The document discusses advances in life sciences and innovation. It notes that life science innovation can provide significant economic and social benefits but depends not just on science and technology, but also supportive institutions and funding environments. Constraints like regulations and public perception must also be considered. The Innogen Institute seeks to analyze the social and economic factors for successful innovation so scientific advances reach society efficiently.

1. Advances in the life sciences are seen
as capable of delivering significant
socio-economic benefits to health,
agriculture and the environment. There
is an opportunity to create wealth, cure
currently incurable diseases, grow new
crops that feed more people and find
cleaner and more efficient energy sources.
Life science innovation depends on these
new ideas and discoveries, but its success
in not based on science and technology
alone.
Such advancements require productive
institutional and funding environments,
and are often constrained by social factors,
such as public perception, regulation and
intellectual property, which can make
or break the uptake of new products or
services. As such, innovation must be
understood as both a social and scientific
phenomenon. The Innogen Institute seeks
to analyse the social and economic
determinants of success in order to
improve the odds that scientific benefits
will reach society in a timely manner.
AN ECONOMIC AND MORAL
IMPERATIVE TO INNOVATE
There is widespread acceptance amongst
economists that innovation lies at the
core of productivity growth, though the
size of the impact is sometimes difficult to
pin down. Ground breaking work by the
Paris based think-tank, the Organisation
for Economic Development (OECD), has
recently cast light on this thorny issue.
Using multi- or total factor productivity as
a proxy for innovation it becomes obvious
how significant a driver for growth it is,
both in mature, advanced and in rapidly
emerging economies. Technological
innovation continues to make a leading
contribution to the overall innovation
impact, and notwithstanding a global
shift in favour of business enterprise
research and development (R&D), public
investment in science remains absolutely
crucial to value creation.
Public investment in science and
innovation also can bring major societal
benefits beyond productivity growth and
there is welcome focus on challenge and
partnership-based innovation. Indeed,
there is a moral imperative to focus efforts
on those innovations that will deliver
societal benefits – and to integrate demand
more firmly with supply, understanding
the close and continuing interactions
throughout the value chain.
Successful innovation increasingly
relies on cooperation and collaboration
nationally, regionally and internationally.
“Open” innovation has become the “new
normal” and so an increasing challenge
is how to access knowledge in open and
collaborative ways whilst continuing
to capture value where investments are
made. The nexus between open science
and value capture will be one of the
crucial factors for our future economic
success. And, for the future of our society,
it is a challenge that we must get right.
INNOVATION AND
INTELLECTUAL PROPERTY
Science and technology based innovation
isexpectedtogeneratenationalcapacities,
and in turn, wealth. Although they are not
the sole source of new knowledge, higher
education institutions play a critical
role in the generation of new ideas,
discoveries and inventions. When this
knowledge is used and valued, innovation
has occurred. But the principle channel
through which knowledge is expected to
be mobilised – intellectual property rights
– focuses attention on specific types of
codified knowledge while overlooking the
contributions of other intangible assets.
An entry point to the valuation of
intellectual assets is to consider formal
intellectual property protection in context
of the management of intangible assets.
Knowledge management is inclusive
of intellectual property, which is to also
say that systems of intellectual property
are not monolithic, consistent or
perfected. Consequently, intangible asset
management strategies can coordinate
the tactics of intellectual property by
contextualising – for example, patents –
in a generalised approach to knowledge
management. Valuation of intangible
assets, therefore, includes knowledge
creation and mobilisation, as well as its
monetisation and returns to its creators.
The challenge for innovation, and
particularlyopeninnovation,isdeveloping
techniques for identifying and valuing
intangible assets that may or may not be
codified.This can be systematised into four
framings: the production of knowledge;
tracking of knowledge flows; ownership
and sharing; and accountability for
knowledge production and mobilisation.
Each of these framings is transactional,
and the potential flow of transactions
provides the entry point to evaluating the
value of intangible assets by measuring
actual transactions in negotiated deals,
mergers and acquisitions, but equally the
non-cash contributions of individuals and
organisations whose actions determine
what knowledge is mobilised and how
the process of innovation is transacted.
PRIVATE AND PUBLIC SECTOR
COLLABORATIONS AND
INITIATIVES
Public private partnerships (PPPs) are
multiplying, particularly in regards to
health innovation. The drivers behind
the increase in PPPs are diverse, but
include: the increase in cost of drug
development and the search for new ways
of working that increase cooperation and
reduce cost; new technologies requiring
different sets of skills across public and
private sectors; and new possibilities for
amassing, combining and using large
amounts of scientific and patient data.
In previous eras a common rationale
for public funding of science was that
of market failure, with public funds
supporting basic research that the private
sector was unable to protect and own,
and the private sector funding the applied
The Life Science Innovation Imperative
Date: June 2013
Iain Gillespie, David Castle, Joanna Chataway and Joyce Tait
www.innogen.ac.uk 1
Innogen Institute

2. aspects of R&D. Whilst this argument is
still widely used, the reality of current
investment in health research and
innovation is very different.
The private sector is able, either through
patenting or agreeing to share pre-
competitive research openly, to invest in
early stage basic science, and state funds
are commonly deployed to support drug
development in multiple ways much
further downstream. The conceptual
basis of market failure and the need
to leverage and ‘de-risk’ private sector
investment is no longer necessarily a
good characterisation of the terms of
public sector engagement. Whilst PPPs
multiply there is often a lack of clarity
about the foundations of public and
private engagement and a stark absence
of evaluation that could guide future
investment strategies and determine what
works.
Recent high profile critiques of private
sector handling of applied research from
Ben Goldacre and others have suggested
the need for increased transparency and a
stronger voice for academia in clinical trial
research. However, there is also evidence
to suggest that problems of ethical conduct
and good practice, which would increase
success in demonstrating efficacy and
effectiveness in drug development, is not
confined to pharmaceutical companies or
applied research.
There is increasing evidence that the
quality of basic health research is very low
(Prinz, 2011; Ioannides, 2010). Publishing
in Nature, Amgen researchers report that
they were unable to replicate 47 out of
53 ‘landmark’ basic science publications
in cancer, which had originated in
academia (Begley and Ellis, 2012). Is it
possible that poor practice in academic
basic research could be overcome to
some extent by increased collaboration
with private sector actors who are more
aware of the real and immediate costs of
‘pollution’ of scientific literature and the
problems that poor quality basic science
pose for subsequent steps needed for drug
development?
Improving the quality and ethics of
science and research in order to bring
down lead times in drug development
and reduce wasted effort in both public
and private sectors is essential. It could be
one way of considering the worth of new
institutional environments and ‘social
technologies’, which encourage good
practice and trust in interactions between
public and private sector actors across the
research and development value chain.
GOOD GOVERNANCE AND
RESPONSIBLE INNOVATION
Since the 1980s there has been a shift in
the way many countries are governed,
away from a top-down approach where
governments dictated and citizens
obeyed to a more consultative, bottom-
up approach that tries to engage citizens
and stakeholders in decision making
processes, known as the ‘governance
approach’.
The notion of Responsible Innovation (RI)
is part of this new governance agenda, and
in 2008 it was recommended by the Royal
CommissiononEnvironmentalPollutionas
an approach to reducing the uncertainties
associated with risk assessment for
nanotechnologies. In nanotechnology
and information and communication
technologies, the Engineering and
Physical Sciences Research Council is
applying it in an ‘upstream’ manner as
part of ‘anticipatory risk governance’ to
minimise environmental, health, societal
and ethical concerns. It is also being
applied by the Technology Strategy Board
(TSB) as part of its Synthetic Biology
Feasibility Studies competition.
The governance approach has worked
quite well in areas like planning and
social policy where people are more
directly affected by proposals and will
have a clearer understanding of their
implications. However, it has proved
more difficult and contentious to apply
it in areas of technological innovation
where there are long lead times from
discovery to the market place, as in life
sciences.
Where upstream engagement takes place
in the context of speculation about the
outcomes of today’s basic research, it can
become a competitive process to frame
a novel technology, either positively or
negatively, in the public mind. The use
of phrases like ‘anticipatory governance’
(equivalent to the precautionary
principle) and ‘upstream engagement’
suggest a continuation of a process begun
under the heading of Ethical Legal and
Social Implications (ELSI) that has been
insufficiently criticised by researchers
with an understanding of innovation and
regulatory processes. RI is likely to become
an increasingly important factor affecting
innovative companies in Europe. Most of
them are already behaving responsibly,
but they will be under increasing pressure
to demonstrate that.
It is vitally important for the
competitiveness of the EU that the
concept of responsible innovation
does not proceed unchallenged in its
present direction. It needs to be refined
and applied in a way that genuinely
encourages responsible behaviour and
at the same time supports innovation. A
small step in this direction was taken in
the Nuffield Council on Bioethics report
‘Biofuels: ethical issues’, adapted by
the TSB for its Responsible Innovation
Framework.
Five ethical principles are proposed,
related to (i) preserving essential human
rights, such as access to food and
water; (ii) promoting environmental
sustainability; (iii) contributing to a net
environmental benefit; (iv) development
in accord with trade principles that are
fair; and (v) equitable distribution of
costs and benefits. Principle VI brings
in the innovation imperative - if the first
five principles are respected and if the
development can play a crucial role
in mitigating environmental and social
harm, then depending on key market and
economic considerations, there is a duty
to undertake the development.
www.innogen.ac.uk
Contact Innogen:
Elisabeth Barlow, Communications and Policy Officer, Innogen Institute,
University of Edinburgh, Old Surgeons’ Hall, High School Yards, Edinburgh, EH1 1LZ
t - +44 (0) 131 650 2842
e - elisabeth.barlow@ed.ac.uk