What you need to know
'It's a knowledge-intensive, time-consuming and unpredictable industry.'
Cumbersome regulations are holding back the growth of biotechnology in Taiwan, an industry expert warns, adding that a suite of reforms proposed by the government could provide the sector with a much-needed boost and set the platform for other emerging technology industries.
The Tsai Ing-wen (蔡英文) administration, which came to power on May 20, has listed biotechnology as one of its “five innovative industries” to create jobs and help revitalize the economy. The administration plans to lift the value of the sector’s output from NT$2.16 trillion in 2015 to NT$3 trillion (US$100 billion) by 2020, according to its 2016 Taiwan Bioeconomy Development Program.
Last year Taiwan invested NT$48 billion in the biopharmaceutical industry. The sector reported revenue of NT$300 billion, up 3.5 percent from the previous year, according to data from the Executive Yuan. However, the Taiwan Institute for Biotechnology and Medicine Industry says growth in the local sector has been slow and that Taiwan is falling behind other Asian countries. The annual growth rate of Taiwan’s biopharma sector from 2007 to 2014 was 2.9 percent. During the same period, Singapore's grew at 6 percent and India 15 percent. The average growth rate for Asia was 4.9 percent.
Commentators from the public and private sectors have blamed outdated regulations as a key factor slowing the industry's development in Taiwan.
If the government is to achieve its expansion plans, it will need to relax a range of rules, including restrictions on foreign capital flows and white collar immigration, says George Yeh (葉志鴻), president of biotech firm Taiwan Lipsome Company (TLC).
TLC develops nanomedicines for the treatment of cancer and other diseases, as well as pain management. Yeh has been working in the biotech sector for more than a decade and was at a recent meeting between President Tsai and industry experts.
In an interview with The News Lens International, Yeh said the government needs to focus on deregulation.
“Biotech is different from the traditional manufacturing industry; it’s a knowledge-intensive, time-consuming and unpredictable industry. It requires capital for long-term research and the integration of talented people with different expertise,” he said.
“Taiwan should be more open to talented people and investors from all over the world. Regulations on immigration should be reviewed so foreign talent can stay longer in Taiwan. The foreign capital controls should also be changed so that more people are willing to invest in Taiwan’s biotech sector,” Yeh said.
In August, the Tsai administration announced its plans to review the Fundamental Science and Technology Act, loosen up regulations for scholars and academics to enter biotech business sectors, attract foreign talent, sign trade agreements with countries such as Japan and the U.S., and also reduce taxes for biotech companies. A suite of reforms is expected to be unveiled by the end of this year.
Yeh believes the government’s plan is a step in the “right direction,” but warns Taiwan needs to be careful about what parts of the sector it competes in.
“We should aim to focus on our core competencies and establish a regionally recognized reputation for biotechnology so that we can compete globally,” he says.
Taiwan needs to know what its advantages and weaknesses are, and focus on execution, he says. Biotech has long been touted as a potential major earner for Taiwan, but successive governments have failed to help the sector realize its potential.
“It’s not just about where you want your industry to be headed. All the competitors have the same vision of boosting growth,” Yeh says. “It’s also about taking the right actions.”
Government incentives and policies should also be used to support the sector’s growth, he says.
“The market for medicines and drugs is usually tied to government policies. For example, health insurance policies have made pharmaceutical products cheaper and helped determine the pricing and demand of drugs,” he says.
Yeh cautions that the government’s success or otherwise in revamping the biotech sector could influence other emerging industries.
“The newest industries, such as apps and e-commerce, need customized regulations as well,” he says. “If the government succeeds in the biotechnology industry, this will help a lot when [lawmakers] are customizing policies to support those other new industries.”
Biotechnology has been one of the most important recent technological breakthroughs. Businesses and researchers develop and manufacture new products and technologies through biological experiments and processes.
First Editor: Edward White
Second Editor Olivia Yang