national r dpolicy: an industrlalperspective · 53. lung disease patients with negative dthr*t had:...

53. Lung disease patients with negative DTHR*Thad: caseating granuloma (1), silicosis (3), tuberculosis with pleural effusion (l ), intravascularangiogenic tumor (1), chronic bronchiectasis (5),chronic organizing interstitial pneumonitis (4),recurrent cyst (1), coccidioidomycosis (1), sarcoidosis (2),chronie obstructive pulmonary disease (8), chronic asthma emphysema, and pneumonitis (5), pneumonia (3).

54. E. R. Pisher er al.; Cancer 36, 1 (1975):55. D. L. Page et al., J. Natl. Cancer Lnst, 61,1055

(978).56. Patients with the following cancers reacted neg

atively (one of each); B-celllymphoma; extrapulmonary carcinoid ; astrocytoma; glioma; glioma-astrocytoma; liposarcoma; leiomyosarcoma;sarcomatous chordoma; 'localized, encapsulatedpapillary-, mixed papillary-, and medullary 10wgrade thyroid carcinoma. In addition; four patients with acute or chronic myelocytic leukemiaand two with Hodgkin's disease in remissionreacted negatively.

57. M. I. Bernhard, H. J. Wanebo, J. Helm, R. C.Pace, D. L. Kaiser, Cancer Res. 43, 1932(1983).

58. J. H. Kaplan,S. H. Lockwood,T. J. Cunningham, G. F.'Springer, E. E. Uzgiris, in CellElectrophoresis in Cancer and Other ClinicalResearch, A.W; Preece and P. A. Light, Eds.(Elsevier, New York,-l98l), pp. 197-202.

59.B.'D. Jankovic andB.H. Waksman, Jc lmmunol, -89, 598(1962); E.J. Holborow and G.Loewi, Immunology 5, 278 (1962).

60. W. O. Weigle,]. ,M.Chilleri G.S:Habicht,

Transplant. Rev. 8, 3 (l972);P.A. Bretscher.v.lmmunol. 131, 1103 (1983).

61. The two-sample comparisons 'of the statisticalresults on carcinoma patients _with those onpatients with benign disease of the same organare in most instances extremely significant statistically, with Pcvaluesof the order of severalone-thousands. This also applies to both categories of squamous-cell carcinoma. In the case ofpooled pancreas and 'pancreas benign, -P is0.0043; there are only five benign pancreaspatients. However,jfall pancreas carcinoma iscompared -with all pooled noncercincma, P is0.,0000. The same pertains if breast .carcinomaStageI infiltrating is compared with all noncarcinema, while for breast carcinoma Stages IIand III P hO.OOOI when .compared with allnoncarcinoma. A two-sample Student test of thehypothesis that the combined carcinoma and thecombined noncarcinoma populations are. thesamehas a P of 0.0000 and yields the very large,extremely significant r-statistic of ::> 9.5. Additional statistical information will be furnished onrequest to the author, as will be the: individualQM' ranges.

62. P. M. Brickell et al., Nature '(London) 306, 756(1984).

63~ G. F. Springer et al., unpublished data.64. J. C. Mottram, J. Pathol. Bacterial. 40, 407

(1935); P. C.Nowell, Science193, 23 (1976); D.Douer et al., Br, J. Haematol, 49,615(981); B.G. Nee1, W. S. Hayward, H. L. Robinson, J;Fang,S. M. Astrin, Cell 23, 323 (1981).

65; D. V. Fournier et ai.iCancer 45,2198 (1980); N.Hayabuchi, W. J. Russell, J.Murakami, ibid.52,1098 (1983).

66. G. W. G. Bird,-J. wingham, M. J. Pippard, J. G.Hoult, V. Melikian,Br.J. Haematol, 33, 289(1976); P.'M, Ness, G. Garratty, P. A. Morel, H.P. Perkins, Blood 54,30 (1978),

67. A F: R.Rahman andBv Mi Longenecker, J.lmmunol, 129, 2021 (15182); S. Metcalfe, R.J.Svvennsen, G. F. Springer, H. Tegtmeyer, J.lmmunol. Methods 62, pM8 (1983):

68.M. K. Robinson and Gi.F. Springer, Proc.Am.Assoc. Cancer Res., in press.

69. I thank.M. Dwass, Northwestern University, forthe statistics. This work benefitted from thecontributions of" my colleagues; their namesappear in the reterences.J owe special gratitudeto E. F. Scanlon, P. R. Desai, W. A; Fry, and H.Tegtmeyer.l thank M. J. Cline, E. R. DeSombre, ,Po Heller, W. H. Kirsten, S. E. Krown,R. D. Owen, and 1. Rosenblum for criticism: Ithank Evanston Hospital's physicians for continued encouragement to study their patients.. Idedicate this article to Heather Margaret Springer, nee Blight, who lived from age 48 through 54with metastases from bilateral breast carcinoma.Her courageous participation in investigation ofunknown immunological territory and her painstaking clinical observations remain. an enduringobligation. Support was provided by grants CA19083and CA 22540 from the NationalInstitutesof Health and by the Julia S. Michels Investigatorship.

National R & DPolicy:An IndustrlalPerspective

Roland W. Schmitt

the performance of basic .research andthe training of research manpower. The'distraction is.especially .great if Washington pays toomuch attentionto the.growing number of calls for the government totake over the job of .selecting and .supporting. R &.D programs aimed at cornmercial results.

The Federal Role

Industrial )olicy has become one ofthe hot. issues on our national agenda,with various advocates telling us how tobeat the Japanese and solve the problems of unemployment"infiation',andindustrial stagnation ,The 1984 pres~den*

tial candidates are picking up these ideasand testing theIll.

Industrial policy has many cornponents-c-fiscal; monetary; and regulatory,for example. It touches on many .areas,from international trade to retraining thework force. I can bring my expertise toonly One corner of this 'many-sided subject; research and developmentpolicy.To me, industrial policy means what thegovernment Illust?otq shape our nationalindustrial posture', and a clear understanding of what governmentshould notdo.

There has been 00 lack of proposals.Bills put before Congress in recent yearshave called for such changes as the es-

The author is senior vice presldent.cCorporateResearchand Development, General Electric Comeparry, Schenectady, New York 12301. This article isadapted from his keynote speech at the NationalConference on the Advancement of Researchc-SanAntonio, Texas, 10 October 1983.

1206

tablishment of a National TechnologyFoundation,or a Cabinet-level Department of Trade and Industry; the selectionofa National Commission. on "Technological 'Innovation and Industrial Modernization to tell us ','what the~c?n~mic,educational, and industrial priorities ofth~ 1JhitedStatesoughttobe' ;,'lriesidentialProgram for the Advancement ofScience-and Technology; and a .Coll1missionon High Technology and Employment Potential. Another proposal wouldestablish a government program to ,con*duct research and development on improved manufacturingtechniques;,'oth;.ers would exempt joint research:. anddevelopment efforts from the .antitrustlaws.

All these proposals to aid U.S. R& Dsho:wa healthyandencQuraging'concernabout the state of American industrialtechnology, but they may at the sametime distract politicians and policy-makers from the most important need,and themost Important step thatgovernment cantake to strengthen U.S. innovation. Thattask is toensufeand strengthen 'thehealth of our university system-e-m. both

In the commerciaLR & Darea thereare some things that. government mustand can do, and other things it cannotand should not do. Government has acrucial role to play. in creating favorableconditions for commercial innovation,but not in actually producing those innovations. There are several reasons forthis.

First; successful innovation requires aclose .and intimate coupling between thedevelopersof a technology and the businesses that will bring products based onthat technology to market and are themselves in touch with that market; This isessential. in a diversified company, andeven more essential in a complex anddiversified economy. The R&D peoplemust ..comprehend .• the..strategies ,of thebusiness as well as know what the market constraints are. and what the competition 'is up to .. Th~ business people, illturn, must understand the capabilitiesand limitations of the technology. Theymust .possess thetechnicalstrength tocomplete the development and believestrongly enough in the technology's potential to make the big investment needed to bring it to market.

SCIENCE, VOL. 224

--_._----~""---------

Il7

Pressure for Pat~nt Reform ..

ees in small companies with initially lowturnovers (or profits). The budget pro-.posed in mid-March brings Britishpolicyin this area more in line with that in theUnited States, however,

On the other side of the coin has beena grtater wuungness to COIIibiBe public

· , Camb~idge,Engl~nd, British scieI1tis{s:;c'~~~~~d t~'at differe'nc'~'~c'~n~:~atentlaws between Europe and the United StatesgiyeU.S.companie~apotential'advant~ge' .ill',the,:commercialization:qf:bi?technology, ','Und~t .European'patent ,lawstas.cientific discovery' cann()~,,',be.patented,once:it','~as beenpublished intheiopen literature or eYen~:ferredto in public debate. In'\contrast~'llp~O·1:yearis allowed after~~~Ii~,~ti,?~f?r, a p~te~t:a,J):pHc~~~6n to

<be filedjnt~e United States. C.; i ·\'·T';iT; ·"1 believe that the greatest inhibitory influence on acl0seLworkil1g:{:)YrelationshiB·bet~een,academic, and ;iI1dllstrialscientists;and:,t~e,:\~reatest. , 'managemelltPro~lem for people like me, comes from this busi~ssofprior

-: .disclosure.Y'says Sydney Brenner, direst~rofthe.y.K Medical.Research. Council's Laboratory of MolecularBiology in Cambridge, E?glandC

Therehaslo?ssbeen'an awareness 0.rthis~isprepancy,particplar!y:amongpatent officers on ~oth sides of the Atl~ntic,but until no"" II? serious;:pressure,for,chang~" Large corporatibl1s,/ill'~articulat;o~ten'\\r~lc,()ifle:being':;:

:. able to scan the scientific literature forne",,(and ~npatented)ldeaswhileemploying patent attorneys to keep aclosewatch on the proposed publications of their ownscientists. They tend to argue that they filldJittl"""rong

.• with the current system. Robin Nicholson,chiefscientific adviser!o theBritish Cablnei, claims that "no one brought-the ·'issue'to out",atte'ntlon'"when his office was preparing a recently published set ofrecommendationsfor changes in the British patentIaw, and expresses some doubt over

:whether change is really necessary.. ..... .: •..•Among smaller companies. however.fhesituation is seen differently; "in

this field, the .l-year grace period afterpublication gives the. Americans a·considerable competitive advantage" says Gerard Fairtlough, chief execu'tive ofCelltech: "I feel that Europe should have the same system:"

Although admitting that biotechnology patents can frequently be success. fully challenged by sufficiently motivated competitors, such companies also

argue that patent rights are seen as crucial assetsby potentialinvestors.Brenner also ,argue~ that it would ease the management problem in 'basic

.research laboratories such as his~aswenastaking,some'ofthe:pressure off:mdividualiscientists-c-by removing th.e"irnmediate' conflict-between theprofessional demands for fast publicatfonand the commercialdem~ndsof·

patent application. "Patents could-be the currency of the interaction:,'between r~s·e~chscientistsand,industry'~says .Brenner.. '~At Jhe,niomentcthey arejustaburden." . .. •.••

Change will not come easily. Friedrich-Karl Beier.rdirector-of the.MaxPhmckClnstitutefor Foreign and International Patent Law in Munich, andlong a campaigner-in favor of a 6-month grace period in Europet?bring it

•more in line with the United States,points out that this woulcnowrequirean internationallyagreed change in t~<EuropeanPatent Conv"ntion. "Todo this, it Will mean finding sufficient support within the whole Europeancommunity.vsays .Beier.· However,' he has already,convinced:lh'e'lnterna.tional.Associationfor the Protection of Intellectual.Propertyto endorse the'ideal and suggeststhat there maY:bea,g~?~r~l:[}1:~v:~,~nthis dir:C~ion"withinthe next 2 or 3 years," ••....;..>... ..:" '..

· Some British go~ernment officials point out that a grace period wouldhelp avoid situations-such. as ·tha!:,,,,,hich'()~curred'with'~mo?oclonal

antibodies in the, mid~1970's-s-where.the .commercialpotential.of a discovery is only realized. after it has been»)~blished,',and,when it 'can no' longer,under the present system, be patentedj~theUnitedKingdom,~D.D,

as well as general, increase the pressurefor 'university scientists-and universities in general-to look elsewhere forfinancial support.

A second factor until now has been thetax, structure, which has made it moredifficult to offer stock options to employ-

first commercial successes, criticism of'its deal with the MRC shifted from thepolitical to the industrial community.Both large and small companies complained at being locked out of access toMRC's research. "The academic excellence in places like the MRC should betreated as a :nationalresource and thegovernment should. be providingeven~

handed access to it, " says Chris Keightley, managing director of one of thenewest and most active small biotechnology companies on the British scene, 10(Bio) Ltd. in Cambridge.

The main product of Keightley's company, set up in 1981 by Acorn Cornputers and recently recipient of a $1.2-million investment from Rothschild's BIL,is a technique for improving the sensitivity of enzyme-based diagnostic tests. Itis based on the research of a scientistwhose work was not supported by theMRC, Colin Self of Cambridge University's biochemistry department.

Given the growing pressure to encourage similar initiatives, the MRC has recently renegotiated its licensing arrangements with Celltech. The company willretain first option to developments infields in which it has already started todevelop products. In other fields, howfever, it will now have.1.0 become a com-

etitive Dlaaer, lor the MRC is setting upn industrial liaison office '.to distributeicenses more widelvmong companies

interested jnfurriing its research intoIcommercialprodlrcts.

The new arrangements have met withgeneral approval in both the industrialand academic worlds. Sydney Brenner,director of the MRC's laboratory inCambridge, says that at the beginning"there is no doubt that in terms of goodwill, theMRC connection was a majorasset to Celltech.". Since then, however, the laboratory

has been receiving an increasing numberof direct approaches from industry. "Inthe past, we have had to tell them to goaway, since the first options on researchin the defined fields had to be offered toCelltech. Now we no longer have to doso,"

Brenner and other British scientistspoInt out that mel e 41C so" etal differences between the United Kingdom andthe United States in the factorSatrectingthe growth of links between the academic }5lOmedlcaI researcn community andthe private sector.

One is a greater reluctance on the partof. BrItIsh academiCS to get lO¥oIved inthe process of transferring research results from the laboratory -a ..traditionw~:~.ich is admittedly changing -as cuts ingovernment suppOrt for (he UOIversities

13APRIL 1984

perspective; the Department of Energy 'sprogram -expense for-just one .unproved,highly speculative 'energy technique,magnetically contained -fusion, Was $295million in 1982-alone.-,We face the sameproblem in several other crucial areas ofuniversity research. This is particularlytrue of engineering rcsearch-c-fundamental research in such areas as softwareengineering, automation, machining systerns, materials engineering, .and cornputer-aided engineering techniques.

The crucial distinction again .is -be'~tween support of the underlying research~the job that the government should bedoing) and support of efforts aimed directly at generating products (the job thegovernment should stay; away from).Some of the bills before Congress do notclearly make this distinction. Consider,for example, the calls for governmentsupport of R&D in manufacturing technology. If a program for conducting theunderlying research at universities is tobe established, I will support it wholeheartedly. ,But when programs to produce more efficient manufacturing technologies iare proposed.vI worry thatsomeone has ignored the differencebe- .tween broadly relevant research and thejob of selecting specific technology targets for new, products and" processes.And when anyone proposes conductingresearch utilization activities .to encourage widespread adoption of these technologies, then I have serious reservations.

In the technology of controls, for example, fundamental theoretical advancesare needed to catchup with the speedand power of microelectronics. Suchwork should be strongly supported at

'universities. But the job of putting research to .work .inv.say, robots-or machine tool controls for commercial markets should, be addressed by privatecompanies.

Some may be concerned that with somuch emphasis .on support, of academicresearchin fast-rnovingareasvsuch asmicroelectronics,' and computerscience,the needs oLcore industries, .such asautomobiles, and steel, will be neglected.That is,not •• so; The',increases inefficicncy needed by these industries .will beprovided much more by some of thesefast-moving-areas. than .by advancesinthe ,core,technologies." These industries ,tooc are.dependent.on strong universityresearch in the fast-moving areas. Moreoyer, these, industries suffer from a lackof investment in already available technology. Giving them new technologywithout the corresponding investment touse that technology is hardly likely toimprove their plight.

15JUNE 1984

Immigration Policy

Another policy issue that strikes at theheart of our universities, yet is rarelydiscussed in the context of R&D policy, is immigration-policy, --In 1982,," asmany foreign students received engineering Ph.Dv's in ouruniversities as didAmerican students. Some regard theseforeign students as a problem, and thereeven have been proposals to reduce theirnumbers. But the real problem is that notenough Americans "are entering doctoralprograms. The solution is to encouragemore of our students, through adequately supported graduate fellowships, to goon to graduate studies. What is clearlynot a solution is to force foreign studentsto leave. They are'an important resourcefor our country. They account for adisproportionately, large portion of'.ourskilled manpower in the fast-moving.areas of science and technology. They arenot taking jobs away from Americans.They are filling a void and advancingU.S. science and technology. Historically the United States has benefited immeasurably- from "opening .our ,doors toimmigrant scientists and engineers. Ineed only mention such greats, as Steinrnetz, Alexanderson, and Giaever , atGeneral Electric; Tesla; Zworykin,andIpatieff at other companies; .and Fermi,Debye,Mark, and many others at Arricrican universities.Yet current laws createobstacles for foreign scientists who seekemployment here. If weare truly concerned about enhancing U.S. industry'scapability to do R&D, we should easethe regulatory barriers to hiring foreignborn students, especially those trainedinthis country. Proposed amendments tothe Simpson-Mazzoli immigration billnow before Congress would do exactlythat. Unfortunately, for reasons .thathave nothing at all to do with science andtechnology, that bill is now stalled in theHouse. The critical.role that foreign scientists play, in the United States must beaddressed directly" rather, than, as.ianafterthought to a bill intended to dealwith the problem of illegal, and largelyunskilled, aliens.

Technology Leaks

A related national issue also directlyaffects the health of our universities: theproblem of leakage of technologyto theSoviet Union. In an attempt to stop thatleakage, the Department of Defense andthe Department of Commerce, proposedregulations that would prevent foreignnationals from taking part .: in advancedmicroelectronics research in universities

and industry. This isintendedasjustafirst step. In the long run the two depart'ments are proposing to imposethesamerestrictions on virtually all fast-movingareas of advanced technology considered.to be militarily ·critical.

There is no question that we must do abetter job of preventing the Soviets fromacquiring our technology, but such regulations are .overkill. The Defense andCommerce Departments propose tochange the export control regulations inways that would sericusly -disrupt thenature of scientific discourse in U.S.universities and industrial R&D laboratories, No doubt some technology doesleak to the-'Soviets· in ,the-course ·of ouropen scientific discourse. .But by-theAdministration's own account, this is' avery small part of the problem. It iscounterproductive to impose such majorrestrictions, onU.S;'science and technology for such a small part of the problem.Again, foreign -scientistsplay a criticalrole in most of our important areas ofscience' and technology. Deny them access to these areas of research and -wewill do far more to damage our technological capabilities than .any of the proposals being made in the name of industrial policy will do to help.

Conclusion

National R&D policy today poses,both risks and opportunities. The excitement and attention tnat proposals forindustrial R&D policy have generatedthreaten to distract us from the federalgovernment's most important tasks.Weneed to go back to the basics: We need toremind ourselves of what it is that the,government can and,cannot do, and what \it is that industry can.and cannot do;

In summary, I want to suggest fourspecific guidelines for federalR& D policy: (i) concentrate direct . support onacademically based: research, not. ongovernment-targeted industrial R&D;(ii) concentrate on sunrise science andtechnology, not on sunrise industries andproducts; (iii)concentrate on strengthening the climate for privatelybasedinnovation, .. .not .ongovernment-selected innovation; (iv) concentrate on development '" for the' .government's own needs,not on development for market needs, Ibelieve that these simple guidelinesmany of which we have followed withsuccess in the past,some of which wehave violated with pain-will go a longway toward greatly strengthening andrejuvenating the 'dynamic innovativepowers of our' American system of research and development.

1209

Boom Time for British Biotechnology?Venture capital is now flowing into small companies and the government

is encouraging the commercialization of university research it funds

and gained with it a seat on the board ofthe company.

Like similar companies in the UnitedStates, Celltech has actively sought collaboration with larger companies withbroader industrial interests or specialmarketing skills. A joint venture waslaunched last year with Britain's largestpharmacy chain, Boots, for example, todevelop the application of monoclonalantibodies to new diagnostic products.And a technology licensing agreementhas been signed with the Japanese company Sankyo to develop tissue plasminogen activator and calcitonin.

Fairtlough says that Celltech, with acurrent research staff of about 120 scientists and technicians, does-not at presentshare the ambitions of companies suchas Genentech to grow into a major corporation. However, with a number ofclearly defined product lines, each in apotentially large market, "We could betalking about a turnover of hundreds ofmillions of dollars in a few years."

Celltech is already earning profitsfrom a reagent for the purification ofinterferon and has recently created aCulture Products Division Which, basedon techniques developed with direct government funding, already claims to bethe world leader in the in vitro bulkproduction of monoclonal antibodies.

One reason for Celltech's early sue,""ess is a unique-and in some quarters'highly controversial-agreement withBritain's Medical Research Council(MRC), unc\erwhich-the-<:ompiiriywasinitiallygiven first option on the rights toall results produced in the fields of genetic engineering and monoclonal antibodies in the council's laboratories. Theseinclude the prestigious Laboratory ofMolecular Biology in Cambridge.

This arrangement was approved by the'conservative government over the oppo

ition of officials in the Treasury, whoelt it wrong that one company should beranted exclusive access to what wasonsidered public property. One factorn the decision, it is widely rumored, washe failure in the late 1970's to take out aatent on the technique for producingonoclonal antibodies, which was first

eveloped in the MRC's Cambridge labratory. Giving Celltech exclusive rightso MRC's work might avoid such lapsesn the future.

When Celltech started to register its

SCIENCE, VOL. 224

ter A. Laing of Biotechnology Investments Limited (BIL), a venture capitalfund set up by merchant bank N. M.Rothschild in 1981 and chaired by aprevious top government science adviser, Lord Rothschild. ElL is said to be thelargest biotechnology-oriented venturecapital fund in the world. Partly due tothis recent flow of venture capital, Britain now has more small biotechnologycompanies than any of its Europeancompetitors.

The government's willingness to letthe commercial and industrial communities act as the seniorpartner in its effortsto boost biotechnology research and developmenthas played a large.'art in both,

the establishment and subsequent operation of Celltech. The company was setup in 1980 primarily at the initiative ofthe National Enterprise Board, a government body recently amalgamated intothe British Technology Group. Althoughinitially providing 44 percent of Celltech's start-up capital, with the four remaining stakes of 14 percent each divided between a group of financial andindustrial institutions, the governmentalways intended to hand over its share toprivate enterprise. It moved inthis direction last year when Rothschilds' venturecapital company-previously criticizedfor not investing its funds in any Britishbiotechnology company-bought out aproportion of the government's ·stock

London. After a relatively slow start inthe late 1970's, Britian's biotechnologyindustry is beginning to pick up speed.Government officials. academics and industrialists all claim that a recent reportfrom the U.S. Office of Technology Assessment (O'TA) was excessively pessimistic in its claim that Britain lacks the"dynamism" to produce. serious competitors to American companies. Theyalso contest the OTA's conclusion thatBritain ranks second behind West Germany among European nations.

"I think that conclusion is completelywrong, particularly if you take the combination of the science and its applications into account" says Gerard Fairt-

. .iough, chief executive of Britain's princi••-pal biotechnology company, Celltech,

which is currently riding a crest of investor enthusiasm.

British industry has benefited fromvarious formsof direct government support for biotechnology. Many smallercompanies, for example, have madegood use of consultancy grants andotherspecial funds offered as part of a $24million. biotechnology package launchedby the Department of Trade and Industryin November 1982. Other industrial initiatives in fields such as fermentationtechnology have been successfully catalyzed by the Biotechnology Directorateof the Science and Engineering ResearchCouncil (SERC).

According to Robin Nicholson, chiefscientific adviser in PrimeMinister Margaret Thatcher's Cabinet Office, broaderpolitical changes must also share thecredit. "The policy of the governmentsince 1979 has been to free restrictionsand to remove barriers to enterprise,"says Nicholson. "The relatively healthystate ofhiotechnology in the U.K. seemspartly to reflect the success of thosepolicies...

He picks out, for example, efforts toencourage Britain's venture capital market-now considered the second largestin the world after the United States-through developments such as the Business Expansion Scheme,,,which allowsndividuals to write off against taxan

investment of up to $60,000 in a smallcompany.. nrovided the money is left infor up to 5years.

"The Business Expansion Schemewas the first real fiscal change in smallcompany funding for 50 years" says Pe-

136

Summary. An analysis of how the government can and cannot use research anddevelopment policyto improve the nation's industrial posture suqqests four guidelinesfor federal R&D policy: (i) concentrate direct SUPPQrt on academically basedresearch, not on gQvernment-targeted industrial R&D; (ii) concentrate on sunrisescience and technology, not on sunrise industries and products; (iii) concentrate onstrengthening lhe climate for privately based innovation,notQngovernment-selectedinnovation: (iv) concentrate on development for the government's own needs, not ondevelopment for market needs.

Second, innovation works best ifthisclose coupling .is in place during .theentire innovation process. It should existwhen the R&D project is identified andshould continue through planning anddevelopment. .It must survive the inevitable adjustments during development,caused.iby .shittingmarket constraintsarid technical 'Surprises. It must withstand the decision points-i-when to goahead or when to quit.

Finally; .in a free-enterprise system,governments not only do notcreate themarkets for products but are.notoriouslyslow in reacting to shifts in the marketplace. They lack the crucial entrepreneurial spirit toperceive or acknowledgeopportunities early in theirdevelopment.

During the years 'of heavy governmentinvolvement in energy R & D,we usedto hear over and over again the expresSIOns ,\'technology transfer." .and':commcrciahzation.v Those terms embodiedthe-notion.that .once· a technology-wasdeveloped by a government. contractoror a natIOnaIlaboratory,the technologycould.then sornepQW be transferred toth~etplace.and commercialized.

That did not happen for a simple reaon. Technology" transfer is. nota sepa-

rate processoccurring downstream fromR. & D. The user and the performer oftargeted R &D need to have establisheda,dose relation before, there .is,anythingto transfer.

In energyR & D, there were .sornewho fell-into the trap of thinking that ifthey got a concept defined, the technology to 'work, .and .someone to produce .afavorableeconomic analysis, then cornmercialization would follow. They forgotto find out whether the customers wouldbuy the product. The result was a misdi

.rection ofeffort and money into technologies that never had a chance of cornmercial success.

Even in.agriculture.iwhere the UnitedStates, has a great history of innovation,underlying" research .on .• corn geneticswas performed·at university researchstations and largely supported by government. '•. But private ,seed companiesconverted that researchinto hybrid cornproducts.

A dose relation between the User andthe performer ofR'& D cannot, in general;· form when govemmentselects com>rnercial R &-Dtargets.'Instead, the g()V M

ernment ends up being a third partyone that .. knows a great deal less -aboutthe technology than the developer and agreat deal less about the market than theuser.

As an example,there are-proposalsthat the government fund R&D in manufacturing technology, in such applica-

15'JUN'E1984

tion areas as programmable automation,robotics, advanced sensors, and computer-aided design and manufacturing. Partof this funding is to support R&D workto be done by industry.

These are key technologies for thefuture .but, because .they are soimportant.ia large and growing number ofcompanies are already addressing-them.General Electric is investing millions ofdollars in each of them. And, in eachone, we are faced withalarge number of

tough' competitors-i-foreign firms andU.S. firms, established firms and newventures, joint ventures and industryuniversity cooperative programs. In justone corner of computer-aided design; forexample, the field of solid modeling, weare competing against at .least a dozencapable firms-established giants,smaller rivals, and newer ventures.

It is simply not plausible for an administrator' in .Washington-c-even with thehelp of a blue-ribbon advisory panel-i-topick the winning solid-modeling productbetter than the dozen firms slugging itout in the marketplace. And even 'ifgovernment could, pickthe winnerv thatis only the first step. The suppliers of thefunds, the performers of the R&D, andthe businessmen who deal with thecustomers have to tie them.selves together ina long-term relation, A'governmentfunding agency', cannot '. create that: kind ofrelationship.

There .isv however, one important exception, It occurs when the governmentis. the customer, for .Innovation-c-as ..·· indefense R & D.Governmentshouldconcentrate its development efforts onthese needs of its own; Ifhistoryis artyguide, it will thereby also generate prod:ucts and technology that can be tappedfor commercial uses.

The government has clear needs in thearea ofsupercomputers for weapons research.cryptanalysisvweather forecasting,economic modeling, the design ofimproved airfoils and, projectiles, andmany other uses. By meeting its needs insupercomputers, the government willalso be sponsoring the development of aproduct that 'has' many valuablecivilianuses, such as' improved oil exploration,

better understanding of crack formationand propagation -in alloys, new techniques in computer-aided engineering,and the design of new materials based ontheoretical principle's. The supercomputer is a prime example of a technologyin which the government should take thelead.

In very. large scale integrated circuits(VLSI) the government will also be amajor customer and thus has a major 'rolein. sponsoring development work. One

emerging opportunity is in the area ofinference chips-VLSI implementationsof intelligent electronic- systems thatwork in real timer basedon.custom chipsrather than 'computers. 'Thes'e inferencechips could be used in military systems,for example, to help the pilot of an F-18with an engine hit by shrapnel make thebest use of'.the 3:6 seconds he has inwhich to decide whether he can limphome or shouldbailout:

Inference chips will also have greatvalue in many.commercial uses, such asin creating three-dimensional. computeraided' design' images in real time and inhelping smart robots plan their paths,Again, by meeting' its' own developmentneeds, the government may advancetechnology that can be used in cornmercial innovations. When the' governmentis 'not thecustomer, government selection of.developments is unlikely-to promote such innovation and economicgrowth.

Competitton: from Japan

At this point;' Lwould expect somepeople to be thinking about the Japanese. Did their' government bureaucracynot. pick the commercial technicalwin~ners and put moneybehind them? No, itdid not. At the heart of that question is amisunderstanding 'about the Japanesegovernment's Ministry of InternationalTradeandIndustry (MITI). The popularpicture depicts MITIas selecting targetindustries, picking out the technologicaldevelopments they need, establishing aconsortium of Japanese 'firms, and SUP""porting the commercial R & Dneeded

1207


is encouraging the commercialization ofuniversity research it funds



Fairtlough says that Celltech, with acurrent research staff of about 120 scientists and technicians, does not at presentshare the ambitions of companies suchas Genentech to grow into a major corporation. However, with- a number ofclearly defined product lines, each in apotentially large market, "We could betalking about a turnover of hundreds ofmillions of dollars in a few years."

Celltech is already earning profitsfrom a reagent for the purification ofinterferon and has recently created aCulture Products Division which, basedon techniques developed with direct government funding, already claims to bethe world leader in the in vitro bulkproduction of monoclonal antibodies.

One reason for Celltech's early sue-less is a unique-and in some quarters

'highly controversial-s-agreement withBritain's Medical Research Council(MRC), under which the company wasinitially given first option on the rights toall results produced in the fields of genetic engineering and monoclonal, antibodies in the council's laboratories. Theseinclude the prestigious Laboratory ofMolecular Biology in Cambridge.

This arrangement was approved by theConservative government over the oppoition of officials in the Treasury, whoelt it wrong that one company should beranted exclusive access to what wasonsidered public property. One factorn the decision, it is widely rumored, washe failure in the late 19iO's to takeout aatent on the technique for producingonoclonal antibodies, which was firsteveloped in the MRC's Cambridge labratory, Giving Celltech exclusive rightso MRC's work might avoid such lapsesn the future.


SCIENCE, VOL. 224

eel/tech chief says orA misjudged Britain.

the establishment and subsequent operation of Celltech. The company was setup in 1980 primarily at the initiative ofthe National Enterprise Board, a government body recently amalgamated intothe British Technology Group. Althoughinitially providing 44 percent of Celltech's start-up capital, with the four remaining stakes of 14 percent each divided between a group of financial andindustrial institutions, the governmentalways intended to hand over its share toprivate enterprise. It moved in this direction last year when Rothschilds' venturecapital company-previously criticizedfor not investing its funds in any Britishbiotechnology company-bought out aproportion of the government's stock

ter A. Laing of Biotechnology Investments Limited (BIL), a venture capitalfund set up by merchant bank N. M.Rothschild in 1981 and chaired by aprevious top government science adviser, Lord Rothschild. BIL is said to be thelargest biotechnology-oriented venturecapital fund in the world. Partly due tothis recentftow .of venture capital, Britain now has more small biotechnologycompanies than any of its Europeancompetitors.

The government's willingness to letthe commercial and industrial communities act as the senior partner in its effortsto boost biotechnology research and developrnentbas played a large part in both

Gerard Falrtlaugh

London. After a relativelyslow startinthe late 19iO's, Britian's biotechnologyindustry is beginning to pick up speed.Government officials, academics and industrialists all claim that a recent reportfrom the U.S. Office of Technology Assessment (OTA) was excessively pessimistic in its claim that Britain lacks the"dynamism" to produce serious competitors to American companies. Theyalso contest the OTA'8 conclusion thatBritain ranks second behind West Germany among European nations,

"I think that conclusion is completelywrong, particularly if you take the combinationof the science and its applications into account" says Gerard Fairt

.lough, chief executive of Britain's principal biotechnology company, Celltech,waich is currentlyriding a crest of inveslor enthusiasm.

British industry has benefited fromvarious forms of direct government support for biotechnology. Many smallercompanies. for example. have madegood use of consultancy grantsand otherspecial funds offered as part of a $24million biotechnology package launchedby the Department of Trade and Industryin November 1982. Other industrial initiatives in fields such as fermentationtechnology have been successfully catalyzed by the Biotechnology Directorateof the Science and Engineering ResearchCouncil (SERC).

According to Robin Nicholson, chiefscientific adviser in Prime Minister Margaret Thatcher's Cabinet Office, broaderpolitical changes must also share thecredit. "The policy of the governmentsince 19i9 has been to free restrictionsand to remove barriers to enterprise,"says Nicholson. "The relatively healthystate of biotechnology in the U.K. seemspartly to reflect the success of thosepolicies."

He picks out, for example, efforts toencourage Britain's venture capital market-now considered the second largestin the world after the United Statesthrough developments such as the Business Expansion Scheme.o;;;",which allows\ndividuals to write off agaJDst tax-aninvestment of up to $60,000 in a small,company. e!:2vided the money is left infor up to 5 years.


136


is encouraging the Commercialization .. of university research it funds


Like similar companies in the Uri'itedStatesv Celltech has actively sought collaboration -with larger,;;ompanies, withbroader industrial interests or specialll1arketing skills,/\ joint venture' \\laslaunched last year ¥lith, Britain's largestpharmacy chain, Boots,; for ,exall1ple, todevelop the application of monoclonalaWibodies to new diagnostic. ,products.And, a technologyIicensingagreememhas been signed:,\¥ith th~Jap,anesecompany San~yo todevelop tissue plasminogen activator and calcitonin.

Fairtlough says that Celltech, with acurrent research staff ofabout J20 scientists and technicians, ,?qespo,t,at prese:_rits~are .the ambitions.of_:c?ll1P~nies, suchas Genentech to grow into .a major corporation., Howe"er, ,with 'a,:number ,ofclearly defined product 'lines,' each, in apotentially large market, "We could betalking about a turnover of hundreds ofmillions ofdollars in a few years."

Celltech is already earning profitsfrom. a reagent forfhe purification. ofinterferon and has recently created aCulture Products Division which, basedon techniques.developed with direct gove~Ilrnent funding, already claims to. bethe world leader in the in vitro bulkproduction of monoclonal antibodies.

One. reason for. Celltech's early sue,)ss isa unique-i-and in some, quarters'highly controversial--:agreement . withBritain's Medical Re~earch Council(MRC), under which be. companY)"iWinitially given first option on the n:grts:;.'t<.lall results produced in the fields of g!',IW,ticengineering :and mOllodol1al, ~?ti'bod-:iesin the council's .laboratories.. Theseinclude" the prestigious Laboratory ofMolecular Biology in Cambridge,

This arrangement was approved by the.conserv~tiv~.governrnentover the opp~

ition of officials' in the Treasury, whoelt it wrong that one company should be .rantedexcltlsiye acc~ss to what wasonsidered public property. One factor

n the decision,it is widely rumored, washe failure in the late 1970's to take out aatent on the technique for producingonoclonal antibodies, .which. was firsteveloped in lhe MRC's Cambridge labratory, Giving, Celltechexclusive rightso MRC's work might avoid such lapsesn the future.


SCIENCE, ·YQL. 224

Gerard' Fairtlough

Celltech chief says OTA misjudged Britain.

ter A.• Laing of Biotechnology Investments Limited (BIL), a venture capitalfund set up by merchant. bank N. M,Rothschild in 1981 and chaired by .aprevious top government science adviser, LordRothschild. BIL is said to bethelargest biotechnology-oriented "venturecapital fund in the world, Partly due tothis recent_ flow, of venture capital, Britain now has more small.biotechnologycompanies than any 'of its Europeancompetitors.

The government's willingness to letthecommercial and industrialcommunities act as the senior partner in its, effortsto boost.biotechnology research and development has played a large part in both

the establishment and subsequent operation" of, Celltech. The company, was setup in 1980 primarily 'at the initiativeofthe National Enterprise Board, a governmenrbodv recently. amalgamated .intothe British Technology Group. Althoughinitially providing 44 percent of Celltech's start-up capital, with the four remaining stakes of 14 percent each divided between' a group of financial andindustrial institutions, the goverpmentalways intended to hand over its share toprivate enterprise. It moved in this direction last year when Roths,childs' veIit~recapital company-eprevicnsly criticizedfor not investing its funds in any Britishbiotechnology company-e-bought .out. aproportion of" the government's stock

London. After arelatively slow start inthe late 1970's, Britian's biotechnologyindustry isbeginning to pick up speed.Government ofljdals,acad~micsand industrialists all clairn that a recent reportfrom the U,S, Office of Technology As"sessment to'l'A) was excessivelypessimistic in its claim that Britain lacks the"dynamism" to produce serious cornpetitors to American companies. Theyalso contest the OTA's conclusion thatBritainranks second behind West Germany_amongEuropean nations,

"I think that conclusion is completelywrong, particularly if you take the combination -of the science and itsapplicationsIntoaccount" says Gerard Fairt-

)\;~~orq;h,l chief executive of.Britain' sprinci+jlPall,iotechnology .company ,Celltech,

'?"~chis;~~rrentlyriding a crest of inves',{orenthusiasm.

British industry has benefited fromvarious forms ofdirect government support for biotechnology, Many Smallercompanies,' for' example, have madegood use of consultancy grants and otherspecialfunds offered as part of a $24million.biotechnology package launched1Jyt~.~Departmentof Trade and Industryin1)lilv"mber 1982. Other industrial ini

:Ctia.ti\r~esiQ;fields, such as fermentation. -,' _i>:, '-'::/,1 :'" .. '.

fechl'l"lqgy have been successfully catalyzed by the Biotechnology Directorateof the Science and Engineering ResearchCouncil (SERC).

According to Robin Nicholson, chiefscientific adviser in Prime Minister Margaret Thatcher's Cabinet Office, broaderpolitical changes. must .also share thecredit. :,,"ThepolicY,of the governmentsince 1979 has been, to free restrictionsa[l~ toremove 'barriers to "enterprise,"says Nicholson. ' 'The relatively healthystate of biotechnology in the U.K seemspartly to reflect the success of thosepolicies."

He picks out l for example, efforts toencourage Britain's venture capital market-i-now considered the second largestin the world after the United States-

~thr. o.u,.g.h.. d.e.. v.• elopm.•.• e•.• nts .su..•ch .a.s the.BU.•s••. i-.ness., Expansion, Sl:heme,~which 'allowsindividuals to write off agaiosJ: tax.....aninvestment of up to $60,000 in a small

omnanz, provided the money is left in• for upto 5 years, .

"The Business ,Expansi()n, Schemewas the, first real fiscal change .in smallcompany, funding for 50 years" saysPc-

136


is encouraging the commercialization of university research it fundsand gained with it a seat on the board ofthe company.


Fairtlough says that Celltech, with acurrent research staff of about 120 scientists and technicians, does not at presentshare the ambitions of'cornpanies suchas Genentech to grow into a major corporation. However, with a number ofclearly defined product lines, each in apotentially large market, "We could betalking about a turnover of hundreds ofmillions of dollars in a few years,"

Celltech is already earning profitsfrom a reagent for the purification ofinterferon and has recently created aCulture Products Division Which, basedon techniques developed with direct government funding, already claims to bethe world leader in the in vitro bulkproduction of monoclonal antibodies.

One reason for Celltech's early sueless is a unique-and in some' quarters

'highly controversial-agreement withBritain's Medical Research Council(MRC), under which the company wasinitially given first option on the rights toall results produced in the fields of genetic engineering and monoclonal antibodies in the council's laboratories. Theseinclude the prestigious Laboratory ofMolecular Biology in Cambridge.

This arrangement was approved by theConservative government.over theoppo

ition of officials in the Treasury, whoelt it wrong that one company should beranted exclusive access to what wasonsidered public property. One factorn the decision, it is widely rumored, washe failure in thelate 1970's to take out aatent on the technique for producingonoclonal antibodies, which was first

eveloped in the MRC's Cambridge labratory. Giving Celltech exclusive rightso MRC's work might avoid such lapsesn the future.


SCIENCE, VOL. 224

ter A. Laing of Biotechnology Investments Limited (BIL), a venture capitalfund set up by merchant bank- N. M.Rothschild in 1981 and chaired by aprevious top government science adviser, Lord Rothschild. BIL is said to be thelargest biotechnology-oriented venturecapital fund in the world. Partly due tothis recent flow of venture capital, Britain now has more small biotechnologycompanies than any of its Europeancompetitors.

The government's willingness to letthe commercial and industrial communities act as the senior partner in its effortsto boost biotechnology research and development has played a large';:art in both,,

the establishment and subsequent opera'tion of Celltech. The company was setup in 1980 primarily at the initiative ofthe National Enterprise Board, a government body recently amalgamated intothe British Technology Group. Althoughinitially providing 44 percent of Celltech's start-up capital, with the four remaining stakes of 14 percent each divided between a group of financial andindustrial institutions, the governmentalways intended to hand over its share toprivate enterprise. It moved in this direction last year when Rothschilds' venturecapital company-previously criticizedfor not investing its funds in any Britishbiotechnology company-bought out aproportion of the government's stock

London. After a relatively slow start inthe late 1970's, Britian's biotechnologyindustry is beginning to pick up speed.Government officials, academics and industrialists all claim that a recent reportfrom the U.S. Office of Technology Assessment (OTA) was excessively pessimistic in its claim that Britain lacks the"dynamism" to produce serious competitors to American companies. Theyalso contest the OTA's conclusion thatBritain ranks second behind West Germany among European nations.

"I think that conclusion is completelywrong, particularly if you take the combination of the science and its applications into account" says Gerard Fairt-

. .Iough, chief executive of Britain's princi,1~a1 biotechnology company, Celltech,1wID.ch is currently riding a crestof invesltor enthusiasm.

British industry has benefited fromvarious fOIlDS ofdirect government support for biotechnology. Many smallercompanies, for example, have madegood use of consultancy grants and otherspecial funds offered as part of a $24million biotechnology package launchedby the Department of Trade and Industryin November 1982. Other industrial initiatives ~I! fields such as fermentationtechnology have been successfully cataIyzed by the Biotechnology Directorateof the Science and Engineering ResearchCouncil (SERC).

According to Robin Nicholson, chiefscientific adviser in Prime MinisterMargaret Thatcher's Cabinet Office, broaderpolitical changes must also share thecredit. "The policy of the governmentsince 1979 has been to free restrictionsand to remove barriers to enterprise,"says Nicholson. "The relatively healthystate of biotechnology in the U.K. seemspartly to reflect the success of thosepolicies."

He picks out, for example, efforts toencourage Britain's venture capital market-now considered the second largestin the world after the United States-through developments such as the Business Expansion Scheme,.,which allowsndividuals to write off against tax.......an

investment of up to $60,000 in a smallcompany. provided the money is left in

ifor up to 5 y~ars.

"The Business Expansion Schemewas the first real fiscal change in smallcompany funding for50 years" says Pe-

136

ees in 'small companieswith .initiallylowturnovers (or profits). The budget pro' ,posed in mid-Marchbrings British policyin thisarea morein line with that in theUnited States;' however;

On the other side.of the coin hasbeena grt'a1erwlIImgm%s to ClHnbifle public

as well as general; increase the pressurefor university' scientists-s-and universitiestin general-s-to Iook elsewhere forfinancial support.

A 'second factor until nowhas been thetax structure; which has made it moredifficult to offer stock options to employ-

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first commercial 'successes, criticism' ofits deal with the MRC shifted from thepolitical to the industrial community.Both large and smallcornpaniesicomplained at beinglocked out of .access toMRC's research. "The academic excellence in places like the MRC should betreated: as a national. resource .'and .thegovetnm~ntshouldbeproviding.even'

handed access to it," says Chris Keightley, .managing director of one of thenewest and most active small biotechnology companies on the British scene, 10(Bio) Ltd. in Cambridge.

The main product of Keightleys company, set up in 1981 by Acorn Computersand recently recipient of a $1.2-million investment from Rothschild's ElL,is a technique for improving the sensitivity of enzyme-based diagnostic tests. Itis based on the research of a scientistwhose work was not supported by theMRC, Colin Self of Cambridge University's biochemistry department.

Given the growing pressure to encourage similar initiatives, the MRC has recently renegotiated its licensing arrangements with Celltech. The company willretain first option to developments infields in which it has already started todevelop products. In other fields, howver, it will now have to become a cometitive Bidder, tor theMRC is setting up

Ian industrial liaison office .10 distributeicenses mor;e-wideIy;:>among companies

,. nterested in turning its research intoIcommercialproillicts.

The new arrangements have met withgeneral approval iil both the industrialand academic worlds. Sydney Brenner,director of the MRC's laboratory inCambridge, says that at the beginning"there is no doubt that in terms of good M

will, the MRC connection was a majorasset to Celltech."

Since then, however, the laboratoryhas been receiving an increasing numberof direct approaches from industry. "Inthe past, We have had to tell them to goaway, since the first options on researchin the defined fields had to be offered toCelltech. Now we no longer have to doso."

Brenner and 'other 'British scientistspOInt out that thele dIe sCgetai differencesbetween the United Kingdom andthe United States in the factors affectingthe growth of links between the academic DlOmedlcaI research community andthe~e-secfor .

One is a greater reluctance on the partof British academiCS to get lnyolved inthe process of transferring research results from the laboratory a ,.,traditionwhich is admittedly changing as cuts ingovernment support for the UnIversities

13 APRIL 1984


is encouraging the commercialization of university research it fundsand gained with it a seat on the board ofthe company,


Fairtlough says that Celltech, with aCurrent research staff of about 120 scientists and technicians, does not at presentshare the ambitions of companies suchas Genentech to grow into a major corporation. However, with. a .number ofclearly defined product lines, each in apotentially large market, "We could betalking about a turnover of hundreds ofmillions of dollars in a few years."

Celltech is already earning profitsfrom a reagent for the purification ofinterferon and has recently created aCulture Products Division Which, basedon techniques developed with direct government funding, already claims to. bethe world leader in the in vitro bulkproduction of monoclonal antibodies.

One reason for Celltech's early sueless is a unique-and in .some quarters

'highly controversial-agreement withBritain's Medical Research Council(MRC), under which the company wasinitially given first option on the rights toall results produced in the fields of genetic engineering and monoclonal antibodies in the council's laboratories. Theseinclude the prestigious Laboratory ofMolecular Biology in Cambridge.

This arrangement was approved by the:Conservative government over the oppo

ition of officials in the Treasury, whoelt it wrong that one company should be'anted exclusive access to what was

onsidered public property. One factorn the decision, it is widely rumored, washe failure in the late 1970's to takeout aatent on the technique for producingonoclonal antibodies, which was first

eveloped in the MRC's Cambridge lab"t~tory. Giving Celltech exclusive rightso MRC's work might avoid such lapsesn the future.

When Celltech. started to register its

;iff SCIENCE, VOL. 224

ter A. Laing of Biotechnology Investments Limited (BILl, a venture capitalfund set up by merchant bank N. M.Rothschild in 1981 and chaired by aprevious top government science adviser, Lord Rothschild. BIL is said to be thelargest biotechnology-oriented venturecapital fund in the world. Partly due tothis recent flow of venture capital, Britain now has more small biotechnologycompanies than any of its Europeancompetitors.

The government's willingness to letthe commercial andindustrial communities act as the seniorpartner in its effortsto boost biotechnology research and development has played a large part in both

the establishment and subsequent operation of Celltech. The company was setup in 1980 primarily at the initiative ofthe National Enterprise Board, a government body recently amalgamated into

.the British Technology Group. Althoughinitially providing 44 percent of Celltech's start-up capital, with the four remaining stakes of 14 percent each divided between a group of financial andindustrial institutions, the governmentalways intended to hand over its share-toprivate enterprise. It moved inthis direction last year when Rothschilds' venturecapital company-previously criticizedfor not investing its funds in any Britishbiotechnology company-s-bought put aproportion of the government's jstock

London. After a relatively slow start inthe late 1970's, Britian's biotechnologyindustry is beginning to pick up speed.Government officials, academics and industrialists all claim that a recent reportfrom the U.S. Office of Technology Assessment (OTA) was excessively pessimistic in its claim that Britain lacks the"dynamism" to produce serious competitors to American companies. Theyalso contest the OTA's conclusion thatBritain ranks second behind West Germany among European nations.

"I think that conclusion is completelywrong, particularly if you take the combination of the science and its applications into account" says .Gerard Fairt.Iough, chief executive of Britain's princi..pal biotechnology company, Celltech,which is currently riding a crest of investor enthusiasm.

British industry has benefited fromvarious' forms of direct government support for biotechnology. Many smallercompanies, for example, have madegood use of consultancy grants and otherspecial funds offered as part of a $24million biotechnology package launchedby the Department of Trade and Industryin November 1982. Other industrial initiatives infields such as fermentationtechnology have been successfully catalyzed by the Biotechnology Directorateof the Science and Engineering ResearchCouncil (SERC).

According to Robin Nicholson, chiefscientific adviserin Prime Minister Margaret Thatcher's Cabinet Office, broaderpolitical changes must also share thecredit, "The policy of the governmentsince 1979 has been to free restrictionsand to remove barriers to enterprise."says Nicholson. "The relatively healthystate of biotechnology in the U,K. seemspartly to reflect the success of thosepolicies. "

He picks out, for example, efforts toencourage Britain's venture capital market-now considered the second largestin the world after the United States-through developments such as the Business Expansion Scheme''I;:;"which allows'individuals to- write off agamst taxaninvestment of uP to $60,000 in a small~ompany. provided the money is left infor up to 5 years.


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national r dpolicy: an industrlalperspective · 53. lung disease patients with negative dthr*t had:...

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