Biotechs are better together

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Biotechs are better together

22/03/2017

According to the Japanese proverb, a single arrow is easily broken; a quiver of ten is not. So holds the conventional wisdom around the benefits of sticking together. This logic might be called into question when it comes to close proximity with your competitors, however. Can biotechs really gain advantages by operating in the midst of rivals for market share, funding and human resources? In our globalised and digitised shrinking world, what part does location play in success or failure?

Business clusters are by no means a new phenomenon. The most recognised examples, Hollywood and Silicon Valley, both originated long before the term ‘business cluster’ was popularised and cluster economics have long suited sectors as diverse as banking, aerospace and, yes, biotech.

In the 1990s, leading academic, Professor Michael Porter defined the advantages of business clusters with his influential book, The Competitive Advantage of Nations (1990) and in his Harvard Business Review article, ‘Clusters and the New Economics of Competition’ (1998). His thesis addressed an apparent paradox; how could clusters still be important and advantageous when the Web was supposed to be making the issue of where you work less relevant. Professor Porter argued that clusters provided a competitive advantage to businesses located within them via ‘knowledge, relationships and motivation that distant rivals cannot match.’

If we look at knowledge first, business clusters offer excellent access to brainpower and talent pools, especially if a cluster incorporates universities, government institutions, think tanks or trade associations. Thanks to their positioning as industry hubs and innovation centres, clusters are also efficient at attracting high-calibre talent from outside by merit of their reputation alone.

When it comes to building relationships, clusters literally remove the leg-work. It is much easier to facilitate site visits and face-to-face meetings with suppliers, peers, buyers and complementary businesses when they are based on your doorstep. Motivation comes from the close-quarters exposure to competitors, with the constant presence of strong local rivalry spurring companies into action as they bid to be the best amongst their peers. This continuous bid for improvement and need to outdo the competition is a major driving force behind the innovation that we see coming out of business clusters. Proximate competition also acts as a catalyst for increased productivity – the Holy Grail of improving economic performance in our economy.  

Manchester Science Partnerships (MSP) is the UK’s leading science and technology park operator. Our assets include Manchester Science Park, Citylabs and Alderley Park in Cheshire, the largest single site life science ecosystem in the UK. Alderley Park is  considered a micro-cluster in its own right - home to 150 businesses operating across 1.5 million sq. ft. of the highest specification laboratory and office space. These include companies focused on CMC/Formulation, Regulatory, Chemistry and Proteins and therapeutics firms specialising in Oncology and Anti-infectives. An on-site incubator supports early-stage companies.

This entrepreneurial community sits alongside key assets such as the Medicines Discovery Catapult, a national centre of applied R&D expertise to promote fast-to-patient drug discovery and the the UK’s AMR Centre, a new translational centre for antimicrobial research. There are also two life-science focused venture funds – the £42m Greater Manchester & Cheshire Life Sciences Fund and the £5m Alderley Park Ventures Fund – on site. Given the number of startups and growing companies in the same sector, a valuable range of science services has been developed and is available to the cluster on a walk up basis.

Alderley Park offers a fully integrated life science campus, resident businesses and individuals meet and mingle naturally, whether it’s in a queue for coffee or in one of the many shared spaces. Why does this simple reality matter? It’s a community experience, very different to driving to a business park, working in your office all day, and then heading home without encountering anyone from outside your organisation.

Innovation is by its very nature challenging. Complex industries like biotech need researchers, venture capitalists, entrepreneurs, business executives, and service providers to collaborate well. That formula is driving success at Alderley Park and it’s the same model that’s long flourished in hubs like Greater Boston.  As Bio-Europe itself perhaps exemplifies, ours is an industry where community matters. People working together in close proximity have a better chance of achieving hard to reach goals.