Many countries, including the UK, aspire to attract pharmaceutical companies to carry out research on their home turf. Western governments are keen to create a highly skilled workforce as a competitive edge against cheaper labor in the far east.
Now Singapore is making inroads into this sector. Its weapon is S$3 billion (US$583 million) of government cash, which is being used to make the country biotech-friendly in the five years ending next year. The country is close to signing a deal with UK drugs group GlaxoSmithKline to set up a research house that will investigate drugs for Alzheimer's, Parkinson's and other neurodegenerative diseases.
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The number of scientists Glaxo is hiring is small relative to its British operations: about 30, compared with its estimated 6,000 in the UK. But the area of research is highly skilled and just the sort of investment Britain cannot afford to lose if it is to keep its global second-place position in biomedical research and pharmaceuticals.
Pharmaceutical firms have been manufacturing drugs in Singapore since the early 1970s, when Beecham set up a factory to make antibiotics, primarily for the Japanese market. Others soon followed, attracted by the 0 percent corporation tax that manufacturers are offered as well as the fact that English is the first language.
Growth in medical manufacturing output grew 16 percent last year to S$11 billion, and the country plans to get this up to S$20 billion by the decade's end.
Now it wants to attract the highly skilled research that the UK and US excel at, and has succeeded in luring Glaxo and Swiss-owned Novartis as well as small British and American biotechnology companies. Top scientists such as Alan Colman, who led the team that brought us Dolly the cloned sheep, and Martin Hibberd at Imperial College London are relocating there. The country is trying to create a new force in international biomedical research.
"It is an effort by Singapore to add new a growth area to the economy and complement manufacturing," said Beh Swan Gin, director of biomedical sciences for the economic development board. "Biotechnology represents the knowledge-based economy. The initiative is fundamentally about diversifying [the country's] portfolio."
So far, it has persuaded a dozen or so biomedical sciences firms to set up research operations there, including Paradigm Therapeutics from the UK and US firms Isis Pharmaceutical and Vanda Pharmaceuticals.
"Singapore is increasingly becoming a country of excellence in biomedical research; it makes sense do research out there," said a Glaxo spokesperson. "We want to be part of what is happening in Singapore in terms of bioscience."
According to the Singapore government, Glaxo intends to double its laboratory space for early stage drug development.
To drug research firms, a significant attraction of Singapore when compared to the UK is its strict law and ruthless policing. The pharmaceutical industry in Britain is under threat from animal rights activists and a "tendency to blow up scientists," according to Paul Herrling, the chairman of Novartis's new research unit in Singapore that will look at new treatments for dengue fever and tuberculosis.
Glaxo says that animal rights extremism is not a factor in its decision to go to Singapore, and that it is not shipping out the experiments carried out on monkeys and apes that attract the most outrage from anti-vivisection groups.
The main attraction is hard cash. Companies in high-tech sectors do not have to pay any corporation tax. And when research is loss-making, the Singapore government will match every pound spent with 50p in research grant, with no strings attached. It has also set up a S$1 billion venture capital fund under which the government will take a shareholding in the company in return for a cash injection, although this is most attractive to smaller biotechnology firms.
One of the downsides for companies was the small number of trained scientists in Singapore. So the government is funding 1,000 extra students to do PhDs either at home or abroad. It has built a science park called Biopolis, where the country's academic researchers are now housed and biotechnology companies are encouraged to rent office space, so that the private and public sector can interact.
The fact there are fewer workers' rights also makes the country more attractive. As one service-industry worker in Singapore remarked, "in Europe you have human rights; here we are machines." Staff costs can be up to 25 percent lower than in Britain, according to Mark Carlton, chief executive of UK drug discovery firm Paradigm Therapeutics, which has opened a research facility in Singapore.
"That makes it very favorable, you have a highly motivated workforce all being retrained in the biotech area," he says. "They live to work, basically."
Singapore has also made its rules and regulations attractive. The pharmaceuticals industry tests its potential products on large numbers of animals before it tries them out on humans.
The country has developed streamlined rules and regulations which are not as bureaucratic as those in Europe. It has also taken advantage of what is effectively a ban on stem cell research in the US by signing a deal with the US-based Juvenile Diabetes Research Foundation International to carry out such studies.
Although Singapore has made some fast leaps in the industry, it is far from the status and activities of western Europe and the US.
But could it one day rival the West to be an industry leader? "It depends how the Chinese market develops," said Mark Carlton at Paradigm Therapeutics. "Singapore is a springboard into Japan and Asia, and everyone is watching what's going on in China with great anticipation; it will be a great new outlet for drugs being developed. Singapore is a very easy nation in which to work, it is very stable, etcetera. We will have to see how the industry matures, but I see no reason why it won't be highly competitive."
Singapore insists that it is not trying to steal the industry from the west. "We only need a very small slice of the pie," said Beh. "We want to play a complementary role, and be part of the international community. The West will always remain very important research centers."
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