German bio plan is 'not a threat'

Fears that the massive state-backed expansion of the biotechnology sector in Germany threatens Britain's leadership in the field in Europe are unfounded, according to a study.

Over the past year Germany has rapidly increased its number of biotechnology companies from 170 to over 220, sparking concern in the UK that the expansion could threaten the sector at home.

The expansion has been generously funded through the German government's Bio Regio programme with an annual budget of Pounds 50 million, part of a Pounds 125 million-a-year support initiative.

But Philip Cooke, of the University of Wales, Cardiff, argues that the heavy interventionist German policy for the sector, in contrast to Britain's more market-driven approach, is unlikely to lead to many successful German biotechnology companies.

In a study for the Department of Trade and Industry he estimates that of the 220 existing firms, less than a dozen will survive the next ten years.

He said: "The problem for the sector across Europe is lack of support for new companies. Germany has tried to address the problem through state support for start-ups but eventually it will hit the same problem as every other country, providing the second more substantial injection of capital for the companies three to five years down the road. It is hard to see how the public sector can provide it."

The study estimates that Pounds 4 billion to Pounds 12 billion would be required in developmental financing for just 50 of the German firms to eventually succeed in placing one product on the market in ten years.