South-South entrepreneurial collaboration in health biotech.

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nature biotechnology volume 28 number 5 mAY 2010
407
countries as several developing countries have
built up capacity in the field, including private-
sector development5–9.
At the same time, analysts have called
for increased South-South collaboration to
address shared health problems10. Developing
countries are increasingly aware of the impor-
tance of doing so through joint efforts with
one another, and they have set up networks to
deal with malaria, tuberculosis, HIV/AIDS and
other common diseases. Together with Russia
and the Ukraine, Brazil, China, Cuba, Nigeria
and Thailand are working together in a net-
work that jointly promotes research and devel-
opment (R&D) aimed at developing innovative
diagnostics kits, drugs and vaccines for HIV/
AIDS prevention and treatment11. In addi-
tion, 24 manufacturers of vaccines in develop-
and increased global
trade2. Furthermore,
developing
tries have
setting up mecha-
nisms to encour-
age increased trade
with one another
by establishing free
trade zones, such
as the Association
of Southeast Asian
Nations Free Trade
Area, the Southern
Common
(Mercosur/Mercosul)
in Latin America and
the Common Market
for Eastern
Southern Africa.
Developing coun-
tries have also been targeting science and
technology sectors as key areas for encourag-
ing South-South collaboration and are forg-
ing a growing number of bilateral, multilateral
and regional agreements with this aim3. South
Africa and Malawi, for example, have formed
an agreement directed at accelerating eco-
nomic growth and reducing poverty through
the adoption of current global technologies4. In
addition, there are significant science and tech-
nology components in regional collaboration
efforts in developed countries, such as those
organized by the New Partnership for Africa’s
Development (http://www.nepad.org/), and
the IBSA network organized by India, Brazil
and South Africa (http://www.ibsa-trilateral.
org/). Health biotech provides a substantial
scope for collaboration between developing
coun-
been
Market
and
I
the economically and politically dominant
northern, or developed, countries, favoring
instead South-South partnerships that syn-
ergize strengths and bolster competitiveness.
Entrepreneurial firms in developing countries
are increasingly aware of the opportunities in
one another’s markets, as is evident from the
12.5% increase in the rate of South-South trade
each year1.
Emerging economies, such as China and
India, have experienced unprecedented growth
n recent decades, developing countries have
sought to reduce their reliance on trade with
South-South entrepreneurial collaboration in health
biotech
Halla Thorsteinsdóttir, Christina C Melon, Monali Ray, Sharon Chakkalackal, Michelle Li, Jan E Cooper,
Jennifer Chadder, Tirso W Saenz, Maria Carlota de Souza Paula, Wen Ke, Lexuan Li, Magdy A Madkour,
Sahar Aly, Nefertiti El-Nikhely, Sachin Chaturvedi, Victor Konde, Abdallah S Daar & Peter A Singer
A survey of entrepreneurial collaborations among health biotech firms in developing countries reveals a surprisingly
high level of collaboration but a lack of emphasis on new or improved health biotech products and processes.
Halla Thorsteinsdóttir, Christina C. Melon,
Monali Ray, Sharon Chakkalackal, Michelle
Li, Jan E. Cooper, Jennifer Chadder, Abdallah
S. Daar and Peter A. Singer are at the
McLaughlin Rotman Centre for Global Health,
University of Toronto and University Health
Network, Toronto, Ontario, Canada. Halla
Thorsteinsdóttir and Abdallah S. Daar are
also at the Dalla Lana School of Public Health,
University of Toronto, Ontario, Canada. Tirso
W. Saenz and Maria Carlota de Souza Paula
are at the Centre for Sustainable Development,
University of Brasilia, Brazil. Wen Ke and
Lexuan Li are at the Institute of Policy and
Management, Chinese Academy of Sciences,
Beijing, China. Magdy A. Madkour is at the
Arid Lands Agricultural Research Institute, Ain
Shams University, Cairo, Egypt. Sahar Aly and
Nefertiti El-Nikhely are at the Center for Special
Studies and Programs, Bibliotheca Alexandrina,
Alexandria, Egypt. Sachin Chaturvedi is at
the Research and Information System for
Developing Countries, India. Victor Konde is at
the University of Zambia, Lusaka, Zambia.
e-mail: halla.thorsteinsdottir@mrcglobal.org
Members of the team studying South-South entrepreneurial collaboration in
health biotech. From left to right: Sachin Chaturvedi, May Sanaee, Magdy
A Madkour, Wen Ke, Halla Thorsteinsdottir, Victor Konde, Tirso W Saenz,
Monali Ray, Christina Melon, Nefertiti El-Nikhely, Heba Maram.
FEATURE
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volume 28 number 5 mAY 2010 nature biotechnology
address their own problems, and contribute to
economic development and quality of life in
developing countries.
To examine the level and characteristics of
South-South collaboration, we sent a brief sur-
vey to 467 health biotech firms in six develop-
ing countries that have relatively strong health
biotech sectors—Brazil, China, Cuba, Egypt,
India and South Africa—and asked about their
linkages with all other developing countries.
We selected these countries on the basis of our
previous research identifying them as regional
leaders in this field5. The survey was sent to all
the dedicated biotech firms that we could iden-
tify in these countries, to pharmaceutical firms
active in biotech and to other organizations
heavily involved in commercialization activities
in the health biotech field (see Supplementary
Methods for a discussion on how we identi-
fied health biotech firms). We asked the firms
whether they collaborated with firms or orga-
nizations in other low- and middle-income
countries, and if so, to name their collaborators
and provide an overview of each partnership.
Data collected included the reasons for the
collaboration, the activities involved and the
output of the collaboration. We presented the
firms with a broad definition of ‘collaboration’,
including in that definition any work jointly
undertaken by firms and organizations that
contributes to the production of knowledge,
products or services in health biotech.
A total of 288 firms completed the survey,
a response rate of 62% (Table 1). We feel this
is a solid response rate, given that participa-
tion was voluntary and the nature of the sec-
tor can make it challenging to get responses
from firms. The sector is fluid, with companies
frequently merging or going bankrupt. In bio-
tech surveys by the Organisation for Economic
Co-operation and Development (Paris) involv-
ing mandatory responses, only response rates
under 50% are considered low18.
In the following sections, we describe the
extent of South-South health biotech collabo-
rations, map where the main linkages lie and
to work together is to minimize costs and risk.
The commercialization of new health products
and services in biotech is characterized by high
costs and high risks13. Even though preclinical
work may produce promising medicines, attri-
tion of products remains high, with many lead
candidates rejected after costly clinical human
testing.
Another reason why collaborations are
attractive is that they provide a conduit to new
and foreign markets. Alliances between firms
are often necessary to expand their markets14.
Firms in small countries are particularly depen-
dent on exporting their products to survive,
and collaborative arrangements with firms in
other countries are typically needed to obtain
this access.
A third rationale for collaboration is to
gain enhanced access to strategic knowledge
or specific technical skills13–17. Both scien-
tific and product development knowledge in
health biotech is highly specialized, making it
nearly impossible for small firms or institu-
tions in developing countries to harness it all.
Collaborations therefore become a means by
which firms can obtain access to a wide spec-
trum of knowledge, technologies and skills,
allowing them to implement new and relevant
findings in their field. This knowledge can be
requisite for various phases of health biotech
development. For instance, for many small
firms that are taking their first steps in product
development, access to knowledge about regu-
latory authorities and processes in local and
foreign markets is particularly important.
If developing countries can cultivate ways
to work effectively together, they may be able
to harness a more relevant model of promot-
ing innovation than the traditional model of
relying on linkages with developed countries.
By pooling their expertise and resources, they
could strengthen their capability to address
shared problems—problems that may not
affect the developed world nor capture the
interest of companies there. If successful,
South-South collaboration could increase
capacity in science-intensive fields by allow-
ing participants to learn from each other,
improve the ability of developing countries to
ing countries have come together to form the
Developing Countries Vaccine Manufactures
Network (http://www.dcvmn.com/), which
ensures a consistent and sustainable supply of
quality vaccines to developing countries at an
affordable price and encourages R&D efforts to
meet the emerging vaccine needs in the devel-
oping world.
Although South-South collaboration in sci-
ence and technology has been high on develop-
ing countries’ agenda since the 1960s12, there
is only a limited amount of empirical evidence
that examines these collaborations. In health
biotech, for example, we are not aware of any
work confirming that developing countries’
firms have heeded the call for South-South
collaboration, or that they are to any signifi-
cant degree working together. In this article,
we aim to fill this knowledge gap and provide
empirical data on South-South collaboration.
We refer to partnerships between health bio-
tech firms in developing countries (that is, low-
and middle-income countries) as ‘South-South
firm collaboration’. Collaboration between
firms in developing and developed countries
(high-income countries) is called ‘South-North
firm collaboration’.
Rationale for South-South collaboration
One reason why firms in health biotech, both in
developing countries and elsewhere, may want
Both
Neither
North-South only
South-South only
41%
32%
6%
21%
Figure 1 Extent of international collaboration of
health biotech firms in developing countries and
comparisons of their South-South versus South-
North collaborations.
80
70
60
50
40
30
20
10
0
BrazilIndiaEgyptCubaChinaSouth
Africa
Country
South-South collaboration
(percentage)
Figure 2 Percentages of firms in the countries
we surveyed that engage in South-South health
biotech collaboration.
Table 1 Number of health biotech firms surveyed and their response rates
Country Number of firms surveyed
Brazil 110
Number of responses
72
Response rate
66%
China 139 8360%
Cuba 118 73%
Egypt 2215 68%
India 121 6856%
South Africa 644266%
Total 46728862%
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nature biotechnology volume 28 number 5 mAY 2010
409
collaborated with ‘firm A’ in India and ‘firm B’
in China. This may inflate the aggregate num-
ber of South-South collaborations.
On average, the firms reported taking part
in 3.5 collaborations, with responses ranging
from 2.8 collaborations per firm for Brazil
to 5.7 collaborations for Cuba. Brazil has the
largest number of South-South collaborations
of the countries we surveyed, with well over
60 collaborations. Even though the countries
with the smallest populations, Cuba and South
Africa, have relatively low numbers of health
biotech firms, they are so active in South-South
collaborations that comparing their collabora-
tions with those of large countries is still likely
to produce valid results. South Africa has the
second-highest number of collaborations
of the countries in this study, and Cuba has
slightly more collaborations than the popula-
tion giant China.
tion, with twice as many South-South collabo-
rations as South-North (Table 2).
Most of the firms that are active in South-
South collaboration are engaged in several
collaboration initiatives. The total number of
South-South collaborations reported in this
study is 279. It is important to note, however,
that some collaborations may have been dou-
ble-counted; that is, a particular partnership
between an Indian firm and a South African
firm may have been counted twice—once for
India and once for South Africa—if both firms
responded to the survey and reported all of
their collaborations. We attempted to address
this issue by asking the respondents to provide
the names of their partnering firms; however,
many opted to keep this information confiden-
tial, thereby limiting our ability to adjust the
number of collaborations accordingly. In such
cases, the firms reported, for example, that they
explore the main characteristics and outputs of
the collaborations.
Extent of South-South collaboration
The results show that South-South firm col-
laboration is substantial, with more than a
quarter (27%) of the health biotech firms that
responded reporting collaborations of this type
(Fig. 1). South-North collaboration is still more
predominant, however, with over half (53%) of
the firms reporting collaborations with devel-
oped countries. A proportion of the firms in
our sample (21%) indicated they engaged in
both South-South and South-North collabo-
rations.
We looked at the proportion of firms involved
in South-South collaboration in each of the
countries we studied (Fig. 2). Those countries
in our sample with the smallest populations—
Cuba and South Africa—are the most active in
South-South collaborations, with almost half
of the South African firms and three-quarters
of the Cuban entrepreneurial organizations
reporting involvement in this type of collabo-
ration. This is in stark contrast to the more
populated countries, such as China, where just
over 10% of the firms report South-South col-
laborations, and India, with fewer than 20% of
firms engaged in such partnerships.
According to our findings, almost all the
countries studied are more active in South-
North collaborations than South-South col-
laborations. Egypt was the only country that
showed a lower rate of South-North collabora-
China
Mexico
Malawi
Brazil
South Africa
India
Egypt
Colombia
Venezuela
Ecuador
Peru
Argentina
Jordan
Yemen
Pakistan
Botswana
Thailand
Malaysia
Indonesia
Bolivia
Paraguay
Dominican Republic
Namibia
Swaziland
Lesotho
Mozambique
Zimbabwe
Uganda
Sudan
Nigeria
Turkey
Sri Lanka
Philipines
Kenya
Guatemala
Ghana
Libya
Iraq
Cuba
Figure 3 Collaboration network of health biotech firms in South-South collaborations. The size of each node represents the total number of South-South
collaborations for the country, while the width of each line represents the number of collaborations between the two linked countries. For clarity, only linkages
of two or more collaborations were included on this map.
Table 2 Number of international collaborations reported
South-South collaborationsNorth-South collaborationsTotal collaborations
Country
Brazil
Number
64
Average number
per company
0.9
Number
127
Average number
per company
1.8
Number
191
Average number
per company
2.7
China 270.3 991.21261.5
Cuba 344.3 637.9 9712.1
Egypt 392.6 302.0 694.6
India 540.8 1261.91802.6
South Africa 61 1.566 1.61273.0
Total 2791.05111.87902.7
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volume 28 number 5 mAY 2010 nature biotechnology
tries, Egypt collaborates with Middle Eastern
and North African countries, and there are
many linkages of Brazil and Cuba with other
Latin American countries.
Characteristics of collaborations
To get a deeper understanding of South-South
collaborations, we asked the firms what activi-
ties were involved in the collaborations, what
were the reasons for partnering and what out-
puts had arisen from these deals.
Collaborations involve mostly commercializa-
tion. We asked the firms to specify the activi-
ties they were pursuing jointly in South-South
collaborations, choosing from a wide selection
of activities that are typically undertaken by
health biotech firms, from research-intensive
activities to end-stage commercialization
activities such as distribution and marketing.
We considered activities to be innovative if
they focused on research and developmen-
tal activities of new products or services, or
of production processes. This includes, for
instance, clinical trials and laboratory services.
Conversely, we regarded collaborations involv-
ing simply the packaging of products or their
export between countries—that is, marketing
and distribution—as noninnovative activi-
ties. We indicated to the firms that they should
choose all the activities that were applicable to
their collaborations, and we offered the option
to add any other activities not included on
our list.
The resulting responses show that the
majority of the collaborations (60%) involve
two or more activities. For example, rather
than creating collaboration solely around
distribution, partnership deals more usu-
ally involve distribution and another activ-
ity, such as providing supplies. It is also clear
that most of the South-South collaborations
involve end-stage commercialization activities,
with around 200 (72%) involving distribution
and 95 (34%) involving marketing activities
(Fig. 4). Innovative activities were much less
frequently cited by the firms that responded:
R&D was part of only 36 (13%) of the col-
laborations, clinical trials just 25 (9%), and
contract research only 9 (3%). It is noteworthy
that the third most frequently cited collabo-
ration activity was providing supplies, with
53 (19%) of the South-South collaborations
involving such provisions. Supply activity can
vary from providing plant material from which
active pharmaceutical ingredients are derived
for drug development to providing active phar-
maceutical ingredients.
The relatively slight emphasis on R&D
activities in South-South firm collaboration
contrasts with that reported in an analysis
lished in only around 8% of the collaborations
overall. South Africa (seven joint ventures) and
Cuba (six joint ventures) had the highest num-
bers of joint ventures reported.
Geography of collaborations
To map South-South collaborations in health
biotech, we drew a diagram of the main link-
ages reported by the firms using the Ucinet 6
program (http://www.analytictech.com/uci
net/; Fig. 3). The countries we surveyed directly
appear as hubs involved in various collabora-
tion networks; it is not surprising that they are
featured centrally. In contrast, this map is likely
to under-represent the collaborations of coun-
tries we did not survey, such as Mexico, Nigeria
and Malaysia. Nevertheless, the map provides
an approximate overview of South-South col-
laboration in health biotech and shows that the
strongest linkages of the countries we surveyed
are with one another.
Chinese companies collaborate mainly with
those in Brazil and India, Indian companies
have close linkages with those in South Africa,
and Brazilian companies have close linkages
with firms in Cuba. The only other pairs of
countries where companies are involved in
a similar level of South-South collaboration
are Brazil and Argentina, and South Africa
and Botswana. As Argentina and Botswana
are active in forming partnerships with other
developing countries, surveying them would
have provided an even fuller picture of South-
South firm collaboration in this field. Our data,
however, reinforces the notion that we surveyed
the strongest countries in health biotech and
that they collaborate with one another despite
substantial distances.
The map of South-South collaborations also
reflects the regional nature of health biotech
partnerships between firms in developing
countries. Every country in our survey has
collaborations with other countries within
its continent. For example, South Africa has
numerous ties with other sub-Saharan coun-
We asked the firms to indicate who initiated
the collaborations: themselves, their partners,
government agencies, international organiza-
tions, expatriates or any other intermediary.
Their answers indicate that the firms them-
selves typically initiated the collaborations.
Governments or other local or international
organizations seldom played this role, with
only 17 of the 279 reported collaborations said
to have been initiated by such organizations.
Respondents from Cuba and Brazil were most
likely to indicate governmental influence, typi-
cally targeting public research organizations
that are heavily involved in entrepreneurial
activities. Follow-up interviews in developing
countries revealed that firms find it challenging
to identify appropriate collaborative partners
in other developing countries and to initiate the
collaboration. Finding enough detailed infor-
mation about potential partners is a difficult
task, and building trust can also be challenging.
Thus, there definitely is scope for governments
and other third parties to take a more proac-
tive role in initiating collaborations. It is also
notable that only one of the collaborations was
reported to be initiated by expatriates who have
moved between the collaborating countries.
One explanation for this may be a relatively
low migration rate of professionals between
developing countries. It would be interesting
to see whether expatriates are more important
in South-North health biotech collaboration.
In addition, we asked the respondents
to indicate whether they had set up formal
arrangements with their collaborators, and
to elaborate on the nature of those arrange-
ments where applicable. We found that most
(almost 90%) of the collaborations involved at
least one type of formal arrangement among
participants, ranging from supply agreements
to R&D cooperation agreements to marketing
and distribution agreements. Licensing agree-
ments were commonly cited, with around 19%
of the collaborations having formal licensing
contracts, whereas joint ventures were estab-
250
200
150
100
50
0
Distribution
Contract research
Lab services
Using supplies
Clinical trials
Training
R&D
Manufacturing
Providing supplies
Marketing
Other
Collaborative activity
Number of collaborations
Figure 4 Distribution of the activities involved in the South-South entrepreneurial collaborations for all
the countries we surveyed.
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nature biotechnology volume 28 number 5 mAY 2010
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marketing collaborations between Brazil and
China, Brazil and Cuba, India and China, and
India and South Africa. They probably form
linkages to reach each other’s markets. Also
striking are the widespread regional commer-
cialization collaborations in health biotech.
South African firms, for example, have distri-
bution and marketing collaborations with well
over 20 African countries, including relatively
strong linkages with Botswana, Namibia and
(Fig. 5). Some of the activities represent only
a few collaboration linkages, which certainly
limits the possibility of generalizing from
these results. As distribution and marketing
are closely related activities, we graphed them
together as ‘end-stage commercialization’.
There are relatively strong end-stage com-
mercialization linkages between the leading
developing countries in health biotech (Fig.
5a), with, for example, active distribution and
of North-North collaboration in biotech17.
From the mid- to late 1990s, more than 20%
of biotech collaborations between developed
countries involved R&D, up from around 6%
in the 1970s. It will be of interest to repeat this
survey in a few years to detect whether R&D
collaborations between developing countries
also increase.
We then explored where the collaboration
linkages lie for the different types of activities
Cuba
Brazil
South Africa
India
China
Egypt
Mexico
Colombia
Venezuela
Ecuador
Peru
Argentina
Jordan
Yemen
Pakistan
Botswana
Malawi
Thailand
Malaysia
Indonesia
Bolivia
Chile
Paraguay
Dominican Republic
Namibia
Swaziland
Mozambique
Zimbabwe
Uganda
Sudan
Nigeria
Turkey
Sri Lanka
Philipines
Kenya
Cuba
Brazil
South Africa
India
China
Egypt
Mexico
Guatemala
Venezuela
Ecuador
Peru
Argentina
Palestine
Iran
Pakistan
Botswana
Zambia
Malawi
Thailand
Malaysia
Indonesia
a
b
Figure 5 The network of collaborations involving end-stage commercialization versus R&D. (a) Collaborations involving end-stage commercialization.
(b) Collaborations involving R&D. As in Figure 3, node size and line width denote numbers of collaborations. For clarity, only linkages of two or more
distribution and marketing collaborations are included in a; all of the linkages are shown in b.
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