College, University of Cambridge, Cambridge CB2 1TP, UK E-mail: [email protected]
The commercialisation of biotechnology in Japan has conventionally been the preserve of large companies. When genetic engineering had its initial commercial successes in the early 1980s, Japanese breweries and food companies were the first to adopt the new technology. These ‘new entrants’ were successful in launching a number of recombinant drugs, owing to their cumulative knowledge of bioprocessing and use of strategic alliances forged with foreign biotechnology start-up firms.1 However, despite their success, and that of the traditional pharmaceutical companies, Japan cannot be said to be a world leader in the commercialisation of biotechnology. This position seems paradoxical, given Japan’s prowess in other fields of technology, and the fact that, with an estimated value of ¥2trn (US$17bn), Japan represents the second largest individual market for the goods and
services of biotechnology, after the USA.2 With only 2 per cent of the world’s population, Japan accounts for 12 per cent of the world’s total pharmaceutical consumption3 (see Figure 1 and Table 1). Moreover, in life science research, Japan
Food 8%
Instruments 7% Other 6%
Chemical 16%
Pharma 40% Agriculture 23%
Total market: US$11.6bn
Figure 1: Japanese biotechnology-related market (2002) Source: Nikkei Biotechnology
& HENRY STEWART PUBLICATIONS 1478-565X. J O U R N A L O F C O M M E R C I A L B I O T E C H N O L O G Y . VOL 11. NO 1. 9–37. OC
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