World Class R&D Going Forward

Follow the money.

In this month’s Editors’ Picks we discuss in depth the need for new men, new money and new organizational forms. These are the ingredients for successful Phase 1 industries+: industries looking to take new science and put it on a firm commercial footing. For the last ten months across the website, World Class R&D has worked out what is meant by each of these ingredients. In this article we explore the prevalence of these ingredients within Asian cultures.

The U.S. market will not embrace your ideas. Head to Asia like Deming. Head of Clinical for Major Pharmaceutical Company (2011). Personal Communication.

If we need “new money” and “new men” for our new industry, then can we consider a change in venue to Asia? Can we follow the U.S. dollar in its flight to the Far East?

The Asian market is flush with U.S. dollars and bright new PhD’s from top tier universities (U.S. and otherwise). Japanese industry, as one example, has had notable successes in pharmaceuticals (e.g., including Kirin beer’s financing of Amgen – see especially the ending comment by Carlos). Ten of the top 40 pharmaceutical companies (by revenue) are Japanese. Visit any major research facility and you see an unmistakable over-representation of Asian culture and enthusiasm for the ‘new’ in science. We find the skills, the experience with R&D-centric industries and the money. Can we tap into this geography with the World Class R&D agenda?

We need “new men". Having the technical skills and the financing is necessary but not sufficient. We need innovators and risk-takers. We’re look for men accustomed to beating a trail where none gone before, both in the science research and in the financial markets. We look for individuals who are willing to probe the boundaries of legality and cultural acceptability.1 New organizational forms, one of the three key ingredients, do not come from old men and old money, which are overly invested in the current way of doing things.

Deming tapped into a long-standing predisposition of the Japanese culture with his quality-comes-first religion. We need a culture where the C+ student can do just fine.2 Our C+ student is not average, just rebellious. They find gavage feeding of yesterday’s academic teachings, of the accepted ways, to be for turkeys. These are not slackers, rather individuals who early in life decide what interests them and what doesn’t. They reach into this reservoir to be able to keep going when others wane. They don’t fit into the accepted pattern, which is exactly what we seek in a World Class R&D (Phase 1) industry.

Walter Sneader, who maintains a database of innovators in the drug industry, opined that the most productive researchers (looking at the 20th Century) came up through the school of hard knocks. They had the academic credentials, to be sure, but their leadership skills and determination came mostly from early hard-scrabble careers. These often were not your A+ students (at least in secondary and undergraduate education). These were individuals where were always questioning today’s accepted wisdom, and looking to build their own wisdom.

We’re talking about new organizational forms. The money is available. There’s a surfeit of new science platforms, both tested and untested, waiting to be exploited. What’s missing is the ability to take new money and new science and to productively organize it into firms filled with ‘new men’. By ‘it’ we refer to both the science and the money. We seek innovation in finance and in how we conduct science. This innovation comes from our organizational form, and this organizational form comes from men willing to try things the world has never before seen.

Can we find this within the “Asian” cultures? Japanese firms are succeeding in today’s pharmaceutical industry. Can they translate today’s success in a Phase 2 industry into tomorrow’s successes in Phase 1 industries? It’s not a given. Can we build a respect for the talents of the scofflaw (i.e., the outsider)? Perhaps the ability to devalue t=time in financial transactions will be easier in thousand-year-old Oriental cultures. Perhaps fans of thriller-movie directors Shinya Tsukamoto or Chan-wook Park are more abundant than the westerner observer can see. Having access to piles of expat U.S. dollars is helpful, but not sufficient. It's not clear whether the rebellious nature of a World Class R&D agenda can find a home overseas.

Editor's Picks for January, 2011

  • 1. Perkins for Genentech pursued innovation in financing using the R&D Clinical Partnership until the SEC later deemed his approach too aggressive.
  • 2. In probably one of its most commented articles ever, the Wall Street Journal’s article Why Chinese Mothers Are Superior sparked a huge debate on stereotypical Chinese mothers and the merits of raising A+ children. But it does raise the question of being able to tap into those Asian children, for our new industry, who were willing to ‘fight back’.