part0009

In late 2007, I gave a talk in Taiwan on the development of commercial biotech. By then, Taiwan’s drive to upgrade into biotech had been in full gear for nearly two decades, and Taiwan’s aspirations in the sector had become a central part of the discourse about the island’s economic future. I began my talk by recounting a recent biotech investment deal that had been spearheaded by the government, one that seemed, at least from a technical perspective, to be based on a promising drug candidate. I suggested that it was by all industry-insider accounts a sound, if not spectacular, investment deal. It was also pointed out that the Taiwan government had invested US$20 million into the start-up firm. During Q&A, an audience member asked how many new jobs would result from the creation of this firm. Given its start-up nature, I responded that likely 15–20 employment opportunities would be a reasonable expectation, to which the questioner asked, I assume rhetorically, “And how is this deal a good investment for Taiwan’s economy?”

I recount this story because it reveals quite clearly the popular evaluations of Taiwan’s ongoing efforts to make it in commercial biotech. The exchange highlighted people’s growing impatience and frustration with the slow pace of biotech development in Taiwan. It betrayed a sense that people outside the sector were beginning to feel the extraordinary efforts, investments, and resources committed to commercializing biotech were perhaps not worth it. There was, to be sure, a palpable skepticism among many in the audience. The concern about how these investments would specifically benefit Taiwan’s economy in terms of economic returns and new job opportunities also revealed a techno-nationalist impulse. President Chen Shui-Bian himself had described biotech as the “most important industry to Taiwan’s future economic development,”1 also stating, “If we don’t do this today then we will regret it tomorrow.”2 Analytically, the challenge from the audience member illuminated how the notion of “progress” is contested: what I saw as a promising commercial lead was to someone else an example of technological largesse from which reasonable returns were unlikely.

What was most significant about the exchange, however, was that it confirmed a growing sense that in Taiwan (and elsewhere) the appetite for the long-term realities of biotech development is beginning to wane, and that the long-range prospects of overcoming the myriad uncertainties inherent in commercializing biotech have become less tolerable, or simply viewed as no longer worth it. People’s patience is understandably beginning to run out. Indeed, although billions of dollars have been allocated to commercial biotech from government and industry over the last two decades, growth rates in both inputs (investment) and outputs (commercialization) are leveling off. Economic returns have been underwhelming. Fewer than expected new higher-value jobs have been created. And to the extent that developments in the biotech sector are resulting in any wealth accumulation, such wealth is concentrated among only a few. People in Korea, Taiwan, and Singapore are beginning to question the socioeconomic value of the biotech sector, just as governments there have also begun to wonder about the political value of continuing to bet on biotech. What has become particularly troubling is that private sector investment in the life sciences has slowed considerably in recent years, threatening the long-term imperatives of biotech innovation. In Korea, Taiwan, and Singapore, investors have begun to lose their tolerance for the uncertainties inherent in betting on biotech .

There are multiple reasons for this, many of which have been covered in this book thus far but are nonetheless worth reviewing. First, as relative newcomers to the life sciences field and science-based industrialization more generally, Korea, Taiwan, and Singapore have had to confront a very long and steep learning curve. As I described in Chapter 3, there is a lack of both investment and bio-industrial experience in the region. It is not as though stakeholders in Korea, Taiwan, and Singapore do not understand the long-term imperatives of biotech innovation, however. Rather, after several years of modest growth, they have only begun to appreciate just how long-term the innovation process can be. That the global commercial biotech sector has more or less underperformed to date, even in places such as the United States, casts further doubt on the viability of bio-industrial growth in recent entrants such as Korea, Taiwan, and Singapore.

Second, many suggest that the prevailing business model for bio-industry development needs to be reconceived. Past practices in growing technology-based firms have to be rethought in light of the challenges of biotech innovation. There is no consensus yet, however, about an optimal business model for biotech firms. From the perspective of venture investors and bio-entrepreneurs, for instance, the long-term realities of biotech innovation have sealed off many of the conventional exit strategies used by risk capital to recoup their investments. In addition, because returns on investment have been much slower in life sciences industries than in other endeavors, standard exit mechanisms such as listing on the stock market or business consolidation (through mergers and acquisitions) have become less and less tenable. Valuing market potential for venture firms has also proven difficult when technologies remain so distant to the market. The cash burn rate for life sciences firms is uniquely rapid. Consequently, venture capitalists, institutional investors, and would-be entrepreneurs have become increasingly less inclined to invest in biotech. It is simply becoming more difficult for risk capital to be patient. One experienced drug industry observer recently pointed out to me that in his opinion the VC-driven model of information technology upgrading is unsuited to the sorts of uncertainties inherent in cutting-edge life sciences innovation. His is a view echoed by many.

Third, investors and entrepreneurs are, understandably, increasingly hedging their bets by continuing to invest heavily in other value-added high-technology sectors. Information technologies and advanced electronics are viewed as much safer investments than the life sciences in terms of timely economic returns and effective exits. They are also high-growth technology sectors in which Korea, Taiwan, and Singapore already enjoy competitive advantages in downstream R&D and manufacturing. Domestic firms in the region command significant global market share in these sectors, and they have continued to grow much more rapidly than the life sciences sector. The underwhelming performance of the global biotech industries and relatively slow growth in the pharmaceutical sector have deterred further investment in the life sciences. The dot-com bust early in the first decade of the 2000s and the subsequent contraction of the VC market, which forced venture investors to reevaluate their risk management strategies and thresholds for high-risk enterprises, have also made it increasingly difficult for the commercial biotech sector to attract and retain investment. Frankly, there are other high value-added investment opportunities that are safer and less uncertain than biotech.

The waning appetite for the long-term realities of commercial biotech innovation presents a host of problems for the state and bio-industry stakeholders in Korea, Taiwan, and Singapore. This chapter examines how the challenges of temporal uncertainty are requiring the state and bio-industry stakeholders to take on a new kind of political economic leadership role to stem people’s growing impatience regarding the slow pace and unpredictability of commercial biotech development. Biotech stakeholders in Korea, Taiwan, and Singapore have had to reorient expectations about progress in the sector away from what one informant referred to as the prevailing mindset of “short-termism” to a more realistic “long-termism.” The challenges of managing commercial biotech’s temporal uncertainty require the state to expand the temporal horizon of expectations and to recalibrate the measures of progress in order to essentially buy more time. This chapter examines how commercial biotech stakeholders in Korea, Taiwan, and Singapore have attempted to manufacture progress in the near term in order to sustain an appetite for biotech over the long term.

Stakeholders agree that what is needed is a success case, a compelling story about the development of a “star.” The value of such a success would extend beyond just the economic returns from a single firm or the credibility gained by a blockbuster research project. Rather, its demonstration effects would entail much larger implications and positive externalities for stakeholders in government, research labs, industry, and the investment community. A star could be held up as a model from which lessons can be learned, proliferated, and emulated. A star also provides hope that despite long-term uncertainties, some measure of success or progress is possible in uncertain endeavors such as commercial biotech. The development of stars and the strategic portrayal of success stories are expected to reconfigure prevailing expectations about the speed of economic returns and the likelihood of failed initiatives, and to narrow the wide gulf between the lab and the market. Star stories would therefore be a source of inspiration and emulation, as well as a sort of reality check on the high-risk, high-reward realities of the sector. Thus, the emergence of a star—any star—is required in the near term to revive and sustain an appetite for the long-term challenges of life sciences innovation; it would portray the prospects of commercial biotech development in a less—albeit slightly less—uncertain light.

East Asia’s entry into biotech has been a very public venture. Beginning in the 1990s, the state explicitly identified biotechnology as a future “star” industry and a “pillar” of the region’s industrial upgrading trajectory. The prospects of biotech have been hyped, and the media and governments themselves have trumpeted their commitment to growing the life sciences sector. New investments by government and industry are regularly reported on the front pages of newspapers, not buried inside the business sections. The construction and development of new research infrastructures are conspicuous. Even the most casual observers of the economy in the region are aware of the supposed importance of biotech to their economic futures. The stakes have become extraordinarily high, and because of this, the development of biotech has become central to public debate and a topic of everyday conversation. In other words, the prospects of success in commercial biotech industries have become political.

The state actively shapes this political conversation. It portrays biotechnology, and this portrayal is politically strategic.3 For example, because of the newness of bio-industrialization and biotech in Korea, Taiwan, and Singapore, the state has had to play an educative role for the general public. It has launched campaigns to inform and educate people about how life sciences innovation can improve health care and also be a major source of future industrial growth. The biomedical sector is characterized as a critical industry in the knowledge economy. Biotech and applications of the technology have had to be demystified and made more accessible to the general public so that popular support can be built for the push to grow a biotech industry. The state’s educative role has also extended to issues of regulation and the public interest more generally. Because clinical R&D is central to the biotech innovation enterprise, particularly as projects move closer to market, the state has had to clarify the regulatory imperatives of safety and patients’ rights. It mediates debate surrounding bioethics and arbitrates the normative aspects of life sciences R&D. To varying degrees, Korea, Taiwan, and Singapore have adopted a public stakeholder model of regulatory deliberation, for which the state’s portrayal of the biotech innovation process is crucial.

Ironically, the state is therefore responsible for having transformed the distant and uncertain prospects of the biotech sector into the very public spectacle that it now must skillfully manage if it expects to sustain a long-term commitment to innovation. In this respect, the state is also responsible for reporting on development and progress in the sector. Reporting—or, put another way, portraying—progress in the sector is crucial for biotech stakeholders. Gaining and maintaining buy-in into the life sciences field requires that the state be accountable for its efforts in growing the biotech sector. But balancing progress (or the lack of it) against prevailing expectations is not easy to do. On the one hand, the state has to portray developments in the biotech sector as having progressed and continuing to do so, and it has to show that the trajectory remains upward. On the other hand, it also needs to manage popular expectations about the realistic prospects, especially the speed and pace, of such growth, especially in higher value-added commercial activities in biotech. That the postwar developmental state is perceived to have essentially delivered rapid industrialization makes handling this tension between reporting growth and managing expectations even more difficult, as people’s expectations of the state are, wrongly or rightly, inflated. As I have argued in previous chapters, prevailing expectations about the ability of the state to deliver industrial success are unrealistic when it comes to science-based industries such as biotech. Nevertheless, the state must strategically portray the sector in ways that deepen rather than undermine long-term commitment to biotech innovation.

One obvious strategy for portraying progress in biotech development would be to highlight commercial blockbusters, and in particular those firms that have gained significant market share or are on the cutting edge of biotech. However, the reality is that few such firms have emerged in Korea, Taiwan, and Singapore and the economic impact of innovative value-added development has, thus far, been far smaller than expected. In the absence of star cases to celebrate, the state has had to resort to other strategic portrayals of biotech. One involves the recalibration and management of expectations regarding the processes and prospects of biotech industry development.4 In all three places, the state is attempting to portray commercial biotech innovation as a necessarily long-term endeavor and to downplay expectations for commercial blockbusters in the near term. As Johnsee Lee, president of Taiwan’s ITRI during the first decade of the 2000s, aptly puts it, “if the electronics industry is a sprint, then the biotech industry is a marathon relay.”5 His is a message that is continually reported to the general public, industry stakeholders, and investors.

Managing expectations entails a recalibration of popular or lay expectations and the formulation of a new metric that reflects more reasonable, and thus more attainable, indicators of biotech industry development.6 Put another way, measures of progress and success, short of a blockbuster product or cutting-edge discovery in the lab, have to be recalibrated. Policymakers are introducing intermediate benchmarks that portray the development of biotech with a more positive prognosis. It goes without saying that portraying the sector as fledgling would be disastrous for the heavily invested state and biotech industry stakeholders. In this respect, benchmarking, and more precisely the construction of those benchmarks, has been a strategic exercise.

Intermediate measures of commercial biotech development include, for example, the recruitment of international R&D talent to the region. Overseas Taiwanese with bio-industry experience are lured back to Taiwan to head up firms and public research institutes, notably the Development Center for Biotechnology and Academia Sinica. Singapore, given its dearth of local talent, has been the most aggressive in its efforts to recruit star researchers from industry and star scientists from academia in the United States, Europe, and Japan. The government has overhauled its immigration and tax policies specifically to attract foreign R&D talent.7 In 2006, Philip Yeo, then head of the A*STAR, boasted about his efforts to lure top scientists to Singapore, saying that “Once I catch a whale, I know other whales will follow. I have quite a large collection of sirs and Nobel prize winners here now.”8

Even Korea, thought to be the most insular of the three in terms of foreign talent recruitment, has looked to globalize its universities and public research institutes and to facilitate life sciences research exchanges among local and foreign labs. Indeed, international collaboration is perceived as a source of much-needed global credibility, another measure of biotech development among latecomers in Asia. The selection of Seoul National University (SNU) by the United Nations Development Programme to house the International Vaccine Institute (IVI) has made Korea a magnet for world-class research. As of 2005, the vast majority of biomedical researchers at the IVI were from foreign countries. The decision to put the IVI in Korea is perceived, above all, as a stamp of legitimacy from the international scientific community.

Another strategic portrayal of biotech emphasizes the rapid development of the physical and policy infrastructures supporting life sciences R&D. Singapore’s Biopolis complex has captured the public’s attention for its design, scale, and the speed with which its construction was completed, signaling the government’s unequivocal commitment to promoting cutting-edge biomedical research. Taiwan’s National Health Research Institute is located at its own large-scale campus in Miaoli, an hour outside Taipei. Government policies in all three cases are also being revised in line with international standards to facilitate biotech innovation. Intellectual property rights, regulatory compliance, and manufacturing and clinical regulatory standards have been legislated and gradually put into place, not only to ensure domestic protection for patients and firms but also to attract more opportunities for international collaboration. These developments are all intended to reflect progress; they are noteworthy achievements.

Because the distance from lab bench to market is uniquely long in biotech, stakeholders in Korea, Taiwan, and Singapore are highlighting other statistical indicators to demonstrate advances in life sciences R&D and commercial development. Short of a commercial blockbuster, which could most easily be measured in terms of revenue earned or market share, other benchmarks are being reported, such as statistical indicators of publications and patent registrations. Academic publications in international journals and registrations with foreign patent offices are weighted more heavily than domestic ones. That the discoveries published as patents and in academic papers remain a fair distance from becoming marketable technologies and commercial applications is beside the point; what is important is that such indicators demonstrate progress. And as I showed in Chapter 2, the trajectory of this measure of progress in Korea, Taiwan, and Singapore has been quite remarkable given their recent efforts in science and technology development. Such measures have allowed stakeholders, notably the state, to recalibrate and thus manage more realistic and achievable expectations in developing commercial biotech.

In addition to recalibrating expectations about a more realistic pace for life sciences innovation and commercial biotech development, the state in Korea, Taiwan, and Singapore is strategically reframing the scope of what is meant by biotechnology and thus how it measures economic output in the life sciences industry more generally. As the example of the STAG’s proposed benchmarks for biotech commercialization among public labs in Taiwan suggests (see Chapter 2), counting is strategic, and how one defines the parameters of what is being counted matters in portraying political-economic realities. In Taiwan, for example, the state has purposely expanded the definition of biotech industry to include a range of non-biotech products (or at least not conventionally counted as biotechnology), such as cosmetics, health foods, traditional Chinese medicines, and mechanical medical devices and other electronics hardware. These are all health-related products, though far from what are typically classified as biotechnologies. But they nonetheless matter in the portrayal of the growth of the biotech industry in Taiwan. The government regularly reports that biotech and pharmaceutical industry revenues are growing by double-digit rates each year, an impressive figure, to be sure. In reality, however, a significant portion of that revenue growth is attributable to the distribution and sales of health foods and the local manufacture of pharmaceutical ingredients and medical diagnostic kits. In fact, according to figures from the National Science Council in Taiwan, biotech R&D conducted in science-based industrial parks (such as Hsinchu and Tainan) represented a mere 0.20% of total sales in 2000, and biotech ranked lowest in terms of productivity when compared with other technology sectors covered in the survey.9

The Singaporean government has similarly reframed its biotech program by incorporating a much broader notion of what it calls the “biomedical sciences industry.” By doing so, the state counts pharmaceutical manufacturing, marketing, and distribution—all essentially low-tech activities—as part of the total economic output from the biomedical industry sector. Every year the EDB and A*STAR report impressive growth rates in the life sciences, measured in terms of revenue, job creation, and inward investment. Yet it needs to be noted, as I did in the previous chapter, that the fastest growth segment of the biomedical sector reflected in such economic measures is in the manufacturing side of the industry. In the meantime, the proportion of value-added output (as a share of total manufacturing) has actually decreased over the past decade. In other words, by strategically incorporating commercial biotech innovation and firm creation into the broader category of biomedical sciences industry, the state is able to portray the life sciences industries as having rapidly expanded, even if cutting-edge biotech innovation and its share of national economic output are lagging.

Efforts to strategically portray development in biotech are not intended to deceive. In fact, many argue that in the case of Singapore, the state’s primary objective is in fact to grow the biomedical sciences industry in the aggregate, and the state is therefore less concerned about the development of cutting-edge firms and labs in the innovation process; that is, sales, jobs, and investment are in fact the intended measures of growth. Nonetheless, the key point is that stakeholders in all three places are reframing the biotech sector—or, put more accurately, are subsuming the objectives of biotech innovation under a broader conceptualization of health technology industries—in order to cast the life sciences industry and its prospects in a more positive light. Portraying the biotech sector in these ways is intended to sustain an appetite for the long-term uncertainties of first-order biotech innovation. It allows stakeholders, particularly the state, to bolster figures for economic and R&D output in the near term. It gives them more of the time needed to translate promising research into marketable products and services. In these respects, managing expectations about the long-term realities of the innovation process and reframing the biotech sector are politically expedient responses to coping with uncertainty. Given the massive amounts of resources that have been invested in the sector, the state cannot politically afford the perception that its efforts to grow biotech in reality teeter on the brink of failure.

Notwithstanding efforts to portray the development of biotech with an optimistic prognosis, the prevailing consensus among biotech stakeholders in Korea, Taiwan, and Singapore is that a star case or a success story is needed soon to rejuvenate and sustain the appetite for the long-term imperatives of commercial biotech innovation. Such a star, it is argued, would serve as a model for emulation and a source of inspiration. After all, increased returns from manufacturing or from the health-food industry are not the long-term objectives for biotech stakeholders in Asia. They do not endeavor to be the manufacturing plants for the global pharmaceutical industry. Rather, Korea, Taiwan, and Singapore look to climb the commercial value chain and ultimately to become biotech industry leaders and innovators. But people are getting impatient. The growth rate in biotech industry is increasingly viewed as unacceptably slow. There is a growing sense that maybe the challenges of managing commercial biotech’s technical, economic, and temporal uncertainties are beyond the capacities, scale, and patience of stakeholders in Korea, Taiwan, and Singapore—that maybe they should no longer bet on biotech.

The state has therefore taken on the more direct role of manufacturing stars, to artificially cast the commercial biotech sector and its prospects in a more positive light. In addition to policies aimed at mitigating risk and coping with uncertainty, described in earlier chapters, the state has looked to manufacture, in the nearer term, success stories or star cases. The state has chosen to allocate public resources to very specific high-profile initiatives in industry and upstream research. By subventing and in effect leading the private sector in these initiatives, the state has thus taken on the financial and administrative burdens of manufacturing these success stories. In fact, it would be more accurate to say that the state has overallocated resources to these endeavors to, as best it can, ensure their success. In this respect, the state’s interventions to manufacture stars go beyond their otherwise facilitative roles discussed in previous chapters to enhance R&D and bio-industrial growth from a more arm’s-length distance. The strategy of manufacturing stars is discrete, limited to specific projects, and one that appends the state’s other strategies for promoting life sciences industry development. These stars are not intended to anchor the entire biotech industry in Korea, Taiwan, and Singapore. Rather, their anticipated value is in their demonstration effects. The strategy to manufacture stars is therefore understood by the state as a necessary, high-risk, loss-leader intervention intended to revive and sustain an appetite for biotech’s long-term uncertainty.

In the fall of 2007, the Taiwan government announced the formation of TaiMed Biologics, a “supra-incubator” start-up firm for developing biopharmaceuticals.10 Its first licensing deal featured the transfer of the experimental HIV/AIDS drug TNX-355 from U.S. biotech giant Genentech.11 Phase 2a human clinical trials for TNX-355 were completed in 2006, and TaiMed’s plans were to take the candidate through Phase 2b and 3 trials, first in Taiwan though with hopes of mounting global trials. It planned to bring the drug to global markets in three to four years, making it the first pharmaceutical product to be developed and marketed worldwide by a Taiwan-based firm. It was also expected that TNX-355 would be Taiwan’s first drug therapy to be approved by the U.S. FDA. What really set this particular deal apart from other licensing agreements between foreign and local life sciences firms was that the government, through its National Development Fund (NDF), invested US$20 million in the start-up of the firm. Before the 2007 TaiMed deal, government investment in biotech firms tended not to exceed an equity ceiling of 20% (which I have argued is a significant departure from past practices in the developmental state).12 The state claimed a 40% equity share in TaiMed, however, as it intended to use the government’s credibility and networks in industry to draw follow-on investors. The size and proportion of the state’s investment in TaiMed, a single firm, was unprecedented for Taiwan’s biotech sector.

The supra-incubator formulation was envisioned as the private sector’s replication of the ITRI model in technology development and commercialization. The parallels between TaiMed and the ITRI are not accidental, as many of the ITRI’s leaders were also involved in the organizational design of TaiMed. Indeed, direct references to the Taiwan Semiconductor Manufacturing Corporation (TSMC) experience were made with respect to the TaiMed initiative. Like the ITRI, TaiMed Biologics focuses on midstream biotech development. To compensate for Taiwan’s nascent upstream research capacity in the life sciences, TaiMed aims to replicate ITRI’s “license-in, license-out” strategy, acquiring promising leads and taking them further downstream closer to market. As the TNX-355 deal demonstrates, the firm’s strategy is to capture a lucrative though relatively small segment of the biopharmaceutical commercial value chain.13

State leadership in the TaiMed experiment extended beyond its unusually large equity investment in what is technically a private firm. The creation of TaiMed also involved the state’s direct role in prospecting and cementing the Genentech deal in the first place, and subsequently in organizing the firm’s management operations. The TNX-355 acquisition from Genentech and the founding of TaiMed were brokered by local political and scientific heavyweights, collectively described in the media as Taiwan’s biotech “dream team.”14 The Genentech deal involved negotiations between Ho Mei-Yueh, chairwoman of the Council for Economic Planning and Development (CEPD), renowned U.S.-based AIDS researcher and former Time magazine “man of the year” David Ho, and senior officials at Genentech. The government’s investment came from the NDF, which is overseen by the CEPD. Former premier Tsai Ing-Wen was appointed chairwoman of TaiMed, with Academia Sinica’s president, Wong Chi-Huey, and his predecessor, Nobel laureate Lee Yuan-Tseh, serving on the company’s board. Morris Chang, the visionary who founded TSMC during the 1980s, agreed to be an external adviser for the firm.

TaiMed’s founding also benefited from fortuitous timing. In 2007, as the TaiMed initiative was being formulated, the Taiwan government pushed through significant legislation that not only encouraged the deepening of academic-industry linkages and increased venture investment in the biotech sector, but also reoriented the Executive Yuan Development Fund (EYDF) to become more aggressive in investing in private sector firms. In addition, it was at this time that the EYDF was transformed into the National Development Fund, which committed to investing an additional US$1 billion in the commercial biotech industry.15 In short, a fortuitous confluence of government elite networks, the buy-in of industrial heavyweights, and state policy initiatives ensured a successful and much publicized take-off for TaiMed.

Despite the public fanfare that accompanied the government’s announcement about the founding of TaiMed, there were some, including those who supported the state’s leadership role in founding the firm, who expressed concerns about the profitability and long-term commercial viability of the start-up biotech venture. Several accounts from industry observers and state officials suggest, for instance, that the TNX-355 initiative is not a particularly good business deal. According to one major investor in Taiwan’s biotech industry, the TNX-355 drug will likely command a relatively small market share, and some experts forecast that the AIDS drug would gain only a US$200 million market, which in the pharmaceutical industry is considered very small, especially when measured against the costs of running clinical trials. Insiders also pointed to the fact that the TNX-355 lead was inherited by Genentech when it acquired U.S.-based biotech firm Tanox, and that the reason the experimental drug languished after initial Phase 2 trials was because Genentech did not see TNX-355 as central to its own business plans; in other words, the market was simply too small for Genentech. The TNX-355 drug was essentially a throwaway lead that Genentech did not want and, according to some, was all too happy to license out.16 There was also concern that because the TaiMed-Genentech deal was based on a single drug candidate, the Taiwan start-up firm would be particularly vulnerable.17

The TaiMed initiative revealed the government’s anxieties about the waning appetite for commercial biotech in Taiwan. According to state officials, the creation of TaiMed was explicitly intended to “speed things up” in terms of developing Taiwan’s biotech industries.18 In short, TaiMed was to be a compelling success story, a star. The strategic rationale behind the TaiMed initiative, according to industry observers and government officials, was not about the firm’s future profitability per se, but rather about providing the government with a star and thus the ability to portray Taiwan’s emerging biotech sector as a promising industrial venture. TaiMed’s demonstration effects for the broader industry were more important than its revenues earned.19

To be sure, the TaiMed-Genentech agreement was extremely high-profile, as it was the first Taiwan-based biopharmaceutical deal to be played out on the international stage. It gave Taiwan instant international credibility. The founding of TaiMed was, it was hoped, a “magnetic catalyst” to reinvigorate investment and bio-entrepreneurship. It signaled to investors, industry, and researchers the government’s continued commitment to growing a domestic innovation-driven biotech sector.20 It also provided local bio-industry the much-needed experience in running clinical trials, establishing clinical R&D facilities and drafting protocols, and forging international collaborative agreements. TaiMed, in this respect, was expected to serve as a model of how a cutting-edge biotech firm is formed and managed, and one that could be emulated by local industry. TaiMed’s supra-incubator model represented a firm-level organizational innovation—by which I mean its downstream developmental function—that could be replicated by industry.21

Merlion is a Singaporean drug discovery firm that specializes in the development of anti-infective therapies, using natural product compounds as screening candidates. The start-up firm was established in 2002 with the privatization of the government’s Center for Natural Product Research (CNPR), which was at the time a lab within the Institute for Molecular and Cell Biology (IMCB). The CNPR was created in 1993 through a partnership between the Economic Development Board and the multinational pharmaceutical company GlaxoSmithKline. Merlion inherited GSK’s extensive catalog of natural product compounds. In the initial contribution to the start-up firm, GSK invested 50% and the government provided the remaining 50%, shared between the EDB and the IMCB.22 Tony Buss, a former senior executive with GSK, was recruited to head up the new firm. Shortly after its founding, Merlion completed its “A” round of financing, led by Avaris, a foreign venture capital fund with connections to the EDB. The EDB’s biomedical investment fund was a follow-on investor.23

Merlion’s initial business plan was to use its natural product catalog, considered the largest in the world, to screen new drug therapies. Drug development was to be carried out in-house, aided through R&D collaborations with local labs and with multinational pharmaceutical firms that had located some of their R&D projects in Singapore. Merlion’s business model was revised in 2006, however, when the strategy of in-house drug discovery and development proved too slow and financing was drying up. Without a revenue stream and without an exit option for the near term, local and foreign investors became increasingly cautious about the firm. Merlion thus took on a more aggressive business plan, acquiring in 2006 two biotech firms, Germany’s Combinature and Switzerland’s Athelas. Both were in financial distress, but each had developed an anti-infective drug candidate through preclinical R&D and was about to enter Phase 1 trials. Merlion acquired their drug candidates and at the same time raised nearly US$30 million in its “B” round of financing. This time the government’s Bio*One fund co-led the investment with Avaris.24 Merlion began Phase 1 trials in late 2007. The firm also set out to recruit new research talent at that time, specifically researchers and management personnel with expertise in clinical R&D.25 Merlion won the Scripps Award that year for “best company in an emerging market.” It is seen as one of Singapore’s star firms.

ES Cell International (ESI) was formed in 2000, when scientists from Australia’s Monash University and the National University of Singapore (NUS), led by Professor Ariff Bongso, successfully replicated a line of embryonic stem cells, the scientific basis for the development of cutting-edge stem cell therapies. The firm was established in Singapore, in part because of the relatively liberal regulatory regimes governing human stem cell research and also because of the government’s commitment to developing biomedical industry, especially in the area of stem cell research. Alan Colman, who had led the Scottish team of researchers that cloned Dolly the sheep in 1997, was recruited to ESI to become its chief science officer in 2002; he was made CEO in 2005. In 2001, ESI was selected by the U.S. National Institutes of Health as one of ten research organizations eligible for U.S. federal government funding for stem cell research. ESI was envisioned as a stem cell therapy development firm, focusing on treatments for diabetes and cancer. The future looked bright for ESI.

As of 2005, the government’s Bio*One fund had invested over US$26 million in ESI,26 which accounted for reportedly just under a 50% stake in the firm.27 It was expected that ESI would have therapy candidates ready for human trials in 2007 and marketable products by 2010. Because revenues were slow, however, the firm diversified its business model by selling its stem cell lines to labs for research use. While Colman admits that the business of selling lines was not the firm’s core objective, the rationale was that it would help raise ESI’s profile domestically and internationally.28 As such, ESI was portrayed by the state as a success case, not so much because of its revenue-generating potential—to be sure, the firm was reorganized in 2007 after it failed to gain a new round of financing—but rather as an example of how cutting-edge upstream research from within the university lab could be translated into a potentially viable commercial venture.

S*Bio, another one of Singapore’s star firms, was formed in 2000, when U.S.-based Chiron Biotechnology (acquired by Novartis in 2005) and the government’s EDB formed a partnership to spin out a new biopharmaceutical firm. Focusing on small molecular and genomic technologies, S*Bio is currently developing anticancer drugs, particularly HDAC inhibitors. The firm’s initial investment amounted to US$40 million, with Chiron claiming a 19% stake and the EDB investment arm (now Bio*One) fronting the remaining US$32 million (or over 75%). S*Bio was high-profile from the beginning, inheriting Chiron’s gene expression technology and gaining access to some of Chiron’s anticancer drug leads. The long-term realities of drug discovery quickly set in for the firm, however. S*Bio was reported to have been running out of capital by late 2005. Chiron had in fact divested itself of the enterprise. The management team of S*Bio was subsequently changed, with Jan-Anders Karlsson, a former senior research executive with Bayer, taking over as CEO in 2005. The firm’s fortunes took a turn for the better in 2007 when it announced that one of its drug candidates had entered Phase 1 trials and that two other anticancer HDAC inhibitors were far along preclinical stages of development. In 2007, S*Bio began pursuing its “B” round of financing. It eschewed what it saw as risk-averse local VCs, focusing instead on internationalizing the firm in terms of its clinical R&D, investment, and manufacturing. If commercially successful, S*Bio would be Singapore’s pioneering anticancer therapies firm in arguably the most high-profile and lucrative drug market of all.29

Merlion, ESI, and S*Bio were intended in their conception to be stories of success in biomedical industry development in Singapore. Common across the three was state leadership in manufacturing what it hoped would be eventual bio-industrial stars. The state was a critical source of business investment, given the dearth of local VC investors willing to shoulder the risks of commercial biotech development. State resources were also patient capital, evidenced by long-term investments in ESI and S*Bio. Alan Colman, CEO of ESI, suggests the stem cell firm enjoyed a “privileged existence” in Singapore because of the government’s financial commitment. He adds that ESI “would not be alive [as of 2006] if we had been based in either Australia or the U.S.”30 Singapore’s star firms also benefited enormously from the networks provided by the government and specifically the EDB. Tony Buss of Merlion explains that even though Avaris led the first round of investment in the firm in 2002, much of that start-up initiative was owed to the EDB’s introductions to local and foreign investors and to the EDB’s international credibility.31

The state actively selected and targeted Merlion, ESI, and S*Bio to be star firms; adhering to a classic developmental state strategy for infant industry promotion, it provided these firms with advantages and protection from local competition. ESI was Singapore’s only dedicated stem cell therapy discovery firm. S*Bio is considered Singapore’s flagship anticancer drug development company. They were provided advantages that other firms were denied, whether in terms of investment, R&D resources, collaborative opportunities, talent recruitment, or media attention.32 The state thus leveraged its comparative institutional advantages, and specifically its international networks, to facilitate local commercial biotech industry growth. In turn, it expected these star firms to have a positive demonstration effect on the rest of the biomedical sector, to spark follow-on investment, and to restore or at least whet a waning appetite for cutting-edge biotech innovation. Merlion, ESI, and S*Bio were intentionally high-profile stories.

In early 2006, the once celebrated Korean researcher Hwang Woo-Suk admitted to committing scientific fraud. He and his team published what were thought to be landmark articles in the prestigious research journal Science. His 2004 article claimed that his lab had successfully cloned human embryos. The 2005 piece asserted that he had tailored stem cell lines to match their donors. Both findings, if valid, would have moved the field of stem cell research and the development of stem cell therapies a giant step forward. Hwang’s work was considered revolutionary. It turned out, however, that Hwang had fabricated evidence. He had also breached important ethical regulations in the acquisition of donor eggs.

Before these revelations and his own admission of guilt, however, Hwang was Korea’s most famous scientist, arguably Korea’s most celebrated celebrity. People imagined he would be Korea’s first Nobel Prize laureate in the sciences. Hwang was a star who at the time was single-handedly propelling Korea toward becoming one of a few global leaders in upstream life sciences research. He brought tremendous credibility to Korea’s scientific research establishment. A commercial biotech industry could be built, it was reasoned by industry and government, on the achievements and credibility of Hwang and his team at Seoul National University. But just as Hwang manufactured evidence to bolster his research standing, his star status had been manufactured by the government and by Korean society, which wanted to rapidly upgrade its global standing—to “leap ahead”—in the life sciences.33

Hwang’s star status was critical to Korea’s long-term plans for developing its biotech industry. Manufacturing Hwang’s star paid off in terms of international stature and the perception of global leadership in basic research in the life sciences. The prestige that was won through Hwang’s purported groundbreaking findings led prominent labs elsewhere to either abandon or rework their stem cell research agendas. Hwang’s work had that much impact. Had his research been legitimate, not only would Hwang have successfully taken on world leaders in cutting-edge stem cell research; he would have raised the bar for all future developments in the field. The payoff was instant international credibility. Korea emerged as a player in the global biotech scene, hastening the formation of new collaborative R&D opportunities for Korean labs, universities, and firms. Local industry looked to benefit. Investors gained confidence in the sector. The chaebols were expected to move more decisively into life sciences innovation. Simply put, Hwang’s international star status was a significant, if indirect, stimulus for Korea’s infant life sciences industries.

Hwang’s rise to research prominence was more than just facilitated by the state; it was unequivocally a product of direct government efforts. Hwang was anointed Korea’s “top scientist” by President Roh Moo-Hyun. The MOST funded Hwang upward of US$65 million in research funds, a not insignificant share of Korea’s total basic science research budget. Just before the revelations about his suspect research, the MOHW committed an additional US$15 million to create the World Stem Cell Hub for Hwang and his lab. Hwang became part of President Roh’s elite inner circle, where he advised the president on science- and technology-related policies.34 Korea’s regulatory regime for embryonic stem cell research was effectively retrofitted to support rather than constrain Hwang’s ongoing research.35 And finally, the government turned a blind eye to early suspicions about Hwang’s research. As one Korean scientist reported after Hwang’s admission of guilt in early 2006, “Many of us didn’t trust him. But pressure from the public and the government to support him actually inhibited our criticism. We couldn’t say anything.”36 Political economists David Kang and Adam Segal note that Korean efforts to bolster Hwang and his research were driven by a “technonationalist” impulse. In Korea, the imperative to manufacture a star scientist was intense.37

Such technonationalist sentiments were not the government’s alone. Hwang’s story resonated with, and was fanned by, a wave of popular nationalism, and it penetrated deeply into Korea’s national consciousness. His rise was couched in national, not individual, terms. He was, as one analyst put it, “a beacon of light in the dark,” and he “triggered Korean sentiments of nationalist pride.”38 People saw Hwang as a deliverer of greatness to Korea. He was treated like a rock star. In a wired society in which citizens see themselves as netizens, Hwang naturally had an online fan club. The government created a postage stamp in his honor. Early responses to the Hwang crisis went so far as to suggest that accusations of fraud were an American conspiracy to humiliate a rising Korea. When Hwang was charged and later indicted, his detractors were seen by some to be antipatriotic.39

The Hwang debacle finally came to a head in early 2006, though the effects of his downfall continued to linger. His fraudulent research claims and initial resistance to owning up to the evidence against him undermined Korea’s—and, more generally, Asia’s—credibility in life sciences research. It lent credence to Francis Fukuyama’s assertion that Asians by and large approach biotech development with little ethical grounding, driven solely by financial and status-based motivations.40 Hwang’s downfall also brought up serious concerns about the credibility of the peer review process in academic journals, raising red flags in other parts of Asia, most notably the Chinese academy. Hwang had become an embarrassment to the Korean government, the nation, and Seoul National University. The story of Hwang clearly illuminates the political economic pathologies of extreme technonationalism and the strategy of manufacturing stars.

Still, Hwang continues to enjoy a small but dedicated corps of supporters in Korea. To some he remains the pride of Korean science. Perhaps most important, however, is that despite Hwang’s fallen star, many Koreans continue to believe, as his supporters did when Hwang was first found guilty of having fabricated evidence, that “biotechnology is our future.”41 In other words, to the extent that a loss-leader strategy to manufacture Korea’s own star scientist was intended to help sustain an appetite in Korea for biotech’s long-term uncertainties, Hwang’s rise and fall achieved just that. Korean stakeholders did not abandon their biotech ambitions in the wake of the Hwang affair. Indeed, it is arguable that the Hwang debacle hardened even further Korea’s resolve to succeed.

The stories of TaiMed, Merlion, ESI, S*Bio, and Hwang Woo-Suk are exemplary of what I mean by the strategy of manufacturing stars: the creation of national champions by the state. While the individual experiences differ in important ways, the various stories recounted here have common features. All the cases have been high profile, attracting media attention locally and globally. Each has benefited from the allocation of disproportionately large amounts of state resources in terms of investment capital, protection from competition, and political stewardship. It is not unreasonable, in fact, to assert that the state in Korea, Taiwan, and Singapore overallocated resources to these targeted initiatives.

These specific enterprises were intended to be successes. However, unlike during the postwar period, their success was not expected to anchor the entire biotech industry, as we saw with the entry of Samsung into semiconductors or the creation of TSMC in Taiwan during the 1980s. Though they were hoped to be national champions in their own right (i.e., earn revenue, gain market share, and produce path-breaking publications), their achievement of star status was primarily intended to yield other positive externalities and demonstration effects for the long-term development of biotech and bio-industry. They were intended to be exemplars of manufactured “progress.” In other words, the value-added gains from their respective successes rested in the stars’ ability to convey credibility for recent entrants such as Korea, Taiwan, and Singapore; to provide a model for emulation among local firms and labs; and most important, to reinvigorate and sustain an appetite for the long-term uncertainties of commercial biotech innovation.

In some respects, the efforts by the state to manufacture such stars have more or less been successful. They have provided compelling stories and important lessons for would-be entrepreneurs, investors, and scientists involved in the biotech sector. But the processes by which biotech stars have been manufactured in Korea, Taiwan, and Singapore also reveal limitations and tensions in the strategy. This is not to say that the strategy to manufacture stars and national champions is terribly flawed or that it is poor government policy. In fact, there are compelling reasons to view such efforts as necessary, given biotech’s temporal uncertainties. Nor is it my intention to suggest that such limitations and tensions are unique to the biotech sector. Rather, my point is that significant political and economic tensions are brought to the analytic fore when the state attempts to take on a direct leadership role in manufacturing stars in biotech, tensions that are rooted in the state’s developmental or leadership role, on the one hand, and real commercial imperatives inherent in market forces, on the other.

Overinvestment by the state has, for instance, led to concerns about firms’ market fitness, drawing critical views on how resource allocation decisions are made. In Taiwan, criticisms have been raised about the commercial viability of the recently formed TaiMed, especially since its management team is made up mainly of high-profile political heavyweights rather than those with biotech industry experience and expertise. Similarly, in Singapore, executives in targeted star firms admit that excessive reliance on state patronage can undermine the perception of firms’ market fitness, especially when it comes to attracting nongovernment investment. Fears have emerged that resources from the government’s Bio*One inadvertently fuel the perception that investment decisions are a function of state clientelism rather than sound industrial policy or market fitness. In this respect, ESI’s “privileged existence,” as CEO Alan Colman describes it, entails some negative consequences for the firm. Most notably, ESI was unable to gain subsequent rounds of financing after 2006, a development that some suggest is due to the firm’s close ties to the Singaporean government.42 Industry insiders in Singapore similarly explain how it is often assumed that S*Bio is a state-owned enterprise ( which it is not) and that the firm therefore “has nothing to worry about” because it is in the “government’s interest to bail S*Bio out.” This common if incorrect perception of the firm is shared among investors both inside and outside Singapore. It is a damaging misperception, to be sure, but one that has been difficult to correct given S*Bio’s close ties with EDB and the Bio*One fund.43 Informants in Singapore tell me that smaller firms in Singapore in fact deliberately eschew state financing for fear they might be perceived as market-failing firms, unable to gain private sources of financing and thus in desperate need of state subvention. Such firms, having learned from the examples of ESI and S*Bio, prefer to go it on their own, to “grow their business organically,” and to ensure some distance from the state.44

The state-led strategy of selectively manufacturing stars also illuminates what are seen as fundamentally conflicting agendas in how states make their resource allocation decisions. Questions surrounding whether the strategy of manufacturing stars is intended to be an instrument for sectoral industry growth more generally (stars as models for emulation and demonstration) or the growth of a specific firm (a viable commercial business) have emerged among biotech stakeholders and industry watchers. The two roles—developmental versus commercial, industry building versus business investing—may appear on the surface to be complementary. In reality, however, they are not. Outputs are evaluated differently. The developmental approach emphasizes positive externalities gained more generally from a specific initiative, while the commercial dimension focuses on the returns derived from specific investments. The original intent of manufacturing stars in Korea, Taiwan, and Singapore was to emphasize the industry-wide developmental role of the state. Over time, however, people have come to evaluate the payoffs or outputs of such stars in much narrower terms, such as commercial returns. In other words, the strategy to manufacture stars has led to conflicting expectations about outcomes and also fundamentally conflicting logics of resource allocation.

For example, the emerging consensus among most industry observers in Taiwan is that the TaiMed enterprise is not likely to be a particularly good business deal in terms of commercial returns. State officials have echoed similar expectations but assert that the state’s motivation in forming TaiMed in the first place was more developmentally oriented and thus for the benefit of the biotechnology sector as a whole. This has not, however, assuaged the many—such as the audience to which I spoke in 2007—who regard the TaiMed deal strictly as a business investment and one that ought to be evaluated as such, in terms of job creation, wealth accumulation, revenue generation, and market share. Expectations about TaiMed’s performance have been confused. There has been a similar dynamic at play in Singapore. The Bio*One venture fund was originally formed by the Singaporean government to play a developmental role for biomedical industry growth; it was a fund to spark bio-industrial development. Bio*One financed ESI, even though the firm (as well as its supporters in the EDB) quickly realized that its intended business plan to translate basic research in stem cell therapies into marketable goods was going to be extremely long term. The Bio*One’s investment motives were nonetheless centered on elevating the status of stem cell research in Singapore and on generating collaborative opportunities between ESI, the various institutes at the Biopolis, and of course foreign labs and firms. And it did just that. Nevertheless, many in Singapore expected the Bio*One-invested ESI to be a commercial success, a firm that brings in revenues. As in Taiwan, expectations of such state-led efforts to manufacture stars have been confused and conflicted.

The role of Bio*One illustrates particularly well the tensions between the state as industry builder and its perceived role as business investor. Bio*One was created to facilitate the growth of Singapore’s biomedical industry, and it has invested domestically and abroad to do so. Outbound investments have tended to be conditional on the invested firm locating some of its operations in Singapore. Bio*One also invests in foreign VCs to gain expertise in carrying out its own due diligence and to prospect collaborative projects elsewhere. Local investments, however, are expected to fund market loss leaders, such as ESI, in order to generate positive spillovers for the sector. Reflecting this developmental role, the Bio*One fund has by and large been staffed by government bureaucrats tasked with executing government industrial policy, rather than conventional private sector investors interested more narrowly and conventionally in commercial returns. Yet expectations that Bio*One investments produce commercial returns—that the fund be used as a revenue-generating tool as opposed to a developmental instrument—have emerged in Singapore. Its investment logic has thus been gradually transformed, driven by pressures that the fund adhere to a more commercially oriented logic of resource allocation. Though Bio*One continues to fulfill its broader developmental role, it has also begun to let “failed” investments go, much as a “normal” investment fund would.45 The most conspicuous example of this came in 2007, when ESI, one of Singapore’s most important star firms, was forced to abandon its core business plan in therapeutic drug discovery and was reconstituted into a de facto research lab.46 The fate of ESI was big news in Singapore, in large part because the government had effectively admitted that the enterprise had failed, at least as a commercial entity.

The story of ESI also demonstrates how this strategy of manufacturing stars shifts the costs of these potential failures to the state, something the state has otherwise looked to avoid, as I argued in Chapters 2 and 3. Stars have been created in Korea, Taiwan, and Singapore to compensate for the dearth of resources coming from the private sector. But how do states mitigate the effects of inevitable failures, especially when the motivation for creating these stars was to sustain enthusiasm for biotechnology in the first place? One way, as I have already suggested, is to recalibrate popular expectations about the prospects of commercial biotech innovation, so that failed initiatives are understood to be inevitable and even positive. The transformation of ESI into a public research lab and its integration into the Biopolis, for instance, demonstrate how an orchestrated “soft landing” can actually be portrayed as an indicator of progress.47 Expectations can be recalibrated to anticipate the possibility of failure and to stress lessons that can be learned from failed initiatives.48

Still, anticipating and portraying failure is difficult to do, particularly when the political stakes of such investments have been so heightened in the political mainstream. By this I mean that the failure of stars is not just about the failure of a firm or a particular university lab, but rather is about the failure of a star initiative intended from the outset to entail much broader externalities for the sector as a whole. If Taiwan’s TaiMed, for instance, proves to be a commercial failure over the next few years, its losses to Taiwan’s biotech stakeholders would measure far more than the $20 million the government invested in the project. It would signify not only a failed firm but a failed model that was expected to be emulated in the sector more generally. Therefore, overinvestment in a single firm in Taiwan or Singapore, or in the case of Korea, Hwang Woo-Suk and his lab, heightens the political and economic stakes of potential failure, the burden of which is absorbed by the state. As the story of Professor Hwang illustrates, a key challenge in the strategy of manufacturing success stories is balancing the potential promise of spectacular stars against the risk of equally spectacular failures. And in the case of Korea, the state has had to bear the brunt of such failure.

Only five years after Samsung boldly announced its entry into the semiconductor sector in the early 1980s, the firm emerged a global leader in the industry and other Korean firms successfully upgraded into the advanced electronics sector. It was less than a decade after UMC was formed that TSMC launched its pureplay foundry model and quickly integrated Taiwan’s IT industry into lucrative global markets. In other words, it was not long after Korea and Taiwan first laid bets on these important industrial sectors that there was sufficient evidence to strongly suggest that the bets had paid off or were on their way to paying off. The same could be said of Singapore’s efforts to upgrade into the production of high-technology electronics and computer peripherals. The development of commercial biotech industries, however, has thus far played out quite differently in Korea, Taiwan, and Singapore. Biotech innovation and commercialization has turned out be expensive, fraught with economic and technological uncertainties, and very long term. Investment in the life sciences over the past two decades dwarfs past initiatives in industrial upgrading in Korea, Taiwan, and Singapore, and yet very little in commercial returns has been realized thus far. The uncertainties of biotech innovation have been exacerbated by the fact that the bets are not only expensive but also conspicuously public; everyone is keenly aware of the gambles that have been undertaken.

Biotech’s temporal uncertainty, which is a function of the sector’s technical and economic uncertainties, thus poses an entirely new set of political economic challenges for the state and its industrial allies. The state finds itself needing to sustain a long-term appetite for commercial biotech innovation among stakeholders, investors, and even the general public. Biotech stakeholders understand the long-term imperatives of commercial life sciences innovation. But they also understand that they must transform prevailing short-term expectations into a much longer temporal horizon. Failing that, betting on biotech may prove to be not only economically costly but politically costly as well.

The evidence presented in this chapter demonstrates how the state in Korea, Taiwan, and Singapore is attempting to strategically portray the development of commercial biotech in ways intended to recast unreasonable short-term expectations as more realistic long-term opportunities. The state plays an active role in educating the public about the health and economic benefits of biotech innovation. It has also strategically recalibrated popular expectations about biotech, devised new measurements of intermediate “progress” in the life sciences, and even reconceptualized the scope of what counts as biotech in order to portray a positive growth trajectory in the sector. Simply put, the state has strategically portrayed the development of commercial biotech in an attempt to buy time to ride out its bets over the long term.

Perhaps most conspicuous have been efforts by the state to manufacture stars, whether in industry or in the university lab. In one sense, this strategy might appear to mirror past practices of the postwar developmental state in which state leadership created successful firms on which entire industrial sectors could grow. Though I have argued throughout this book that the logic of state leadership in commercial biotech has seen the state retreat from picking and making winners, the selective cases of manufactured stars presented in this chapter certainly point to an enduring heuristic bias that favors such loss-leader strategies. Indeed, one could reasonably explain the decision to manufacture stars as a path-dependent legacy of the postwar developmental state and its successes in growing new industries. But it also needs to be emphasized that these choices to manufacture stars have in fact been rationalized by decision makers in Korea, Taiwan, and Singapore along a different strategic logic. The strategy is less about making market-dominant national champions and more about creating stories and models for emulation, demonstration, and inspiration in the sector as a whole and over the longer term. Thus, the anticipated success of TaiMed or ESI or Professor Hwang was not intended to commercially anchor the biotech industry. Rather, the success of a potential star was its value for other positive externalities. As I have suggested, the upside of this strategic rationale is that a star firm, lab, or scientist can help revive and sustain a long-term appetite for what is an uncertain commercial endeavor. The downside of this strategic bet, of course, is that failure may accelerate the decline of what is already a waning appetite for biotech, and the political and economic costs of such failure will fall on the state.

2 . Cited in Dan Nystedt, “Chen Asks Foreigners to Help in Building Biotech,” Taipei Times, August 7, 2001.

3 . I first got a sense of how central the strategy of “portraying” biotechnology is to life sciences development in Asia when I arrived for my initial round of research interviews in Singapore in 2002. After all my scheduled interviews with EDB and A*STAR officials were canceled at the last minute, the EDB sent a binder full of news clippings and government press releases concerning the development of Singapore’s biomedical industries. All the news reports cast a positive light on the prospects of biomedical industry growth in Singapore; of the 200 or so pages of reports, not one was pessimistic or critical.

4 . See Michael Hopkins, Paul Martin, Paul Nightingale, Alison Kraft, and Surya Mahdi, “The Myth of the Biotech Revolution: An Assessment of Technological, Clinical and Organizational Change,” Research Policy 36 (2007), 586.

5 . Cited in Ming-Ling Hsieh, “Taiwan’s Biotech Outbreak,” Commonwealth Magazine, August 15, 2007.

6 . Author interview, Singapore, December 1, 2006.

7 . Between 2001 and 2006, the number of biomedical personnel in Singapore increased from 100 to 4,600. In addition, the A*STAR has reported that it intends to recruit 1,000 R&D personnel (with doctoral degrees) by 2015, up from just 10 in 2001. In 2004, nearly one-third of state scholarships administered by the A*STAR went to non-Singaporeans studying in the life sciences field. See Alexius Pereira, “Whither the Developmental State? Explaining Singapore’s Continued Developmentalism,” Third World Quarterly 29 (2008), 1196.

8 . Mia Shanley, “Maverick Singapore Bureaucrat Hunts for Scientists,” Reuters News, February 17, 2006.

9 . Productivity here is measured as the ratio of R&D expenditures to sales revenue. See National Science Council (NSC), Indicators of Science and Technology 2002 (Taipei: NSC, 2002), 110–117.

10 . Author interviews, Hsinchu and Taipei, Taiwan, September 19, 2007.

11 . TNX-355 was acquired by Genentech when it absorbed the smaller U.S.-based biotech firm Tanox in February 2007. The connections between Tanox and Taiwan (and thus indirectly with Genentech) run deep. Tanox, before it was acquired by Genentech, was headed by Nancy Chang, a Taiwanese American. She is also the former spouse of Chang Tse-Wen, a renowned biotechnology researcher who was recruited to Taiwan to head up the parastatal Development Center for Biotechnology early in the first decade of the 2000s. Some have suggested that the Tanox-Genentech deal was made possible through such personal connections.

12 . Author interview, MOEA, Taipei, Taiwan, September 16, 2007.

13 . Author interview, Hsinchu, Taiwan, September 20, 2007.

14 . Ming-Ling Hsieh, “Taiwan’s Biotech Dream Team,” Commonwealth Magazine, September 26, 2007.

15 . Hsieh, “Taiwan’s Biotech Outbreak.”

16 . Author interview, MOEA, Taipei, Taiwan, September 16, 2007.

17 . Author interview, Taipei, Taiwan, September 17, 2007.

18 . Author interview, MOEA, Taipei, Taiwan, September 16, 2007.

19 . Author interviews, MOEA, Taipei, Taiwan, September 16, 2007, and Hsinchu, Taiwan, September 20, 2007.

20 . Hsieh, “Taiwan’s Biotech Outbreak.”

21 . Author interview, Hsinchu, Taiwan, September 19, 2007.

22 . Author interview, Singapore, December 12, 2002.

23 . Author interviews, Singapore, June 17, 2004.

24 . Author interview, Singapore, November 29, 2006.

25 . Author interview, Singapore, October 29, 2007.

26 . Jessica Cheam, “Biogenesis: Potential Stem Cell Venture,” Straits Times, August 13, 2005.

27 . John Burton, “ES Cell International: In Singapore, a Company with Ambitious Goals Leads a ‘Privileged Existence,’” Scientific American, June 27, 2005.

28 . Author interview, Singapore, November 28, 2006.

29 . Author interview, Singapore, October 30, 2007.

30 . Author interview, Singapore, November 28, 2006; Burton, “ES Cell International.”

31 . Author interview, Singapore, December 12, 2002.

32 . One local venture capital investor recounted how he had approached the government’s Bio*One fund with an investment proposal for a foreign-based cancer drug development firm. The company had already listed on the prestigious NASDAQ, and its product was near market (i.e., in Phase 3 clinical trials). This was thought to be a safe investment. The response he received from Bio*One was that its “flagship” anticancer firm was S*Bio and it was therefore not interested in investing in its competition. Author interview, Singapore, October 30, 2007.