Economic Implication's in Singapore's Biotechnology Industry

Team Leader: Mary Peplinski

Author: Adrian Yung

 

        Singapore’s biotechnology industry has grown astronomically within the last decade. With Asia’s legal drug industry worth approximately $168 billion US dollars and growing at a rate of over 12 percent annually, there are abundant opportunities in the country for large pharmaceutical companies and top international researchers in the field, both of which play a major part in further increasing growth. This is heavily affected by the government’s continued allocation of resources and investment into the industry as well as the stability of the economy.

 

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        Since 2010, a year with a record high annual gross domestic product growth (GDP) of 15 percent, the number of local drug-development and related biotechnology has more than doubled with $1.5 billion Singapore dollars now spent annually on biomedical research. Accounting for around 5 percent of the total national GDP, the state of the biotechnology industry is inextricably linked to Singapore’s economy, which is estimated to grow by 2.9 percent in 2017 (compared to the worldwide average of 3.6 percent). Growth is then expected to slow down to an average of 2.5 percent a year from 2018 to 2022. However, this regression can be in part attributed to the economic slowdown of China and the United States, Singapore’s largest and fifth largest trade partners respectively.

 

        The growth of Singapore’s economy and biotech industry allowed the government to support its seven research institutes, five research consortia, and numerous research awards and grants such as the Singapore Translational Research (STaR) Investigator Award and the Clinician Scientist Award (CSA). It also served to attract the attention of large foreign pharmaceutical companies and top scientists in their fields to the country, which is a major contributing factor for the growth and development of the industry. The list includes Roche, the third largest pharmaceutical company in the world, Takeda, the largest pharmaceutical company in Japan and Asia, Dr. Barry Halliwell, who is at the forefront of research on diseases such as Alzheimer’s and cancers, and Dr. Jackie Ying, responsible for over 300 technological patents under Singapore’s Institute of Bioengineering & Nanotechnology (IBN).

 

        Singapore has recently seen a sharp decrease in its annual GDP growth from a record 15 percent in 2010 down to below the world average at just 2 percent in 2016. The predicted economic growth slowdown might not only decrease available funding, grants, and awards for the numerous research institutions and scientists, but more notably provide a disincentive for companies to continue to invest in Singapore’s biotech industry as well as dampening recruitment efforts for top researchers. This will deal a heavy blow to the development of the industry and further impede research, in addition to the existing difficulty of developing new medicines. However, it is also likely that Singapore maintains or even increases its investments in research and development (R&D) despite the slowdown, like how the United States government increased its R&D funding for universities in times of recent economic crises. Both countries are very similar in terms of percent GDP expenditure per annum for R&D (2.0 and 2.7 respectively), and their biotech industry contributions to the national GDP (5 and 2 percent for Singapore and USA respectively). In tandem with the fact that a country’s investment into R&D is an indicator of national power, as well as innovation being a major way to overcome economic crisis, Singapore is likely to take a similar approach to the United States in this situation.

 

        Since 2011, pharmaceutical companies and researchers have started taking their leave from Singapore including cancer geneticists Neal Copeland and Nancy Jenkins who were part of the Institute of Molecular and Cell Biology (IMCB), and companies Novartis, GlaxoSmithKline, and Pfizer, which have a combined revenue of over $137 billion US. If Singapore wants to continue the growth of its biotech industry, it is essential to reverse the downwards trend of their economy, which if ignored, will result in a continued withdrawal of large foreign investment and the loss of top researchers and scientists.