| Thank you very much for inviting me to speak at this important international event, which sees all the major players in the biotechnology industry in the World coming here to discuss the future. I would particularly like to congratulate the organisers of Bio 2002 on the imaginative and exciting programme they have put together for this week's event, and I very much look forward to my time here today and tomorrow.
DEVELOPMENTS IN THE UNITED KINGDOM
The United Kingdom believes that success in Biotechnology is vital for the future competitiveness of the United Kingdom. The Prime Minister said at a Biotechnology Industry Association Conference in November 2000 that he wished to see the United Kingdom as the best place in Europe to carry out scientific research and the best place for Biotechnology firms to start and grow.
We start from a good base. The United Kingdom biotechnology industry leads in Europe by a fair margin and globally we would claim that we are second only to the United States of America. UK companies represent 46% of the European listed biotechnology companies, 63% of biotechnology market capitalisations, and over 50% of new European biotechnology drugs in late stage clinical trials are from the United Kingdom.
We have in the United Kingdom the key ingredients for success: a world class science base, the best venture capital industry in Europe and experienced and entrepreneurial managers. Now we want to build rapidly on our early success and the Government is determined to play its part in supporting the biotechnology industry.
The Government's first responsibility must be to ensure that public sector bioscience in the United Kingdom continues as world class and in the last two Government spending reviews the science budget has been substantially increased. This has included specific funding for the biosciences. From 2001 to 2004 the science budget will increase by 7% per year in real terms.
The science base is the first step but the growth of the biotechnology industry is critically dependent on the innovative exploitation of our R & D, and the Government has already allocated considerable sums of money to encourage universities to support innovation.
As the Prime Minister pointed out in a recent speech to the Royal Society:
"Government and business support for scientific research is not enough on its own. We also need to make sure that scientific innovation gets translated into applied uses in businesses".
We are already leaders in science based industries including pharmaceuticals, aerospace and opto-electricals but it is very clear that many more of our industries could benefit from our world class science and technology.
We have, therefore, supported knowledge transfer from our universities into industry through the University Challenge Scheme which puts seed corn funds into universities, through Science Enterprise Centres which provide access to entrepreneurial skills to science and engineering undergraduates and graduates, and through the £140m Higher Education Innovation Fund which provides incentives to universities to transfer ideas into industry.
As a result of these schemes we are seeing a huge cultural change in our universities. In 1999/2000 there were 199 spin-offs from our universities as compared with an average of 70 a year in the previous five years. This is in fact a greater rate of spin offs from our universities per $1 million of research than in the USA.
It is also encouraging that we are now getting more than our fair share of fast growth high tech businesses in the United Kingdom. Recently Deloitte and Touche published a survey of the 500 fastest growing European high tech companies; 150 are in the United Kingdom, compared with 97 in France, 51 in Germany and 43 in Ireland.
We are determined to create an environment where business in encouraged to invest in R and D and investors are encouraged to invest in high tech enterprises. Recent budgets, therefore, have introduced R and D tax credits for small and large companies, and Capital Gains Tax on unlisted companies is now only 10% if the investment is held for two years.
In addition, the Department of Trade and Industry has introduced a number of schemes to specifically support the biotechnology industry, such as the Biotechnology Exploitation Platform Challenge that helps to identify, protect and exploit IP, the Biowise Programme which encourages the wider use of biotechnology by manufacturing and service companies, and the £25 million Harnessing Genomics programme. This latter programme supports bio manufacturing and bio-informatics and also our highly successful Biotechnology Financial Advisory Service, whilst the creation of Genetic Knowledge Parks is supported jointly by the Department of Trade and Industry and the Department of Health.
Finally, I would like to say a word about the regulatory environment. Our aim is to ensure that legislation is practical, proportionate, scientifically based and enforceable, thereby ensuring that human health, environment and ethical concerns are met without stifling commercial research and innovation.
Last year, for example, saw a significant step forward in the United Kingdom through the pioneering decision by Parliament to extend the Human Fertilisation and Embryology Act to allow research into the therapeutic uses of embryonic stem cells. We approached the subject with the very greatest care. Firstly, we established the scientific facts very thoroughly with an authoritative report by the Chief Medical Officer in August 2000. There was then a lengthy discussion which gave time for all groups, including the Medical Charities, to make their views known, and this led to a very balanced debate in Parliament, resulting in carefully framed legislation. As a result, we have an independent, stable, regulatory regime for this crucial field, which has put the United Kingdom into a leading position internationally, and has been instrumental in attracting world class scientists to the United Kingdom.
INTERNATIONAL PARTNERING
While we have taken steps to make the United Kingdom the best possible place for biotechnology firms to start up and grow, we equally believe that biotechnology is a global industry, as is clear from the attendance at this event.
UK Companies are globally minded and welcome global partnerships. Partnering provides a company with a global presence by accessing new markets and customers, and by transferring skills and knowledge between its staff and those in a partner company, and in these ways improves the growth prospects for the company. Invest UK are, therefore, developing the global partnerships programme which will help overseas companies identify potential partners in the UK so that they can both share knowledge and improve competitiveness. The programme is operating across the key knowledge driven sectors where partnering is particularly important, including the Life Sciences. A pilot of the scheme is expected to be under way shortly across the North American market.
Next year will see the 50th anniversary of the discovery of the structure of DNA. This epoch making event led to an amazingly fruitful period of British research in the biological sciences and the growth of the most successful biotechnology industry in Europe. The United Kingdom Government is determined to build on our early success because we believe that supporting the biotechnology industry is an investment in the future: providing an essential foundation for building a healthier, safer society, a cleaner environment and a dynamic knowledge economy for the 21st century.
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