It is no secret that the process of developing new biotechnologies that involve human health and safety can be an arduous task that takes a long time to commercialize. The timeframes can stretch anything from four to 20 years to develop a certain product, but these products hold critical and immense benefits for both the economy and the population.
The development process of biotechnology can be sped up if the financing for these projects is more readily available, but what keeps private investors from injecting their funds into technologies that could change the trajectory of a country, and what role does a government play in creating value for these investors?
These technologies are high risk and require high capital investment even at the early stage of development.
One of the most significant barriers to entry for entrepreneurs in the biotechnology field in South Africa is the issue around infrastructure. Investors are very reluctant to provide immovable infrastructure and entrepreneurs often do not have the equipment or space to bring their projects to fruition.
Through initiatives such as the BioPark@Gauteng, a business Incubator at The Innovation Hub that provides business development support to start-ups in the health (biopharmaceuticals, medical devices and diagnostics, indigenous knowledge-based neutraceuticals, cosmeceuticals, cosmetics) and food security (agro-/food-processing, bioprocessing, smart agriculture) industrial biotechnology sectors, start-up projects are de-risked through the provision of fixed assets, such as buildings. The Innovation Hub Management Company helps in de-risking by affording these entrepreneurs access to funding opportunities to ensure that the start-ups are attractive to the larger investors.
Most of the countries that are economically prosperous today rely on and use biotechnology as economic leverage. It may take longer to yield results owing to ongoing testing, but it yields high results. However, in the biotechnology ecosystem, because it is a high-risk environment, you hardly find investors that have got that high-risk appetite except a few who have monopolised the sector.
Now in its third phase of development, which will focus at larger-scale manufacturing in the local pharmaceutical sector, the BioPark@Gauteng plays a critical role in creating an ecosystem for supporting those technologies that have the potential to change the health landscape of South Africa, but that do not necessarily have the means to reach commercial production by themselves. Through these initiatives and the ecosystem that is created in collaboration with educational and research institutes, these new entrants and entrepreneurs are able to get technical assistance and raise funds for the equipment to start manufacturing in the biotechnology sector.
Another critical aspect of having a platform where the start-ups or entrepreneurs come together such as The Innovation Hub is that they start to share ideas and help one another. This ignites more innovations and helps in overcoming hurdles along the entrepreneurial journey faster. The benefits and provision of such innovation enabling spaces to have been witnessed at The Innovation Hub’s BioPark@Gauteng. Ideas are exchanged, and new products are developed or improved, while procurement for manufacturing also becomes less tedious and costly through economies of scale.
One might be tempted to ask about competition amongst entrepreneurs within such an ecosystem. This is very limited and in line with the spirit of developing together, the entrepreneurs help one another knowing that the market is large, and the entrepreneurship jungle cannot be conquered by loners. The testimonies of success by companies that work together has helped to foster the culture of collaborative innovation. Furthermore, the product, technology and market diversity has helped to ease the fear of progress stifling through competition. The BioPark staff generally inculcates values such as the success of one should not be measured by how many are worse than him/her, but by how many you have helped to be like or more than yourself.
However, when one looks at the broader innovation ecosystem there are some issues that need attention to ensure that the entrepreneurship development in this sector is well oiled. Non-coherence and a silo approach to supporting entrepreneurs sometimes leads to duplication of efforts. This leads to some entrepreneurs taking advantage of the system and can be serial grant fund raisers who use funding from multiple sources to repeatedly support one exhausted milestone. If stakeholders are well coordinated and systems are in place to monitor progress of funded milestones it can help in increasing success rates of commercialising biotechnologies.