Linkages between bio-innovation, knowledge production and policy

1. Introduction
There is probably no better example of the necessary interaction between scientific and technological research and innovation than biotechnology. The following statement from Chris Freeman could have been inspired by life sciences related innovation:
… what is at issue is the ability of a national science and technology system to make use of the results of world science to advance national technology. It is certainly the case that it is impossible to understand and assimilate new advances in many branches of science without an active participation in the world scientific community. Moreover, it is also the case that the interdependence of science and technology is increasing and some of the most important generic new technologies are intimately related to basic science (Freeman 1987: 30).
Bio-innovation, that is, the ensemble of new products and services derived from the exploitation of new knowledge in life sciences, can be included in what current literature terms a sectoral systems of innovation.
“A sector is a set of activities that are unified by some linked product groups for a given or emerging demand and which share some common knowledge. Firms in a sector have some commonalities and at the same time are heterogeneous. A sectoral system framework focus on three main dimensions of sectors:
a) knowledge and technological domain
b) Actors and networks
c) Institutions” (Malerba, 2004: 385).
Bio-innovation can be divided into three main sub-sectors, not necessarily without contact but distinctly different in terms of structure: human health, agriculture and environment. Each sub-system shares with the others a wide knowledge base; each exhibit differences in terms of actors, networks and institutions. In the South, and particularly in Latin America, bio-innovation presents some specificities. Two of them deserve special attention: the first is that life sciences have become specially strong there, the strongest in terms of number of researchers, participation in world science and scientific success; the second is that for different reasons, ranging from a rich bio-diversity to idiosyncratic natural and social situations, life sciences need to provide answers to problems that are weakly tackled or not tackled at all in developed countries.
It can be safely said that bio-innovation in developing countries can be a good opportunity for problem solving, for creation of knowledge-based firms, for enlarging the labour market for life sciences graduates and researchers –thus weakening brain-drain tendencies-. All these outcomes depend, however, on the match between the relatively good science-base already acquired and the related business opportunities that can be sustained. This match can be analysed at macro and meso levels, that is, studying the structure of the bio-innovation business sector and its linkages to research activities, as well as the sector’s overall situation in terms of policies and institutions. This approach has been attempted in various occasions (Correa 1995; Arocena and Sutz 2005). In Uruguay, for instance, the mapping of firms and research groups in biotechnology has been completed very recently by initiative of the programme of scientific cooperation in biotechnology between the Pasteur Institute in France and its Uruguayan branch. Case studies and surveys have been made, for instance, to better understand the sectoral potential for exports and for helping client sectors to export with special attention paid to the “triangulation” between supply biotech firms, clients of such firms and knowledge providers (Pittaluga 2005). Comparative analysis between countries have been done, particularly in agro-biotechnology (Snoeck, Sutz et al. 1994; Bortagaray 2007 (forthcoming)).

There is little work done, however, on the road followed by biotech projects, in firms or in universities, regarding the problems they decide to invest in. Those roads are featured by complex and diverse considerations, where issues related to knowledge and absorptive capacities are integrated into business considerations, shaped to a good extent by different policy factors. The “innovation project” is a particularly good point of entry to analyze, at micro level, the interactions between firms, universities and policies. The aim of this proposal is to explore the roads followed by biotech projects at firm level in the different sub-sectors of the sectoral bio-innovation system in Uruguay.

Another dimension deserving attention is the comparative one. Cuba is well known in the Latin American context for the technical excellence and business success of its biotech innovation. The definition of bio-innovation projects in Cuba is less market-centred than in Uruguay, but probably many features of the roads followed by those projects are similar in both countries. The comparison between Uruguay and Cuba is particularly interesting because it can highlight the role played by the different actors, networks and institutions in the setting of the biotech research and innovation agenda.

2. The research proposal
The unit of analysis of the research proposal is the ongoing innovation project at firm level. Three of such projects will be selected, one in each sub-system of the sectoral bio-innovation system: human health, agriculture and environment.
The main research objective is to understand the logic -at firm level- of committing to a biotech innovation project: rationale, risk evaluation, main strong points to rely on, main weak points to overcome, strategies to put the innovation “out the door”. A second research objective is to evaluate a main feature of systemic behavior: to what extent firms are aware of and utilize local research capabilities and knowledge accumulation. A third research objective is to detect considered and yet not undertaken biotech projects, and understand why they were rejected and which conditions would be necessary for including them in the firm portfolio.
The project aims at identifying the factors that stirred the innovation agenda towards the ongoing projects: types and structure of demand, commercial opportunities, perceived technical opportunities. Other issues of particular interest are the role played by factors like knowledgeable people at firm level and outside the firm, and where ideas to address the problems faced by the project are expected to come from. Strategies related to fund rising, marketing, IP, public regulations need also to be addressed. It is expected that a much better understanding of bio-innovation at the micro level will be acquired through this research.
The research will detect, for each main “knowledge ingredient” of the innovation project being studied, the “knowledge supply” available in the country, in terms of research groups and main research results; the linkages of the innovation project to the knowledge supply will be also analyzed. In-depth interviews will allow to cover also the third objective, more speculative but not less interesting from a public policy perspective.
The methodology to be followed will be mainly qualitative, based on interviews to the main actors related in a way or another to the bio-innovation projects: decision-makers and R&D people at firm level, clients, research groups, policy makers at sectoral level (Ministry of Health, of Agriculture and of Environment).
A preliminary exploration has shown that interesting innovation projects with good exports prospects and strong links with academic groups are being developed in Uruguay, working on a common knowledge base that include molecular biology, genetic engineering, microbiology, virology and immunology. A particularly interesting feature is the recent inclusion of quite a few young biologists and biochemists in some very innovative biotech firms that are pushing forwards new ideas into the firms’ innovation agendas. Analyzing these ideas is important for the third objective of this proposal.
In principle the innovation projects to be studied will be related to vaccines for human health, bio-devices for diverse human diagnostics, cattle vaccines and bio-herbicides (based on bacteria and enzymes). These issues can lead to a useful comparison with Cuba.

3. Organization of research
The steps of the research include:

i) background of the Latin American and each country’s biotech sector from the most recent literature available;
ii) gathering of secondary data and previous empirical studies in each country;
iii) identification of the ongoing bio-innovation projects and final selection of the cases to be included;
iv) first round of interviews following the research objectives;
v) mapping of the different types of actors related to the innovation project and second round of interviews with them;
vi) organization and interpretation of the information gathered;
vii) last round of interviews to receive comments of the preliminary conclusions;
viii) final report and diffusion activities.

In Cuba, these activities will be carried on by Isarelis Pérez Ones and Jorge Nuñez Jover. In Uruguay in turn, these activities will be undertaken by a team including Rodrigo Arocena, Judith Sutz and Isabel Bortagaray, currently involved in the UniDev project. Isabel is finishing her PhD thesis at the Department of Public Policy of Georgia Institute of Technology comparing agro-biotechnology policies in Uruguay, Costa Rica and New Zealand . The team will probably include as well a young PhD interested in bio-innovation in agriculture. The resources available for the research will be devoted to the young researchers salaries, the organization of the diffusion workshop and publication of the research results. The research can be completed in a year work.

4. Country’s backgrounds

4.1. Biotechnology in Cuba

Cuba has a well-established trajectory in biotechnology. Some of the specific research questions in that country include the following:

1 How was established the biotech sector in Cuba? What kind of linkages and relationships have been established between university, government and firms?
2 How is the biotech research agenda designed in Cuba and what institutions are involved? What has been the role of the State and the scientific community in the development of that agenda? What type of necessities (social and market) drive the biotech research agenda?
3 What is the role of Universities in the development of the biotech sector in Cuba? In what specific sub-sectors are universities leaders within the biotech sector in Cuba?
4 Which are the factors responsible for success or failure of scientific research communities that go from the laboratory to the market?
5 What kind of mechanisms have been created by universities to generate social and economic benefits? What are the underlying factors that have either enhanced or hindered these mechanisms? What is the social perception of the principal actors about these processes?

Cuba is increasingly associated with accomplishments in the biotech sector and is proving itself in the highly knowledge intensive and competitive field of modern biotechnological research. The biotech system in Cuba has the backbone for generating innovation. The government has developed an explicit S&T policy, which is closely linked to the economic and social development goals of the country. It has expressed a strong and sustained political will and continues to support the biotech sector with both finances and policies for close integration. Their policy focus has advanced from a more uni-dimensional science push to a more integrated and systemic approach. Cuba has developed a high level of human capital in this field and has built up the necessary infrastructure both in research and production. Knowledge is produced in an integrated fashion based on inputs from public research institutions, universities and articulated demands of a well functioning health system. Here the linkages are both within the research institutions and with supply and demand institutions in the Cuban national innovation system. The links are also with international learning centers around the world as well as with a variety of international markets. The regulatory and intellectual property rights environments provide guidance and support for generating successful biotech products. These all encourage a well functioning innovation system in the biotech sector and their close linkages make it easier for learning to take place. The linkages have been the key factor for the growth of the Cuban biotech sector.

4.2. Biotechnology in Nicaragua

4.3. Biotechnology in Uruguay

Bio-sciences are the leading sciences in the country. They entail not only a well-established research trajectory in terms of research results, number of scientists, and public R&D investment, but also relatively high levels of integration and articulation throughout the sectoral actors. Even though biotechnology outputs are still few, they play a fundamental role as an input to the more traditional agricultural sector (Pittaluga and Vigorito 2005).
This work will draw upon previous studies conducted in the country (INIA-MEC-DINACYT 2001; Pittaluga and Vigorito 2005) and on Bortagaray’s dissertation work (Bortagaray 2007 (forthcoming)).