Monday, August 11, 1997
Why an industry will develop differently in one country than
in another can provide insights into the necessary and sufficient conditions
for growth of a sector. For example, 10 years ago, biotechnology in the U.K.
and the Netherlands appeared to be on a par. Each had a few biotech companies,
both had good universities, and the Dutch also were benefitting from inward
investment from U.S. companies such as Centocor Inc. and Cetus Corp.
A decade later, the U.K. has pulled far ahead, with a large
and thriving healthcare-focused biotech industry, and numerous publicly traded
companies. In contrast, the relatively few Dutch biotech companies are mainly
focused on agricultural biotech rather than human therapeutics, and few are
Without a big cap pharma sector, the Netherlands has few companies
whose needs could be served by small biotech startups, nor is there a pool of
Dutch pharmaceutical executives that could provide managerial expertise. Rather,
some of the major Dutch companies, such as Royal Gist-Brocades and Unilever,
are active in agri-foods, and seed companies comprise an important economic
The Dutch government estimates that there are 43 biotech health
care companies, 11 companies using biotech for veterinary applications, 40 companies
using biotech for agriculture, 22 in horticulture, 6 in floriculture and 5 in
The industrial development issues in the Netherlands don't lie in the incentive structure: the country's rules on capital gains, taxes, employment and stock options are highly favorable to business.