Aquatic weed seedlings are produced by Fongyu Corp. at Pingtung Agricultural Biotechnology Park in southern Taiwan. (Photo by Huang Chung-hsin)

The public and private sectors are redoubling efforts to bolster Taiwan’s biotech-based economy.

Earlier this year, work started on the second main building at Hsinchu Biomedical Science Park (HBSP). Situated near Taiwan High Speed Rail’s Hsinchu Station in the northern Taiwan county, HBSP spans around 38 hectares and comprises a medical center, an R&D hub and a startup incubator.

At the launch ceremony for construction of the building, scheduled for completion by 2020, President Tsai Ing-wen (蔡英文) said the Ministry of Science and Technology (MOST)-overseen park underscores the government’s commitment to promoting the biotechnology and pharmaceutical industry in the areas of advanced medical devices, intelligent health care systems and new drugs. With firsthand experience running a pharmaceutical business, Tsai understands that creating a biotech cluster in Hsinchu and other sites around the country is key to positioning the biomedical sector as a pillar of Taiwan’s economic growth.

(Infographic by Cho Yi-ju)

National Approach

In addition to HBSP, the other clusters are Central Taiwan Science Park in Taichung City, National Biotechnology Research Park (NBRP) in Taipei City, Pingtung Agricultural Biotechnology Park in the southern county, and Southern Taiwan Science Park in Tainan and Kaohsiung cities. With support from local academic and research institutions like state-backed Industrial Technology Research Institute (ITRI), as well as National Chiao Tung and Tsing Hua universities, parks such as HBSP can enjoy the benefits of cross-industry synergies and integrated road and rail transportation infrastructure.

MOST Deputy Minister Su Fong-chin (蘇芳慶), who heads the ministry-supported Biomedical Development Board of Taiwan headquartered at HBSP, said the government aims to double the annual revenues of health and well-being, medical device-making and pharmaceutical businesses to NT$1 trillion (US$33.3 billion) by 2025. Citing a report from the 2017 BIO International Convention, Su said Taiwan is a leader in biomedical industry innovation among major emerging market players. “In Asia, Taiwan is considered on par with leading lights such as Israel,” he added.

Organized by U.S.-based Biotechnology Innovation Organization, the annual convention is the largest of its kind in the world. Taiwan sent a delegation in June last year for talks and exchanges with around 15,000 business representatives, policymakers and scientists from over 60 countries and territories.

Solid Numbers

Biotech applications extend from medicine to a number of fields spanning agriculture, cosmetics, food and environmentally friendly products. Together with the medical devices and pharmaceutical sectors, biotech revenues from 1,918 companies hit NT$315 billion (US$10.5 billion) in 2016, up from 1,116 and NT$191.2 billion (US$6.4 billion) a decade ago, according to statistics from the Biotechnology and Pharmaceutical Industries Promotion Office under the Ministry of Economic Affairs (MOEA).

Over the same period, private investment in the three areas reached NT$50.9 billion (US$1.7 billion), up from NT$26.3 billion (US$876.7 million). This is on top of financing from the Cabinet-administered National Development Fund, which has invested more than NT$10 billion (US$333.3 million) on biotech companies since the mid-1980s.

Sun Ten Pharmaceutical Co. operates a lab and production line for herbal medicine at Taichung Industrial Park in central Taiwan. (Photo by Huang Chung-hsin)

In 2016, biotech exports were NT$129.5 billion (US$4.3 billion), up 10 percent year on year, and represented the bulk of the sector’s overall production value for that year, according to the 2017 White Paper on the Biotechnology Industry in Taiwan published by the MOEA’s Industrial Development Bureau.

The definition of “biotechnology” varies in the international arena. It is defined by the U.N. Convention on Biological Diversity, for instance, as “any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use.”

According to the MOEA’s white paper, the term is defined as the application of life sciences knowledge in such fields as cell and molecular biology, genetics, immunology and proteomics, as well as related engineering technologies to develop, manufacture or upgrade products for a better quality of life.

The paper also enumerates features distinguishing the biotech industry from other high-tech sectors: internationally orientated, knowledge-intensive, multidisciplinary and value-added. These are characterized by the sector’s elongated, high-cost development phase followed by extremely strict trial and inspection processes for products to ensure maximum safety and effectiveness.

ICT Potential

Incorporation of electronic and information and communication technology (ICT) is viewed as one of the main ways of upgrading medical and health care services. “Taiwan enjoys a significant advantage in this regard given its outperforming ICT sector,” Su said. “Homegrown heavyweights like BenQ, Delta, Hon Hai and Quanta are working on extensions to digital medicine, a field requiring fresh approaches as compared to the industrial sector’s long-standing manufacturing-oriented model.”

Julie Sun (孫智麗), a research fellow with Taipei-based Taiwan Institute of Economic Research and director of its Biotechnology Industry Study Center, shares Su’s opinion. For a country with a tremendous scope of knowledge like Taiwan, it is a sensible move to develop the bio-based economy through utilizing local technology know-how.

“This is not necessarily about branding,” Sun said. “Instead of devoting energy and resources to the high-profile goal, local firms should focus on forming an innovative research hub and transferring technology to foreign pharmaceutical companies.” In this way, the two sides can harness their respective strengths, get products quickly to market and foster global tie-ups, she added.

Long Road

Taiwan’s biotech development has come a long way since the establishment of the government-supported Development Center for Biotechnology (DCB) in 1984, according to Sun. Former Chairman Johnsee Lee (李鍾熙‬), now a standing member of its board of directors, said one of the center’s first missions involved production of hepatitis B vaccines as part of the government’s program to control the disease when Taiwan had one of the highest infection rates in the world.

Partly due to DCB efforts, Taiwan was the first in the world to conduct universal vaccinations for all newborns against hepatitis B in the mid-1980s. Now headed by MOEA Deputy Minister Kung Ming-hsin (龔明鑫), DCB seeks to coordinate resources from academic, private, public and research sectors to assist with commercializing biotech discoveries through forming strategic alliances and research collaborations, as well as spinning off startups.

An indoor plant production facility is run by Tingmao Agricultural Biotechnology Co. in Taoyuan City, northern Taiwan. (Photo by Huang Chung-hsin)

Before heading DCB from 2010 to 2014, Lee helped found ITRI’s Biomedical Technology and Device Research Laboratories. He also served as president of the Hsinchu-headquartered institute from 2003 to 2010. These days, Lee is president of Taipei-based Taiwan Bio Industry Organization (TBIO). Established in 1989, the group comprises around 130 companies and government-supported R&D organizations such as Agricultural Technology Research Institute in Hsinchu City, DCB, ITRI, and National Health Research Institutes in northern Taiwan’s Miaoli County.

According to Lee, while initial membership was chiefly composed of food additive-makers producing monosodium glutamate, or MSG, using bacterial fermentation techniques, current members encompass the green, agricultural; red, health; and white, environmentally related sectors. “Taiwan ramped up biotech and semiconductor development around the same time in the 1980s,” he said, adding that while the latter matured globally in a relatively short period, the former is still in its infancy at home and abroad.

New Direction

Su sees the potential-laden sector as finally ready for blastoff. Its more than 100 biotech companies, up from less than 40 in the late 2000s, listed on bourses and over-the-counter markets boast sales revenue exceeding NT$200 billion (US$6.7 billion). “Stock market value of these firms is NT$1 trillion [US$33.3 billion] and set to climb higher as they fulfill their promise,” he said.

Similarly bullish on the industry’s prospects, Lee is busy cooperating with the government in identifying areas where significant gains can be made. Part of this undertaking involves the TBIO-staged BioTaiwan trade show, which attracted around 600 local and foreign companies from 19 countries and territories displaying wares at 1,310 booths last year. The 2018 edition of the annual expo takes place in July at Taipei Nangang Exhibition Center.

Other activities held on the sidelines of the show include BioBusiness Asia Conference, bringing together corporate executives, investors and scholars from around Asia, especially those from member states of the Association of Southeast Asian Nations. For Su, a keynote speaker at the event, the massive population of this market glitters with allure for Taiwan firms. “The future is on our doorstep,” he said. “Patience and more hard work are all that’s required to bring home the bacon.”

(Infographic by Cho Yi-ju)