June 2, 2014 1:00 pm JST

The biomed industry has found a Southeast Asian home

TOMOMI KIKUCHI, Nikkei staff writer

Biopolis glass corridor in Singapore (Courtesy of A*Star)

SINGAPORE -- At first glance, Biopolis looks like one of this city-state's financial centers or shopping malls -- rows of shiny towers connected by glass-walled corridors. True to the peculiar building names, such as Genome and Synapse, the area is, in fact, a center of biomedical research and development where big pharmaceutical companies such as GlaxoSmithKline have set up shop.

     Biopolis symbolizes how Singapore is quickly emerging as a global biomed capital. One of the main players is the Agency for Science, Technology and Research (A*Star). With its own set of qualified researchers, A*Star has persuaded big international powers in the field to come by and collaborate.

     Recently, the agency announced a new project with Coca-Cola for optimizing production processes. Japanese detergent maker Lion is also working with A*Star to develop anti-bacterial products that do not use harmful biocides. And this year, Procter & Gamble opened a new innovation center in Biopolis.

     Since the government laid out its vision in 2000, the biomed industry has emerged as a key pillar of economic development in Singapore. In the previous few decades of rapid economic growth, the country's aviation, electronics and other industries flourished. Then "Singapore went looking for another industry that could attract foreign investment, provide jobs for highly skilled workers and produce high value-added products in a limited amount of space," said Dr. Benjamin Seet, executive director of A*Star's Biomedical Research Council. "Biomedical was a good fit."

     The first step was setting up the infrastructure. After Biopolis went up, A*STAR set about attracting researchers. It landed the likes of Dr. Sydney Brenner, who helped to give Biopolis global recognition. Along with low corporate taxes, Singapore offers financial incentives and technological assistance to foreign companies that make homes in Biopolis. In addition, the government has helped to feed the increased demand for researchers by offering more scholarships for doctoral degrees both in Singapore and overseas.

     When Japan's Chugai Pharmaceutical decided to set up Chugai Pharmabody Research, an antibody medical research arm, in summer 2012, it took only half a year for the research center to start operating. "It was a surprisingly quick process," said Dr. Koichi Matsubara, chief executive officer of Chugai Pharmabody Research. A*Star referred researchers with appropriate degrees to work for Chugai, which allowed the center to launch with both Singaporean and Japanese employees. Earlier this year, Chugai expanded its laboratory and increased the number of employees from 25 to 66 since launching the facility. It has plans to hire even more researchers.

Resort Hospitals

Medical tourism is also booming in Singapore. While the pharmaceutical sector is mainly dominated by global giants, Singapore's Raffles Medical Group and Malaysia-based IHH Healthcare lead the way here in providing medical services to foreigners willing to travel for them.

     IHH's hub hospitals are in Singapore, Malaysia and Turkey, but in all it operates 37 hospitals in 10 countries. Here, Mount Elizabeth Novena Hospital has the ambience of a resort hotel, with palm trees outside and luxurious decor inside.

     IHH has given itself an edge in a part of the world where medical skills and services remain somewhat undeveloped by recruiting highly skilled doctors from all over the world to set up specialized clinics.

     "Our business model," an IHH representative said, "is to attract and retain the best doctors by offering them significant autonomy as well as opportunities to develop their personal brand name."

     IHH and its major shareholder, Mitsui & Co., last year brought Dr. Koichi Tanaka to Mount Elizabeth Novena Hospital to set up a liver-transplant clinic. Before he left Japan, Tanaka had been involved in more than a third of all liver transplants in his home country.

     IHH is eyeing more overseas locations. It is currently developing a 500-bed hospital in Hong Kong and has set up a joint venture to develop a 450-bed hospital in Mumbai, India.

     IHH also recently sent shockwaves through the industry by showing interest in purchasing Healthscope, Australia's major health care provider.

     Last year, the biomed industry contributed 23.7 billion Singapore dollars ($18.9 billion) to the city-state's economy, up from S$6 billion in 2000. The number of employees in the field more than doubled, to 16,700 in 2012.

     The success of Singapore's biomed industry was made possible largely because the government created business opportunities for both domestic and overseas companies. In Hong Kong, "the state has not taken many initiatives to support the development of the industry," said Kohei Shiino, deputy managing director of Jetro Singapore. Jetro is Japan's trade-promotion organization.

     Compared with Singapore, Hong Kong has fewer reasons to nurture its biomed industry. One has to do with its manufacturing base, in mainland China, which presents intellectual property risks. Singapore, meanwhile, provides a fuller package, ranging from basic research and manufacturing to medical services and sales.

     Singapore also has a demographic advantage. Its population consists of Chinese, Malays and Indians, all of whom allow it to better target its research and development activities at products meant for numerous races.

     Looking ahead, Singapore's next step is to widen the variety of foreign companies it attracts. Cosmetics makers are on its radar. In the next two years, A*Star, Nanyang Technological University and the National Skin Center will open the Skin Research Institute of Singapore to conduct dermatology research programs.