This blog is written by Deniz Temelli, Business Analyst at TechAlliance.
Over the past few months, TechAlliance, along with other organizations across the country, has been busy planning events to celebrate National Biotechnology Week. Now it’s time to put those plans into action as today is the kickoff of this exciting week! With the official launch event happening in Halifax, here in London, TechAlliance has planned a great week of online features and community events to highlight what’s happening in biotech locally. Before all of these events begin, I thought it would be a good time to step back and take a look at the Canadian biotech industry in general to understand why we should be celebrating this week.
When talking to those involved in the biotech industry, especially in the start-up space, many will grumble about the lack of VC funding and the infamous ‘commercialization gap.’ Although these complaints may be warranted, there are also many aspects of the biotech industry in which Canada excels. In its 2012 global biotech industry scorecard, Scientific American Worldview ranked Canada 7th in the world, which is definitely something to be proud of. This ranking was based on six main subcategories including IP, a country’s amount of effort devoted to biotech, enterprise support, education and workforce, foundations and policy and stability.
Canada ranked 3rd in terms of IP showing that the amount of innovation coming out of Canada and the processes used to protect it are world class. This level of innovation is no surprise as Canada is well known for the quality of its post-secondary institutions and their research programs. Another driver of innovation is that 50% of Canadians have a post-secondary education, the highest among all OECD countries. This innovation translates into a biotech industry employing more than 1 million people and being worth $87.3 billion in 2011, more than 7% of our GDP.
Along with great strengths, there is almost always some sort of weakness, and the Canadian biotech industry is no exception. The biggest weakness is the lack of VC funding available. In Canada in 2011, $343 million of VC funding was invested in 60 life science companies. Although this is a 15% increase from 2010, the numbers are not close to their peak of the early 2000s and are not comparable to the level of investment happening south of the border. I have spoken with many entrepreneurs who are seeking funding and they say that it is very tough to find the capital needed to propel their company forward past the ‘valley of death.’
Despite all this, some optimism is still warranted, as it appears that things may be changing. Along with VCs becoming aware of this gap and trying to capitalize on it, the federal government is supporting the life science industry now more than ever. Through SR&ED credits, a $220 million investment in NRC-IRAP and a $400 million VC matching program, the government is actively trying to increase the viability of life science companies in Canada. Of course, this may not be the magic bullet solution that will satisfy the cynics, but it is at least a step in the right direction.
So during the week of September 14-21, whether you’re at a local event or checking out the video features on the TechAlliance website, keep in mind that there are a lot of great things happening in the Canadian biotech industry, especially in London, and that there’s definitely a lot to celebrate during National Biotechnology Week.