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Assessment of Indian Biotechnology Landscape


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The study analyses the Indian Biotechnology landscape and provides a roadmap for its future.

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Assessment of Indian Biotechnology Landscape

  1. 1. Assessment of The Indian Biotechnology Landscape An International perspective DEPARTMENT OF BIOTECHNOLOGY
  2. 2. The world is confronted with potentially irreparable changes to its climate; unprecedented exploitation of natural resources through unsustainable development paths; and social upheaval caused by high unemployment rates and record high inequality. These issues would be exacerbated by the increase in population that is expected to reach 9.7 billion in 2050, up from the current figure of 7.7 billion. The wellbeing of our current and future generations depends on how these complex and inter-connected socio-economic challenges are tackled by the countries. 7.7bn 9.7bn 2019 2050 Population figures The biotechnology sector, mainly due to its holistic nature, holds the potential to provide a solution these societal challenges. Introduction
  3. 3. Source: IFC Analysis Scenario-1 Growth Projection under different Scenarios Scenario-2 Scenario-3 Sizeoftheindustry(USDBn) $84 Bn $128 Bn $162 Bn
  4. 4. The Indian biotech industry has already become a prominent player in the global biotech industry The evolution of the global share of the Indian biotechnology industry is more clearly reflected in the Figure. If India follows the growth at the same rate as that of the global biotech industry, then by 2025, Global biotech would be a $670.09 bn industry and Indian biotech would be a $128 bn industry. Thus, the contribution of the Indian biotechnology industry in the global biotechnology market is expected to grow from 3 percent in 2017 to just over 19 percent by the year 2025. Source: IFC Analysis Contribution to the Global Economy Indian Industry Value Global Industry Value
  5. 5. Source: IFC Analysis • The National Biotechnology Development Strategy highlights underlying problems faced by the industry and provide recommendations. • States have introduced their own biotechnology policy documents to attract investments. • Lack of coordination between departments and ministries which makes the system confusing • India is home to young minds and could act as affordable high-quality skilled workforce. • Industry-academia collaborative mission of department of biotechnology (DBT) in collaboration with World bank is an initiative for improving the linkages between industry and academia, the absence of which hinder research and developmental activities. • The educational curriculum does not prepare the students for the industry’s demands • Need for state-of-the-art research facilities across the country to boost R&D. • Lack of venture capital funding due to information asymmetry regarding the biotech industry • Global biotechnology industry is growing at the rate of 7.4 percent and there is huge demand within each segment of the industry that Indians can cater to. • With an established IT system and infrastructure, growth in Bio-IT, an untapped segment, could propel the growth. • India’s production of insulin could turn out to be the key, as the forecasted burden of diabetes seems to be big. • Biofuels could be of strategic importance given the increasing global energy needs. • Low percentage of clinical trials conducted in India when compared to the rest of the world is a concern. • Separate departments for Biotechnology, Scientific and Industrial Research, Science and Technology promote research, formulate policy and provide financial assistance. • Presence of bio-incubators, bio-clusters and biotech parks will help in multiplying the output, revenue and employment generation in the industry Strengths Weakness Diamond Model Analysing the Competitiveness
  6. 6. Issues & Challenges
  7. 7. Source:UNESCO India’s research & development expenditure is low i.e., just 0.8% of its GDP while China is contributing nearly 2%. The private sector spending on R&D is very low. Also, the country falls short of the number of researchers (216 full time researchers) R&D as % of GDP Low Investment in R&D
  8. 8. Regulatory Practices Source:UNESCO The Indian biotechnology industry is regulated by four main bodies There is a need to increase coordination between each department
  9. 9. Human Capital India should focus on increasing the employability of its work- force. There is a need to align the demands of the industry with university curriculum for the students to thrive in a competitive market.
  10. 10. Infrastructural Facilities India has made considerable progress on the physical facilities (roads, rail, transport etc.) and should now focus on research facilities. The focus should be on world-class Clinical Trial Infrastructure as today India has just 1.3 beds per 1000 of population. Though bio-incubators are present, but they lack in productivity as a US bio- incubator can employ about 20 times more than an Indian one. Electronic records are valuable for research purposes and a roadmap should be created for its adoption.
  11. 11. Source: DBT Contribution of States to the biotech industry: How Innovation and Clusters play a role? Job Creation In Biopharmaceutical Cluster, India (Relative to 2009) Many states have their own specialized departments for biotechnology and also have released specific biotech policies. States such as Karnataka, Tamil Nadu have taken the lead and Delhi, Maharashtra have also become strong in this sector. The reason that these regions are the front-runners in the growth and development of India’s biotechnology sector lies in their innovative potential. As per the recent India Innovation Index, released by NITI Aayog, the states such as Maharashtra, Karnataka, Delhi and Tamil Nadu have a strong innovation landscape and are also the states that are contributing the most to the Biotech economy. Evidence suggests that clusters provide an environment conducive to innovation and knowledge creation. They do so by offering advantages to firms in as compared to isolated firms.
  12. 12. Segments of Indian Biotechnology Industry
  13. 13. Biotechnology Competitiveness Assessment • This dimension is reflective of the country’s capability in providing a conducive environment for starting and operating a business. • These include human capital, investment in research and development, and strength of legal institutions. • The second dimension comprises of advanced factors that govern that ensure the overall development and long-term sustainability of the biotechnology industry. • It includes elements such as technology transfers, which talk about the industry- academia linkages, regulatory environment, and market incentives. • This dimension evaluates the benefits that have been derived from the enablers and facilitators. • It is divided into three sub-dimensions – Clinical Trials, Research output, and Biotechnology output that together provide a comprehensive view of the performance of biotechnology industry in deriving benefits from the inputs. The assessment is conducted by comparing 20 emerging as well as mature biotech markets of the world. The comparison is performed on the basis of 3 broad dimensions with 29 indicators. Enablers Facilitators Performance
  14. 14. • Industry-Academia Linkages on R&D • Barriers to technology transfers of publicly funded and supported research • State of Cluster development • Patents filed in 2 or more offices • Regulatory framework for Biopharmaceuticals • Regulatory framework for bio-agri • Regulatory Quality The Framework Enablers Facilitators Performance 1. Human Capital 1. Technology Transfers 1. Clinical Trials 2. Investment in R&D 2. Regulatory Environment 2. Research Output 3. Safety and legal Environment 3. Market Incentives 3. Biotechnology Output • Number of Researchers per million of population (Full time equivalent) • Knowledge workers • Quality of Research Institutions • Clinical Trials • Clinical trials per million population to date • Clinical trials for biologics per million population to date • Expenditure on R&D as a percentage of GDP • Government spending on R&D • Business and private (BERD) sector spending on R&D • Universities spending on R&D • Biotechnology triadic patenting, share of global total average 1999-2013 • Scientific publications standardized for population • Quality of academic publications • Intellectual Property Protection • Efficiency of legal framework in challenging regulations • Efficiency of legal framework in challenging regulations • Rule of Law • Biopharmaceutical pricing and reimbursement policies • R&D tax incentives • Ease of Doing Business • Biopharmaceutical product launches, percentage available in country within 5 years of global product launch • Biofuels production, percentage of global total • Biotechnology crops, hectares under cultivation, percentage of total
  15. 15. • Switzerland is the top scorer, with an overall score of 74.27 and Vietnam being the weakest of all (20.62). • India performs better than Vietnam, Egypt, and Indonesia, yet there is substantial ground to cover. • India needs to perform better in R&D spending. Though country has relatively efficient legal system challenging regulations and settling disputes. Source: IFC Analysis Results 01 Enablers
  16. 16. 02 Facilitators Source: IFC Analysis • Disparity among scores remain quite high with the United States of America performing exceptionally well in all the components and scoring 90.23 and Egypt, the lowest (12.88) • India’s performance in this dimension with an overall score of 47.97, is better than the ‘Enablers’. Results
  17. 17. Source: IFC Analysis • The average score is lowest amongst the three (28.30 as compared to 50.5 in enablers and 61.8 in facilitators). • Also, maximum disparity is observed within this dimension as the scores range between 0.24 (Vietnam) and 78.1 (US). • India has immense potential to improve its performance on this dimension 03 Performance Results
  18. 18. • A strong relationship between the Enablers, Facilitators and Performance. • The United States of America is the top performer led by its outstanding performance in two of the three dimensions i.e. facilitators and performance. • The performance between India and China is close in the third dimension as both of them have not fared well. • Concentrated efforts should be put in by India specially in the performance dimension. Source: IFC Analysis Overall Scores
  19. 19. Improving Ease of Doing Business R&D Tax Incentives Favourable FDI Policy Efficient Legal Framework Demographic Advantage Indian Biotechnology Industry As an Investment Prospect
  20. 20. Policy Recommendations
  21. 21. Source: UNESCO The Indian government undertakes more than 60 percent of the total research and development expenditure. This is in stark contrast with countries like Israel, US, China, Japan, Republic of Korea and Australia where more than 70 percent of the spending is undertaken by the private sector on an average. Thus, private sector needs to step up its level of research spending and the government should identify reasons that are impeding private investment. R&D Expenditure undertaken by various entities Derive Value from Research and Development
  22. 22. The number of research publications in India is following an upward trajectory and has just surpassed Japan. However, the number of citations have still not increased. Thus, not only quantity but the quality of research institutions should also be increased. The launch of National Biopharma Mission, is a step in the same direction. Source: Science and Engineering Indicators 2018 Improve Industry-Academia Linkages and the Quality of Research Output S&E publication output in the top 1% of cited publications India Japan China USA
  23. 23. Biotechnology has created deeper impacts on the Indian lives than often acknowledged. The sector contributed extensively in Green Revolution that used hybrid seeds to enhance farm yields, which made India self-sufficient Similar benefits were reaped in during White Revolution that enhanced India’s dairy production through biotechnology interventions. Sustainable growth of agriculture sector will help in ensuring zero hunger in the future. Biofuels and bio-crops are by-products of sustainable agriculture. India is the world’s largest producer of BT cotton and cultivates 6 percent of the global biotech land under cultivation. India has already taken major steps in introducing these two products in the market but can do more to expand its use Bio-crops and Biofuels, the way ahead
  24. 24. Creation of Market Database Emphasis on Clusters Easing the Regulatory Environment The Indian biotechnology sector is growing exponentially with more start- ups joining and expanding the share of output for the industry (according to the latest ABLE data). Hence it is necessary that a database must be maintained to identify such firms and record their contributions to the industry. Maintaining a database will lead to better understanding of the market size and the rate of its growth. Policy Recommendations Clusters possess the ability to attract large number of companies, and generate employment, revenue and output. there is a strong positive correlation between presence of clusters and economic growth & innovation. Cluster based production quickens the innovation process and further creates ancillary industries which will then establish a consistent supply chain emphasizing on specialized goods. Thus, we must focus on identifying such clusters. There is a need to establish coordination between the departments and ministries to fasten the rate of assessment of applications. Japan provides a perfect example where applications for approvals of new drugs (bio-pharma products) are put on the fast track in order to expedite the approval process as these are goods with substantial medical needs. India also needs to establish a similar set up that would speed up the application approval process and quality checks process.