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Just about every country has identified life sciences in some form or other as a priority for academic and commercial development. But what will characterise the countries that may in the end prevail?

  1. The research community needs a high degree of autonomy. The European University Association released an interesting study, University Autonomy in Europe II: the Scorecard, in 2011, assessing the degree of institutional autonomy universities in the various EU member states enjoyed. The countries with the greatest university autonomy were from northern Europe: Denmark, Ireland, UK, Finland, Sweden Latvia, Lithuania. Those with highly regulated and state controlled systems were from southern Europe, or had systems where the state just likes to intrude: France, Luxembourg, Greece, Italy and others. To be fair, some countries were more or less autnomous on different indicators, but the rough distinction can be drawn. Surprisingly, at least to me, was the middling performance of countries like the Netherlands, Austria and Germany. No doubt various higher control states will endeavour to justify why the state needs to be so intrusive, but as evidence that this is perhaps an unhealthy state of affairs, we see the highly instrusive French state over the past year moving to create greater diversity and differentiation in funding for its universities with greater autonomy (see this news item for instance). Clearly, greater autonomy necessitates greater diversity and differentiation and in the end some will need to become better than others. While we would like to think that all universities are essentially the same, reality suggests that the only real equality lies in the extent to which they all meet minimum standards, rather than all trying to meet some arbitrary ‘gold standard’.
  2. The second point is that the bulk of significant research results in life sciences arise from centres known as academic health science centres (AHSC). This is a theme I warm too, as it provides an organisational model that drives innovation from the clinical user end, rather than from the research end. Yes, more research funds are always needed, but we also need solutions. Efforts to operationalise translational medicine are doomed to fail if the driving forces are not coupled to the clinical user and innovation policies in general need to start with problems needing solutions, and hence a factor more likely to be evidenced. Only a few countries have AHSCs — such as US (over 50), Canada (about 14), Sweden (1), Belgium (1), Netherlands (8) and the UK (5). Germany arguably has at least one as does Italy. France has none, and one will need to see whether changes in their higher education system are likely to lead to formal establishment of this approach. The challenge (and this was the subject of a paper I presented, see the previous entry below), is that while universities are more likely to enjoy degrees of autonomy, hospitals are less likely to. The UK was only able to move toward establishment of AHSCs when the state control of the hospitals was relaxed through successive periods of NHS reform. The Netherlands model built on existing relationships. Countries without AHSCs, though, will confront the twin challenge of institutional autonomy of both universities and hospitals.
  3. The third point is that not all countries will be able to do everything in life sciences and therefore will need to set some priorities. National priorities are hard to conceive, because countries usually think of themselves as being able to do everything and so efforts for instance, get diluted and underperform. Cash is tight these days (think debt) and governments just cannot afford everything, so the most difficult challenge is establishing priorities.

There is a clutch of small states within the European Union. There are many more small states outside the EU.

TAMPA, FL - JULY 13:  John Winskas, a student ...

Small states? (Image credit: Getty Images via @daylife)

Much can be learned from them, as at least within the EU, some seem more robustly managed and economic productive than their larger debt-laden counterparts.

Healthcare systems are often seen as requiring some degree of economy of scale. This in part is a function of how prevalent diseases are, such that in some small countries they would have one case in 2 years, rather than one case per million of population. Healthcare technologies can be incredibly pricey; for instance, a proton therapy facility will run between €100 and €200 million to set up. Healthcare buildings and research infrastructure are expensive to build and run. Health professionals can be expensive to train and employ and are generally globally mobile.

Associated with investment in healthcare within the EU, we find that almost every region or member state has life sciences, in some form, in their top 5 or so areas of national priority. Life sciences is challenging and demanding, and requires high degrees of global visibility and connectivity to other researchers. Commercialisation of life sciences in Europe is generally appalling; the EU’s research budget focuses on research, not translation and there is precious little to help good ideas bridge the ‘valley of death’ where unfunded good ideas go to die. Financing for life sciences developments consume vast quantities of risk capital, some of which will be unlikely to return any value for a decade or more.

Many EU countries try to avoid downside risks of failure by punishing it, rather than creating opportunities to learn. Countries that encourage risk taking, and make it easy to start and close down companies, with associated flexible labour practices, will outstrip protectionist fearful countries. While many countries fear unemployment, they fail to encourage job creation, which is an economies way of moving work around. Life sciences is one such area that requires particular flexibility owing to the nature of the work.

I recently had the privilege of working with colleagues in one of the EU’s small states, to help develop a life science strategy. National excitement included the construction of a new bioscience research and commercialisation centre (partly funded by the EU, thanks for that). The University is active across its faculties in life sciences areans, and with the College are both keenly extensively in high quality training of health professionals. Local industry is building on past successes in life sciences. The country has a well-developed and well-financed healthcare system.

The main lesson to small countries building life science (or any research-based commercial capacity for that matter) is that setting priorities is more important the smaller you are, as you can’t do everything. That means that some people may be disappointed that they are not on the short list of first projects. It means, too, that infrastructure projects are precious, as they are enablers of future potential — the longer term vision must be sustainable, as getting it wrong can be expensive — research buildings don’t make very good hotels.

Some thoughts:

  1. build on what you already are doing well as that is evidence you have the expertise, networks and working practices in place
  2. keep in mind that life sciences is much, much more than drugs; progress may be quicker in other areas, such as informatics, telecommunications, engineering, materials science, physics, chemistry, agriculture, etc.
  3. you can’t sensibly do life sciences with a weak university, so this may entail some difficult and hard rethinking of priorities and some sensible review of research productivity
  4. you can’t sensibly do life sciences without a teaching hospital; the academic health science centres in the US account for over 80% of productive life sciences research, so think about reorganising your own infrastructure to enable closer collaborations and alignment between university and hospital; this may, by the way, raise real issues for government if the teaching hospital(s) is state run
  5. you can’t sensibly do life sciences without understanding the logic of ‘bench to bedside’; productive work lies in translational research and solving clinical problems; this can challenge academe, which rewards the production of papers and volume of research funding for career progression; in life sciences, solving problems is paramount; understand what the Grand Challenges in life sciences are and see which one(s) you can focus on
  6. you’ll need to consider the economic developments that come with building a life sciences sector as you’ll need to energise high net worth individuals as angel investors to help start and run the small businesses that you’ll create; I’d discourage too much public sector hiring as it disincentivises university graduates from pursuing entrepreneurial careers (there is good global evidence that this can be a problem, so don’t make that mistake); best role for government is ensuring a flexible corporate start-up environment, a non-punitive bankruptcy regime, sensible taxation of start-ups, and seed funding; it might also be a good idea to give away all that publicly owned intellectual property;
  7. finally, the good news is that size doesn’t matter for innovation; there is no correlation between the size of a country and the ability of the country to innovate; many very large countries have clumsy policies that disincentivise and frustrate.

I wrote a paper looking more generally at healthcare systems of small countries (which includes a few remarks on life sciences). Paper on Overview of Small Health Systems

If these issues stir you to think more about life sciences and / or the challenges of smaller states, do make a comment.

Euractiv is reporting some concerns that there will be a decrease in research spending in the EU. The article is here.

According to the survey that triggered the anxiety, some 93% of those surveyed said that “investing in innovation is one of the best ways

Innovation

Innovation can also be quite mundane, it all depends on what problem you're trying to solve (Photo credit: Stephanie Booth)

to create jobs in Europe.” This is absolutely right! However, investing in innovation is not the same thing as spending more on research.

There are two, broad schools of thought here. The first sees spending money on research, translating into innovation. The other is that innovation occurs when real-world problems are solved. The EU and most EU member states have pursued the first approach; the problem of job creation is pursued through the second approach. The evidence on job creation might suggest that the first approach is not working.

Spending more on research is not, in itself a bad thing. However, the quality of the research has to be good, results disseminated and academic researchers held to account for their work. I am not a big fan of state-run or controlled higher education, and less a fan of protected job status for academics. According to this model, more research literally pushes innovations into the market where hungry investors snap these great ideas up and go off start companies and hire people. And so it goes. This approach does not generally work. It is called the ‘research push’ model, and is faced with the tremendously difficult challenge of research translation, that is, of linking the research through various arrangements to people who can create innovations from the research. Research, itself, is not an innovation; it only becomes an innovation when it becomes useful.  [see Michael Gibbons et al The New Production of Knowledge”, Sage 1994 on the distinction between ‘use-less’ and ‘use-full’ knowledge]

The other model involves innovation emerging in markets, which have needs and which investors, inventors and others are encouraged to respond to. This is called the ‘adoption pull’ model, as it focuses on how markets (that’s you and me needing something and buying it) adopt innovations which respond to our requirements. The value of any research is precisely in the context of whether it feeds this innovation or adoption pull. The research translation process here is about identifying knowledge needs that research can fill, and which in turn can be converted into innovations that people will want and value.

The key distinction is that the needs of academic researchers, to do research, solve problems, learn new things, etc., is not the same thing as the needs people have for innovations. Research commercialisation by European universities is generally very poor, and particularly so in countries which operate the research welfare state. They also have poor access to risk capital, burdensome public ownership of publicly funded research (as though no one learned anything from the role of Bayh-Dole in the United States, or hadn’t gone back to the 1940s and read Vannevar Bush) and generally complex labour market rules which frustrate businesses startups (for those who wonder why this is important, a business start-up is something new, creates employment, is risky, but is where all large companies start from. How they get to become big is not just a function of their products and innovation, but the flexibility by which they can grow, and that is often a function of the perverse impact of national bureaucracies.)

Spending more on research won’t address the development of innovation or create jobs as such. Spending more on research will of course expand the research system, and possibly expand the research welfare state.  I am not ignoring the real challenge of what proportion of research funding should be for pure or curiosity research and which should be mission directed (or linked to Grand Challenges, which are proving such an effective way to align researchers’ interests with compelling real-world challenges.

If you want innovation to create jobs, as apparently 93% of people surveyed want, then you want different things from just more research spending; you need things that in Europe and particularly in some Eurozone countries are proving particularly hard to do, namely:

  1. You need a risk culture where it is easy to start companies, try out new things, and if they don’t work, start again; but many countries penalise innovators who go bankrupt, for instance, while other countries load small start ups with massive social costs, inflexible labour rules, so the company can hardly get going for the tax-burden.
  2. You need an environment which encourages adoption of research findings; perhaps better, you need the academic institutions to be more proactive in encouraging entrepreneurialism amongst academics. Secure employment contracts that restrict freedom to explore alternatives are not help. Key concepts here are: flexible academic employment contracts, real-world incentives within universities to encourage a career focus on problems as well as new knowledge.

Of course, this list can go on. The key message is that equating research spending with innovation investment is a broken paradigm that should be quickly abandoned.

Want to know more?

Well there is a lot out there. I’m going to recommend these for starters:

Roger Miller and Marcel Cote, Innovation Reinvented: six games that drive innovation. University of Toronto Press, 2012.

An older book that is worth a read about companies and innovation (remember that the SME is the engine of job creation, not the public sector) is this one:

Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-creating Company: how Japanese companies create the dynamics of innovation, Oxford University Press, 1995.

And because this blog is about healthcare, everyone must be mindful that research and innovation in healthcare, as in other sectors, can be highly disruptive (this creates unemployment and new jobs at the same time and may even bend the cost curve down), I’m suggesting a read of this new book:

Eric Topol, The Creative Destruction of Medicine: how the digital revolution will create better healthcare, Basic Books, 2012.

 

 

In this Age of Austerity, good ideas risk being lost. The dynamics of funding of innovations has always been full of risk. But as various debt-laden governments try to balance bloated public balance sheets, should we worry about where the ‘next big thing’ will come from? Yes, if you believe that governments can find and fund winners (the evidence says they can’t by the way, but can act as catalyst or midwife), no if you believe that the wisdom of crowds, otherwise known as markets, might be a useful driver of innovation development and adoption.

The diagram below summarises the funding of innovation, identifying in particular the so-called ‘valley of death’ where good and bad ideas go to die for lack of funding. The risk we, as taxpayers, face is that governments will continue to fund innovations into the valley of death, perpetuating what I call the ‘research funding welfare state’, where research happens, but innovations don’t. Hyperactive civil servants with indelible portfolios will continue to pursue dead-end projects despite evidence that the world has moved on. The real problem for governments isn’t finding money for funding research (though that is hard enough), but realising a simple algorithm:

  1. the world is characterised by change
  2. the world will change faster than our ability to respond
  3. this will not change.

Europe has a shortage of innovation gorillas compared to other countries, and if the politics of some countries are to be believed, would rather retreat into a safe haven of social solidarity and protected interest groups, than face the harsh realities of the modern world. This Fortress mentality will not keep the disruptive wolf from the door and will only add to domestic turmoil as native talent packs up and leaves for more encouraging countries.

The harsh reality of innovation is that it can be violent, overthrow trusted ways of doing things, and challenge what may be thought of as defining cultural norms and social innovation is just as much part of innovation as the inventions themselves. The other true thing about innovation is that it knows no favoured nation or culture — anyone and any country can do this.

Find the risk

FAIL stamp

Academic Health Science Centres combine teaching, research and healthcare service delivery. They are complex organisations bringing together hospitals with academic institutions, and embrace socially important missions. They employ people who work on wards, caring for very ill people, as well as researchers working at the limits of our knowledge. Reconciling these twin challenges in particular is important because many front-line staff are users of research results through medical devices and medicines, yet have little direct involvement, and perhaps interest in, research. At the other end are researchers, particularly those involved in basic research. The translation challenge is to figure out how these basic researchers and their work can link, if at all, to the issues confronting patients. Much research goes nowhere, but even failures are important research learning.

This is why research translation, the bench to bedside agenda, has become so very important. But it is fraught with conflicting interests, as basic researchers are skeptical, for understandable reasons, that mission directed research should replace the basic research priorities. My reason is that we, as humans, are simply not smart enough to pick the winners, as serendipity and luck are research colleagues. Those faced daily with the problems and challenges of disease and treatment may not fully understand this, as they demand better tools and methods. They don’t understand why a good idea can’t be made easier for them to use (taking sensible account of risk of course). For them the issue is adoption and diffusion, not invention.

Somewhere in this mess lie people who can bring products to markets, meaning in effect that they link ideas to markets, frequently a commercial activity involving money but also a bit like a dating agency, of bringing people with ideas together with people wishing to solve problems in a practical manner. Sometimes governments have to take on this role, and sometimes they are so enthusiastic that they drive the risk takers away and all the funding and commercial responsibility falls on the public sector. There are risks here, as for every dollar/pound/euro that the governments put into a risky development pot, the private sector takes out the same amount. This creates the impression of market failure in commercialisation, but is really more an example of the government crowding out investors. Unless governments have become particularly good at commercialisation, something commentators are broadly agreed they are not very good at, this defeats the whole research process, and leads to a public welfare-like system of research and development.

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Photograph of Brittania statue, taken 13th Jun...

What would she do?

One of the great mysteries of the modern world is how to get appointed to the board of a quango.

I have also wondered whether the concerns about the effectiveness or not of quangos may lie in the criteria used to identify the types of people to run or govern quangos. To that end, would the public and political perceptions be different if there were greater confidence that quangos were both purposeful AND engaged the right people to sit on their boards and lead their management teams.

When I was doing work on revalidation of doctors (in the UK), following the tragic baby deaths scandal at an NHS hospital, I observed to medical colleagues that if they didn’t get their medical house in order they would be seen as unable to govern their profession and would lose their autonomy and control of the GMC: in which case, the chair of the General Medical Council would be lay chair, and they would be outnumbered by lay members. I observed that I might be the chair of the GMC since I knew a fair bit about what doctors do, which put the issue quite starkly.

The real issue is whether the criteria used to select candidates for quangos by appointing bodies fully engages the widest possible talent pool, or does it favour certain types of people, who in the end want to work with people like themselves, presumably in some respect professional quango-ites. Part of the challenge is that in many cases quangos should actually be putting themselves out of business. Other quangos should be driving reform and change. But the characteristics of people who get to sit on quango boards have to a great degree established their legitimacy, not as reformers, but as a ‘safe pair of hands’.  Radical, reforming, challenging individuals will never fit as quangos exude stability and bureaucratic purpose, not the instability that comes from reform and general disruption of the status quo.

Quangos could even be seen as evidence that the status quo is alive and well!  A quango focused on innovation should itself be innovative, it might instead suffer from the usual pressures to deliver performance metrics on attendees at workshops on innovation rather than evidence of innovative outcomes.  A quango on research would be disinclined to consider speculative more risky research proposals, as they must prove the value of taxpayers’ money. Quangos that invest in early stage high technology research spin-offs from research labs would need to demonstrate in some budgetary cycle that their investments were creating jobs, for instance, despite evidence that such start-ups might take 5 years before they would have any impact.  And so it goes.

In the meantime, taxpayers’ money is spent on people whose careers are simply to sit on quangos. And when do we have a discussion about whether the very criteria for public appointments to quangos are themselves part of the problem? Perhaps there’s a quango for that?

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