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COMMENTARY
A Site Selection Web Exclusive, November 2011
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COMMENTARY

The Berlin-Brandenburg region has become a
leading biotech cluster since reunification.

by DR. KAI BINDSEIL
T

wenty years after German reunification, Berlin is Germany's political capital, a cultural metropolis, an attractive business location and one of Europe's leading centers for science and research. Life sciences and health care industries have been one of the main focuses of the innovation policy in Berlin-Brandenburg for more than 10 years now.

Today the German Capital Region is among the leading biotech locations in Europe. Oliver Rakau, analyst at Deutsche Bank Research and author of the study "Deutschlands Biotechnologieregionen. Konzentration setzt sich fort" (Germany's Biotechnology Regions. Concentration Continues) states: "Berlin-Brandenburg benefits strongly from having the largest number of research facilities by far. They provide considerable advantages for technology transfer and staff recruitment. The region therefore has excellent preconditions for sustained growth."

In fact the biotechnology sector in the region is steadily growing. The number of jobs in biotech companies has doubled in the last decade with some 10 companies per year being founded or relocating their business to Berlin, including pharma giants such as Bayer, Sanofi and Pfizer.

The 2011 report of the regional cluster initiative "BioTOP," which appeared in June, listed a total of 200 companies with short descriptions. The included statistics show very positive developments: The number of employees in biotech grew by 4.7 percent in 2010. And in terms of scientific and technological progress there are many encouraging developments, especially in the fields of diagnostics, drug development, regenerative medicine and industrial biotechnology.

Why is it that Berlin biotech has become such a success story? The conditions for building up a productive biotech cluster with international influence were better here than in many other regions of Germany. The high number of research facilities concentrated in the area leads to an almost inexhaustible pool of resources from which many young, innovative companies have emerged. Many of them are spin-offs of the universities and 15 research facilities of the Max Planck and Fraunhofer Societies as well as the Helmholtz and Leibniz Associations, where approximately 350 scientific groups are engaged in research regarding life sciences.

Thanks to the great commitment of the states' governments, six biotechnology parks were created, providing ideal starting conditions to young companies in particular.The parks differ in their offers and strategic focus and provide good conditions for newcomers. More than half of the companies in the cluster are utilizing the infrastructure of a publicly or privately managed park.

Efficient networks

Nowadays research and development in high-technology segments is furthered by a worldwide flow of know-how and by international co-operation. A cluster can never be self-sufficient. It is rather a point marking a hub on the international roadmap. When you look closer, you will find out that this point is a dense network itself.

The biotech region of Berlin-Brandenburg is a very good example of such a place. The concentration of expertise in core areas of biological basic research, biotechnology and biomedicine is a special characteristic of the region. In these areas great and efficient potentials have come up, forming the basis of the internationally recognized status of life sciences in Berlin-Brandenburg.

Owing to these potentials, many stimuli from outside can be integrated. The close relationship of strong partners from science and industry within the networks ensures an efficient transfer of technology and thus the fast implementation of results from basic research into widespread use.

The networks in the region dedicate themselves to, among other categories, drug discovery and development, the combination of microsystems technology and biotechnology, bioinformatics, functional genomics, glycobiotechnology, molecular diagnostics, nutrition and plant genome research, structural biology, regenerative medicine, RNA technologies and industrial biotechnology.

The close interlocking of basic research with clinical research is another great strength of the region. The Charité, one of the biggest university hospitals in Europe with more than 2,000 scientists, provides research facilities as a competent partner for clinical research covering all indication areas. Clinicians and basic research scientists work together under one roof in special centers like the Experimental and Clinical Research Center (ECRC), the Berlin Brandenburg Center for Regenerative Therapies (BCRT), the center for molecular diagnostics and bioanalytics(ZMDB) or the NEUROCURE excellence cluster.

Potential for even stronger growth

Despite the overall positive trend there are major challenges. Although in 2010 more than €100 million (US$135 million) was invested in Berlin biotech companies, the biggest challenge is the industry's extraordinary capital-intensive nature. From the beginning the companies have to invest heavily in R&D, while not being able to guarantee that there will be a marketable product in the end. That makes it difficult to gain substantial funding for start-up companies. Venture capital companies have become more reluctant because of the high risk and the long time period for product developments in biomedicine. Whereas these obstacles are not at all limited to the Berlin region, both the regional government and the federal German government have set up a variety of programs to cope with the problem. There are R&D grants, loan guarantees and also equity investment by state-owned banks, which allow young entrepreneurs to start their businesses and reach the stage of maturity that allows them to attract international investors.

Bright perspectives

Most biotech companies in the region are young, which means that many of them have potential to grow considerably in the coming years. They typically focus on research and development, and their business concepts primarily aim at co-operation with big pharmaceutical and chemical enterprises. Companies like this form the basis for sustainable growth. And they attract the attention of international life science corporations and bring them into the region. This way companies such as Sanofi, Pfizer, Shire, DSM, STRATEC and Thermo Fisher Scientific have come to the region in recent years. The internationally leading contract research organization Parexel also has a branch in Berlin, employing 1,500 people.

Together with the companies in medical technology, the biotech companies are the technological basis of and thus a driving force behind the altogether well positioned health industry in Berlin-Brandenburg. The Berlin-Brandenburg region is home to 6 million people who are not only potential customers but also a pool of highly qualified potential employees. The availability of well-educated staff is a key priority when companies look for places to locate their activities. Due to the number and high quality of regional research institutions and educational institutions, the Berlin-Brandenburg biotechnology cluster is able to provide the human resources needed for high-level R&D activities. The city has also become a magnet for young and talented people from all over the world, who keep an eye on the Berlin job market, looking for an opportunity to move to the "place to be" in Europe.

Dr. Kai Bindseil is CEO of BioTOP Berlin-Brandenburg. For more information on the BioCapital region, visit www.biotop.de.


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