In July, the Belgian-Dutch biotech firm Galapagos made headlines. Securing a big long-term support agreement with a US pharma giant, it succeeded in guaranteeing its long-term survival as an independent company. In an environment where large companies are aflush with money and innovate (or stifle competition) by acquiring successful start-ups, this is no mean feat. As Het Financieele Dagblad wrote in an editorial, value is usually created by scientists and then turned into money by entrepreneurs. Galapagos wants to do both, which takes a lot of guts. After successful innovation (research), it wants to drive this innovation to market (development) on its own as a big independent company.
The link between R&D and growth is an interesting and important one. The European Union has recognized a causal relation between R&D and societal advance in its Lisbon Strategy in 2000, which it renewed in 2010. It stated that in order to develop the European economy to become a competitive, social and environmental market economy, member states among others need to invest 3 percent of their GDP in R&D. As an indication, in 2013 this was 1.9 percent for the EU and 2.8 percent for the US. Probably this hasn’t changed much over the years.
Whether said causal relation has been rigorously proven and whether the key performance indicator here is only the GDP or whether it should or does include a happiness or inequality index, I don’t know. But having been on both sides of R&D for all of my professional life, it shouldn’t come as a surprise that I’m a strong believer in societal progress being driven forward by R&D.
In that light, I had an interesting experience with a small role I played in the democratic process of deciding where to invest public money for the greater good, in this case of the province of Gelderland. Many Dutch provinces are investing the windfall that they acquired by selling the provincial energy companies. In that respect, the province of Noord-Brabant has been a shining example by targeting innovation and new business creation. Gelderland was considering something similar: investing in a new research center driven by Imec, together with the Radboud and Wageningen universities. The remit of the center is creating long-term solutions in healthcare and food production.
The research center asked public authorities for a 65 million euro investment – a sizable sum, which could also be used to further goals with more immediate benefits, such as improving infrastructure, public transport or nature conservation. Several politicians of major parties were struggling to assess the expected return on this investment. They, therefore, decided to have a hearing with representatives from across the institutional spectrum, to which I was invited as the representative of the business.
Having collaborated closely with Imec and knowing their excellent track record in innovation and new business creation, the decision was a no-brainer to me. But then again, I don’t carry the responsibility of an elected representative. Their questions revealed a thorough preparation and concern and it was clear that it was in no way a done deal from the start. In the end, the green light was given after extensive due diligence, with clear accountability. In addition, the grants were made conditional on involving regional small and medium-sized enterprises as well as vocational colleges. It was impressive to witness democracy at work and see representatives of all walks of life coming to terms with the complicated relationship between innovation and societal return on investment.
Presumably, it’s just a coincidence that this research center is also a Belgian-Dutch collaboration, just like Galapagos. But it may also turn out that there’s something in this mix that helps to overcome the well-known valley of death, separating innovative ideas and commercial success. Time will tell.