As per a recent McKinsey study, the economic centre of gravity has dramatically shifted towards the emerging markets of Asia, Middle East/Africa and Latin America over the past couple of decades. The success of these “evolving innovation ecosystems” (as demonstrated by an increasing number of patents, publications in high impact journals, more start-ups), is primarily driven by four key factors: increased funding, improved capabilities, expanding talent pools and strengthening of intellectual property.
The innovation cocktail – emerging markets style
R&D investments in China have significantly increased over the past decade with plans for several 100 billon dollars of additional investments over the coming years. A key focus is on improved R&D capabilities, high-tech institutions and delivering locally discovered and developed novel therapeutics. Similarly in Russia, the government is implementing the ‘Pharma 2020’ plan to launch innovative drugs developed locally.
Improving capabilities include high-tech parks, such as the Zhangjiang in Shanghai; high quality, certified clinical centres in Seoul and Taipei; and new start-ups across St Petersburg, Beijing and Sao Paulo. Russia also launched the three-billion-dollar Skolkovo project close to Moscow, which is being developed as an innovation ecosystem along the lines of Silicon Valley, with healthcare and biotech as one of the focus areas.
The expanding talent pool has been one of the biggest innovation drivers, due to the availability of highly talented, locally-trained scientists, as well as a rise in the number of returnees – folks who grew up in emerging markets, went to the US or Europe for higher education and work, and then returned to their countries with years of experience and expertise that contribute to the development of local capabilities.
Finally, policy changes and the strengthening of IP to recognise innovation are ensuring that good work does not get wasted by lack of protection for new inventions. While lots of progress has already been made in this area, there is still some way to go, however.
Singapore is probably the poster child of this framework’s success, having built a truly innovative and entrepreneurial environment over the last 30 years or so. It’s been driven primarily by the government’s focus on innovation and incentives, helping Singapore build capabilities in biomedical research and collaborations between academia and industry both locally and internationally.
Despite the tremendous progress in a short span of time, significant challenges remain, primarily the innovation culture. However, countries with evolving innovation ecosystems have been able to overcome this and build on their strengths by nurturing entrepreneurship and innovation.
Greater China is another example of successful emerging market innovation. AstraZeneca has been at the forefront with a significant R&D presence and a growing number of collaborations. This includes plans to develop and commercialise a novel biologic for autoimmune and inflammatory diseases through a joint venture between our biologics unit MedImmune and WuXi AppTec, which would make AstraZeneca one of the first multinational companies to bring a locally developed novel biologic to China.
Elsewhere, AstraZeneca is playing a central role in advancing science in emerging markets and in helping to foster innovation at local academic and biotech centres. In the area of building infrastructure and clusters of innovation, we have partnered with two leading institutions in Russia – Almazov Centre and Petrov Institute of Oncology. We also recently announced a partnership with Hadassah University Hospitals, one of the largest medical groups in Israel. In Korea, we have built several collaborations with academia and institutions to facilitate research partnerships and scientific exchange between Korean centres and our labs in the UK, Sweden and US.
These are no doubt small steps towards the goal of achieving sustained innovation, but it is only a matter of time before the centre of gravity for innovation shifts towards these markets, just like the economic gravity has already shifted as reported by McKinsey. Having spent the past decade in different emerging markets, I am passionate about these evolving innovation ecosystems and looking forward to AstraZeneca playing a central role in advancing science and fostering local innovation as these markets start to deliver on their potential in the coming years.