1.  Biotechnology is the industrial application of biological processes. The biotechnology industry has been a source of both controversy and excitement over the last two decades. Whilst the origins of modern biotechnology lie in discoveries made in the post war years by figures such as James Watson and Francis Crick, commercial biotechnology emerged in the United States in 1970s. The UK was the next country to follow when commercial biotechnology developed here during the 1980s.

2.  The USA's early start established a lead in the field, both in technological and commercial terms, that it has maintained ever since. The UK has generally been considered to be in second place. However since the mid-1990s governments of many other countries have prioritised biotechnology and committed significant funding to develop their own biotechnology sectors. The German government, for instance, made an explicit commitment to catching and overtaking the UK as Europe's biotechnology leader.[1]

3.  With biotechnology such a focus of public policy in Germany, France, Canada, Singapore, Puerto Rico, Israel, and Ireland, amongst many others, fears have arisen that the UK may not be doing enough to nurture an industry seen to have such potential and may be in danger of jeopardising the advantages of its early start in the field. With this in mind we undertook an inquiry into the condition of the biotechnology industry in the UK, the challenges it faces, and the government policies designed to help it. The inquiry focuses, in particular, on the pharmaceutical or 'red' biotechnology sector, rather than the agricultural, 'green' biotechnology. Pharmaceutical biotechnology is the dominant branch of biotech activity in the UK, with a far greater number of companies involved in the sector;[2] agricultural biotechnology is a different industry facing a different set of challenges and so we chose to restrict our focus. However, red biotechnology is a prime example of the sort of knowledge-driven industry that the government has been so keen to encourage and the lessons drawn here will be relevant to other high-technology industries making products with long gestation periods.

4.  In the course of the inquiry we have taken evidence in Westminster from: the British Venture Capital Association; Bionow; the BioIndustry Association; Professor Peter Dunnill; the Association of the British Pharmaceutical Industry; Dr Greg Winter; Dr Jeff Skinner; Dr Ederyn Williams; Lord Sainsbury, Minister for Science and Technology and a DTI official; and the Investment Management Association. In addition we took oral evidence from: Scottish Enterprise; the Roslin Institute; Sir William Stewart; Pantherix; Cyclacel; Strakan; and Scottish Equity Partners in Edinburgh and from: the Eastern Region Biotechnology Initiative; Babraham Bioscience Technologies; Sense Proteomic; De Nova; and Acambis in Cambridge. We received written submissions from a range of individuals and institutions. In addition to the formal evidence sessions we undertook visits to Berlin and Munich in Germany, and to Boston, Washington and North Carolina in the United States. We are grateful to all those who contributed evidence to the inquiry or who helped with the visits. And finally, we would like to express our thanks to our Special Advisors, Mr John Hodgson, Dr Robin Fears and Mr Roger Quince.

2   According to figures prepared by the research consultancy Critical I for the DTI of almost 500 biotech companies in the UK, less than 20 % are involved in agricultural and environmental aspects of biotechnology. Back