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Vision Report on the eFORESEE Malta Biotechnology Foresight Pilot Project

Realising a Thriving Maltese Biotechnology Industry by 2015

Dorita Galea and Alex Felice

December 2003 The eFORESEE Malta Project was a co-sponsored foresight project between the European Union and the Maltese Government, under the Fifth Framework (FP5) STRATA Programme for research, technological development and demonstration (RTD), which programme promotes dialogue between researchers, policy-makers and other societal actors on general science, technology and innovation (STI) policy issues of both European and national relevance.

Index List of Figures 4 List of Tables 5 Executive Summary 6 Introduction 7 Chapter 1: Foresight: A proactive approach for the future 8 1.1 Background 8 1.2 Rationale 8 1.3 Core Objectives and Key Recommendations 9 1.3.1 Mission Statement 9 1.3.2 Recommended Action Lines 10 Chapter 2: The Foresight Process 13 2.1 Introduction 13 2.2 Stakeholder Mapping 14 2.3 Launching seminar 16 2.4 Participation in the Biotechnology Pilot Project 17 2.5 Scenario-building and Questionnaire-based Survey 18 2.5.1 Questionnaire Survey: 18 2.5.2 Scenario building 19 2.6 SWOT Analysis 20 2.7 Assessment of the Issues and Key Drivers 22 2.8 The vision for 2015 27 Chapter 3: Overview of the Biotechnology Sector in Malta 28 3.1 Economic environment 28 3.2 Strengths and weaknesses of the enterprise sector 29 3.3 Legal and Administrative Environment 33 3.4 Control of Genetically Modified Organisms 34 3.5 Intellectual Property and Data Protection 36 3.6 Teaching, Training and Research 37 3.7 Research Community - Industrial Cooperation 40 3.9 Business networks for innovation 43 3.10 Malta Innovation Scoreboard, 43 3.11 Biotechnology related sectors present in Malta 46 3.12 Public Opinion 48 3.13 Ethical Framework 49 Chapter 4: Overview of Current and Future Issues, Trends and Opportunities in Biotechnology in Europe and Worldwide 51 4.1 Why Biotechnology? 51 4.2 Healthcare applications 51 4.3 Agriculture and food production 52 4.4 Harvesting the potential 52 4.5 Ethical issues 54 4.6 Regulations 55

4.7 The knowledge base 56 4.8 Europe’s capacity to offer scientific and technological solutions 57 4.9 The US model 59 4.10 Other Countries: 60 Annex 1: Interviewees and Panel Members 62 Annex 2: Proposed Terms of Reference 65 Annex 3: List of Documents and Websites 66 Annex 4: Biotechnology R&D Questionnaire Survey 69 Annex 5: Abbreviations 80 Annex 6: Dates of Pilot Meetings 81 Annex 7: Launching Seminar Speeches and Newspaper Letters 82 Annex 8: Applications of Modern Biotechnology 95

List of Figures Page

2.1 Distribution of work responsibilities within the pilot 15

2.2 Diagrammatic Representations of Scenarios. 20

3.1 Maltese population by gender and age group in 2003 and as projected to 2015

28

3.2 Gross Domestic Product by Industry and Type of Income

29

3.3 The number of patents registered since 1994 37

3.4 Number of University graduates over a four year period 38

3.5 Standard process followed in the commercialisation of biotechnology products

41

3.6 Summary of the basic foundations for the successful commercialisation of biotechnology

43

4.1 Countries who have adopted biotechnology crops 54

4.2 Biotechnology Industry in Europe compared to the US 58

4.3 Comparison of Employment 59

List of Tables Page

3.1 Turnover (millions) and employment in manufacturing sector over a period of 3 years

31

3.2 Initiatives towards economic restructuring 32

3.3 European Union Regulating Genetically Modified Organisms and competent authorities in Malta

35

3.4 Malta Innovation Scoreboard 2003 as compared to European Union (EU) and Associate, Acceding and Candidate Country (AAC) statistics

45

4.1 Direct and indirect market potential of life sciences and biotechnology

53

Executive Summary Presented here is the documentation of the biotechnology foresight pilot project carried out as part of the EU fifth framework project eFORESEE. A bottom up approach was selected and therefore the general opinion of the stakeholders involved in biotechnology is herein documented.

The core objective of this pilot is to produce a plan to develop the fledgling Maltese biotechnology industry into a core sector of the Maltese economy by 2015 through a collaborative venture between academic institutions, the public sector and private enterprises.

Biotechnology is predicted to be an area for the next economic growth. The European Commission itself is preparing to reap the benefits of this technology and has already outlined the strategy to be followed (COM(2002)27final). A Vision for Malta’s biotechnology industry is herein formulated and the recommended actions to achieve industrial growth are outlined. Two aspects of biotechnology are distinguished, that is applications within the health sector and the non-health sector. A survey of the current local biotechnology activities was carried out and it was found the number of small companies that exist in the health aspect of biotechnology are ‘struggling to survive’ because of a number of factors which include one or more of the following reasons, lack of scientists trained in this field, lack of cooperation by relevant authorities, lack of entrepreneurial knowledge of scientist managing these companies. One the other hand, in the non-health aspect of biotechnology, a strategy already exists and appropriate decisions have been taken to reap maximal benefit possible within our limitations.

Moreover, biotechnology research and development in Malta is carried out by government organisations (mainly University), non-government organisations and the private sector. In the first case all contacts complain of limiting funds while the other two sectors allocate funds from their profits. Lack of awareness of opportunities in training and funding offered by EU programmes was a general shortcoming.

The two main vectors limiting development of the local biotechnology sector were identified to be STI education and RTDI capacity. Four main scenarios for the possible development of local biotechnology sector were developed around these two vectors. Actions to be taken to move from one scenario to another and hence reach optimal scenario are outlined. SWOT analysis of the local biotechnology sector identified that our major strengths are the well established medical and engineering faculties, good health care system, strong ICT sector and a skilled workforce. However lack of right decisions being taken at the right time might result in brain drain and low GDP.

Introduction eFORESEE is the acronym for Exchange of Foresight Relevant Experiences for Small European and Enlargement Countries. The overall aim of the project is to help the smaller economies deal with the structural changes they will be faced with upon accession. The partners of the eFORESEE Project are Malta, Cyprus and Estonia and each country has carried out its own thematic national foresight pilots in specific areas, selected according to the respective country’s priorities. In Malta’s case, the three foresight pilots within the eFORESEE Project focused on ICT (Information and Communication Technology) and Education, Biotechnology and Marine Science.

Foresight pilot activities consist of methodologies and processes that allow for the development of national strategic vision, by taking into account the needs, potential, interests and priorities of the specific sectors. Foresight is about preparing for the future. It is about deploying resources in the best way possible - for competitive advantage, for enhanced quality of life and for sustainable development. Foresight makes possible the identification of the opportunities and challenges in the future, and what Government, scientists and engineers should be doing to meet them.

The time horizon of this pilot project is set at 2015 and the exercise itself is completed in seven months.

The core team is formed of four indivduals, Professor Alex Felice, of the Faculty of Medicine and Surgery of the University of Malta, the Pathology Division (Section of Genetics) of the Department of Health and Chairman of Atheneum Biotechnologies Limited, Dr. Jennifer Cassingena Harper, Manager of the Policy Development Unit of the Malta Council for Science and Technology (MCST), Ms. Sharon DeMarco, local coordinator of the eFORESEE pilot and Ms. Dorita Galea, a scientist, acted as managing secretary, with responsibility for carrying out and final documentation of this pilot.

As a qualified and experienced scientist with expertise in basic research, genetic engineering, cloning, protein science, molecular diagnostics, DNA sequencing and banking the managing secretary firmly believe in the potential of biotechnology for a small island mostly lacking in resources such as Malta. A Biotechnology sector is knowledge based, multidisciplinary and in most applications the resources required are derivatives of living organisms.

The managing secretary would like to most sincerely thank all those who committed their time, energy, expertise and experience to this exercise, either through their work on the panels or through their contributions during the consultation stage. One person who was outstanding in his contribution to this pilot was Dr. Pierre Schembri Wismayer.

Chapter 1: Foresight: A proactive approach for the future 1.1 Background This document presents a detailed account of the results and process of the eFORESEE Malta pilot on ‘Realizing a Thriving Maltese Biotechnology Industry by 2015’. This was the third Maltese pilot within this two year fifth framework project. Another two eFORESEE pilots were carried out in Malta. The first was ‘Exploring Knowledge Futures in ICT and Education in 2020’ and the second pilot was aimed “Towards enhancing the marine sector’s contribution to the Maltese economy in 2020’. The latter was concurrently documented.

The eFORESEE project was aimed at promoting the Exchange of Foresight Relevant Experience among Small European and Enlargement countries. Locally it was under the coordination of the MCST. This eFORESEE pilot was carried out towards the end of the year two thousand and three. Other partners within this project are Cyprus and Estonia. The main overall objective of this project was to address the challenges faced by accession countries in dealing with the structural changes to the economy through the carrying out of national foresight exercises in their respective countries.

Foresight can be defined as a ‘systematic, participatory, future intelligence gathering and medium-to-long-term vision-building process aimed at present-day decisions and mobilising joint actions’.

As Hon. Minister Dalli said during the launching seminar of this project ‘only through such foresight exercises can we be prepared for the challenges ahead in order to transform them into opportunities’ (complete text of Hon. Dalli speech is found in Annex 7).

1.2 Rationale At the beginning of the 21st century, just as Malta is about to join the European economic block, the Maltese economy is restructuring from a low cost manufacturing base to a knowledge based, sustainable economy.

Virtually all analyses predict that biotechnology is the basis for one of the next major economic growth. All major economies are allowing and adapting for an expansion of this type of industry. According to the National Science & Technology Council of the USA, biotechnology ‘...may well play as pivotal a role in social and industrial advancement over the next 10 to 20 years as did physics and chemistry in the post-World War II period’ (Biotechnology for the 21st century – New Horizons. National Science & Technology Council, Washington, US, 1995)

On the 23 January 2002 the European Commission itself presented a communication entitled ‘Life Sciences and Biotechnology – a strategy for Europe’ (COM(2002)27 final). Thus fulfilling a previous commitment, given in March 2001 at the Stockholm European Council as part of the Lisbon process, to produce strategic guidelines accompanied by concrete actions.

As Hon. Minister Galea said during the launching seminar of the pilot project (complete text can be found in Annex 7) ‘Biotechnology has been identified by MCST and Malta Enterprise as one of the areas to be considered for further national investment in terms of research and innovation. The EU is also focusing on biotechnology as one of the most promising of the frontier technologies for helping Europe to compete economically with the

US and Japan. Such visions and ambitions require substantial investments of resources in research and innovation based on well-targeted policy measures’. At the doorstep of EU membership, Malta must reap the maximal benefits possible from this ‘new technology’. Malta should face this change actively and not be drawn into an economic sector it is not prepared for. Malta is faced with two major policy choices: either to adopt a passive and re-active role, and bear the implications of the developments of these technologies elsewhere, or develop pro-active policies and exploit them in a responsible manner that is consistent with local values and standards. The longer our hesitation is the less realistic the second option will be.

As Hon. Minister Galea said during the launching seminar of this eFORESEE pilot project ‘eFORESEE Project is a strategic initiative for Malta which presents a challenge. It forces us to think again about how to best formulate strategic national policies and strategies. It is significant and important that the MCST is coordinating this initiative in Malta, given the need for such approaches in the area of science, research and innovation.’

This pilot project has aimed to provide an opportunity for the academia, the public and private sectors and society to participate in dialogue and consultation where opinions were aired and visions shared for an optimal future in this field. The process itself helped forge closer working partnerships between the various sectors (academic, business and public sectors) in Malta to tap emerging market niches in biotechnology as well as provide an appropriate direction and support for publicly-funded research.

This pilot project has aimed to create a national effort to boost the biotechnology sector. All constructive criticism and suggestions were taken in consideration and put forward at a round table of experts during the consultation process.

1.3 Core Objectives and Key Recommendations 1.3.1 Mission Statement The objectives of this eFORESEE pilot were formulated around the title ‘Realising a Thriving Maltese Biotechnology Industry by 2015’

The core objective was ‘to produce a plan to develop the fledgling Maltese biotechnology industry into a core sector of the Maltese economy by 2015 through a collaborative venture between academic institutions, the public sector and private enterprises.’

The core objective was further divided into four main tasks, these being

i. To map biotechnology-related activity and resources in Malta current and as projected by 2015.

ii. To identify developments in biotechnology that will impact on the Maltese economy and society by 2015.

iii. To develop a basis for a national biotechnology strategy that will provide the basis for the national investment of resources in this area and also help to attract direct investment.

iv. To stimulate the formation of new networks and create an awareness of the fundamental changes required within the public, private and academic sectors for the Biotechnology industry to take root.

1.3.2 Recommended Action Lines In this section the recommended action lines as drawn up by the panel of biotechnology experts during panel meetings and one to one interviews are put forward.

RESOURCES BASE

• The University of Malta ought to offer Biotechnology related credits in Science degrees. The curriculum of the biology Bachelor’s degree should be revised to include more biotechnology and applied biology (Annex 7 includes related feedback). Applied science diploma can also be offered by other post secondary institutions such as the Malta College for Arts, Sciences and Technology (MCAST). It is proposed that the University ought to have a role in enabling young scientists and maximise their opportunities of work, together with improving and diversifying the local industry. Opportunities in biotechnology offered by European programmes such as Comenius and Erasmus ought to be utilised to a maximum.

• Invest in people. Since these fields of science are fast moving a whole spectrum of programmed training is required, together with continuous education.

• In order to reach as many potential scientists as possible and to have a science literate workforce, science education has to be optimized.

• Help to be offered to Maltese R&D scientist who want to take part in networks of excellence and integrated projects in order to take up and adopt new technologies to improve national competitiveness.

• The University of Malta or the MCST ought to create a forum for students to encourage interdisciplinary discussions at an early phase of training. This could take the form of seminars involving more then one faculty at a time.

• The MCST and Malta Enterprise to tap EU structure funds for the purpose of biotechnology related R&D and capacity building. Specific measures should be taken to encourage SME participation.

• Possible funding for start-ups and expansions by the European Investment Fund should be investigated by the Malta Enterprise.

• Government through its various ministries ought to take measures to attract and retain scientists and avoid brain drain. Foreign tuition and training is important in such specialised fields, however initiatives should be offered to scientists who decide to settle and work in Malta. Participation in ‘A Mobility strategy for a Research Area’ should be both ways. There is much to be gained by our industry and higher education if we manage to attract top level scientist to transfer their knowledge to our workforce.

• The University of Malta ought to train scientists in business (especially management and marketing); preferably by creating the possibility that final year thesis project could involve interdisciplinary company formation and

business start-up.

• There should be continuous effective discussion to match a skilled workforce with job opportunities. The industry through Employers Association or FOI should continuously push public entities like University, MCAST, ETC and education department to be accountable and resourceful. The labour force, secondary and post-secondary students should continuously be made aware of openings and possibilities within the job market.

• Post Graduate Programme of studies should be offered at university.

• The Inventory of Capabilities and Inventory of Laboratories should be updated.

RESEARCH

• National Research Programme (coordinated by MCST) in collaboration with the European Research Area (ERA) should obtain funding from various sources (including industry, EU and government) to be used to support early stage research to be later applied in industry.

• A Biotechnology Institute with the role of taking up R&D projects from industry should be created by the government. There is the possibility of eventual privatisation of such an institute.

• The MCST should coordinate a network of biotechnology company managers.

• Government should work on the development of specific legal and ethical competence.

• Enhance role of ethical groups vis-à-vis developing regulations, educate the public and network with European counterparts.

• Commercialization of research by creating interdisciplinary networks. It is especially important to train students in research and development and not just research.

EXPLOITATION OF INTELLECTUAL PROPERTY

• University should encourage awareness training in the strategic use of intellectual property rights during the entire research and innovation process and raising awareness among academics of the commercial potential of their research.

• University should encouraging entrepreneurship and movement between academia and industry.

• The government should create a strong affordable intellectual property protection system to function as an incentive for RTDI.

AID TO EXISTING BIOTECHNOLOGY COMPANIES

• Existing Biotechnology companies should be aided to improve their standards, expand, create contacts and carry out waste management.

INFRASTRUCTURE

• Unite fragmented research and development capacities.

• Create a Biotechnology Centre.

• Administration bureaucracy must be uprooted.

• There should be oversight of Science and Technology possibly by University.

NATIONAL CONVERSATION ON BIOTECHNOLOGY

• The public must be made aware of the opportunities and treats offered by this sector and educated to correctly measure possible treats versus opportunities.

STRATEGIC

• Political responsibility for science and technology.

(European parliaments are even introducing political representation for biotechnology)

SERVICES

• An office within Malta Enterprise to cater for the specific needs of the biotechnology industry should be created.

• Improve customs law and efficiency.

• Continuous supply of basic utilities such electricity and water must be ensured.

Chapter 2: The Foresight Process This chapter provides an almost chronological account of the foresight Pilot as it unfolded. Certain steps interacted with each other in synergetic, iterative loops which enhanced the process. The methodology and approaches used include stakeholder-mapping and co-nomination exercises, the setting up of expert panels, questionnaire-based surveys, SWOT analysis and scenario-building exercise.

2.1 Introduction Biotechnology is a term that refers to a broad spectrum of activities. One of the first tasks of the pilot secretary was to establish a definition for the term so as to eliminate at an early stage in the pilot possible misunderstandings and establish a clear idea of what activities the pilot would be referring to. On advice of a lawyer who is involved in ethical and legal issues related to biotechnology, the definition of Biotechnology adopted by the pilot is that used by the Convention on Biodiversity (UN, 1992) ‘Biotechnology means any technology application that uses biological systems, living organisms or derivatives thereof, to make or modify products and processes for specific use’. Malta like a large number of other nations is a signatory of this convention and therefore this definition is legally acceptable.

Biotechnology Background

The discovery of antibiotics in the 1940s, and the need to develop ‘process fermentations’ capable of large-scale antibiotic production during the World War II years led to striking new developments in fermentation technology and to the coining of the term “biotechnology’. In the 1970s, biotechnology went into a remarkable new expansion phase stimulated by discoveries in molecular genetics. These discoveries led to the extraordinary powerful technology of recombinant DNA biology and drew attention to the whole field of biotechnology.

Although the term is relatively recent, man has used biotechnology for thousands of years. For most of human history, plants and animals have been selectively bred to improve particular traits, such as yield, disease resistance and hardiness. The making of bread, wine and beer by microbial fermentation processes are age-old activities, documented in our historical development even as far back as Egyptian times. Archaeological evidence suggests that the early Romans recovered copper leached by bacteria from natural copper sulphide deposits. The first recorded, large-scale bio-mining operation was initiated in the early 1700s in Rio Tinto, Spain. OECD Definition (1982)

Biotechnology means the application of scientific and engineering principles to the processing of materials by biological agents to provide goods and services. These principles cover a wide range of disciplines but rely heavily on microbiology, biochemistry, genetics, biochemical and chemical engineering.

The umbrella of modern biotechnology encompasses a broad array of technologies, both “traditional” and “new”. However, the term biotechnology has, to the general public, become synonymous with genetic engineering. Genetic engineering, in turn, encompasses recombinant DNA technology, genetic modification, gene technology, genomics and/or gene manipulation. Genetic engineering makes it possible to cut DNA into its fundamental functional units, the “genes”, and to splice (recombine) those genes into other DNA molecules. Thus, it is now possible to enhance the ability of an organism to produce a

particular product, to prevent it producing a product, or to enable it to produce an entirely new product. While maintaining all or most of its original properties, a genetically engineered (GE) or genetically modified (GM) organism can do something it had not done before or ceases to do something which it did before.

The ability to manipulate living organisms at the genetic level is one of the principal tools of modern biotechnology. Although the aim of traditional biotechnology, such as selective breeding, was to develop new traits or enhance existing functions (or to add or enhance a particular trait), new biotechnology (or genetic engineering) allows sophisticated manipulation of the genes in plants and animals which encode for particular characteristics in a more direct, precise manner.

Genetic engineering is capable of providing an organism with a specifically chosen, designed and desirable “new” ability or property. In making such a specific manipulation, the outcome becomes much more predictable, precise and controlled than was feasible with traditional biotechnology techniques. This level of control is a tremendous asset in the application of modern biotechnology to sustainable development and improvement of the quality of life.

To date, the most notable impact of biotechnology has been in the medical and pharmaceutical arenas. Important medical products such as human insulin and factor VIII are produced through genetic engineering.

The last decade has seen an exponential increase in the sequencing information available, with the completion of the human genome and that of other organism, man is now trying to interpret the language of life. It is now expected that the number of treatments also increases as information on the human genome is revealed.

Genetic engineering has the potential to modify physical characteristics of production crops, including their nutritional content, disease resistance and growing season. It can also be used to produce pharmaceuticals and nutraceuticals in farmed animals and to improve the growth and fitness of agriculturally important animal species. Genetic engineering has the potential to improve food production, industrial processes, waste and waste water treatment, bioremediation, renewable energy generation and biomining. Overall, this technology has the potential to improve the quality of life and to enhance conservation and preservation of the environment.

2.2 Stakeholder Mapping The core group of this project was formed by Professor Alex Felice (Chairman of the pilot), Ms. Dorita Galea (managing secretary), Ms. Sharon DeMarco (eFORESEE coordinator) and Dr. Jennifer Cassingena Harper (Manager, Policy Development Unit, MCST). The managing secretary joined the MCST team on this pilot in May 2003. The first task to be tackled was the identification of experts to take part in this pilot. Local enterprises that fall under the definition of biotechnology were identified from business directories like Made in Malta and Trade Directory of the Malta Chamber of Commerce. Key people from these local biotechnology companies were contacted by individualised letters, followed by telephone calls and emails. Those consenting to participate in the project were registered on the mailing list of the pilot (www.eforesee.info).

Other participants were co-nominated by members of the panels. There were also the possibility for interested individuals to register and de-register themselves on the website.

Two working panels of experts were formed to better manage the number of individuals per meeting. It was decided by the core group to have people involved in food biotechnology (panel B) and people involved in human health related biotechnology (panel A) meeting separately (Figure 2.1). The outcomes of these meetings were pooled in the final compilation of this document. Individuals from academia, the public and private sector and students formed part of the two panels of experts.

The Health Biotechnology Panel (Panel A) was made up of 74 members mostly from academia, health department and some from the health/pharmaceutical industry. The Food (Non-Health) Biotechnology Panel (Panel B) was established with 54 members mostly coming from academia, food manufacturing industry, brewing industry, agricultural sector, aquaculture and the governmental agriculture and fisheries ministry.

Figure 2.1: Distribution of work responsibilities within the pilot

Figure 0-1

Key people from biotechnology sector support group including education, finance, services, legal and ethical sector, formed a wider group to enable a more extensive consultation. These were consulted by the pilot secretary and the problems identified by Panel A and Panel B members were put forward to them so that action lines and recommendations developed were feasible to the support people and as desired by the biotechnology stakeholders. These also had access to the web site and formed a panel of 80 individuals.

Panel A and B met and the following standardised questions were put forward to them:

Q1 Which factors influence achievement within such an industry? These factors could be social, technological, educational, economic, environmental, political and/or of ethical values (STEEEPV).

BIOTECHNOLOGY PILOT CORE GROUP

BIOTECHNOLOGY PANEL ‘A’ • Human Health

Pharmaceutical Industry

BIOTECHNOLOGY PANEL ‘B’ • Agro-food Industry, • Aquaculture • Environmental Biotechnology

LEGAL & ETHICAL

SERVICE

FINANCIAL

EDUCATION

Q2 What infrastructure does Malta need in order to support and develop

a thriving biotechnology industry by 2015?

Q3 What areas within biotechnology need to be developed to sustain

successful research and development programmes and business enterprises in Malta?

2.3 Launching seminar A half day launching seminar was organised on the 28th July at the MCST premises, Villa Bighi, Kalkara. The launch was advertised in the local English language newspapers, and announced by means of email and faxes to University staff, Department of Health management personnel and other government departments. This seminar was co-sponsored by the British Council and the Bank of Valletta.

The Agenda for this seminar was as follows:

Opening Session - Chaired by Mr. Peter Diacono, Chairman, MCST

Opening Speech by

• Hon Louis Galea, Minister of Education

• Hon John Dalli, Minister for Finance & Economic Affairs

• H.E. Vincent Fean, British High Commissioner

• Prof Roger Ellul Micallef, Rector of the University of Malta

Dr Beatrice Leigh, GlaxoSmithKline, UK –

• Meeting the needs to develop a thriving biotech industry

Second Session – Chaired by Prof. Alex Felice, Chairman Biotechnology Pilot

Overview of the eFORESEE Biotechnology Pilot – Prof. A. Felice and Ms. D. Galea

Interventions from the Floor

Speeches of the four main speakers are presented in Annex 7.

This launching seminar was commentated upon in the prime time news of the major stations on the Island namely TVM and Net television. In the local written media, the launch was reported on in both the English language newspapers, The Times of Malta (60% market share) and the Malta Independent (7.2% market share). The only Maltese language newspaper reporting on the launch was In-Nazzjon (11.2% market share, Informa Consultants, Media Survey 2003). Other information about the Launch was available on the website of the local newspapers. Therefore it can be concluded that the great majority of the Maltese was informed of the MCST initiative to boost the local Biotechnology sector.

The Times of Malta, the most prominent newspaper locally, published an editorial entitled ‘Coming of age of Biotechnology’ on the 29th August where the launching seminar of the pilot is mentioned (complete text is presented in Annex 7). It was hoped by the core group that this media coverage will fuel a public discussion on the pros and cons of biotechnology as happens in continental Europe. No such thing seems to have happened locally yet. One letter by Dr. Pierre Schembri Wismayer (Panel A member, presented in Annex 7) was published in the Times of Malta which fuelled a couple of replies, including one by Professor Axiak (Head of Biology Department of University of Malta, complete text presented in Annex 7) and some comments within regular columns however not much else. The managing secretary has information that although more letters are sent to the editor these were not published.

Due to the little foresight experience in Malta, the managing secretary Ms. Galea attended a ‘Regional Foresight Methods Training Workshop’ organised by the European Foresight Academy at the Joint Research Centre of Ispra in May 2003 and established a number of links namely with PREST - Science and Technology Policy and Management at the University of Manchester, IPTS – Institute for Prospective Technological Studies, European Science and Technology Observatory and Institute System and Innovation Research. She was in communication with personnel from these organisations throughout this foresight exercise.

2.4 Participation in the Biotechnology Pilot Project High level ownership and government rubber stamp to this project was ensured when two high profile ministers accepted to attend and address the launching seminar. There was a high level of cooperation from the service industry including the educational sector at tertiary level, the Industrial Property Office, the financial sector and from legal representatives.

The launching seminar was well attended and a lot of new contacts were established especially with the services providers within the industry.

The industrialists and other stakeholders from Panel A show scepticism on the possible beneficial outcomes of such a document and hence were reluctant to attend the panel meetings, although they offer their time and efforts in one to one interview with the pilot secretary. On the other hand members of Panel B show enthusiasm and continuous encouragement throughout the pilot project. This was probably because the food related biotechnology is well established in Malta while the health related one is still trying to take root, and hence the personnel in the second case are still facing teething problems in their operations.

One drawback of this pilot was the time setting and the short duration for completion. The Launch, with the accompanying media publicity took place towards the end of July, and locally August is a very slow month, with the consequence that some of the momentum gained during the launching seminar was lost during the following month. The total time span of the project was seven months.

Panel members also show reluctance to use the forum due to the ‘complex’ way of logging in.

The information on the website, our means of communication with the stakeholders, included:

• Minutes of panel meetings,

• Reports of meetings including launching seminar

• Opinions

• Strategic documents

Empirical evidence was drawn from R&D questionnaire (Annex 4), statistical information from the National Statistics Office (NSO), interviews, selected reports like Malta scoreboard and as listed in References.

2.5 Scenario-building and Questionnaire-based Survey The questionnaire survey as presented in Annex 4 was designed with the principal aim of partially filling the lacuna within the Malta Scoreboard for the percentage of GDP used in R&D and also to establish an estimate of the level of R&D taking place in the biotechnology sector in Malta. This was also meant to give a first indication of the level of funding of R&D, main scope of R&D in academia and in industry, the opinion of the management on the purpose of R&D and the number of people employed in actual R&D activities. Questions about the susceptibility to the ERA were also put forward to the management of biotechnology research. The survey was adopted by the pilot secretary from a previous survey designed by Mr. Brian Restall and Dr. Aldo Drago. 2.5.1 Questionnaire Survey: A total of 30 R&D questionnaires surveys were posted to the management of government institutions (46%), non-government organisations (4%) and private enterprises (50%). In a letter signed by the Chief Executive Officer of the MCST, the management was given two weeks to reply to the questionnaire. The people who did not reply were contacted by the managing secretary by means of email and requested again to fill the questionnaire and send it in. In total 10 filled in questionnaires were returned. In addition one person declared that the questionnaire cannot be completed because of confidentiality reasons while one other stated that a branch of the enterprise would reply to the survey as in fact it did. Three replies came from government institutions, one from a non-government organisation and six replies were filled in by private enterprises.

All government institutions that replied to the survey declare that their R&D funding is not sufficient. They carry out mostly basic research with some product/process development. Funding is in this case in-house (University) and from private grants including UNESCO grants. Staff carrying out the research is insufficient in number and all three government institutions are looking forward to participating in ERA and partnerships within EU 6th framework projects.

One non-government organisation that replies to the survey does applied research from in-house funding. Personnel are very receptive of European opportunities and are looking for partners in EU funded projects and ERA opportunities.

The private enterprises that reply to the survey include representatives both from the food manufacturing biotechnology and local pharmaceutical industry. Three of these enterprises carry no biotechnology related R&D while the other half carry out extensive R&D projects. Funds for these projects come from the enterprise or from IPSE. All three enterprises have adequate staff and funding for R&D, however only

one of these enterprises has management that is showing interest in opportunities being offered by the ERA and European framework programmes.

2.5.2 Scenario building The key vectors of Biotechnology development in Malta were identified during interviews with key stakeholders of the biotechnology sector to be STI education together with RTDI capacity. Four possible scenarios were developed around these key vectors. The scenarios are pictorial representations of future possibilities and descriptive names selected were: Stupor, The Hurdle, Rooted and On Top.

Stupor

As a nation we are in a torpid state of mind. At low level of STI education and low RTDI capacity, biotechnology based products are mostly imported and scientific services are poor. People are not aware what they are consuming and the authorities are not taking appropriate steps to control importation. We are vulnerable to abuse and unethical experimentation. The Maltese environment is deteriorating due to lack of resources and education. Tourism sector gets major setback as we cannot reinvest money to upgrade our tourism facilities. Neighbouring countries are advancing and developing. High flying students have to go abroad to specialise however have no job prospects when they come back to their home country. Most of our employment is in low wage manufacturing sector with low value added. Standard of living is low, health care and social policy systems are not sustainable and have to be downgraded.

The Hurdle

Although STI education is at a high level RTDI capability is low. The number of graduates in science is adequate and a number of people are specialising in biotechnology. However all our knowledge is imported and therefore cannot be called intellectual property and hence cannot be commercialised. Due to lack of financial resources for research our start-ups are failing and not proceeding to the manufacturing phase. Our young scientists are discouraged and hence have to seek employment in other countries. There is no return on capital invested in the educational system.

Rooted

At high RTDI capability, governmental schemes to improve science exploitations are in place. However, the population is not science literate and therefore nobody is taking up scientific research and developing products for the market. Major governmental efforts to improve the standard of living of the population are futile. There is no return on investment in RTDI capability. Advantageous schemes presented by government are taken up by foreigners, who have to employ foreigners on research and intellectual property development as the local workforce is not educated enough in science. The Maltese are still working at the lower wage jobs.

On Top

Simultaneous development in STI education and RTDI capability results in the seamless development of a knowledge based economy and applications of biology in industry to our economic benefit. Standard of living improves from the aspect of better health care system and medicinal and due to economic growth. The country is

renowned for its highly educated workforce, with well formed interdisciplinary networks. Open job opportunities increase scope of specialisation with university being a hub for opportunities in research and development. Biotechnology industry support professions are also well developed.

The last scenario entitled On Top is considered to be the most desirable scenario and to be achieved by 2015 both the RTDI capacity and STI education must be improved.

The diagram shows that any effort to improve STI education without improving RTDI capability or vice versa would not result in optimal return on investment. Improving one aspect and not the other would result in human resource mismanagement and no improvement in economic position of the country as intellectual property would not be commercialised.

Figure 2.2 Diagrammatic Representations of Scenarios. The key drivers for biotechnology sector in Malta are identified to be STI education and RTDI capacity. The scenario named On Top is the most desirable situation. This can be achieved through various paths however the longer paths result in wastage of funding and human resources.

Hurdle • Start-ups failing • Brain drain as scientists find no

employment and hence seek foreign opportunities

• Research and Intellectual Property are not commercialized

Stupor • Biotechnology products rare

and mostly imported • Lack of Public awareness • Weak educational

programmes • No biotechnology platform • No knowledge on the use of

biotechnology

Rooted • Government efforts to boost

local industry futile. • Local funding taken up by

foreign enterprises that employ foreign nationals on local R&D projects and the Maltese work at the lower wages jobs.

On Top • Seamless integration of

biotechnology in agricultural, medical, industrial products and processes

• Highly educated workforce • Interdisciplinary networks

functioning • Sustainable biotechnology

industry employing professionals from a broad spectrum of disciplines.

R T D I C A P A B I L I T Y

STI

EDUCATION

2.6 SWOT Analysis Main areas of opportunities, strengths, weaknesses and treats of the Maltese Biotechnology industry were identified during interviews and panel meetings with the key stakeholders of the local biotechnology industry. Due to the short duration and time setting of the pilot, the number of panel meetings held was three, however, key stakeholders who could not attend the fixed panel meetings were interviewed by the pilot secretary.

STRENGTHS WEAKNESSES

• Well established engineering and medical faculties and expertise

• Low number of postgraduates in biotechnology

• Strong ICT sector and ICT knowledgeable workforce • Low Science Education and literacy

• Good Health Care System • Weak Research and Development capabilities

• Strong banking and financial system

• Time lag, most nations are well ahead in the race to attract multinational biotechnology companies

• Skilled workforce which is very often successful in such ventures • Weak IP protection system

• National minimal curriculum formularised • Lack of natural resources

• Lack of land

• Lack of public private sector partnerships

• Large financial deficit

OPPORTUNITIES THREATS

• Location within the Euro Mediterranean region • Brain Drain

• Members of the European Economic Block

• Poverty because of low per capita GDP

• Ability to participate in research and educational programmes being offered by EU

2.7 Assessment of the Issues and Key Drivers

Maltese Biotechnology stakeholders assessed issues and key drivers influencing the Maltese biotechnology sector during interviews and panel meetings by addressing three major questions formulated by pilot secretary. Replies and comments grouped by subject are presented below. (These may not be the opinions of the core team, whose main role was to encourage and record open discussion on the local biotechnology sector)

Q1: What factors influence achievement within such an industry? These factors could be social, technological, educational, economic, environmental, political and/or ethical values.

• Locally science subjects are not popular with secondary school students. Following such a curriculum of study has a very high failure rate, and therefore a high risk is associated with these subjects. High achievers prefer to follow degrees leading to a career in medicine and pharmacy practice, where both professions have a fixed prototype of activity. Other science students are taken up by health related professions like laboratory technicians, nurses and teachers.

• The lack of science education results in low level of science awareness, that is, the important role of science in our every day life. This probably results from the conservative, textbook teaching of pure science and not the application of science. People are not being convinced that science is playing a critical role in their quality of life.

• Applied biology is not being taught at any level. At tertiary level very little molecular biology and its applications are being taught. Greater emphasis is being placed on classical biology and marine biology (the main area of specialisation of the Department of Biology of the University of Malta). Very few students are given an opportunity to specialise in ‘modern’ areas of biology. Not all members of academic staff are abreast with the modern applications of biology. Such subjects are still being treated as unreachable and foreign (Feedback from Prof. Axiak head of Biology Department is presented in Annex 7). In fact even basic infrastructures like library books on modern applications of biology are sparse at university. Biotechnology is a very vast and fast moving field of science, modern books are not available. This is partly because the subject per se is not being taught and therefore no recommendations for appropriate textbooks are reaching the library personnel. Biotechnology industry tends to develop in clusters around areas of academic excellence for example Boston, Heidelberg, Oxbridge (Oxford, Cambridge and Paris), Carolina Triangle Park and Silicon Valley. Malta still has very few biotechnology graduates, boosting these numbers must be one of the first steps to be taken to get the ball rolling towards a sustainable biotechnology industry.

• Investment funds for research including basic research are limited. These are needed as pre-venture funding. No competitive programme for funds is as yet operating. Funds when available tend to be sparse and for a short duration. That is, funding of a project may be terminated before an industrial application is achieved. Development phase of a biotechnological industry is

typically long and return on capital takes an unusually long time. Support measures need to be in place specifically for such a type of industry.

• No entrepreneurial skills are passed on to the graduates of the Faculty of Science as opposed to those of the faculty of engineering and the degree in pharmacy. Teaching of support subjects like basic business subjects and legal literacy to science graduates is still considered as unessential and inappropriate. This shows lack of practicality and detachment from the real applications of such a degree. Students are not being well prepared to work in industry and to start their own ventures.

• Academics have no initiative to transfer their knowledge to industry. Promotion within the University hierarchy should also be influenced by IP registrations and industrial links and not just scientific publications. On the contrary academics who are entrepreneurial and strive to establish or involve themselves in business activities are seen as abusing the system within the university.

• Malta is not competitive relative to the regional countries, for example Tunisia has a good patent protection system, a cheap and educated labour force and easy tax terms. It will also very soon join the European free trade zone. Tunisia has established its national biotechnology programme way back in the 1980’s. For a long term investment we do not compare well at all.

• Students are not being encouraged to form interdisciplinary groups with the aim of sharing expertise and translating it into development and innovation. The mentality to improve financial condition is not very popular and therefore most science students prefer sheltered secure jobs of lower wages then more challenging posts with greater potential income.

• Interdisciplinary networking is essential for successful biotechnology venture, these should include people with expertise in subjects like management, marketing, pharmaceuticals, biochemistry, molecular biology, engineering, physics and chemistry. Within the University there is no networking which is essential in biotechnology research applications.

• University has up till now not taken any research stand. The life sciences research is dispersed. The consequence of this is that there is no pooling of resources towards a common goal.

• Work experience during the academic lifetime of a student is still considered as a hurdle as outcome is not considered important in the final classification of the degree of the student.

• Laboratory facilities are dispersed and very little sharing of equipment takes place. Within the University, equipment maintenance is taken from the sparse departmental budget and therefore, this creates a mentality that instrumentation should be protected even though it can become redundant before optimal use of it has occurred. This needs to be overcome ( if needs be with all departments and labs pooling into a common insurance fund which will ensure speedy repair of equipment)

• There is no parliamentary representation for science and research. Therefore, there is no central plan or vision for biotechnology.

• Number of science and technology Ph.D.s is low.

• There is also no intellectual property protection mentality among academics and local entrepreneurs. No mentality to sell or translate R&D into financial gain. Money spent on patent protection is not tax exempt.

• There is a lack of willingness by industry to invest in training and research. Most innovation is being imported and therefore the net profit is reduced due to royalties which must be paid for intellectual property.

• No post graduate programme is in operation and post graduate studies are not encouraged. In fact very often great personal sacrifices are involved in specialisation.

• Legal framework to support and control biotechnology industry is not complete. Biotechnology industry legal infrastructure would be a whole array of legislations spanning amongst other intellectual property, control of genetically modified organisms, research subject protection and disposal of dangerous chemical and biological waste.

• One of the hurdles limiting this industry is that negotiates between a foreign investor and the local authorities generally take a very long time (two years) which discourages potential investors.

• There are no local good laboratory practice accreditation laboratories. This is because service industry is much dispersed, permits take ages to be issued and most personnel involved are not trained in efficiency.

• There are very little openings for graduates in the field of biotechnology; most students holding a post-graduate degree in this field have little possibility of employment except teaching at higher institutes of learning.

• No links between University and Industry vis-à-vis post graduate teaching.

• Such an industry requires chemical products which are often restricted or considered dangerous. Customs and Couriers personnel are not trained/informed about proper handling procedures and generally lack efficiency in clearing such products out of customs. Increased efficiency is also required to clear live biological material (including cell cultures). Also the cost of custom clearance of these products which very often are purchased in small quantities becomes excessive, together with a huge amount of paperwork required. This is one of the major hurdles limiting the growth of small start-up companies. A reform in the customs law is necessary together with training of customs personnel in proper handling of such a merchandise.

• During the meetings held with representatives of Malta enterprise we frequently heard the comment that although a number of schemes for start-up companies are in place these are not being taken up by local entrepreneurs. While entrepreneurs’ frequent comments were that support schemes are non existent and they are being discouraged by the lack of business friendliness of the country. Hence we realised that there is a lack of effective communication between government bodies supporting entrepreneurs and the entrepreneurs themselves.

Q2: What infrastructure does Malta need in order to support and develop a thriving biotechnology industry by 2015?

Biotechnology industry is highly dependent on research output. Research spending is therefore an essential aspect of development of a national biotechnology sector. No country has developed this sector without investing in R&D and no successful national development programme has ever been initiated by any country without addressing this need. Malta has been a very low spender in R&D and this has seriously limited our ability to develop this sector.

A strong biotechnology infrastructure has many benefits. It will:

1. provide the technology and expertise from which the Maltese Biotechnology companies will be formed

2. provide the basis for many service industries, as biotechnology companies are major users of sub-contracted services

3. stimulate multinational companies to put down R&D roots in Malta

4. provide the technology and expertise which indigenous Maltese food and other companies require to remain competitive in the face of the rapidly changing technologies in their sector.

5. act as a magnet and anchor for international biotechnology companies.

Infrastructure required include:

• Laboratory facilities are present however are distributed in a large number of small laboratories around the island. These being within the Agricultural Department, University at various faculties and departments, National Laboratories, Malta Standards Authority and so on. These resources need to be catalogued and used as a National Scientific infrastructure for the RDI efforts.

• Scientific literature at least in the form of database should be available to research community.

• A Research Institute should be establish that can do contract research for industry.

• Specialised industrial facilities for such a technology are not available from MDC (now part of Malta Enterprise).

• The creation of a specific office within the Malta Enterprise to cater for the specific needs of the biotechnology industry.

• Oversight mechanisms to ensure good practices within such an industry.

• No central vision or pooling of efforts has as yet taken place. Such a complex industry cannot take root without a concerted effort from all those concerned, including the educational, industrial and support sectors. A central coordinator possibly at the level of parliament (as is the practice in other European countries) must be in place to coordinate all these efforts otherwise there could be a huge wastage of finance and human resources.

Q3: What areas within biotechnology need to be developed to sustain a successful research and development programmes and business enterprises in Malta

It was agreed upon that a Mediterranean regional role for Malta in biotechnology must be identified. There was a tendency for panel members to indicate their field of expertise to be the area within Biotechnology that needs to be developed to sustain a successful R&D programmes and business enterprises in Malta. A local ‘Expressions of interests’ exercise should be conducted and input judged by an international multidisciplinary panel.

Among the most promising areas for Malta the following were chosen (presented in alphabetical order):

• Biofuels (fermentation products)

• Bioinformatics (combining excellence in IT and Biology)

• Biomaterials

• Diagnostic kits and treatment of local prevalent disease including diabetes (centre of excellence for Mediterranean region).

• Environmental biotechnology (waste treatment and purification of contaminated soils of heavy metals and toxic chemicals)

• Genetic Medicine and Clinical Genomics

• Medicinal plants (maximise turnover from agriland)

• Plant development for arid environment, able to tolerate high salt content in soil and water (including local vine, olive)

• Products of fermentation/Cell culture at production scale

• Specialised foods (including those of marine origin)

For further information about these fields of biotechnological applications refer to Annex 8.

2.8 The vision for 2015 Education and Training

• Reformed in school science education to provide for “Science literacy for all”

• Increased scope of “Life Science” teaching in undergraduate programmes.

• Train research scientists in pure biological science and provide for specialization at post graduate levels – European mobility programmes can be utilised for this purpose.

• Expanded opportunities for research based graduate education and post-graduate training to satisfy needs for Life science Ph.Ds – Graduate School in Life Science and Biotechnology.

Funding for Research and Development • Increased budgets of tertiary level institutions for research and

development work. • Established of a National Programme for Scientific Research,

Technological Development and Innovation at 3% of GDP with participation of academic, public an private organisations (Public : Private contributions at 1:2).

• Increased participation of private sector in funding research (60% of National spending).

• Corporate Academy: linking academic research with business development.

• Increased participation in EU framework and other R&D programmes.

Research and Development Capability • Promotion of research and entrepreneurial culture among

graduates. • Increased number and integration of well equipped research

laboratories. • Provide mechanisms for funding by peer review and oversight

of science and technology.

Biotechnology Business Development; • Efficient business-friendly infra-structure.

• Effective Ethical and Legal framework. • Sound protection of intellectual property. • Venture capital and other investment tools.

Chapter 3: Overview of the Biotechnology Sector in Malta A biotechnology sector is highly influenced by the economic environment of the nation. A brief overview of the economic environment locally is followed by the government initiatives to promote the economy and foreign investment. This is further followed by an overview of the infrastructural setup which includes human resources and the legal, financial and ethical frameworks.

3.1 Economic environment Malta has an aging population of around 380,000 (Figure 3.1) and a labour force of just over 140,000. GDP in 2002 amounted to 4.1 billion euros. The Maltese economy is small, per capita GDP is estimated at just over one half the EU average (Eurostat website), placing Malta in third place among the candidate countries. Economic activity is fairly diversified, with one-fourth of output being generated by manufacturing and around one-third by services, among which is an important tourism sector. Services in the financial field and in information technology are expanding rapidly. In Malta, Government has traditionally had a dominant role in the economy, from the size of its expenditure to pervasive direct controls, which have bred a culture of State-dependence and stifled competitiveness and innovation (Delia, 1986, Cordina, 1992) (Figure 3.2).

Maltese Population in Jan 2003

0.0 5.0 10.0 15.0 20.0 25.0 30.0

0 - 4

5 - 9

10 - 14

15 - 19

20 - 24

25 - 29

30 - 34

35 - 39

40 - 44

45 - 49

50 - 54

55 - 59

60 - 64

65 - 69

70 - 74

75+

Age

Gro

ups

Number in Thousands

Males Females

Expected Maltese Population in 2015

0.0 5.0 10.0 15.0 20.0 25.0 30.0

0 - 4

5 - 9

10 - 14

15 - 19

20 - 24

25 - 29

30 - 34

35 - 39

40 - 44

45 - 49

50 - 54

55 - 59

60 - 64

65 - 69

70 - 74

75+

Age

Gro

ups

Number in Thousands

Males Females

Figure 3.1: Maltese population by gender and age group in 2003 and as projected to 2015 (Data from the National Statistics Office)

Gross Domestic Product by Industry and Types of Income

12%

23%

324%

46%

510%6

9%

76%

817%

911%

1012%

1 2 3 4 5 6 7 8 9 10

Figure 3.2 Gross Domestic Product by Industry and Type of Income

(1) agriculture and fishing (2) construction and quarrying (3) manufacturing including ship repairing and shipbuilding (4) transport and communication (5) wholesale and retail trade (6) insurance, banking and real estate (7) government enterprises (8) public administration (9) property income (10) private services (Information from NSO website)

3.2 Strengths and weaknesses of the enterprise sector Economic smallness implies that firms may be unable to reap economies of scale to their full extent, as well as a limited domestic market where competitive forces may be relatively weak. As is typical of such small economies with relatively few natural resources, Malta’s economy is highly dependent on transactions with foreign economies to earn its income and satisfy its expenditure needs.

Exports consist mainly of electronic equipment and tourism services (Cordina and Anderson, 1993). The most important, though not exclusive, example, is ST Microelectronics, a subsidiary of a major global microchip manufacturer which started operations in Malta in the early 1980s employing a few tens of people and has by now grown to employ a workforce of over 2,000 persons and generating around one half of Malta’s manufacturing exports (NACE 32 Table 3.1). On the other hand the manufacture of food products and beverages mainly caters for the local market employs twice as many individuals and has one fourth the turnover.

In the 1970s and early 1980s, direct foreign investment was mainly attracted by low costs and financial incentives including tax concessions. At present, the financial incentives remain in place but the emphasis for the attraction of investment lies on a skilled and flexible work force as Malta no longer remains cost competitive compared to other investment locations in Eastern Europe, Asia and North Africa. Indeed, the investment which had in the past relied exclusively on low costs, most

notably in the textiles sector, has by now virtually disappeared from the island (Cordina and Anderson, 1993). However, investment which relied on technology and skills has thrived and prospered.

In this context, it is important to note the dichotomous nature of Maltese enterprises. The typical exporter has a significant foreign participation in its ownership and/or management, faces international competition and has the ability to adapt and innovate in response to and in anticipation of market dynamics. The typical domestic market supplier is locally-owned and managed, probably family- run business, and either an importer or a producer sheltered to varying degrees from international competition with very little ability for innovation and for facing competitive pressures. There are weak connections, if any at all, between these two spheres of business. Malta’s prospective membership within the EU necessitated a restructuring programme to assist domestic producers to become effective competitors within such an environment. Measures undertaken towards this end include privatisation, programmes aimed at providing finance and expertise for business restructuring and innovation, as well as business promotion measures for targeted sectors mainly in the form of tax concessions (Table 3.2).

The availability of different stages of capital financing for the right ventures is still underdeveloped and enterprises still depend predominantly on individual and bank finance (White paper on Industrial Policy, Ministry of Economic Services, 2001).

In practice, it is found that a main hurdle in the implementation of these programmes is the mentality of local entrepreneurs, which is essentially geared towards family-run concerns serving protected market niches. The concepts of restructuring and innovation are often viewed as threats to an otherwise stable business environment, rather than as opportunities to be exploited in an unavoidably more competitive globalised business environment. This issue is being tackled through contacts with sectoral representatives in industry aimed at informing the local entrepreneur of developments in their industry in other countries and to anticipate the changes necessary for business in Malta.

Table 3.1: Turnover (millions) and employment in manufacturing sector over a period of 3 years (NACE 24 includes the manufacture of basic pharmaceutical products and preparations)

Turnover Number of employees NACE

code Description

1999 2000 2001 1999 2000 2001

15 Manufacture of food products and beverages 127 126 126 4350 4177 4276

17 Manufacture of textiles 18 22 22 811 728 836

18 Manufacture of wearing apparel 65 59 77 3209 2992 3845

24 Manufacture of chemicals and chemical products 29 27 29 933 907 905

28 Manufacture fabricated metal products, except machinery and equipment

20 23 22 1582 1595 1572

29 Manufacture of Machinery and equipment 14 12 13 533 504 461

31 Manufacture of electrical machinery and equipment 37 32 38 1111 1159 1336

32 Manufacture of radio, television and communications equipment and apparatus (including electronics)

442 703 476 2671 3014 3065

33 Manufacture of medical, precision and optical instruments, watches and clocks

30 33 29 1349 1439 1272

35 Manufacture of other transport equipment 23 20 29 4032 3911 3755

Table 3.2: Initiatives towards economic restructuring

Date Action Comments

1988 Setting up of MCST Advisory body to assist in the formulation of a National Science and Technology (S&T) Policy

1994 National S&T Policy Outlined the direction of future Maltese activity in developing effective science and technology policies

1996 Increase University Budget

To improve research as majority of government funded research located at University

MCST and the National Coordinating Unit are actively encouraging the University researchers to involve the private sector in their research projects

2000 EU’s (5th and) 6th Framework RTD programme

To encourage innovation and provide the linkages required for the joint development of technology and its transfer from foreign partners.

2001 Business Promotion Act Intended to attract new investment by means of tax concessions and other financial incentives

Directed to specific sectors identified on the basis of their high value added, contribution to technological improvement, and innovative capability

Research institutions in Malta qualify for tax concessions

Capital investment in R&D financed through loans at subsidised interest rates, loan guarantees and tax credits

2001 IPSE Business Incubation Centre

To increase the innovative capacity of the country

To assist enterprise restructuring through the provision of financial packages and expertise

To provide business support services to start-up enterprises a focus on innovative new-economy businesses

Biotechnology is named as one of the target sectors

2001 Credit Guarantee Fund 12 million euros were set aside aimed at the restructuring of the manufacturing sector and the establishment and growth of innovative SMEs

New enterprise Loan Guarantee post business plan approval, fund up to 80% of the client’s requirements (not exceed 96,000 euros

Technology Venture Fund is mechanism for seed

and venture capital fund. This is basically a risk capital financing for innovative knowledge-based ventures. It also aims to improves Malta attractiveness for high-tech investment.

2001 European Innovation Relay Centre

To seek application of research to create products and services which can sell

To assist SMEs in sourcing appropriate technologies

2001 Amendment to the Income Tax Act

120% of any expenditure on scientific research is deductible from the total income for the calculation of income tax due.

(this was further improved in September 2003)

2002 Patent and Designs Act Patent legislation in line with that in the EU

2003 Malta Enterprise Act to establish the Malta Enterprise Corporation

To originate, lead and further initiatives relating to the economic and social development of Malta;

To promote Malta as a location of businesses, to assist and co-ordinate its promotion as such a location;

To develop the technological, human resource and skills bases and to strengthen the capability of business enterprises;

To undertake strategic assessment and formulation;

To innovate and to undertake research, development and design activities;

To provide and manage land, sites, premises, services and facilities for business enterprises;

To administer schemes, grants and other financial facilities requiring the disbursement of funds, including funds originating from foreign sources.

3.3 Legal and Administrative Environment At the time when this document is being finalized the Malta Enterprise Corporation is still in the process of formation and selecting its employees. However up to some time ago companies seeking to set up new ventures in manufacturing and service industries or to expand their operation on the island were requested to submit a business plan on their proposed project to the Malta Development Corporation (MDC). Once the MDC reaches an informed opinion on the project’s feasibility the investor was informed of the outcome. A favourable answer meant that the investor is faced with a number of bureaucratic procedures since the concept of a one-stop shop does not exist.

All permits and trade licenses required needed had to be obtained from the police and trade department whereas water and electricity services and communication lines needed had to be obtained from three different corporations. This was a rather lengthy process that discouraged the potential investor.

Local non export-oriented SME’s and in particular small microenterprises experienced difficulties to find suitable premises. The following are some of the reasons: scarcity of industrial land, the relative restrictive attitude of the Planning Authority, regarding the allocation of zone’s for industrial use, MDC’s policy to reserve industrial estates for export-oriented projects, the growing problems for SME’s located in residential areas.

Until now MDC had virtual monopoly on all industrial land and premises in Malta and certainly most of the prime sites. While some cases of private ownership do exist these sites tend to be small in scale and few in number. Since the private sector is not able to obtain suitable building sites for industrial development, either through direct purchase or leasehold, the private property development market in Malta has been distorted if not destroyed. The lack of private sector participation has been caused in large part, because industrial land for private development is not available. In 2001 MDC granted a rent subsidy to its tenants to further attract and encourage investment, but as from this year the subsidy has been removed so as to be in line with the ‘acquis’.

The Malta Enterprise Corporation took over the responsibilities of the Malta Development Corporation, IPSE, METCO and External Trade Company Limited. Through this act these three entities will be merged together in order to create an efficient one-stop shop for the business community. Malta Enterprise will influence all services that have a bearing on industry competitiveness as the educational institutions. It is being envisaged that this step would reduce the bureaucracy associated with setting up of a industry in Malta.

Thus a lot of effort is being channelled to create an environment that is friendlier to high technology ventures. Of course, a lot still needs to be done and all these initiatives need to be further refined and marketed in order to spur increased innovation capability in Malta. Increased Research and Development and innovation are a EU wide challenge.

3.4 Control of Genetically Modified Organisms The EU Directives dealing with contained use (Directive 90/219/EEC) and deliberate release of GMOs (Directive 90/220/EEC) were introduced into Maltese law in as the Environment Protection Act (Act No. XX of 2001). The Environmental directorate of the Malta Environmental and Planning Authority (MEPA) was nominated as the competent authority to administer this Regulation in Malta.

Table 3.3 lists the EU Directives and Regulations currently governing contained and field use of GMOs in crops, foodstuffs and medical, veterinary and plant protection products and highlights the relevant Competent Authorities in Malta.

In fact, the procedure for granting or refusing permission is at the moment intensely laborious and the applicant is required by legislation to submit extensive environmental risk assessments, which would be scientifically scrutinised and permission granted or refused according to such assessments.

Given the size of the Maltese Islands it is highly unlikely under the current regulations that any GMO will be released in the environment but R&D is not excluded.

Table 3.3: European Union Regulating Genetically Modified Organisms and competent authorities in Malta. In preparation for joining the EU open market most European legislation controlling genetically modified organisms has been transposed to Maltese law. The enforcement of this law is not completely in effect, but enforcing bodies are being formed and manned. These laws basically apply the precautionary principle until more facts are accumulated upon the possible consequences of GMO/human/environment interactions.

Directive/Regulation Purpose Competent Authority in Malta

Directive 98/81/EEC amending Directive 90/219/EEC

Regulates the contained use of Genetically Modified Micro-organisms (GMMs)

Biosafety Coordinating Committee

Directive 90/220/EEC Regulates the deliberate release of GMOs into the environment for: • R&D purposes (field trials) • Placing GMO products on the market

Environmental Protection directorate of the MEPA.

Directive 90/679/EEC Regulates biological agents in the workplace

Biosafety Coordinating Committee

Directive 94/55/EEC Regulates the transportation of certain GMOs

Regulation 258/97/EC Regulates novel food and novel food ingredients including GMOs

Food Safety Commission

Regulation 1139/98/EC Regulates the labelling of certain foodstuffs produced from GMOs


Regulation 49/2000/EC Establishes a threshold below which the labelling of genetically modified food or ingredients is not required


Regulation 50/2000 Regulates GMOs for food additives and flavourings


Regulation 2309/93/EEC Regulates GMOs for medicinal and veterinary uses

Directive 91/414/EEC Regulates the use of plant protection products

Plant Health Department MRA&E

Directive 98/95/EEC Regulates the marketing of GM plant varieties and amends current Directives relating to seed

Plant Health Department MRA&E

Directive 70/524/EEC as amended

Regulates the authorisation, marketing and use of additives in feeding stuffs

Food and Veterinary Department

Directive 87/153/EEC Regulates guidelines for the assessment of additives in animal nutrition

Food and Veterinary Department

3.5 Intellectual Property and Data Protection The efficiency of the generation and application of knowledge depends on the degree and reliability of the protection of intellectual property through patents. Effective intellectual property protection is an essential cornerstone for creating an attractive investment climate. Firms planning to develop and market innovative products will not invest without assurance that their trademarks are protected. Local legislation, concerning property rights has been recently updated to reflect current practice within the EU. However the European patent law has been identified as one of the factors limiting the development of a biotechnology industry (COM(2003) 96 final).

The cost of patents varies with respect to the number of years held. The price ranges from 60 euros to 180 euros for patents held between 4 to 14 years. All patents that are registered in Malta fall under the Maltese jurisdiction irrespective of whether these are made by local or foreign applicants. The Industrial Property Registration Directorate acts as a receiving and registration office in so far as Patents are concerned. The Directorate is currently aspiring to set-up a Patent Registration and Information Dissemination Unit where the function of the unit would not only be the administrative processing of patent applications but also that of creating an increased awareness of existing patents amongst the local industry and higher education institutions.

Application for a patent can be quite time consuming too. Where the applicant has been notified that his application complies with all the formal requirements, the Comptroller on payment of the prescribed fee, grants a patent on the application. As soon as possible after the decision to grant a patent, the Comptroller publishes a notification that the patent has been granted and publishes the patent in the prescribed manner. The Comptroller publishes each application filed with it promptly after the expiration of 18 months from the filing date or, where priority is claimed, from the priority date of the application. However, where, before the expiration of the said period of 18 months, the applicant presents a written request to the Office of the Comptroller that his application be published, the Office of the Comptroller shall publish the application promptly after the receipt of the request.

Up till now Malta is not a signatory to any international registration conventions on Patents. Discussions are under way with the European Patent Organisation, and the World International Property Organization. It is envisaged that by early 2004 Malta would have joined these two organisations. Figure 3.3 shows the increase in the number of registered patents since 1990.

Of similar significance is the act for effective data protection. Worldwide Internet use is growing very fast. This international phenomenon is also affecting trade practice in Malta where the use of the Internet as well as electronic commerce is growing too. This creates the need for a regulatory framework, which is suited to this technology. The Data Protection Act is a step forward towards this end, while specific regulations on e-commerce would protect both suppliers and consumers better.

0

50

100

150

200

1994 1995 1996 1997 1998 1999 2000 2001 2002

Year

Num

be

Resident -Filed Non-Resident-FiledResident -granted Non-Resident-Granted

Figure 3.3: The number of patents registered since 1994. Approximately 80% of locally registered patents come from abroad. The figure also shows a steady increase in the number of patents registrations. However, none of the patents registered locally are in connection with biotechnological applications (information through interview). (Source Industrial Property Office, Ministry of Finance and Economic Services)

3.6 Teaching, Training and Research 3.6.1 Research

Prof. Roger Ellul Micallef – Rector of the University of Malta during this pilot’s launching seminar states that ‘life sciences together with Biotechnology have been a priority target of the University of Malta since the late eighties and will continue to be so, as may be seen from the University's current Strategic Plan. Considerable funds have been invested over the last ten years, funds coming mainly from Government, from the Italian protocol and through participation in the EU framework programmes. Unfortunately comparatively little funding has been made available by private industry’.

3.6.2 Science Education

Prof. Ellul Micallef continues to state that ‘Greater emphasis worldwide, but perhaps even more in the EU countries is being given to the teaching of science. Science education in undergoing extensive reform in order to attract to it as many students as possible. The recent changes in the National Minimal Curriculum have been an important step forward in promoting science education in Malta. But there is more to be done. The number of students taking science subject at tertiary level is still very low which the number of doctoral level

research scientists produced is only about 1/10th of the number graduating in other EU countries (Figure 3.3). It is obvious that a properly funded graduate education programme is essential to increase numbers. ‘

0

250

500

750

1000

1997 1998 1999 2000 2001

Year

Num

ber o

f Stu

dent

HumanitiesUndergraduate

SciencesUndergraduate

Other DisciplinesUndergraduate

HumanitiesPostgraduate

SciencesPostgraduate

Other DisciplinesPostgraduate

Figure 3.4: Number of University graduates over a four year period. Most popular courses are the Humanities Undergraduate with a good proportion of these getting a postgraduate degree. Only a minor proportion of science graduates go on to specialise. (Data from University Website – Student Statistics)

The need for human resources with high technical skills and with an enterprise culture to contribute to innovation is strongly being felt. Proposals for direct foreign investment in Malta are known to have failed simply because of the lack of human resources with the required skills. Likewise, insufficient skills and inadequate enterprise attitude are often viewed as the principal hurdle that is impeding business restructuring from proceeding at a faster pace.

The University of Malta organises an annual Graduate Potential Seminar where developments in the labour market are discussed and programmes aimed at better fulfilling these needs are instituted. The first seminar was held in 2000, and has become the main forum where the policy debate on development of human resources is carried out on a national basis. After the first Seminar, a working group was set up which includes top level representation from the Malta Federation of Industry, the Malta Chamber of Commerce and Employment and Training Corporation and is chaired by the University. The aim of this group is to enhance the rapport between the University of Malta and industry and business to maximise the potential of University graduates in a way which will benefit both the graduates themselves and their employers.

At the University of Malta topics falling under the definition of Biotechnology are taught within the Faculty of Medicine and Surgery, the Faculty of Science and the Institute of Agriculture. There is little cross talk between these entities and no overlapping credits or other modules of teaching. The Faculty of Science offers a four year general bachelor’s degree in Science. Two science subjects must be

covered. The course content is rich in classical biology however somewhat lacking in modern molecular biology, human genetics and biotechnology. The Faculty of Medicine and Surgery has a number of departments, those that are mainly related to Biotechnology are the Departments of Physiology and Biochemistry, Clinical Pharmacology and Pharmacy. These teach the medical course and an honorary bachelor’s degree in pharmacy. Undergraduates in none of these courses are exposed to practical work in connection with modern molecular biology and biotechnology. Graduates in medicine do not usually follow a career in biotechnology while the pharmacy course is at the moment not offering practical sessions at all due to lacking infrastructure. Instead students are carrying out their laboratory practical virtually (information through interview University lecturing staff). The pharmacy course gives somewhat more emphasis to pharmacy practice then industrial applications. The Biology Curriculum offered by the Faculty of Science gives a great importance to classical biology like classification and ecology, and is run by scientists highly specialised in marine biology. World class research in marine related science is carried out here, however there is little know-how of modern molecular biology within this department. The situation locally is completely opposite to what is taking place in other countries where recombinant DNA technology is even being offering during one year diploma level courses while the Maltese graduates in Biology do not even encountered the term in their curriculum. Each year there are a number of openings for Masters Degrees however the openings for Ph.D.s are very limited.

In an initiative to make education available to everyone a stipend system in conjunction with a work experience for students was designed in the 1980s. This was redesigned a number of times but is basically still existent. However, students carrying out post-graduate studies or a second first degree do not qualify for such a stipend system. Such policies discourage further studies and much needed specialisations.

The Institute of Agriculture offers a Master of Science degree in Agricultural Science and a one year diploma in Agriculture.

In its Strategic Plan 2002-2006 the University of Malta is committing itself to:

‘Strengthen curriculum development in all Faculties/Institutes to ensure that course content and delivery reflect academic advances in the subject area’ and ‘continue the process of facilitating inter-faculty …. student mobility by reinforcing uniform and transparent assessment criteria together with course structures that are in line with the Bologna Declaration’.

These two action lines indicate that the University management is aware of the limitations existing at the moment within the running of some undergraduate courses and are working to remedy the situation. Through personal communication it is known that the department of biology is aware of the situation and working to remedy it. However, the new curriculum is still in the process of formulation.

In order to fulfil some of the lacunae identified, the Malta College for Arts, Science and Technology (MCAST) has been set up. Training is provided at a certificate level and is considered to be post-secondary but not of a graduate standard. It is aimed to satisfy the need for skilled personnel with technical and innovative abilities. It consists of eight institutes concerning with Art and Design, Information and Communication Technology, Business and Commerce, Electronics and Engineering,

Building and Construction Engineering, Maritime Studies, Community Services and Agribusiness. The results of this initiative are as yet to be evaluated.

3.7 Research Community - Industrial Cooperation The University of Malta is virtually the sole institution of tertiary education in Malta where research is undertaken. The academic staff constitutes 0.5% of the labour force spread over 10 faculties. The research work of science and engineering nature is primarily focused on projects involving international collaboration with Universities abroad, which finds little applicability within the local business. For example the department of Biology’s main research areas and expertise include Marine Ecotoxicology; Floristics and Vegetation; Conservation Biology; Faunistics of the Maltese Islands; Marine benthic ecology and Environmental Chemistry (organotins, petroleum hydrocarbons); Aquaculture and Fisheries (the only aspect related to Biotechnological applications and has resulted in a local aquaculture industry due to expertise of one member of academic staff). While the Faculty of Medicine and Surgery has quite an extensive range and expertise in research, however the fields of research interest are much dispersed and are not industrially oriented. Most of the areas mentioned are covered by just one academic or are transitory (University website, Current Fields of Research). Within this Faculty there is the know-how of modern biotechnological applications, however there is little industrial application because of lack of resources in one laboratory and a different objective of another. On average 10 research papers are published every year by the Maltese research community.

The business sector in Malta can be split into two distinct categories. The export-oriented sector is foreign-owned and highly innovative, but generally tends to import its innovation from abroad or rarely conduct it in-house. On the other hand the domestic-oriented sector is in great need of restructuring and innovation, but generally at a lower and less sophisticated level than that which would be produced by University research. It is for these reasons that, generally speaking, there are very weak links between the research community in Malta and industry, with these being limited to the provision of human resources rather than focused on producing research aimed at promoting indigenous innovation. Figure 3.4 illustrates the developmental phases of a typical biotechnology company.

The Malta University Services, a company owned by the University to service business needs, is far more oriented towards educational activities then towards research.

Thus, due to the small size of the Maltese economy, the research community/ domestic industry collaboration is thwarted by the fact that research bears more fruit when undertaken in an international context rather than to specifically serve the small scale of domestic industry. On the other hand, domestic industry has restructuring and innovation priorities that do not typically match research work being undertaken. Some exceptions are the collaborations between Amino Chemicals and the Department of Pharmacy and those of ST Microelectronics with the Faculty of Engineering. Any efforts to boost the research base of the University with the hope of improving the innovative nature of the Maltese industry may not bear

Public Protection and support

secure research grants

file provisional patents & patent search

file full local & international patents

secure development grants/support

protect IP & access 3rd party IP where necessary

secure tax concessions/grants

maintain patent portfolio

secure tax concessions/grants

Financial and Business support

identify potential investors

secure initial funding

identify milestones and manage research

secure further funding through venture capital & other investment sources

list company on stock exchange

Product development and marketing

identify competing technologies & potential market size

identify partners & collaborators

finalise marketing/development deals with partners/ collaborators

bring product to market with partners

Maltese examples

Atheneum Biotechnologies Ltd Synergene technologies Ltd Optima Laboratories Ltd

Cremona Biogas The Edible Oil Refinery Company

Institute of Cellular Pharmacology Ltd

Malta Vaccines

Figure 3.5 Standard process followed in the commercialisation of biotechnology products

Research Project

Start-up Company

Developing business Self-sustaining business

fruit as there is no direct link between the University of Malta and the local industry within the area of Biotechnology. However, improving the research capacity of the University would result in improvement in our status in terms of basic science research. Academics’ bottom line is the number and quality of publications in scientific journals as this is what results in their promotions within the academic scale. Very few academics have a direct interest in industry, not even from the financial point of view!

As an effect of these factors, and perhaps also partly as a cause, there exist in Malta no formal research community/business cooperation programmes in disseminating and applying the results of research.

In the University of Malta Strategic Plan 2002-2006 the University administration sets as a second most important goal ‘continue to pursue investigative and applied research that is recognised internationally for its quality and impact on the academic community as well as on the local population at large’.

Actions to be taken to achieve these objectives include:

• ‘Encourage staff to undertake research projects that are of a Transdisciplinary nature to seek answers to specific local technological, economic, social and cultural issues.

• ‘Prompt the Research Fund Committee to undertake a research assessment exercise to review current research projects for their effectiveness, and to implement a clear policy for future research objectives.

• ‘Support and encourage research programmes that enhance the work of existing or emerging Centres of Excellence

• ‘Seek contract research from industry, government, as well as from local and international organisations’

Within this strategic plan the separate faculties are autonomous in the implementing the action lines. Each one of the faculties would determine independently how best to achieve these objectives. These actions are all actions in the right direction and have the potential of injecting manpower to a knowledge society. However, research stand and directionality has not been taken yet vis-à-vis Biotechnology.

3.8 Commercialisation of Biotechnology

A survey carried out in connection with this pilot identified less then forty companies engaged in activities broadly related to biotechnology, but only a small proportion of these are involved in the most recent applications of biotechnology.

Support structures for biotechnology companies existent in other countries are listed in Figure 3.6.

Biotechnology Venture

Basic Research Public protection and support

Financial and Business support

Product development and

marketing

• Competence in a novel platform technology capable of spawning competitive products, processes and/or services

• Strong linkages with academic institutions

• Access to public funding

• registration, maintenance and protection of patents

• shared ownership of IP as in incentive for inventors to commercialise ideas

• grants and other support from government for concept development and proof of concept

• funding for product development, testing, approval and marketing

• competent management of research and company development

• business incubation

• market intelligence for strategic development and marketing decisions

• ability to get products through trials and regulatory agencies

• commercial skills to get the product/service to the market

• expansion capital

Figure 3.6: Summary of the basic foundations for the successful commercialisation of biotechnology

3.9 Business networks for innovation As Hon. Minister Dalli comments during the closing speech of the 4th International eFORESEE Conference ‘An economy’s wealth can only be increased through increasing its productivity. Productivity can only be increased by looking for new and more efficient ways of doing what we are doing today. Thus innovation is the key to increasing output and thus standard of living. Obviously innovation can only by achieved through investing in research’ and its translation into industrially applied projects.

The idea of business clusters and networks is underdeveloped in Malta, so much so that, local entrepreneurs are sceptic to join forces within the same sector as they fear that their competitors will take advantage over their competitive edge once they share their know how. In addition there is no National mechanism or special financial support that attracts businesses to form such networks.

3.10 Malta Innovation Scoreboard, Hon. Dalli, Minister for Finance and Economic Services (during this project’s launching seminar) said that ‘the prosperity of a nation is dependent on its ability to create value, that is, its value added. Thus increased prosperity can only be sustained by the production of higher value added products. Innovative products have a high value added as they can command higher prices due to their scarcity. Therefore, increased prosperity needs to be continuously fuelled through innovation’. Innovation is one of the essential elements of a successful biotechnology industry.

A study commissioned by MCST (Micallef, 2003) carried out in line with the European Innovation Scoreboard, utilised seventeen indicators to measure innovation. These seventeen indicators are grouped into four categories, namely:

1. Human resources

2. The creation of new knowledge

3. The transmission and application of knowledge

4. Innovation finance, outputs and markets

The updated outcome of this study is summarised in Table 3.4.

Malta like all other candidate countries on average lags behind the EU15 in all four groups of indicators of the innovation scoreboard. The gap seems to be biggest in the creation of new knowledge and the smallest in the indicators of the ‘innovation finance, output in markets’ (fourth group).

In terms of human resources for innovation Malta like other candidate countries lags behind the EU15 on average by 30% when all indicators in this group are taken into account. Malta is significantly behind in the proportion of the population with tertiary level education and science and engineering graduates. Indicator 1.1 for new science and engineering graduates shows that not enough students are choosing science subjects at post-secondary levels, as is also indicated in Fig 3.3. While indicator 1.2 is drastically below EU15 and EU25 level because of the very limited opportunities that were available for tertiary education in Malta for a significant number of years. Malta still needs to attract significantly more students to take up science and technology at all post-secondary levels or education and training.

Investment in the creation of new knowledge is the weakest dimension of innovation capability of Malta and all other candidate countries. This is surprising since other indicators show that Malta has a high R&D capacity. Significantly higher investment in R&D and innovation in high-tech areas is necessary in Malta in order to overcome a major weakness in knowledge generation. Significant increase in public R&D funding is urgently needed, together with a national R&D policy. The fund should be open to both institutional as well as industrial applicants. The R&D fund should cater also for capacity building for research at the precompetitive stage both as regards human resources training, as well as investment in equipment and laboratories. Unofficial figure for R&D spending in Malta is 0.007% of GDP which is well below the EU mean and target of 3% of GDP (Lisbon Summit).

Malta already ranks high in the fourth category of indicators ‘Innovation finance, outputs and markets’ this augur well to the rest of the economy as Malta can mobilise funds for innovation. These funds come mainly from self-retained earnings from domestic firms or in the case of foreign firms from the parent company. Malta’s foreign direct investment (FDI) is higher then the EU average.

Table 3.4 :Malta Innovation Scoreboard 2003 as compared to European Union (EU) and Associate, Acceding and Candidate Country (AAC) statistics

Indicator Ref.

Indicator MT EU mean

AAC range

1.1 New Science & Engineering graduates (‰ of 20-29 years age class), includes diplomas up to PhDs

3.3 11.3 3.3 -13.1

1.2 Population with tertiary education (% of 25-64 years age group)

7.00^ 21.5 8.9-44

1.3 Participation in life-long learning (% of 25-64 years age classes)

4.4 8.4 1.1-23.5‡

1.4 Employment in medium-high and high-tech manufacturing (% of workforce)

7.142 * 7.41 1.1-9.28

1.5 Employment in high-tech services (% of total workforce

3.06* 3.57 1.57-4.81‡

2.1 Public R&D expenditures (% of GDP)

-- 0.69 0.1-1.33‡

2.2 Business expenditures on R&D (%of GDP)

-- 1.3 0.05-1.95‡

2.3.1 EPO high tech patent applications (per million population)

1.5 31.6 0.1-49.6

2.3.2 USPTO high tech patent applications (per million population)

2.6 12.4 0.02-21.5‡

3.1 SMEs innovating in-house (% of manufacturing SMEs)

15.4 37.4 4.1-58‡

3.2 % of SMEs involved in innovation co-operation

4.1 9.4 4.1-18‡

3.3 Innovation expenditures (% of all turnover in manufacturing)

7.82 3.45 0.85-8.8‡

4.1 High technology venture capital investment (% of GDP)

-- 0.11 0.02-0.9‡

4.2 Capital raised on markets by new firms as a % of GDP

3.68 3.68 0.23-3.68‡

4.3 % of ‘new to market’ product sales of total sales

37.72 6.5 6-37.7‡

4.4 Number of internet users per 100 inhabitants

25.4 32.7 4.5-30.1

4.5 ICT expenditures as a percent of GDP

4.1 7.0 2.2-10.2‡

4.6 Share of manufacturing value-added in high-tech sectors

22.42 14.1 5.9-22.7‡

1 constant over a five year period 1995-2000 2 highly influenced by one successful multinational enterprise in the electronics sub-sector * inherent strong potential for R&D and innovation ‡ Data is not available for all candidate countries ^ 2000 figure (Ref: ‘The Innovation Scoreboard for Malta’ MCST sponsored report by Joseph Micallef and Brian Restall, Sept, 2002;ADE report ‘Innovation capabilities in seven candidate countries: an assessment’ by Slavo Radosevic and Tomasz Mickiewicz; http://trendchart.cordis.lu/scoreboard2003/html/data_ tables.html)

National RTDI Programme (2004-2006) is part of a Government strategy to address the weaknesses identified in the Innovation Scoreboard. The core objective of the Programme is to promote national competitiveness through research and innovation. The Programme which supports knowledge creation is to complement the Technology Venture Fund, which provides support for commercialization.

The MCST is to launch a National RTDI Programme aimed at promoting a culture for continuous scientific research and innovation as well as providing the technical support for Malta to meet its requirements for effective implementation of the Acquis Communautaire.

The Programme is to encourage public-private sector partnerships and cross-sectoral synergies, by providing financial support for scientific research over the whole research and innovation chain, from basic and applied research to near-to-market innovations. The beneficiaries of the Programme include SMEs, University, Public and Private Entities including Foundations and Authorities .

The programme will be managed by RTDI Programme Management Committee, set up by MCST which is to be composed of key stakeholders, including the University of Malta and Malta Enterprise.

Funding for this Programme is to be made available mainly through the re-allocation of research funding currently paid to the European Commission in return for the benefits of full association to the Sixth Framework Programme, as upon accession Malta will no longer have to pay the related Association fee. Structure funds can also be used for this purpose, however, the first call has been missed.

The Programme will have sub-programmes covering capacity-building, scientific research, SME collaborative research and SME in-house innovating activity respectively. The funds are to be allocated on the basis of public call for proposals and an external and local peer review system. The call will be open to all legally established entities in Malta and others from the EU on a reciprocal basis.

3.11 Biotechnology related sectors present in Malta A number of groups at the University of Malta have conducted research and development in relevant sectors; in Physiology and Biochemistry; Superoxide Dismutase, Haemoglobin and Thalassaemia, Neurobiology; in Anatomy; cytogenetics and congenital anomalies, natural products and cancer; in Pharmacology; epilepsy, in Obstetrics and Gynaecology, osteoporisis.

The Laboratory of Molecular Genetics (Department of Pathology & BioMedical Sciences, University of Malta), run by the co-author, initiated molecular genetics diagnostic services and research in the 1989. It is now also part of the Department of Health – Division Of Pathology, Section of Molecular Genetics. In addition, the laboratory conducts maternal and newborn testing and maintains a DNA bank. The service is intimately connected with the research on genetics epidemiology, genotype – phenotype relationships and control of globin gene expression. The group has an interest in blood biotechnology. Three commercial entities have developed out of its work. They also participate in EU – Framework Program Funded consortia including Eurobiobank, Geoparkinson and EUMEDIS – Genetics Network. Between 1996 and 2000, the group was funded by the 4th Italo-Maltese financial protocol (Molecular Biotechnology Programme)

Optima Laboratories Ltd is a speciality neuro-chemical synthesis laboratory which is housed on campus and has close ties with the Laboratory of Behavioural NeuroScience (Department of BioMedical Sciences, University of Malta)

Synergene Technologies Ltd operates a DNA sequencing facility and offers diagnostic services in partnership with a network of connections across Europe (GENDIA). The company has developed a facility for human identification and forensic services).

The Institute of Cellular Pharmacology Ltd. (ICP) works closely with Tunisian and French interests on the extraction of active substances from algae and plants. In particular they have developed innovative calcimimetics from the Padina pavonic (maltenedione). An extensive case study on this company co-authored by Joseph Micallef and Brian Restall was recently published on the MCST website.

MaltaVaccines Ltd produce vaccines for the veterinary market.

In biofuel; Cremona Biogass at the Incubation Center in Kordin. The Edible Oil Refinery Company (EORC) is now engaged in the production of biodiesel by trans-esterefication of recovered vagetable oils.

Atheneum Biotechnology Ltd (chaired by co-author of this document) developed out of the molecular biotechnology programme initially in partnership with Synergene Genomics Ltd (now Synergene Technologies Ltd). Atheneum is now seeking to establish a core bio-manufacturing unit in partnership with public and private organisations from Malta and overseas and other biotech enterprises based on its developed IP catalogue.

Pharmaceutical industry

Turnover of the chemical/pharmaceutical (NACE 24) industry is less then 5% of the turnover of the electronics sector (NACE 32). However, a recent development has been the opening of Delta R&D, a branch of a local generic pharmaceutical enterprise Pharmamed Ltd. This company has been in Malta for the past 25 years and it is only recently that it expanded its activity in Malta. In its R&D branch, formulations of generic tablets take place just before a patent expires. A loophole in the local patent law allows pileup up to three years before a patent expires. Such an industry would attract more foreign investment in this sector. The facilities of Pharmamed Ltd itself have recently been refurbished and upgraded to 24 billion tablet capacity in preparation to starting operating in the European market once we become members of the EU. Other established pharmaceutical manufacturers include Pharmamed Parentals, Starpharma Limited and Arrow Pharm (Malta) Limited. All of these produce generic pharmaceuticals while Starpharma Limited produces antibiotics.

In Malta there are six units involved in the ‘manufacture of basic pharmaceutical product’ (NACE 24.41) employing 20 individuals and having a turnover of LM382,203. Nine units are involved in the ‘manufacture of pharmaceutical preparations’ (NACE 24.42) employing 350 individuals and having a turnover of 13.7 million. There are also two pharmaceutical manufacturers at the fermentation stage namely Blaschem Malta Ltd and Amino Chemicals Ltd.

Agricultural sector

A small land area combined with a population density ten times the EU-15 average limits the agricultural sector to 2.5% of GDP. This value is increased a little more then 6% when all the agri-food chain is considered. This is produced in 11,000 hectors of agriland, half of which is not utilised because it is not good enough for agriculture.

Agricultural activities face a number of structural constraints, primarily land fragmentation, water scarcity and the labour intensive nature of this sector. Land is mostly devoted to grains and forage, crops, vegetables, fruits, flowers, seeds and other minor crops. Animal production is very intensive including pig, poultry, cattle, sheep, goats and rabbits.

The population of full-time farmers is less then a thousand, with about 10,000 being on a part-time basis. Fifty percent of farmers are over 60 years of age. Only 10% of farmers are less than 40 years old. The agricultural land is very fragmented making mechanisation difficult.

The Maltese agricultural policy was developed on the basis of a traditional inward-oriented approach, in which the basic functions of the industry were those of securing domestic supplies to the maximum possible extent. This was achieved through a fairly wide protection of the domestic agricultural market that had the effect of maintaining high prices of agricultural products.

Malta is now committed to remove trade barriers, which are substantial for agricultural and food products. The government has adopted a new vision for the Maltese agricultural industry which focuses on the sustainable development of rural areas in Malta in a manner which enhances competitiveness in a demand driven international market system.

This requires an interim period of adjustment and adaptation during which market support is necessary so that the sector is equipped to face global competition and achieve genuine multifunctionality. Malta has developed a Special Market Policy Programme to support farmers and food processors through the restructuring phase thus enabling them to face the challenges of a more open market situation. Some of the actions being taken are

• Market research to identify specialised niche markets

• the implementation of the proposed bar-coded produce identification scheme which would facilitate point-of-sale recording of transactions;

• the running of the Research and Development Centre, Ghammieri.

• feeding and housing technologies for livestock including Waste Management Model Unit;

• infrastructural works;

• the development of a Code of Good Agricultural Practice.

A startup on specialized foods already exist locally. Institute of Benthic Algae Research (IBA Ltd) is producing specialized foods from marine algae and prickly pears for foreign markets. It is the under the management of a Maltese Graduate of applied biology of Bristol University and French investment.

3.12 Public Opinion Public opinion on genetic engineering and consumption of GMOs is not yet formed. Recently a number of articles appeared in the local English papers including an article by an environmentalist on possible environmental impact of GMOs and in the consumer column on GMO content of food and food labeling. Usually the Maltese consumer follows public health warnings and is very cautious when there is an indication of a possible health hazards. At least one of the major Supermarkets labels some of the locally packed food as free of GMOs.

In terms of environmental protection, the Maltese population is being educated. There is much more to be done in terms of increasing public awareness on all types of pollution. In fact even legislators and planners have been known to choose the cheaper solutions when it comes to environmental planning, even though the impact of these decisions in the long term proves to be more expensive to reverse or treat.

3.13 Ethical Framework As Hon. Minister Galea said during the launching seminar of the pilot project ‘The social and ethical context of research in life sciences and biotechnology must also be given particular attention, since public opinion has become critical in this area, as has been witnessed in recent years with the controversy over Genetically Modified Food which prevented its take-up in Europe. Other more serious ethical considerations in relation to cloning and stem cell research among others need to be given serious and careful attention. The biotechnology sector presents in this sense a good case study for foresight since ‘scientific and technological progress in these areas raises difficult policy issues and complex regulatory challenges’

However Maltese legislation lacks the necessary framework to control research and applications of modern biology. On some occasions, legislation refers more particularly to outcomes of research and use to be made of research products rather then to the conduct of the research itself. This is particularly the case relating to genomic research, where the only legislation to be found is that in the Patents Act which deals primarily with patenting rather than with the research as such. One exception to this is the Animal Welfare Act (2000) which deals specifically and in detail with animal experimentation.

There is also no legislation relating to the setting up and functions of research ethics committees although reference is made to Research Ethics committees in the Data Protection Act. The Animal Welfare Act also refers to ‘ethical rules and standards which may be drawn up by the Council (Article 33 (1)), implying the existences of such an animal research ethics committee.

In Malta there are the following ethics committees:

1. The Bioethics Consultative Committee. This committee is in the first instance an advisory body to the Minister of Health. Its role in research is limited to formulating guidelines to be followed by various institutes and individuals, as well as to pronounce its views on questions relating to research ethics as the need arises. It is not involved in the assessment of the ethics of individual research projects. Its members are appointed by the Minister of Health on a year-to-year basis. This Committee is not involved in assessing research projects.

2. Research Ethics Committee, Medical School University of Malta. This body was set up by the Faculty of Medicine and Surgery. It examines research projects of biomedical nature submitted to it. There is, however no obligation on the part of researchers to submit their projects to this body. It reports to the Faculty of Medicine. It has no authority to supervise research projects authorised by it.

3. Other research ethics committees: the only other research ethics committee is one set up by the Senate of the University of Malta to deal with non-biomedical issues. Again there is no legal obligation on the part of researchers to submit their research for scrutiny of this body.

Research relating to biomedical issues should all go to the Medical Research Ethics Committee, while all other research that involves human beings should go to University Research Ethics Committee. There is no obligation on the part of researchers to submit their research project for approval by an ethics committee except in the case of research involving animals.

The question of informed consent is not dealt with in Maltese legislation. Malta is expected to sign and ratify the Convention of Bioethics in the near future, following which the relevant articles will apply to Malta. The Charter of the Fundamental Rights of the European Union (200/C/364/01) is not yet binding in Malta. Also not binding is the Directive 2001/20/EC of the European parliament and of the Council of 4 April 2001 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the implementation of good clinical trials on medicinal products for human use.

In the Maltese legislation there is also no specific reference to human biological material for research except in the Patent Act (Chapter 417, 2000) dealing with patentability of tissues and methods of treatment. This law also states no patent can be granted to ‘the human body, at the various stages of its formation and development from the moment of conception and the simple discovery of one of its elements’. The same applies to ‘processes for modifying the germ line genetics identity of the human body and uses of the human embryo for industrial or commercial purposes’. Therefore these procedures are not prohibited as such; however, financial gain resulting from application of these procedures is prohibited.

Chapter 4: Overview of Current and Future Issues, Trends and Opportunities in Biotechnology in Europe and Worldwide

In March 2002, at the Lisbon European Council, Heads of States and governments set the Union the goal of becoming ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion’ by 2010. Two years later at the Barcelona European Council, which reviewed progress towards the Lisbon goal, the Heads of States agreed that R&D investment in the EU must be increased with the aim of approaching 3% of GDP by 2010, up from 1.9% in 2000. They also called for an increase of the level of business funding, which should rise from its current level of 56% to two-thirds of total R&D investment, a proportion already achieved in the US and in some European countries (COM (2002) 499 final).

As probably the most promising of the frontier technologies, life sciences and biotechnology can provide a major contribution to achieve the Lisbon Summit’s objective of becoming a leading knowledge-based economy. The European Council in Stockholm in March 2001 confirmed this and invited the Commission, together with the Council, to examine measures required to utilise the full potential of biotechnology and strengthen the European biotechnology sector’s competitiveness in order to match leading competitors while ensuring that those developments occur in a manner which is healthy and safe for consumers and the environment, and consistent with common fundamental values and ethical principles (COM(2002)27 final).

4.1 Why Biotechnology? Biotechnology is based on ‘enabling technology’ and advances impact on numerous industries such as: Pharmaceutical and Healthcare, Medical Devices, Diagnostics, Agriculture, Food and Drink, Environment and Information Technology. The industry consists of firms which develop newly discovered knowledge and exploit it commercially. Many regions, which are establishing themselves as biotech clusters, frequently include supplier and service companies. This collection of industries is referred to variously as the biotechnology or life sciences sector.

4.2 Healthcare applications There is a huge need in global healthcare for novel and innovative approaches to meet the needs of ageing populations and poor countries. There are still no known cures for half of the world’s diseases, and even existing cures such as antibiotics are becoming less effective due to resistance to treatments. Biotechnology already enables cheaper, safer and more ethical production of a growing number of traditional as well as new drugs and medical services (e.g. human growth hormone without risk of Creutzfeldt-Jakob disease, treatment for haemophiliacs with unlimited sources of coagulation factors free from AIDS and hepatitis C virus, human insulin, and vaccines against hepatitis B and rabies). Biotechnology is behind the paradigm shift in disease management towards both personalised and preventive medicine based on genetic predisposition, targeted screening, diagnosis, and innovative drug treatments. Pharmacogenomics, which applies information about the human genome to drug design, discovery and development, will further support this radical change. Stem cell research and xenotransplantation offer the prospect of

replacement tissues and organs to treat degenerative diseases and injury resulting from strokes, Alzheimer’s and Parkinson’s diseases, burns and spinal-cord injuries.

4.3 Agriculture and food production In the agro-food area, biotechnology has the potential to deliver improved food quality and environmental benefits through agronomically improved crops. Since 1998, the area cultivated with genetically modified (GM) crops worldwide has nearly doubled to reach some 50 million hectares in 2001 (in comparison with about 12 000 hectares in Europe). Food and feed quality may be linked to disease prevention and reduced health risks. Foods with enhanced qualities (‘functional foods’) are likely to become increasingly important as part of lifestyle and nutritional benefits. Plant genome analysis, supported by a FAIR research project, has already led to the genetic improvement of a traditional European cereal crop (called ‘spelt’) with an increased protein yield (18 %) which may be used as an alternative source of protein for animal feed (Van der Bossche, 2001). Considerable reductions in pesticide use have been recorded in crops with modified resistance. The enhancement of natural resistance to disease or stress in plants and animals can lead to reduced use of chemical pesticides, fertilisers and drugs, and increased use of conservation tillage — and hence more sustainable agricultural practices, reducing soil erosion and benefiting the environment. Life sciences and biotechnology are likely to be one of the important tools in fighting hunger and malnutrition and feeding an increasing human population on the currently cultivated land area, with reduced environmental impact.

Biotechnology also has the potential to improve non-food uses of crops as sources of industrial feedstocks or new materials such as biodegradable plastics. Plant-based materials can provide both molecular building blocks and more complex molecules for the manufacturing, energy and pharmaceutical industries. Modifications under development include alterations to carbohydrates, oils, fats and proteins, fibre and new polymer production. Under the appropriate economic and fiscal conditions, biomass could contribute to alternative energy with both liquid and solid biofuels such as biodiesel and bioethanol as well as to processes such as bio-desulphurisation. Plant genomics also contributes to conventional improvements through the use of marker-assisted breeding.

New ways to protect and improve the environment are offered by biotechnology including bioremediation of polluted air, soil, water and waste as well as development of cleaner industrial products and processes, for example based on use of enzymes (biocatalysis) (More general information on applications of biotechnology can be found in Annex 8).

4.4 Harvesting the potential The potential of life sciences and biotechnology is being exploited at an accelerating rate and is likely to engender a new economy with the creation of wealth and skilled jobs. Less certain is the time profile and orientations of this development and who fully participate (Table 4.1).

Some estimates suggest that by the year 2005 the European biotechnology market could be worth over EUR 100 billion. By the end of the decade, global markets, including sectors where life sciences and biotechnology constitute a major portion of the new technology applied, could amount to over EUR 2 000 billion.

Europeans are also likely to become major beneficiaries of solutions offered by life sciences and biotechnology — in the form of products and services for consumers, for public benefits and throughout the production system, but to manage this development and to reap the benefits of a new emerging economy, Europe is investing to command the knowledge base and to transform it into new products, processes and services.

Table 4.1: Direct and indirect market potential of life sciences and biotechnology

(Beyond quoted figures, comparative data on international competitiveness in biotechnology are difficult to establish: the main value factor is knowledge, and the usual statistical data on turnover/sales/exports do not reveal the location where value in terms of intellectual property has been added.) (From COM(2002) 27 final)

Although there is a steady increase in the area sown with genetically modified seeds, the future market value is difficult to predict, as it would depend on the possible development of a non-GM feed market.

Million hectares worldwide (ISAAA: International Service for the Acquisition of Agri-Biotech Applications.):

1998 1999 2000 2001

28 40 44 53

Agricultural:

Allowing for the uncertainty of estimates from different sources, the above would imply that in 2010 there would be a total world market (excluding agriculture) of above EUR 2 000 billion in sectors where a major portion of the new technology and a substantial part of the total technology comes from biotechnology companies.

Industrial: €1 500 billion market globally in 2010 in sustainable industrial and environmental technology (only partly biotech) with environmental technology estimated at €90–120 billion (UK Government data: from the DTI’s bio-wise programme launched in 1999: OECD: POST report 136, April 2000).

Pharmaceutical: EUR 506 billion world market in 2004 (EUR 818 billion in 2010 assuming constant increase) (IMS Health (www.imshealth.com).

Figure 4.1: Countries who have adopted Biotech crops. In 2002 global areas of biotech crops was 58.7 million hectares representing an increase of 6.1 million hectares over 2001.

Source : Clive James, ISAAA (International Service for the Acquisition of Agri-Biotech Applications http://www.isaaa.org/)

4.5 Ethical issues The scientists responsible for developing biotechnology in the 1970s appreciated its potential and requested appropriate regulation of its application. As a result, stringent regulations were put in place, starting in the USA in 1976. Since its inception in the 1970s, there have been many tangible benefits and no significant accidents or damaging incidents that can be ascribed to biotechnology per se. Most scientists who work in relevant disciplines believe that biotechnology is as safe as, if not safer than, many other technologies which are commonplace, and not feared.

As biology is the science of life, people are intensely interested in the potential impact of biotechnology on their health and on their food in particular. As a result of the remarkable advances made both in our knowledge of biological processes and in the application of this knowledge, profound moral issues as well as important

political concerns have emerged. Scientists are contributing to many discussions with the public and the various national and international authorities.

Biotechnology is an extremely powerful technology and many of the moral concerns expressed are understandable and some are well founded. It is, therefore, important that these concerns are carefully addressed taking into account the best available scientific information of how the technology might impinge on widely accepted norms of morality. Such considerations involving many scientists have led to a world-wide ban on human reproductive cloning.

Uncertainty about societal acceptance has contributed to detract attention in Europe for the factors that determine capacity for innovation and technology development and uptake. This has stifled Europe’s competitive position, weakened the research capability and could limit policy options in the longer term. The Commission believes that Europe’s policy choice is, therefore, not whether, but how to deal with the challenges posed by the new knowledge and its applications.

4.6 Regulations Traditional biotechnological processes and products are subject to a wide variety of national and international regulations designed to ensure the safety of food, drugs and medicines, and to minimise negative environmental impact. The development of genetic engineering techniques, with the consequent ability to produce genetically modified organisms and transgenic species, necessitated the development of additional guidelines and regulations that would allow development and application of the “new” biotechnology, while minimising the risks to human health and safety, and avoiding environmental damage.

The desire by leading researchers for appropriate regulation of recombinant DNA technology was evidenced in 1974 by a call for a moratorium on genetic engineering research based on the findings of the US National Academy of Sciences (NAS) Committee on Recombinant DNA Molecules. This led to the landmark Asilomar Conference in 1975, which was attended by eminent specialists in biotechnology and risk assessment and which explored all foreseeable implications of recombinant DNA research. The outcome of the conference was the development of a series of guidelines designed to ensure the safety of genetic engineering research. It also led to the establishment of the Recombinant DNA Advisory Committee (RAC) by the US National Institute of Health (NIH) and the eventual publication in 1976 of what subsequently became known as the RAC Guidelines. To ensure compliance with the RAC Guidelines, Institutional Biosafety Committees (IBCs) were set up to assist the RAC in reviewing recombinant DNA research programmes at institutional level.

Procedures to ensure the safety of genetic engineering research in other parts of the world generally followed the US guidelines. Over the 25 year period from 1975 to 2000, the vast amount of information that has accumulated on risk assessment of GMO research has allowed some relaxation of the initial guidelines without compromising safety.

Commercialisation of the “new” biotechnology processes and products required development of a regulatory framework, rather than reliance on research guidelines. The objective of regulation is to ensure maximum consumer protection, while minimising negative environmental impact. However, it is important to prevent

over-regulation to the extent that it may inhibit the development of GM products and processes that are of benefit to the public at large and to the environment.

US Regulation

In the present US regulatory environment, three agencies share responsibility for regulating the organisms, products and processes of recombinant DNA technology. The agencies involved are the Food and Drug Administration (FDA), the United States Department of Agriculture (USDA) and the Environmental Protection Agency (EPA). The regulations cover the contained use and deliberate release of GMOs.

European Regulation

The current EU Directives and Regulations governing the application of recombinant DNA technology and use of GMOs are outlined in Table. While the EU has given strong commitment to the development of the biotechnology sector, for example through the Framework Programmes of research, technological development and demonstration, these EU Directives and Regulations give a clear priority to human and animal health and to environmental protection and sustainability.

European authorisation of medicinal products for human and veterinary use is carried out by The European Agency for the Evaluation of Medicinal Products (EMEA) in co-operation with national authorities. Table 3.3 indicates the relevant EU Directives and Regulations governing the use of GMO products in human and veterinary medicine.

4.7 The knowledge base The life sciences revolution was born in, and is fed and nurtured by, continuing interest in research. Public research laboratories and institutions of higher education are at the core of the science base interacting also with enterprise based research and that of other private bodies.

The role of R&D as a driving force for a competitive and dynamic knowledge-based economy is linked to the economy’s capacity to turn new knowledge into technological innovation. Although many enterprises recognise the increased importance of investing in R&D, they will do so only to the extent that they can exploit results effectively and expect sufficient returns to balance the short-term risk inherent in such investment.

One of Europe’s main strengths is its science base; centres of scientific excellence in specific technologies exist and are at the core of regional clusters of biotechnology development. However, total European investment in R&D is lagging behind the United States. Moreover, Europe suffers from fragmentation of public research support, and from the low level of interregional cooperation in R&D, among companies and institutions from different regions of several States.

The Commission aims to restore European leadership in life sciences and biotechnology research. The sixth Community framework programme for research, technological development and demonstration activities (2002–06) proposes this area as the first priority and will provide a solid platform for constructing, in collaboration with the Member States, a European research area (ERA). This should reinforce R&D capacity and help overcome existing fragmentation of research policies and efforts. Europeans aim to pool efforts, maximising collaboration and minimising duplication, to better meet challenges such as the handling of the ever-

increasing volumes of data and information and ensure full participation in global scientific initiatives.

Moreover, European research efforts are focusing on the new prospects that are opening up through multidisciplinary research. New discoveries are most often made when biological research is carried out in conjunction with other sciences and disciplines such as information technology, chemistry and process engineering. For example, human genome analysis into so-called ‘gluten allergy’ may ultimately lead to the development of allergen-reduced cereals. A first fully integrated Community project has recently been launched to ensure leadership at the genomes–medicine interface where biotechnology is yielding innovative approaches to treatments of human and animal diseases.

4.8 Europe’s capacity to offer scientific and technological solutions The potential for applications of life sciences and biotechnology promises to be a growing source of wealth creation in the future, leading to the creation of jobs, many of which will be highly skilled, and new opportunities for investment in further research.

If Europe is to benefit from this, excellence in the science base is not enough: it is essential to have the capacity to translate knowledge into new products, processes and services that in turn will generate benefits to society, skilled jobs and prosperity. The development of new capacity involves the encouragement of the entire research and innovation process to attract and train researchers, to attract investment and resources, and to provide a balanced and responsible legal, regulatory and policy framework.

During the 1980s, biotechnology in Europe developed primarily within large companies whereas, unlike the United States, the small company sector remained mostly stagnant. While large companies in the pharmaceutical and chemical sectors continue to exploit the technology to provide innovative products, we have seen a rapid expansion of the small company sector in Europe in the recent past. There are now more dedicated biotechnology companies in Europe (1,570), than in the United States (1,273). This is an encouraging demonstration of entrepreneurial potential in Europe.

The industry consists of firms which develop newly discovered knowledge and exploit it commercially. Many regions, which are establishing themselves as biotech clusters, frequently include supplier and service companies. This collection of industries is referred to variously as the biotechnology or life sciences sector.

However, the European SMEs are relatively small companies, whereas the US biotechnology industry started earlier, produces more than three times the revenues of the European industry, employs many more people (162,000 against around 60,000), is much more strongly capitalised and, in particular, has many more products in the pipeline.

The Commission’s 2001 report on competitiveness analysed in detail why commercial development of EU industry currently lags behind that of the United States in the biotechnology sector. Intellectual property rights were identified as a relevant factor to be taken into account.

Structurally, biotechnology SMEs are very capital-intensive, and investments have long payback periods. Risk capital funding has been increasingly available, but does

not appear to be sufficient at all stages of the long company development process. Insufficient supply of skilled personnel may develop into a major constraint for industry development.

Eliminating such bottlenecks is as important as fostering an entrepreneurial Europe with sufficient incentives for innovation and economic risk-taking to create the necessary dynamics. Europe’s competitiveness should be enhanced through three main pillars for action: the resource base, networks and a proactive role for public authorities.

Figure 4.2: Biotechnology Industry in Europe compared to the US. European data for 2000 and 2001 are adjusted by the inclusion of the Swiss biotech company Serono (Source: (COM(2002) 27 final))

# European companies

# US companies

Revenue USA

Revenue Europe

Revenue Europe (adj)

4.9 The US model The United States has shown that a biotechnology industry cannot be created without highly competitive biotechnologies. In the Unites States these biotechnologists have been and are being produced mainly through government and industry funded R&D programmes at the universities. Of course these R&D programmes also provide much of the information and many of the ideas which are the feed stock for the industry. Many US entrepreneurs are scientists who started their careers as researchers, participating in government funded or industry funded R&D programmes. These people took their ideas and discoveries out of the laboratories into start-up companies which were an important element in the biotechnology revolution.

US government strategy: past and present

The US leads in biotechnology because US university scientists invented it, US entrepreneurs and university scientists commercialized it and the US pharmaceutical and chemical industries have taken it over and developed it. The comparisons with the semiconductor and microelectronics industry should be noted. The same alliance of US government, US science and technology and US business which developed the microelectronics and information technology industry decided that biotechnology had the same potential as microelectronics and IT.

‘the actions of the US government (Mostly through the defence budget) that influenced the development of the US semiconductor industry were many and diverse. Undoubtedly, not all the effects of the Federal government were intended or anticipated. With the benefit of hindsight, however, it is apparent that these actions helped to produce a dynamic, healthy US semiconductor industry. Similar actions by the Federal government could encourage the development of companies in other high-technology fields such as biotechnology’ (Office Technology Assistance report, 1984).

Biotechnology emerged from molecular genetics research in US universities in 1970-1972. The OTA report notes that ’Federally funded research in the United States has been

Figure 4.3: Comparison of Employment (Source: (COM(2002) 27 final))

Revenue USA

Revenue Europe

Revenue Europe (adj)

essential to the development of biotechnology’ and that most of this had been conducted at non-governmental laboratories especially at research universities. Biotechnology became the key driver in the health and life science industries and services in the US in the 1980s. The US led the world in the first phase of the biotechnology industry.

The US government has consistently supported biotechnology over the last 15 years with the result that the is leading the charge in the current phase of the biotechnology revolution. US companies lead the field in innovation. Luckily there is too much to be done for the US to do it alone.

4.10 Other Countries: Brazil

Brazil is emerging as one of the developing country leaders in biotechnology because of its deliberate strategy of targeting those areas that are of national economic priority and organizing its R&D activities in such a way as to exploit scientific expertise and technical infrastructure across the institutional landscape. It has also created a national biotechnology focal centre that spearheads R&D.

A significant contribution to the understanding of citrus crop diseases and cancer has resulted from focused funding of genomic sequencing in Brazil. The FAPEPS genome project has been recognized internationally for its contribution to the understanding and development of interventions into cancer and crop pests. Brazil now has a world-class capacity to address local problems, such as the unusually high incidence of head and neck cancer and specific pathogens that are of local interest to farmers.

The Oswaldo Cruz Foundation (FIOCRUZ) was a national agency conducting research and training in medical biotechnology, but has since extended its activities to agricultural biotechnology as well. Its research focuses on the application of molecular biology and the development of vaccines for diseases such as tuberculosis. It has generated a number of recombinant vaccines and diagnostic kits. The Foundation holds at least two patents for diagnostic kits for hepatitis B and rubella.

Nigeria

Nigeria is one of the African countries that has embarked on a determined programme to exploit biotechnology for the benefit of its peoples and to ensure that Nigeria becomes a key participant in the international biotechnology arena within the next decade. The Federal Executive Council (Cabinet) has approved that Biotechnology Policy and Programme of Action (Strategy), which places strong emphasis on the food and agriculture, health and environmental sectors and bioresource development.

The strategy implemented on a multilevel arrangement of institutions being

The Minister’s Council, responsible for policy formulation and consisting of relevant ministries

The Technical Committee, consisting of professionals to be drawn from the ministries, R&D/academic communities, the organised private sector and other stakeholders.

The National Biotechnology Development Agency, which is to provide the platform for networking (both local and international), co-ordination, awareness creation, R&D management and biotechnology entrepreneurship development.

R&D will be done by specific institutions/universities, with the agency ensuring that specific research targets are met. The programme has the following components:

• Biotechnology entrepreneurship • Bioresources development • Capacity-building in human resources and infrastructure • Networking (Nigeria is one of the few African countries that have joined the

International Centre for Genetic Engineering and Biotechnology (ICGEB), an organization that promotes the transfer of technology between countries).

The Federal Government is providing the National Biotechnology Development Agency with US$263 million per annum for three years as a take-off grant to fund the executive programmes in agriculture, health, industry, environment and human resource development. Tunisia

Tunisia has established an National Plan for Biotechnology as early as the 1980s. This plan has emphasized education and training in the field of biotechnology, and many scholarships have been allocated for postgraduate studies in Tunisia, but mainly in France. The funding for these training programs was provided by the Tunisian Government and the French Embassy under the Agreement between the two governments. Also, as an outcome of these preliminary policy-setting activities, two centres for Biotechnology (The Biotechnology Center in Sfax and the Pasteur Institute in Tunis) and new laboratories in already existing institutes were established.

The coordination of the agricultural biotechnology research programs is done at two levels. The first one is the National Committee for Agricultural Biotechnology of the State Secretary of Research in Science and Technology, and the second one is the Program Committee within the Institution of Research and Higher Education of he Ministry of Agriculture (Cetiner,1995).

Tunisia will join the European Union Free Trade zone in 2008 (www.investintunisia.com).

Annex 1: Interviewees and Panel Members Dr. Anna Mcelhatton, Department of Pharmacy, University of Malta Mr. Anthony Theuma, Department of Pharmacy, University of Malta Dr. Bernard DeBono University of Malta Dr. Chris Scerri Department of Health, University of Malta, Atheneum Biotechnologies Limited Dr. Clair Bartolo Synergene Technologies Limited Dr. Hank Fray Delta R&D - Chief Scientist Dr. Janet Mifsud Department of Pharmacology, University of Malta Dr. Marion Zammit Mangion University of Malta Dr. Nickola Camilleri Eurisconsult Dr. Paul DeBattista President of Employers Association, CEO Marsovin Group Dr. Pierre Mallia Ethicist; General Practitioner Dr. Pierre Schembri Wismayer Lecturer, University of Malta Dr. Robert Vassallo Agius Aquaculture Dr. Simean Deguara Aquabiotech Innovia – Director Dr. Sylvana Camilleri University of Malta, Malta College for Arts, Sciences and Technology

Dr. Tony Vella Crop Protection, University of Malta Dr. Victor Farrugia Director, Plant Health Department, Ministry of Rural Affairs and Environment Dr. Claude Farrugia University of Malta, Malta Federation of Industry Dr. Neville Calleja, Statistician, Department of Health Ing. Bertram Mallia, Faculty of Engineering, University of Malta Mr. Adrian Spiteri PriceWaterhouseCooper Mr. Charles Saliba IBA Ltd – Director Mr. Godwin Warr Director Policy & Regulatory Services, Industrial Property Office within Commerce division of Ministry of Finance and Economic Affairs Dr. Joe Buhagiar Botanical Gardens, University of Malta Mr. Mario Salerno President, Organic Movement Mr. Martin Galea FOI vice-president Ing. Ray Muscat IPSE, Korradino Business Incubation Centre Mr.Byron Baron, Student, Faculty of Science Mr. Julian Holland Business Development Department, Bank of Valletta Ms. Marlene Bonnici Director, Planning and Priorities Co-ordination Directorate, OPM

Ms. Michelle Bonello Assistant Director (Trade Marks), Industrial Property Office within Commerce division of Ministry of Finance and Economic Affairs Ms. Nadia Lanzon Environment Protection Officer, Nature Protection Unit, Environment Protection Directorate, Malta environment and Planning Authority Professor Alfred Cuschieri, Department of Anatomy, University of Malta Professor Anthony Serracino Inglott Head of Pharmacy Department, University of Malta Professor Carmelo Agius Department of Biology, University of Malta Professor Victor Axiak Head of Department of Biology, University of Malta

Annex 2: Proposed Terms of Reference

1. The Biotechnology Panel will be chaired by a champion and supported by a managing 2. secretary. The Panel is free to adopt its own modus operandi with regard to frequency of

meetings in line with the remit detailed below. The Panel may co-opt other members and/or set up sub-panels to focus on specific issues.

3. The Biotechnology Panel will review the proposed mission statement for this pilot and adopt

it. The Panel’s main remit entails:

• analyzing the findings from interviews and desk-based research • exploring alternative futures in the area of Biotechnology • scenario-building • SWOT /STEEPV and feasibility analysis • preparing action plans and recommendations • disseminating the results

4. This work has to be carried out within a short time frame of June – October 2003. The Biotechnology Panel will review the proposed workplan and adopt it.

5. The Expert Panel is able to discuss and decide on the time horizon they will work, ideally this

will fall within the range of 2005-2015.

Annex 3: List of Documents and Websites ADE report ‘Innovation capabilities in seven candidate countries: an assessment’ by

Slavo Radosevic and Tomasz Mickiewicz;

Allansdottir A et.al., (2002) Innovation and Competitiveness in European Biotechnology. Enterprise Papers No.7. Enterprise Directorate-General European Commission

Andrade, M.A. and Sander, C. Bioinformatics (1997) From genome to biological knowledge. Current Opinion in Biotechnology, Vol. 8, No. 6.

Biotechnology for the 21st Century – New Horizons. National Scienc and Technology Council, Washington, US 1995

Busuttil S. and Demicoli E. (2003) Lengthy talks on Malta’s Agriculture draw to a close. Aġġornat Special edition No.16

Cetier S. (1995) Biotechnology Seminar Paper –Agricultural Biotechnology in the WANA region. ISNAR International Service for National Agricultural Research, The Netherlands. References

Cetiner S. (1995) ‘Biotechnology Seminar Paper – Agricultural Biotechnology in the WANA Region’ ISNAR Biotechnology Services’

Clive James ISAAA (International Services for the Acquisition of AgriBiotech Applications http://www.isaaa.org)

Combinatorial Chemistry: A Strategy for the Future, Molecular Connection, March 1995.

Combinatorial chemists focus on small molecules, molecular recognition and automation. Chemical and Engineering News, Feb. 12, 1996.

Communication from the Commission ‘More research for Europe – towords 3% of GDP’ COM(2002)499 final

Communication from the commission to the council, the European parlament, the economic and social committee and the committee of the regions ‘Life science and biotechnology – a strategy for Europe’COM(2002) 27 final

Cordina G and, Anderson D ‘An Analysis of the Export Competitiveness of Manufacturing Industry in Malta’, Central Bank of Malta Quarterly Review, September 1993.

Cording G. ‘Patterns of Fiscal revenue and Expenditure in Malta (1980-1992)’, Bank of Valletta Review, Autumn 1992

Delia E.P. The Task Ahead. Confederation of Private Enterprise, 1986

Economic Policy Division, Ministry of Economic Services, Economic Survey Jan-Sept 2001, 2001

Enterprise Directorate General (March 2003) ‘Innovation policy in seven candidate countries: the challenges Vol. 2.4 Innovation Policy Profile: Malta. Island Consulting Services. ADE in association with SSEES and LOGOTECH

Foresight in FP6 ‘Strengthening the dimensions of foresight in the European Research Area’ Working Document ‘An outline guide to opportunities offered by the Sixth European Community Research Framework Programme for supporting co-operation in the fields of foresight in Europe EC Directorate-General for Research Unit RTD – K.2 –‘Science and Technology foresight; links with IPTS Draft edition 2002

Forfas ‘Health and Life Science- report from the Health and Life Sciences Panel’ ICSTI Ireland

Gaskell G et.al., (2003) ‘Europeans and Biotechnology in 2002’ Eurobarometer 58.0 A report to the EC Directorate General for Research from the project ‘Life Sciences and European Society’ QLG7-CT- 1999-00286

Heim, J. and Furst, P. Molecular Screening Platforms - Perspective 1998. International Bioforum, Vol. 2, June 1998.

ICSTI Report on Biotechnology Forfas

Joseph Micallef and Brian Restall ‘The Innovation Scoreboard for Malta’ MCST sponsored report , Sept, 2002;

Life sciences and biotechnology - a strategy for Europe: progress report and future orientations. Communication from the Commission to the European Parliament, to the Council and to the Economic and Social Committee. COM(2003) 96 final

National ‘Research, Technological, Developmental and Innovation (RTDI)’ Programme MCST Oct 2003

National Statistics Office, Labour Force Survey, December 2001

Noorzad H (2001). Biotechnology, Its evolution, Application and Environmental Implications. Executive office of Environmental Protectional affairs and OTA

Office Technology Assistance (OTA) report 1984 ‘Commercial Biotechnology – an international analysis’ NTIS # PB84-173608

Parker I et.al., (2001) A National Biotechnology Strategy for South Africa. www.dst.gov.za/programmes/biodiversity/ biotechstrategy.pdf

Radosevic S. and Mickiewicz T. (2003) ‘Innovation capabilities in seven candidate countries: an assessment’ Vol 2.3 Enterprise Directorate-General (Contract No. INNO-02-06).

Rastan, S and Beeley, L.J. Functional Genomics : going forward from the databases. 1997. Current Opinion in Genetics and Development., Vol 7, No. 6.

Rose, P., Gorman, J., Kurtz, S., Patel, P. and Fernandes, P. The Successful Partnership of Biotechnology Based Screen Development with High Throughput Screening. Net work Science (http://www.netsci.org/Science/Screening/feature06.html).

Single Programming Document 2004/2006 Regional Policy Directorate

Technology Foresight Ireland. ‘Health and Life Sciences’ ICSTI Ireland. Forfas report

University of Malta – Strategic Development Plan 2002-2006

Van der Bossche (2001).‘Spelt: a recovery crop for future European sustainable agriculture’http://europa.eu.int/comm/research/agro/fair/en/be1569.html

White paper on Industrial Policy, Ministry of Economic Services, 2001

Convention on Biological Diversity http://www.biodiv.org/default.aspx

eFORESEE website www.eforesee.info

European Innovation Scoreboard website http://trendchart.cordis.lu

European Legislation in Force http://www.europa.eu.int/eur-lex/en/index.html

Eurostat website http://europa.eu.int/comm/eurostat/

Malta Enterprise http://www.maltaenterprise.com/

Maltese legislature http://justice.gov.mt/

National Statistics Office http://www.nso.gov.mt/

University of Malta website http://www.um.edu.mt

Community research and development information services

http://www.cordis.lu/en/home.html

Annex 4: Biotechnology R&D Questionnaire Survey

C O N F I D E N T I A L

Dorita Galea

eFORESEE Biotechnology Pilot

MCST,Villa Bighi, Bighi, Kalkara, CSP12

Tel: 79382887

email: [email protected]

website: http://www.eforesee.info

Questionnaire on R&D activities in the Biotechnology sector

This survey is intended to obtain a measure of the Biotechnology research and development (R&D) activity in the Maltese Islands. It forms part of the eFORESEE Biotechnology Pilot Foresight Project. You are kindly requested to complete and forward this questionnaire directly to the eFORESEE Biotechnology Pilot managing secretary in the above mentioned address, within two weeks of receipt. The questionnaire is meant to be completed by management of companies or organisations that are either engaging directly in Biotechnology R&D or having Biotechnology R&D performed on their behalf by other parties. The information you provide will be treated in strict confidence and will be used for statistical purposes only. Data will not be published in any identifiable form.

Please consult the attached definitions and notes at the end of the document while answering the questions to describe the involvement of your organisation in Biotechnology R&D. If your company/organisation/department does not perform any R&D please fill in only section A of this form and enter a NIL RETURN in section B. If your company is/has conducted R&D, please complete both Sections A and B, and return the form within two weeks of receipt.

• Please read the enclosed instructions before completing this form. • Report rounded figures. Reasonable estimates are acceptable. • An electronic version of this survey can be downloaded from the file area at

http://www.eforesee.info/malta • Please complete this form by the date printed above and return it to the above

address or by email. • If you need further assistance, please contact Ms. Dorita Galea (contact details

above) • Please refer to notes at back of document as required.

QUESTIONNAIRE ON R&D ACTIVITIES IN THE BIOTECHNOLOGY SECTOR

PART A – INFORMATION ON BIOTECHNOLOGY RELATED ENTITY

COMPILING THE QUESTIONNAIRE (Section A is expected to be filled in by all companies, organisations or institutions that are involved in Biotechnology-related activities/operations. Please fill in Section A even if your entity does NOT undertake any Biotechnology-related R&D. Otherwise please proceed with section B) Q.A1 Name of entity/organisation/department:

Q.A2 Details of person compiling the questionnaire:

Contact Person Position / Office held Q.A3 How would you classify your entity / organisation? Mark the appropriate box for each category (⌧)

Academic institution

Biotechnology - based enterprise/business

Organisation with Biotechnology-related responsibilities and activities

Others (Describe) :

Q.A4 Describe the key Biotechnology-related activities conducted by your

entity. (Please refer to note 1) (Use a separate box for each activity, giving a short description and listing

the scope and goals of the activity. Use additional sheets as necessary) 1.

2. Q.A5.1 How many overall staff does your entity employ?

(Report in rounded numbers of full-time equivalent as per note 2. If the entity is a department or a section of a larger organisation, give this information only for your department / section. Overall staff includes those engaged in non-Biotechnology activities.)

- PLEASE CONTINUE WITH SECTION B -

PART B – DESCRIPTION OF R & D3 ACTIVITIES WITHIN ENTITY

Q.B1 How would you classify the nature of the R&D exercise that your entity has/is conducting? Please refer to note 3. Mark the appropriate box for each category (⌧)

Academic (e.g. pure research to acquire new knowledge with or without envisaged application)

Product Development (i.e. development of new products to potentially place on market)

Analysis (e.g. research intended for assessments such as carrying capacity exercises, impact assessments)

Service Enhancement (i.e. ways to improve a service rendered) Q.B2 What is the status of your R&D exercise?

Completed Ongoing Planned Potential

Date of Completion

Q.B3 What is the approximate distribution, in terms of the percentage current R&D

expenditures, of the R&D effort

% Basic research (no specific practical application in view)

% Applied research (with a specific practical application in view)

% New* product development

% Existing* product improvement

% New* process development

% Existing* product improvement

% New* technical service development

% Existing* technical services improvement * Please consider “New” to mean totally or essentially new/unknown to the personnel of your R&D establishment. The product, process or service may exist elsewhere in the world but your R&D is not aided by this fact since your personnel do not have access to the information necessary to avoid any of the normal risks of development. “Existing” would mean that your staff would be improving a product/process/service about which they have the basic information - the product/process/service need not be already provided by your company.

Q.B4 Please elaborate on the nature of the R&D activity. Specific targets : Kind of work : Q.B5.1 How many staff does your entity (department/section or

even whole enterprise) deploy on this R&D activity specifically? Report full-time equivalent as per note 3

Q.B6 How would you classify the human resources you have available for the R&D

activity as compared to the actual R&D needs of your entity?

With regard to Number With regard to Expertise

Adequate Adequate

Sufficient / Average Sufficient / Average

Insufficient Insufficient

Q.B7 How is your R&D activity funded?

In-house funding (i.e. through funds allocated by the entity itself for R&D)

Public/government grants/aid

Private grants/aid (include EU funding)

(In the case of a private or public source of funding, please elaborate (e.g. give name of project applied for, etc.) )

Q.B8 Please indicate the total funding available for R&D activities, including

indications of time frame for use of such funds.

AMOUNT IN MALTESE LIRA TIME FRAME

Q.B9 Please estimate for each listed category, the percentage use of funds in the R&D activity.

% Staff (including training)

% Equipment

% Maintenance

% Recurrent expenses Q.B10 How would you classify the funding available for your R&D activities?

Adequate Sufficient /Average Insufficient

Q.B11.1 How do you rate the knowledge of your entity about the R&D

Framework Programme of the European Union? (Please refer to note 4.)

Staff follows regular updates on funding opportunities and partnership with European counterparts.

Sources of funding hard to get

Just follow it irregularly with no particular interest

Never heard about it Q.B11.2 Did your entity participate in any EU funded R&D projects?

Yes No If yes, indicate the level of funding: 1996-1999 Lm 2000-2003 Lm Q.B12.1 What is the disposition of your entity towards the European Research

Area? (Please refer to note 5)

Very receptive and looking forward to take specific actions

Keeping abreast to developments but seeking guidance/advice from others (e.g. FOI, government, etc.)

Just a matter for intellectuals

Never heard about it Q.B12.2 Indicate how your entity is preparing to harness the opportunities of

the ERA?

Partnerships with European counterparts(Describe)

Involvement in European networks of excellence

(Describe)

Plans of joint projects with European partners

(Describe)

Plans for exchange of personnel

(Describe)

Q.B12.3 Write briefly the strategy that your entity intends to follow, to best

integrate into the European Research Area.

- THANK YOU VERY MUCH FOR YOUR RESPONSE -

eFORESEE Biotechnology Pilot Foresight Project

‘Realising a Thriving

Maltese Biotechnology Industry by 2015’

Within the framework of the European eFORESEE project, the Malta Council for Science and Technology has recently launched a Biotechnology Pilot Project targeting to elaborate a foresight exercise into the future of the Maltese Islands, with a focus on the Biotechnology sector’s potential in its contribution to the Maltese economy. The Biotechnology Pilot project’s mission statement entails an assessment of the current relevance of the Biotechnology-related industries and services to our economic welfare, and will look at how the various Biotechnology areas can be optimally redressed and sustainably exploited through emerging science and technology, in order to meet the future needs of an evolving knowledge-driven society and a vibrant and diversified economy projected in 2015. It also underpins the essential management and development strategies necessary to secure an adequate and timely delivery. Foresight programs have recently broken new ground with the pertinent approach, outlook, methodology and aptitude towards the provision of a framework vision into the future shape of structures and activities at national, regional and global scales. Through their capability of taking into account diverse controlling factors, and on the basis of the wide scale of interactions and forcings that can be taken into account, such foresight undertakings are becoming essential tools in projecting a country’s needs in the long-term, and in directing synergies towards common and holistic goals. Within Biotechnology Pilot project special emphasis will be placed on strategic questions relating to the future of the Biotechnology sector, and the identification of likely impacts and forcings that will shape the evolution of local socio-economic trends. In addition, it is deemed pivotal to promote public understanding on the importance of the Biotechnology sector to our economy, and to exploit potentialities through the realisation of private-public partnerships to enable the targeted achievements. A core group will work with your inputs to prepare the Biotechnology Vision Document. A first draft of the document will be presented at an international conference to be held in Malta next November. The Final Document, to be prepared by the end of the year, will give a comprehensive vision of the future of the Biotechnology sector in Malta, and serve as a common basis for future direction and coordinated initiatives. It is furthermore the goal of this Biotechnology Pilot Project to render a service to other local cross-cutting interests/initiatives, and to use the initiative as a catalyst and framework for the exchange of views between local interested parties, as well as to stimulate concerted planning activities in the Biotechnology sphere. For further information please consult the project website at www.eforesee.info/malta/

Notes on the Completion of the Biotechnology Research and Development

Questionnaire

Please answer all questions. PLEASE RETURN THE COMPLETED QUESTIONNAIRE WITHIN TWO WEEKS OF RECEIPT. If you are unable to do so, please inform us of the expected completion date. If you require assistance in the completion of this questionnaire or have any questions, you are kindly requested to contact Dorita Galea, tel: 79392887, e-mail address: [email protected] Your best estimates are satisfactory when precise figures are not available. Your estimates will be better than ours. If you are filling a consolidated return for two or more related companies please ensure that consolidated figures are used for all questions (e.g. revenues, employment, R&D expenditures, technology payments). This reporting unit, as used in the questionnaire, covers groups of related companies when consolidated return is filed. 1. Definition of Biotechnology Biotechnology is defined as any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use (Convention on Biodiversity UN, 1992). 2. Full-time Equivalent (FTE) R&D may be carried out by persons who work solely on R&D projects or by persons who devote only part of their time to R&D and the balance to other activities such as testing, quality control and production engineering. To arrive at the total effort devoted to R&D in terms of manpower it is necessary to estimate the full-time equivalent of these persons working only part-time in R&D. FTE = Number of persons who work solely on R&D projects + the estimate of time of persons working only part of their time on R&D. Please base your calculations on a 40-hour week. Example calculation : If out of 5 scientists engaged in R&D work, one works solely on R&D projects and the remaining 4 devote only one quarter of their working time to R&D, then FTE = 1 + ¼ + ¼ + ¼ + ¼ = 2 scientists. Staff may include supporting staff, such as technicians and technologists. These are technically trained personnel who assist scientists and engineers in R&D, e.g. chemical technicians, draftspersons. 3. Research and Development Research and development (R&D) is defined as experimental or theoretical work undertaken primarily to acquire new knowledge, without any particular application or use in view; original investigation undertaken in order to acquire new knowledge, primarily directed towards a specific practical aim or objective; systematic work, drawing on existing knowledge gained from research and practical experience, that is directed to producing new techniques, products and devices, to implementing new processes, systems and services, or to improving substantially those already produced or installed. Routine activities where there is no appreciable novelty or problem resolution are not considered to be R&D for the purposes of this survey. R&D includes basic and applied research in the sciences and engineering. It also includes design and development of new products and processes and enhancement of existing products and processes.

R&D includes activities carried on by persons trained, either formally or by experience, in the physical sciences such as chemistry and physics, the biological sciences such as medicine, and engineering and computer science. R&D includes these activities if the purpose is to do one or more of the following things:

• Pursue a planned search for new knowledge, whether or not the search has reference to a specific application. (Basic Research)

• Apply existing knowledge to problems involved in the creation of a new product or process including work required to evaluate possible uses. (Applied Research)

• Apply existing knowledge to problems involved in the improvement of a present product or process.

• (Development) • Research and development includes the activities described above whether

assigned to separate R&D organizational units of the company or carried out by company laboratories and technical groups not part of an R&D organization. Reporting the R&D activities of such latter groups may require the use of estimates for some of your responses.

Activities to be excluded from R&D are as follows: research in social sciences or psychology, routine product testing, geological and geophysical exploration activities and technical services. 4. Framework Programme for Research & Technological Development

The Framework Programmes are the European Union’s main instrument for the funding of research in Europe which aims to involve Europe’s research and scientific networks to transform the EU into the most dynamic and competitive knowledge-based economy in the world. The Commission is committed to promoting partnering and collaboration.

Seven key areas have been chosen for the advancement of knowledge and technological progress within the sixth framework programme (FP6), and over 12 billion Euros are being allocated to them so as to achieve the largest impact possible. These areas are genomics and biotechnology for health, information society technologies, nanotechnologies and nanosciences, aeronautics and space, food safety, sustainable development, and economic and social sciences.

The main focus of FP6 is the formulation of a European Research Area, aiming at scientific excellence, improved competitiveness and innovation, by promoting increased co-operation, co-ordination and greater reciprocation at all levels.

Management methods and procedures have been clarified so as to increase efficiency and impact on the scientific and technological front. The main priority is the cohesion of activities.

Networks of excellence and integrated projects have been developed, which will give the EU activities more impact and bring about a stronger structuring effect on research conducted in Europe. FP6 makes it possible to assemble masses of resources, co-ordinate national research efforts and expand support activities, such as the mobility of researchers, research infrastructures and issues of science and society.

5. The European Research Area

The concept of a European Research Area (ERA) was proposed by the European Commission in January 2000, in its Communication “Towards a European Research Area”. The ERA was then launched in March 2000 at the Lisbon European Council and has since received the support of the European Parliament, the Economic and Social Committee, the Committee of the Regions, the Member States and Associated States. The establishment of the ERA is Research Commissioner Philippe Busquin’s chief objective. Research and its end-products are beneficial to a country’s economy. Although in many areas of research, science and innovation, European teams are often in the lead, in many other fields, competition from other major countries is becoming increasingly overwhelming. There is a pressing need for the establishment of the ERA mainly because research funding (both public and private) is lower in Europe than in competing countries, and currently, European research activities are fragmented, with most research being carried out in the framework of national and regional programmes. Since there is no coherent Community research policy as yet, many projects are carried out in duplicate, and other important areas are ignored. Many of the problems which need to be tackled, such as climate change, are pan-European in nature, and require a co-ordinated approach by all the Member States. The questions and challenges of the future cannot be met without the integration of Europe’s research efforts and capacities, and this is the concept of the ERA. There are three main objectives in the concept of the European Research Area:

The creation of an “internal market” for research, within which researchers, technology and knowledge will be able to move freely. This will lead to increased co-operation, more competition and better allocation of resources.

Improving co-ordination between national research policies and activities. The development of a European research policy which covers funding matters

and broader issues such as the role of science and technology in society. Activities are currently underway in many areas, including benchmarking of national policies, mapping centres of excellence, research infrastructures, private investment in research, electronic networks for research and issues relating science and society. In some areas Europe-wide fora have been set up to bring together actors from the public and private sectors. The scientific community and industry have spontaneously set up initiatives to further the aims of ERA. National research organisations are forging and strengthening links with one another, and setting up exchange programmes for researchers

The ERA is well on its way to becoming a reality. In areas where Member States are involved, real steps forward have been made. Similarly, progress has also been made in areas which are well defined and where action is already taking place at the local level.

Annex 5: Abbreviations AAC Associate, Acceding and Candidate Countries DNA Deoxyribo Nucleic Acid eFORESEE Exchange of Foresight Relevant Experience among Small European and

Enlargement countries EMEA European Agency for the Evaluation of Medical Products EORC Edible Oil Refinery Company EPA Environmental Protection Agency ERA European Research Area ETC Employment and Training Cooperation EU European Union FDA Food and Drug Administration FDI Foreign Direct Investment FOI Federation of Industry FP5 Fifth Framework Programme of the European Community for research,

technological development and demonstration activities FTE Fulltime Equivalents GDP Gross Domestic product GE Genetically Engineered GE Genetically Engineered GM Genetically Modified GM Genetically Modified GMO Genetically modified Organism IBA Ltd Institute of Benthic Algae Research IBCs Institutional Biosafety Committees ICGEB International Centre for Genetic Engineering and Biotechnology ICT Information Communication Technology IPSE Institute for the Promotion of Small Enterprises KBIC Kordin Business Incubation Centre MCAST Malta College for Arts, Science and Technology MCST Malta Council for Science and Technology MDC Malta Development Corporation MEPA Malta Environmental and Planning Authority NAS US National Academy of Sciences NIH National Institute of Health NSO National Statistics Office R&D Research and Technological Development RAC Recombinant DNA Advisory Committee RTD Research and Technological Development RTDI Research Technology and Development Initiative S&T Science and Technology SME Small and Medium Sized enterprises STI Science Technology Innovation SWOT Strengths, Weaknesses, Opportunities and Treats USDA United States Department of Agriculture

Annex 6: Dates of Pilot Meetings

17th July Panel B meeting

18th July Panel A meeting

28th July Launching seminar

4th Sept Panel A meeting

16th Oct IP and Patenting informative discussion with stakeholders

Annex 7: Launching Seminar Speeches and Newspaper Letters

Hon. Minister Louse Galea – Minister for Education Launch of eFORESEE Malta Biotechnology Pilot

It is with particular interest and pleasure that I am participating in this opening session to launch the Biotechnology Foresight Pilot, the last of the three pilots being implemented as part of Malta’s participation in the EU-funded Fifth Framework Project project, eFORESEE. The eFORESEE Project is a strategic initiative for Malta which presents a challenge. It forces us to think again about how we best to formulate strategic national policies and strategies: Are we involving all the stakeholders? How should we consult them? Are we thinking in a long-term context or are we constrained by the here and now? Are we preparing for the future? Are there ways that we can move from consulting the stakeholders to involving them actively in ownership and implementation? These are the core challenges of the project. It is significant and important that the Malta Council for Science and Technology is coordinating this initiative in Malta, given the need for such approaches in the area of science, research and innovation.

These approaches are particularly important when strategic policy decisions have to be taken as Malta makes the transition to the globalising knowledge-based economy and prepares for EU membership. Foresight can play an important role in helping us to address the challenge of competitiveness through appropriate and targeted investments in research and innovation. But beyond this, foresight provides the tools for optimizing the impact of these investments by ensuring that they are implemented efficiently and effectively. Foresight’s identification and involvement of key stakeholders at different levels (the design, implementation and take-up of the Strategy) allows a “whole of country” approach. This ensures that policies are formulated across Ministries and sectors and involve consultation down to the community level.

Foresight has been used in other countries worldwide for different purposes, for identifying emerging niche areas at the technology frontier, deciding on priorities for research funding,… but the focus is always on the future impact of science and technology on the economy and society. The fact that science, technology and research and innovation, are now recognized as key drivers of competitiveness, has raised the relevance of foresight within the EU and worldwide.

In the year and half since Malta has been participating in the eFORESEE Project, it has generated a significant learning curve in carrying out foresight exercises. The experiences are now being used to inform the design and implementation of this biotechnology pilot.

Biotechnology has been identified by MCST and Malta Enterprise as one of the areas to be considered for further national investment in terms of research and innovation. The EU is also focusing on biotechnology as one of the most promising of the frontier technologies for helping Europe to compete economically with the US and Japan. Such visions and ambitions require substantial investments of resources in research and innovation based on well-targeted policy measures. The social and ethical context of research in life sciences and biotechnology must also be given particular attention, since public opinion has become critical in this area, as has been witnessed

in recent years with the controversy over Genetically Modified Food which prevented its take-up in Europe. Other more serious ethical considerations in relation to cloning and stem cell research among others need to be given serious and careful attention. The biotechnology sector presents in this sense a good case study for foresight since “scientific and technological progress in these areas raises difficult policy issues and complex regulatory challenges”1

These important issues which affect our future and the future of our children require serious and extensive dialogue and consultation so that all opinions are aired and visions shared for an optimal future. Beyond this, it is clear that single efforts are not enough, and we need to build of synergy of efforts and resources to bring together the best brains to formulate optimal policies and find effective ways for implementing them. What are the public-private sector partnerships that could be generated in this area to promote the biotechnology industry in Malta? What are the drivers that are critical for bringing this about? What action do we need to take now to ensure that we have a thriving industry by 2015? The vision and strategy is at the interface of two Ministries, Ministry of Education and Ministry of Finance and Economic Affairs and I am happy to see this collaboration reflected in this launch event and even in the way the pilot is being designed and the experts being involved.

It is also important that the pilot’s perspective is broad, taking into account the emerging global, Euro-Mediterranean as well as European scenario. This broad perspective will be particularly important for the final eFORESEE conference which will be taking place in Malta between 12-14 November on the theme “Exploring the Role of Foresight and similar policy tools in building the Euro-Mediterranean Research and Innovation Area”

I congratulate you all on taking up this challenge, not an easy one, and look forward to receiving the results of your work.

Speech by the Hon. John Dalli, Minister for Finance and Economic Affairs

Realising a Thriving Maltese Biotechnology Industry by 2015

eFORESEE Malta Biotechnology Pilot Project – Launching Seminar

Monday 28th July 2003

The prosperity of a nation is dependent on its ability to create value, that is, its value added. Thus increased prosperity can only be sustained by the production of higher value added products. Innovative products have a high value added as they can command higher prices due to their scarcity. Therefore, increased prosperity needs to be continuously fuelled through innovation.

NSO is currently working in order to compile a full set of economic indicators, as complete innovation benchmarking is not yet possible. However, statistics on the local business community published lately by NSO indicate that Malta’s innovative base is very weak. Employees with higher education constitute only 4 % of total employees in Malta. On the other hand these constitute 13.5% in the EU-15 with the highest percentage reaching 20.9% in Sweden and the minimum being 6.6% in Austria. The number of employees with higher education gives an indication of the innovative capacity of companies though not a full picture. The NSO survey also

1 European Commission: Life science and biotechnology – A Strategy for Europe (2002) COM (2002)27

reveals that only 19.2% of the interviewed enterprises introduce new or significantly improve products and only 14% introduce new or significantly improved production processes. The sectors that contribute mostly to innovation are the manufacture of radio, television and communication equipment and telecommunications. When asking about the factor hampering innovation activity, the majority of companies felt that innovation is not important for their product.

The Government has laid down a number of incentives to spur research and development. During the last budget speech it was announced that 150% of the expenditure on research and development could be decreased from taxable income. The Business Promotion Act also gives special tax incentives to companies that set up to undertake Research and Development. Companies in the Biotechnology sector qualify for these special tax incentives. Research and development also qualifies for investment tax credits.

The Government is also helping start-ups in innovative sectors as Biotechnology through the provision of the Kordin Business Incubation Centre (KBIC) and the Technology Venture Fund, which are both aimed at highly innovative and technological projects. The KBIC provides physical space and technology infrastructure in a convenient, yet low cost location, along with high speed internet access to its clients, making KBIC an ideal place to nurture, grow, and launch technology oriented businesses. It also provides access to finance, the expertise and the objectivity necessary to refine the venture’s vision, assist in the development of its business model, and build its teams. The KBIC also offers the necessary training and mentoring to enable each enterprise to manage its business effectively as well as networking opportunities. The Technology Venture Fund provides venture capital for high technology projects. These initiatives are already being availed of by a small number of companies in the Biotechnology sector.

Incentives need to be complimented with a sound administrative structure. We have just passed the Malta Enterprise Act through Parliament. Through this act these three entities will be merged together in order to create an efficient one-stop shop for the business community. Malta Enterprise has been entrusted with the focus on and continuous reassessment of niches that Malta is best suited to serve. Malta Enterprise will also market Malta as an ideal location for investments in these niche areas. Malta Enterprise will influence all services that have a bearing on industry competitiveness as the educational institutions. The Omnibus Act, which has also just been passed through Parliament, brought our Patent legislation in line with that in the EU.

Thus a lot of effort is being channelled to create an environment that is friendlier to high technology ventures. Of course, a lot still needs to be done and all these initiatives need to be further refined and marketed in order to spur increased innovation capability in Malta. Increased Research and Development and innovation are a EU wide challenge.

One must welcome foresight initiatives as the one which is being launched today as only through such exercises can be prepared for the challenges ahead in order to transform them into opportunities.

Prof. Roger Ellul Micallef – Rector University of Malta

The University is not only a major stakeholder in biotechnology but also perhaps a unique one. The Biomedical Sciences at the University have been an area of excellence enjoying an international reputation since the mid sixties. Together with Biotechnology they have been a priority target since the late eighties and will continue to be so, as may be seen from the University's current Strategic Plan. Considerable funds have been invested over the last ten years, funds coming mainly from Government, from the Italian protocol and through participation in the EU framework programmes. Unfortunately comparatively little funding has been made available by private industry.

New well equipped laboratories, staffed by fully qualified research workers are presently carrying out high quality work especially in the fields of cell and molecular biology and genetics. A number of PhD students have completed their studies in our departments, some of whom are occupying important positions in other European Institutions.

Clearly the University has two main interests in the field of Biotechnology; an educational one, in providing the country with the experts it requires and, of course, in that of Scientific Research, Technological Development and Innovation.

Greater emphasis worldwide, but perhaps even more in the EU countries is being given to the teaching of science. Science education in undergoing extensive reform in order to attract to it as many students as possible. The recent changes in our National Minimal Curriculum have been an important step forward in promoting science education in Malta. But there is more to be done. The number of doctoral level research scientists we produce is only about 1/10th of the number graduating in other EU countries. It is obvious that a properly funded graduate education programme is essential to increase numbers. On assuming the Rectorship of the University in 1996 Prof Ellul Micallef proposed that a National Research Council be set up an he put the proposal before us again.

Increasingly University has began to play a critically important role in certain areas of the "Knowledge Economy" such as Computer Science and Artificial Intelligence, Microelectronics and Material Science. They are now part of our Economic Restructuring. Naturally, for them to flourish, adequate financial investment is a sine qua non.

He claimed that he is looking forward to reading the policy document at the end of the Project.

His Excellence Vincent Fean - British High Commissioner

His Excellence Vincent Fean said that he looks forward today to learning about the scope for mutually beneficial co-operation between Malta and the United Kingdom in the exciting, fast-moving field of biotechnology. He wished Prof Alex Felice, Chairman of the e-Foresee Biotechnology project for Malta, continuing success with the development of a biotech strategy for Malta in the EU.

This was followed by an outline of pharmaceuticals/biotechnology investment by UK. He said that the pharmaceutical sector in the UK employs almost 60,000 people, and half of what is produced in the UK goes for export. The UK was the world’s largest exporter of pharmaceutical products in 2002.

He also stated that biotechnology is the next wave of growth in the knowledge-based economy. The UK biotechnology sector is now the largest in Europe, with almost 500

companies, producing over 40% of the biotechnology drugs presently in Phase III clinical trials. On the latest figures available, for 2001, R & D spending in the UK was over 1.7 billion euros: more than the rest of Europe put together.

He also said that like the Government of Malta, the UK Government is committed to encouraging scientific development. Both countries share the same policy on tax incentives in this key area. The UK is pledged to increase funding for science by 10% year on year in real terms, aiming to reach 4.7 billion euros by 2005/06. UK has 10% of the world share in R & D, thanks to companies such as Glaxo Smith Kline. He also sated that he is keen to learn about the scope for synergies between activity in the UK and activity here in Malta. Ideas on how to harness EU funding for joint research work will be most welcome. The British delegation in Malta will work closely with Malta Enterprise, now up and running.

The Times Friday August 29, 2003 Editorial The coming of age of biotechnology Perhaps the most outstanding phenomenon in science during the latter half of the 20th century has been the unparalleled developments in biology and biotechnology. The rate of development of techniques to resolve the most intricate mechanisms of the body has exceeded all expectations and has enabled the unravelling of the genetic make-up (genome) of humans and other animals.

Biotechnology now is involved in the creation of new products (e.g. GMO’s – genetically modified organism), the diagnosis of a large number of genetic disorders opening the possibility of replacement of defective genes, and has even infiltrated into the law-courts involved in solving complex forensic dilemmas.

How prepared are we in Malta to take advantage of such technology? It is obviously important that Malta does not slide into a stagnant backwater. What is required is the availability of energetic individuals who possess the right scientific background.

Unfortunately, however, in Malta the training of scientists has lacked behind that in other spheres of knowledge. There has been a relatively low number of students taking science as a profession. Over the past decade, the total number of university students has increased eight-fold, whereas the number of science students has only doubled.

It is therefore opportune that his topic was aired and emphasised at a recent launch of a biotechnology pilot project at MCST in Kalkara, which admitted that Malta has a ‘very weak innovative base’. Unfortunately, there are few incentives for young Maltese men and women to choose science as a career.

It is encouraging therefore to see that biotechnology has been identified by MCST and Malta Enterprise as one of the areas to be considered for further national investment in terms of research and innovation. The EU is strongly supportive of biotechnology. The so called Fifth framework project encourages collaboration between European states. In Malta, eFORESEE is now joining with Cyprus and Estonia to take part in this programme.

Deciding which of the many facets of biotechnology should be encouraged is not going to b easy. On the other hand there are multiple international governmental and private business enterprises overseas who are already miles ahead, and who would present a formidable challenge to a budding industry in Malta. On the other hand, one should not be too pessimistic about the role of a tiny country like Malta. Precedents do exist. For instance, remarkable progress has been made in the computer industry which a decade ago was in its infancy. The same may be said about the electronics and telecommunication industry.

It is envisaged that Malta should reach such a target by 2015. While this is not impossible, it will take a most concentrated effort to build an infrastructure, starting with a veritable revolution in the approach to science studies from an early age, through university and beyond. It requires a modification of the current mind-set of both leaders in education and in industry to appreciate that there is a booming future in biotechnology.

Getting an EU grant to liase with other EU countries in a relatively minor project is certainly not sufficient by itself, but it is a step in the right direction.

Times of Malta – Managing the new biology

Wednesday 17th September 2003

Pierre Schembri Wismayer

On Friday August the 29th, the Times ran an Editorial called - “the coming of age of biotechnology”. It expounded to educators and policy makers alike, the interesting wake-up call being highlighted by the MCSTs EU-funded foresight exercise.

Biotechnology has come of age indeed, but this was a while ago. It is already contributing large chunks to the economies of first and third world nations. One public piece of evidence was the America’s cup – the most expensive sporting event in the world, won by a boat owned by a Swiss Biotech billionaire.

Will Biotech ever play a useful part in the Maltese economy?

In order to increase biotechnology in Malta, one necessity is a good output of highly trained and technologically skilled science graduates and post-graduates. Companies do not want to have to train their recruits from scratch.

In summer 1994, whilst studying towards my PhD in Scotland, I sent a letter relating to the need of the University of Malta to specialise in certain key areas of post-graduate education/research. I sent this letter to various local authorities, including the then rector, health and education ministers and the MDC. At the time, I had suggested a couple of potential niches. These were biotechnology (which I supported by an article from the Financial times which said that biotechnology was already the fastest growing industry in the world), and renewable energy engineering. I received one recognition of my letter from the MDC and none from any other authority.

Ten years down the line, the potential of biotechnology in Malta is largely unrealised. The number of science graduates and post-graduate students exiting our university is very low. The university employs many of its non-medical science post-grads to teach biochemistry and genetics to medical doctors who generally avoid a research-based career. On the other hand, the biology BSc is generally very light in areas are exploding, whilst is very heavy on classification, marine biology and ecology. I have absolutely nothing against Marine biology, where Maltese biotechnology may corner part of the niche market, capitalising on local expertise. However, the major areas of the new biology can be identified by the titles of the new Nature journals which have mushroomed in the last few years – Cell Biology, Neuroscience, Genetics, Immunology, Biotechnology, Structural Biology. None of these elements presently occupy pride of place in our biology BSc course. Nor does the associated area of Bioinformatics, an area where we can rope in Maltese computing skill to help wade through some of the masses of information thrown at us by a decade of high speed sequencing.

It is no use having a biology degree creating mainly teachers and marine biologists, whilst biotechnologists teach doctors who are unlikely to follow the option of such a career. How best can one maximise the benefits and minimise the costs? - through sharing of resources! One option is to create a new Faculty of Biotechnology, serviced by other departments. Another is to or to fuse the pre-clinical medical sciences and the biology dept into an Institute of Biomedical Sciences, servicing both the faculties of Science and of Medicine & Surgery.

Has biotech industry made any inroads at all into the Maltese economy? It has – just about. Synergene Technologies Limited has set up shop offering contract DNA sequencing to International labs and genetic identification services.

More importantly, Charles Saliba has shown, with his companies InCyte Pharmaceuticals and IBA that it is possible to succeed with very little resources in our small island, having adequate training and using one’s own entrepreneurial skill to develop an idea. An important benefit of biotechnology is that with relatively little money, ideas can be used so as to attract investment and realise a new company creating new, knowledge based wealth. As Charles Saliba has succeeded, others can too, with basic training and a suitable package of incentives from Malta Enterprise, MDC’s successor. Regarding the latter, a panel of experts from the MCST foresight exercise are already working on recommendations.

In order to create such an output of new graduates and biotech entrepreneurs, the University of Malta needs to invest in Science. Just as Malta is encouraging girls to follow a science career with Michelle Grech’s posters, it needs to provide education facilities to train these scientists of tomorrow. Science education needs labs, expensive equipment and experienced trainers. This is a heavy investment, but it is a necessary one. It may require a relative shift of funding away from the arts and toward the sciences as is being done in many universities in the UK.

Arts can contribute to the economy - we already compete on a world market when it comes to the teaching of English as a foreign language. Maybe we should look into teaching Arabic in the same way.

However, the world is heading into an always more knowledge-dependant economy. Science (and in particular biology) will be driving much of this economy in the future. The human genome project is only the first step. The large bulk of biological knowledge and application is still waiting to be unravelled and understood. This is not about GMOs only, not at all. It is about possible new treatments for an ageing population, about new detergents for washing machines, about degradable bio-materials made by microbes, about new ways of bioremediation, helping remove toxic and non-toxic waste, about new bio-computers, new ways of harnessing energy. The possibilities are endless.

Investment in engineering (largely driven by the colonial need for training as a naval base) helped prepare us for business in the last century, the century of Physics and Chemistry, attracting the likes of ST Microelectronics and Brandstatter.

The present century has been dubbed, across the world as the one of Biology and Bioinformatics. Today, we make the choices. Will we make the right ones? Will we have the skills to compete?

Times of Malta – Knowledge-society and chattering nature

Thursday 25th September 2003

Ranier Fsadni

Every parent develops repertoire of threats and incentives with which to deal with children reluctant to go back to school. I am afraid this article will not enrich that repertoire. The reasons for going to school and university remain pretty much the same ones that have been around for decades.

What I want to do is raise two questions. What happens to society when knowledge is characterised by frequent discovery and rapid dissemination? What happens to knowledge when different kinds of social institutions – industry, medicine, government, family etc – are organised around it?

One answer would focus on the people you need to produce this knowledge and then to handle it. In an age dominated by information science and biotechnology, it is tempting to think that the balance tilts in favour of people trained in the sciences, rather than the arts. But I believe this would be a mistake.

It is a mistake that even some smart people make. For example, writing in this newspaper last week Pierre Schembri Wismayer made an acute argument for the planned development of a Maltese economy based on knowledge (especially that of biotechnology). But when he mentioned the arts in the context of a ‘knowledge dependent economy’, he placed them very much second-place in importance to the sciences.

But this is not what a number of people (like Charles Leadbeater, Fernando Flores and John Gray) who have studied knowledge-enterprises are saying. On the contrary, they argue that knowledge-based economies require an education that trains people in the interpretive arts – the kind of training in listening to people’s narratives and attention to the shape of their lives that a good education in philosophy, history, literature, etc can give you.

How come? For a start, take what happens to society when knowledge is characterised by frequent discovery and rapid dissemination.

This kind of world is not simply one where scientists slave away to get nature to whisper its secrets. Once nature whispers, what it said changes our lives – our identities and their meanings.

If the Bible portrays a world where God is talkative (all those signs, instructive plagues, and miracles), knowledge – society is a world where Nature is garrulous. It just cannot stop whispering.

And its chatter is doing radical things to economies – not just to what new products come on the market, but also to how work is organised, how people buy and sell, how they spend, save and plan, and to all those things that give meaning to people’s economic participation.

It is an economy of constant change and so a world where the possibility of failure is always around the corner; just because one successfully adapted yesterday does not mean one will manage tomorrow.

Such a world is full of moral hazard. The meaningfulness of one’s life-story is under pressure to become a life experienced as a series of disconnected short stories, a life that escapes one’s control as one moves from project to project.

Mr.Flores and Mr.Gray argue that today business design, the skills of team-building, and entrepreneurial innovation all involve a certain kind of intelligence that is informed by the arts of interpretation – listening to what people say about their identity, where their lives are in disharmony. One might add that even the care of persons in knowledge-society – and welfare is not divorced from the economy – requires these arts.

In short, you still need people with a cultural training to tackle the culture of a knowledge-based economy – not only but not least to address issues that are vital to that economy. Yet the relevance of the arts is there even when one considers what happens to knowledge when society is organised around it.

A multi-disciplinary approach that includes the arts is needed for the production of 21st century knowledge. There is a great awareness, nowadays, that knowledge consists not only of the object of discovery, but also of the intellectual tools used to probe it. The intellectual tools would include the language, media of communication and means of persuasion of a particular discipline.

This is a difficult argument, but a simple illustration might help. When a scientist like Richard Dawkins said that the human body is a ‘machine’ for the replication of genes, he is not using the metaphor simply to clarify what he is saying. His machine metaphor actually shapes the way he thinks about things.

Metaphors are incidental to the validity of scientists’ experiments. But they are not incidental to the directions taken by scientists’ thought (or to the popularisation of their ideas). Think of Einstein’s refusal o believe that God ‘plays dice’ with the universe. These metaphors grip the imagination, cast a spell on it, and can have a formative influence, for better or worse, on the direction of research.

What is true of metaphor can be enlarged to encompass language. And that is the reason why the production of 21st century knowledge calls for people whose training has alerted them to the ways in which language and stories can bewitch thought – the thought of scientist as much as anyone else’s.

Times of Malta - Bioinformatics

Friday 26th September 2003

Neville Calleja

I have followed the editorial of August 29 and Pierre Schembri Wismayer’s ‘Opinion’ (September 17). Being a medical statistician, I strongly believe that bioinformatics is a field to which Malta can contribute greatly.

Our population, being small, lends itself very well to the establishment of databases. Other countries’ national statistics offices can only dream of having a central relational database similar to what the Government of Malta started up a few years ago. This resource alone is priceless for research in the Maltese nation’s genetic make-up and consequently, to the global community. Moreover, there is enough expertise in the mushrooming IT industry in Malta to be able to cope with the technical aspects.

In addition, our population has a number of medical conditions or variants that occur more frequently than in other countries. Clear examples would include diabetes and thalassaemia. Experts in the field will surely volunteer a number of other conditions. Given the ease of applying bioinformatics to the population, Malta would be fertile ground for research, both academic and industrial, into these genetically influenced diseases.

What can be applied to the human population may also be applied to other species, plant and animal.

In summary, one must understand this potential characteristics that the Maltese population possesses – manageable size. With the right ethical considerations to ensure anonymity, this could work out to be quite a profitable quality.

At this point, I hope to provoke discussion among readers, scientist and ethicists alike on this subject.

The Times of Malta - The ‘new biology’ and the biology department

Thursday, October 9, 2003

Victor Axiak

Prof. Axiak is head, Department of Biology, University of Malta

The aim of the Department of Biology at the University of Malta is to provide our students with the best possible teaching programmes so as to give them a sound background to the subject as well as to provide them with the necessary skills to enable them to effectively contribute towards Malta's changing needs and requirements.

All this is to be achieved within very tight constraints of financial and infrastructural resources. Pierre Schembri Wismayer has recently given us a gratuitous opinion ("Managing the new biology", September 17) on whether or not the Department of Biology is achieving its aims.

The fact that Dr Schembri Wismayer is not a graduate of the Department of Biology, has never visited the department, has never participated in any of its activities and has never discussed the matter with any members of its academic staff is besides the point.

I firmly believe that being a public-funded entity, my department must stand up to public scrutiny at any time and must be able to adapt itself whenever and wherever the need arises. However, if any criticism is not based on solid facts, then it is bound to be counter-productive and will fail to produce the desired results. So, let's get the facts right.

Since its reconstitution in the late 1980s, the Department of Biology has been offering a joint biology/chemistry B.Sc. degree as well as postgraduate degree programmes up to doctoral level.

The first group of B.Sc. graduates terminated their studies in 1990. While every effort is made to address the most relevant and newly emerging aspects of the subject at any time, the compromise with maintaining a fairly broad base in the biological sciences has to be constantly kept in line with the needs of a small country such as Malta.

We do not produce "mainly marine biologists and teachers", as Dr Schembri Wismayer suggests. We produce graduates with a broad overview of all of biology, which they can apply to any field, including biotechnology, fisheries, agriculture, environmental protection and management, conservation of biological resources and biodiversity, microbiology, marine biology and a whole list of other fields!

We can only hope to satisfy Malta's diverse requirements in the biological sciences by avoiding the type of specialisation in any single field, as Dr Schembri-Wismayer suggests, while at the same time equipping our graduates with the necessary basic

skills and approaches that allow our graduates to specialise in particular fields if they so wish.

Have we succeeded in doing this? We are currently building a database on our past students that includes information on their employment profile and posts occupied.

Some very interesting results are already available.

Since 1990, over 240 students graduated in biology and chemistry. Of these, almost 70 per cent chose to take up an elective project in biology during their final year; 31 per cent of them continued for a Masters degree, while almost 16 per cent followed (or are following) Ph.D and M.Phil. courses at our university or elsewhere.

This brings the total percentage of graduates with first degree in biology who take up postgraduate studies to 47 per cent! Evidently, postgraduate courses by their very nature must be highly specialised and there is every evidence to prove (including external examiners' reports) that the graduates we are producing have absolutely no difficulty in following such more advanced courses with great success.

Of all biology elective students to date (those that carry our a final year research project in biology), preliminary data shows that about 24 per cent took up a teaching position; 28 per cent went to private industry; 19 per cent are in academia/research at our university and elsewhere and 26 per cent have taken up key scientific administrative jobs with various government departments and authorities (fisheries, agriculture, the Water Services Corporation, the Malta Environment and Planning Authority, the Malta Resources Authority, the Drainage Department, etc.). Incidentally, four have taken up a religious vocation.

We are producing mainly teachers and marine biologists, aren't we?

Now, what about biotechnology? We fully recognise the fact that this should play a much greater role in our economy and it is certainly not any fault of my department that the situation is as it is.

I am sure that Dr Schembri Wismayer is aware of the fact that he works in laboratories which are in good part staffed by our graduates. He has singled out Charles Saliba as one who with his biotech companies has shown that it "is possible to succeed with very limited resources in our small island, having adequate training and using one's own entrepreneurial skills to develop an idea". Excellent!

As Dr Saliba would be the first to acknowledge, it was through the Department of Biology that in the first instance the companies mentioned were attracted to Malta.

This, in turn, paved the way for the developments mentioned through continuous and close collaboration with the same department and, no doubt, others, given the need for an interdisciplinary approach.

A significant amount of R & D data generated by these companies is through research students registered with the Biology Department. So, we are doing it right after all!

Before I conclude, I would also like to mention the fact that all of the five full-time members of academic staff in my department are actively involved in research fields which are directly relevant to Malta's needs.

These include fisheries biology and marine aquaculture; marine pollution and environmental quality; local flora, fauna and ecology; population genetics; assessment of biodiversity and conservation of biological resources.

Our students actively participate in our research programmes. This has greatly helped their academic preparation as well as professional skills which will serve them in good stead when they go on to occupy key positions within the private and public sectors.

It is sometimes claimed that research at the University of Malta is not sufficiently well publicised and that research data and results are not accessible to the potential end-user. While there may be some truth in this claim, I believe that for the past 10 years the Department of Biology has done its utmost to publicise its research data and information, both through publications in peer-reviewed journals as well as through its annual biological symposia and the associated abstracts booklets that we produce. I hope to see Dr Schembri Wismayer at our Biology Symposium 2003, to be held on December 6.

Certainly, there is room for improvement in our teaching and research and we are currently going through an internal exercise of restructuring our B.Sc. (Hons.) degree programme.

As head of department, I welcome any contribution to such an exercise, provided that it will be translated into real benefits to our students and our country and not to the sort of "forced marriage" that is being advocated by Dr Schembri Wismayer.

At a time when the university authorities instruct us to utilise only a certain percentage of our (already low) recurrent funds, we would be more than glad to make use of all possible laboratory and other resources from other faculties. This makes economic sense.

We also support Dr Schembri Wismayer's plea to the university (and to the government) to invest in science and science education. In the meantime, we will continue to fulfil our role within the given constraints. And we will do so by avoiding any myopic vision and by producing graduates who are fully capable of adapting to new circumstances and to satisfy the wide range of national requirements as they unfold.

Annex 8: Applications of Modern Biotechnology In the next decade biotechnology is going to reveal more knowledge in the coming decades than all other technologies put together. This prediction arises from two facts. First, plants and animals contain virtually infinite and evolving store of knowledge within the genetic, biochemical, cellular and physiological systems of each species and their ecosystems. Every plant and animal has a vast library of biological information which can search for useful knowledge. Second humanity now has the tools to find this knowledge and the tools to analysis and utilisation this knowledge are now available. There has been a revolution in biotechnology caused by a single invention, perfected in the early 1990s - automated DNA sequencing.

DNA sequencing is the basis of the science of genomics and is by far the most significant of the tools used to obtain biotechnology data. Bioinformatics and proteomics are by far the most important tools for analysis. The biotechnology companies have other tools that are needed to utilise the knowledge.

MEDICAL AND PHARMACEUTICAL

1. Genomics

There are over 100,000 genes in the human body. These have all been fully sequences by the Human Genome Project. Meanwhile biotechnology companies involved in genomics have established major proprietary databases of EST (expressed sequence tags) for a large proportion of human genes and are using these in association with positional cloning strategies. ESTs are created by partially sequencing randomly chosen gene transcripts that have been converted into cDNA. This is a simple but enormously powerful tool from which to probe or monitor every gene. Prior to 1990 only 1,000 genes had been identified in the human genome. Within a few years EST technology increased that number by almost two orders of magnitude. Many companies have created vast relational databases of EST derived information including sequence, homology, functional annotation and gene expression data. Positional cloning aims to identify genes which are associated with diseases in human tissues as novel targets and has led to the identification of a range of important genes (1).

2. Functional Genomics

Although vast libraries of EST data and full length sequence data are available, only a tiny fraction of the genes are known as to their function. The area of functional genomics aims to identify gene function with the objective of identifying novel targets for drug discovery. Functional genomics involves a number of different fields. As well as the Human Genome project, the full genome of a number of organisms has been fully elucidated. As genes are highly conserved across evolution, the study of these simpler organisms can result in gene identification and the corresponding gene in humans can then be identified. Gene function can also be studied in human cells using various genetic approaches to identify function. The process of function identification has emerged as a major bottleneck in genomics research and there is likely to be an effort to apply here the same types of automation which are used in gene expression.

3. Gene Chip Technology

A key technology for genomics R&D is the recent development of gene chips. The gene chip is a technology which permits the automation of differential gene expression. Differential gene expression between normal and diseased cells is a key technique aimed at identifying key disease genes. The gene chips are plastic or glass arrays onto which large numbers of cDNA fragments have been spotted at particular addresses. Hybridising cDNA or mRNA from the cells in question allows identification of which genes are ‘switched on‘ through hybridisation on the chip. One product, for instance, contains 27,000 human genes. This is a very powerful technology which will have a major impact on many areas of biological research including the study of diseases and drug discovery. It is also likely to have a major impact on diagnostics. It is likely that future routine diagnostic tests on patients will, through this technology, be able to produce a read-out of the expression levels of the patients’ genes and rapidly identify aberrant expression levels or aberrant tissue expression.

4. Bioinformatics

Bioinformatics is a science of recent creation that uses biological data and knowledge stored in computer databases, complemented by computational methods to derive new knowledge. There are a range of major public databases containing gene sequence data and others with protein sequence data. When a novel gene sequence is discovered, rapid progress on identifying its function can often be made by comparing it for similarity (homology) to other sequences in the databases whose function is known. This approach is becoming a major discovery tool. Companies involved in this area use public databases but also have their own proprietary databases such as the EST databases of companies such as Human Genome Sciences and there are also databases containing the complete genomes of a number of micro-organisms. The study of comparative genomes between species is rapidly advancing and is expected to be very useful in function studies. Special software has been developed for these homology searches and we can expect ongoing innovations in this.

5. Transgenic / Knockouts

The ability to generate knockout mouse models has improved greatly over the past couple of years and the service is now available commercially so that one can start with a gene and end up with a knockout animal. The ability to achieve tissue specific knockouts is also very important. However, despite the above, the process is technically difficult and normally takes about one year to achieve. This time problem, combined with its cost, means that it cannot yet become a mass screening system for gene functional analysis. There is an urgent need here for a rapid high-throughput system combined with rapid phenotype analysis. This is a very important area of R&D and any research group or company which can improve on current capabilities would have a very commercial proposition. Related to this are recent advances in cloning especially in producing second and third generation mouse clones. These are likely to be of considerable interest for pre-clinical research.

6. Chemistry methodologies

As with traditional drug design, combinatorial chemistry relies on organic synthesis. The difference is the scope - instead of synthesising a single compound, combinatorial chemistry exploits automation and miniaturisation to synthesise large libraries of compounds. Combinatorial libraries are created by one of two methods:

split synthesis or parallel synthesis. In split synthesis or ‘split and pool’, compounds are assembled on the surface of microparticles or beads. In each step, beads from previous steps are partitioned into several groups and a new building block is added. The different groups of beads are then recombined and separated once again to form new groups; the next building block is added and the process continues until the desired combinatorial library has been assembled. Combinatorial libraries can also be made by parallel synthesis in which different compounds are separated in different vessels without remixing, often in an automated fashion. Split synthesis is used to produce small quantities of a relatively large number of compounds, whereas parallel synthesis yields larger quantities of a relatively small number of compounds. These technologies are used for lead identification in screening and lead optimisation. While huge progress has been made there are still major opportunities to develop this technology further; these include such areas as new linkage methods, the creation of highly diverse universal libraries, the development of new assays and methods, the integration of combinatorial chemistry with structure based design and probably most importantly the further integration of combinatorial methods with functional genomics and proteomics. [3,4,5]

7. Screening & Screen Development

Screening assays in use today use recombinant cellular assays in microbial or yeast cells. The target protein is expressed inside or on the surface of a cell and binding of the ligand to the receptor results in intracellular changes which can be detected by use of a reporter gene construct. For instance use of a luminescence gene will give luminescence on binding of ligands. Other techniques in yeast can be used to analyse biochemical pathways and determine protein-protein interaction. These techniques are a key link in the discovery process between the identification of a target and its protein and the use of combinatorial libraries to screen against. On-going innovation is expected in the development of screens. It is likely that there will also be major developments in the use of mammalian cells as assays as these are slow and costly to operate today. [6,7,8]

8. IT/Biotech Convergence

The impact of robotics on drug discovery R&D has been very significant over the past few years allowing the development of high-throughput screening systems to match the flood of new chemical diversity emerging from combinatorial chemistry. Whereas a few years ago compounds were tested in 96 well microtitre plates, today mixtures of compounds are tested in 384 up to 864 well plates. This process of miniaturisation is only at an early stage and R&D is currently well advanced to develop a ‘lab on a chip‘ which would use extremely small quantities of compounds for testing. It is likely that a significant amount of compound testing as well as molecular biology and cell biology techniques will be automated and miniaturised over the next decade and this will give rise to a new type of technology which will combine elements of IT with chemistry and molecular biology.

9. Proteomics

Proteomics is the study of the sequence, function and control of expression of the total number of proteins made by an organism. It is the name given to a renewed interest in proteins rather than genes and the link to diseases. Proteomics uses a combination of 2 D gel electrophoresis and high-throughput screening. However there are many difficulties in resolution and automation of this area of R&D. There

are many times more proteins than genes due to variations in post translational modification and other factors and this makes the problem a huge one. The use of mass spectrometry combined with chromatographic separation may provide a way forward. Although this is a young field, it may have major long term potential and importance.

10. New Diagnostic Technologies

Increasingly diagnostics will be influenced by the information and technologies emerging from the area of genomics. Molecular biology has already had a significant impact for instance in the widespread use of PCR in diagnostic and forensics. This trend towards gene based diagnostics is likely to expand due to a number of factors; the identification of genes with predictive use in disease prognosis; the identification of disease susceptibility genes; the development of pharmacogenomics and consequent ability to diagnose drug suitability to patient sub-populations and the development of novel technologies such as gene chip technology. These trends may ultimately result in rapid gene analysis technology being available to general physicians which would have major consequences for the way in which the clinical diagnostics market operates today.

11. Biosensors

Biosensors are devices in which a biological component, giving specificity, is coupled with a physical detection technique to produce an electronic signal. Biological components include antibodies, enzymes, nucleic acids, receptors and cells and the physical component includes optical fibers, piezoelectric crystals and electrodes for electrochemical devices. While work has been underway for about forty years only one biosensor of note, the home measurement of glucose by diabetics, has succeeded commercially with sales of about $100 million per year. There are many difficulties to be overcome before other biosensors reach the market. Problems include those of sensitivity, stability, selectivity, quality control and difficult manufacturing techniques. It is still believed that certain niche markets will develop for these devices e.g. in the doctor’s office they will compete with central labs where rapid turn around is needed so long as simplicity and low cost can be achieved. Many problems need yet to be solved before the promise of biosensors becomes reality.

12. Drug Delivery

Many patients are required to administer regular or daily injection(s) of drugs for therapeutic reasons. These include drugs such as insulin for treatment of diabetes and growth hormone for growth stature defects in children and adults. In addition, cancer patients are required to administer, on a frequent basis, drugs such as morphine to relieve pain, usually using an external pump system.

The development of alternative drug delivery technologies which make it easier for patients to take drugs (such as peptide and protein based drugs like EPO, growth hormone, insulin, interferons, heparin etc.) by the oral route in tablet or capsule form, will have a number of important benefits both to patients, to the length of hospital stays required by patients, to administrative costs, to nursing need requirements, to the exchequer and to society in general. This applies to all patient populations including the paediatric, the young, the elderly and adult population. In addition, developing such innovative technologies will result in high-tech

manufacturing employment, product production employment and process improvement employment, again benefiting the economy.

FOOD AND AGRICULTURAL INDUSTRIES

The food and agricultural industries are another area that can greatly benefit from advances in biotechnology. The benefits that advanced techniques of biotechnology are capable of conferring on food and agricultural industries include the following:

• Development of genetically engineered plants that have internal resistance to drought, frost, insect pests and infestation.

• Reduction in dependency of plants on chemical fertilizers and identification of alternatives to expensive fertilizers such as nitrogen fertilizer, which require very large amounts of energy for their production.

• Replacement of dangerous chemical pesticides with biopesticides (microbial pesticides) to manage and control the problem of pests.

• Reduction in the reliance on chemical treatments to control weeds by engineering herbicide tolerance into crops.

• Production of plants that have high yield and enhanced nutritional value.

• Development of novel biomass products as foodstuffs, using organisms such as algae, fungi, bacteria, and yeast.

Prior to the use of recombinant DNA technology, traditional methods such as crossbreeding were used to obtain hybrid species of plants or animals. This method, however, needed many plant or animal generations before the genes with desirable characteristics were brought together.

Today, using recombinant DNA technology, the gene can be spliced into the DNA of the plant in a single generation. Also, with the help of recombinant DNA technology, foreign genes can be introduced into plant genes, which could not be done by the cross breeding method.

A number of biotechnology companies using recombinant DNA technology have been trying to develop food products with extended shelf life. Applying the modern techniques of biotechnology, Calgene Inc. in Davis, California has developed the FLAVR SAVR tomato. The FLAVR SAVR tomato has been genetically altered to delay the softening and decay that follows natural ripening and to have an extended shelf life. This has been achieved by reversing one of the genes responsible for producing an enzyme that causes softening. The FLAVR SAVR tomato has been produced using vectors, which carry an antisense copy of the tomato polygalacturonase gene and a bacterial neomycin phosphotransferase gene with associated regulatory sequences.

Calgene Inc. has also developed genetically engineered canola plants in southern Georgia. By inserting a thioesterase gene from the California Bay tree into the genome, Calgene Inc. has been able to produce canola oil seed crops with nearly 40% laurate. Lauric oils are an important raw material used in soaps and other personal care products. According to Calgene Inc., the plant will offer a reliable domestic supply of laurate for the U.S. manufacturers of soaps and detergents. At present,

lauric oils, obtained primarily from coconut and palm kernel oils, are imported mostly from Southeast Asia.

DNA Plant Technology Corp. of Cinnaminson, New Jersey, in collaboration with ZENECA Group PLC of Great Britain, is in the process of developing genetically engineered slower ripening bananas. Like Calgene's FLAVR SAVR tomato, the gene that produces the hormone responsible for ripening will be suppressed. According to DNA Plant Technology Corp., this technique will allow the fruit to be left on the plant longer, improving flavor and nutritional value. It will also make possible the shipping of different varieties, such as a red banana that is crisper and starchier.

In the field of agriculture, the application of modern techniques of biotechnology has not been confined solely to plants. Transgenic techniques have been used to produce transgenic animals having improved disease resistance, improved meat quality and quantity, and useful proteins in milk.

The transformation method uses retroviruses to produce transgenic animals. Recently, this method was tried for transformation of cells in goat udders, by infusion with a retrovirus carrying a gene for growth hormone. When lactation was induced in these goats, the resulting milk contained large quantities of growth hormone. Thus, this method is effective for producing proteins of interest, whether they are small quantities of highly valuable proteins or larger quantities of proteins of lower value.

Monsanto Corporation has used Bovine Somatotropin (BST) to boost milk production. BST is a growth hormone produced naturally by cows in small quantities. Using recombinant DNA technology, by inserting the gene for BST production into bacteria, Monsanto Corp. has been able to produce commercial scale amounts of BST. The injection of BST into cows can increase milk production by as much as 15%.

For many years chemical pesticides were used as weapons in the battle against insects, infestations, and weeds. Scientists are attempting to control these problems biologically using microbial pesticides. They have identified several strains of bacteria, fungi, and viruses that produce toxins detrimental to insects. Using recombinant DNA technology, the genes that code for the production of these toxins could be cloned and inserted into bacteria that are normally present on crops. For example, Monsanto Corp. has taken from the microorganism Bacillus thuringiensis (BT) the gene that codes for production of a protein that kills insects and has transferred it into plants such as tomatoes.

Also, Upjohn Company of Kalamazoo, Michigan developed a squash line (called ZW 20) that contains the coat protein genes of watermelon mosaic virus 2 (WMV2) and zucchini yellow mosaic virus (ZYMV). The modifications have demonstrated remarkable field resistance against the two viruses. The ZW-20 squash has been developed with the use of vectors, promoters, and terminators from plant pathogenic sources.

Another accomplishment of biotechnology in the area of agriculture has been the development of insect resistant rice by Japanese scientists at Plantech Research Institute of Yokohama. Plantech has introduced a truncated deltaendotoxin gene crylA (b) from BT into a japonica rice. The Transgenic rice plants efficiently express the BT gene. Under tests, R2 generation plants were exposed to two major rice insect

pests, striped stem borer and leaf folder; a subsequent bioassay revealed that the plants expressing the BT gene protein proved more resistant to the pests than non-transformed plants.

Furthermore, to combat grapevine fanleaf virus (GFLV), scientists at LVMH, Inc. in Paris, France have used a bacterium vector to introduce a GFLV coat protein gene into a chardonnay grape variety. According to LVMH, Inc., the gene has been effectively transferred and the engineered grapevines have exhibited resistance to infection by the virus.

Also, applying modern techniques of biotechnology, agricultural scientists have tried to introduce herbicide and frost resistant genes in plants. Researchers discovered that certain proteins, found in the bacteria Pseudomononas syringe that grow on the leaves of plants, are "ice-nucleation proteins" responsible for frost damage to the plant. Using recombinant DNA technology, they were able to identify the genes that code for these ice crystal-forming proteins and delete them from the bacterium.

To control weeds, chemical herbicides have come to play a significant role in agriculture. However, there are risks associated with the use of chemical herbicides. In addition to causing serious environmental problems due to chemical contaminants, chemical herbicides themselves have undesirable effects on non-target organisms. With the help of recombinant DNA technology, scientists are hoping to genetically modify plants tolerant to herbicides. Herbicide tolerance can occur when the phytotoxic compound fails to be taken up by living tissue or is rendered non-phytotoxic by conjugation, hydrolysis, or another metabolic event (detoxification). By using recombinant DNA technology, the genes that code for the protein involved can be identified, isolated and modified by directed mutagenesis and introduced into plant cultivar to confer the herbicide-tolerant phenotype.

To reduce dependency on chemical fertilizers, agricultural biotechnologists are conducting considerable research using genetic manipulation to increase the range of plants that can fix atmospheric nitrogen.

CHEMICAL INDUSTRIES

Chemical industries are involved in the production of specialty chemicals such as amino acids, enzymes, polysaccharides, vitamins, sweeteners, food additives, flavors, fragrances, etc. These industries are also interested in converting biomass to produce specialty chemicals from either plants or biological wastes, such as those generated from agriculture and food processing. Although advanced techniques of biotechnology have not yet played a significant role in chemical production, there are areas of chemical industries, however, where this technology can have substantial impact, such as the production of amino acids, enzymes and polysaccharides.

Manufacturers are particularly interested in the potential for producing existing and new chemicals at lower cost with reduced energy requirements and waste disposal problems. Biocatalytic chemical production has the added advantage of specificity, controllability, low temperature operation, environmental acceptability, and simplicity. For example, much of the present organic chemical industry is based upon petroleum and most of the chemical intermediates generated are partial oxidation products. Specific, controlled, partial oxidation is difficult to achieve by

conventional catalysis. By using microorganisms, this type of reaction can be easily realized.

Amino Acids

Amino acids are the building blocks of proteins in animals, plants, and microorganisms. Twenty different amino acids have been identified in proteins. Amino acids are also important as nutrients, seasonings, flavorings, and precursors for cosmetics and pharmaceuticals. As nutritional supplements in foods, lysine and tryptophan are used to enrich vegetable protein. Amino acids, as precursors, are used for the manufacture of detergents, polyamino acids (used in synthetic fibers and films), polyurethane, and agricultural chemicals.

Amino acids can be produced either by isolation from natural materials – from hydrolysis of plant proteins – or by chemical, microbial, or enzymatic synthesis. Whereas chemical synthesis produces a racemic (optically inactive) product that may require additional resolution, microbial and enzymatic syntheses give rise to optically pure amino acids.

Commercially, amino acid producing bacteria have been used since the 1950s. With the help of biotechnology, strains have been subsequently improved genetically by the generation of auxotroph or regulatory mutants.

Enzymes

Enzymes are biochemical catalysts and, as a specific class of proteins, constitute the most useful tools of biotechnology. Enzymes increase the speed or efficiency at which a chemical reaction takes place without being altered itself. Common uses of enzymes include the production of starch, cheese, detergents, meat tenderizers, and high fructose corn syrup. Enzymes have certain characteristics, of which the most significant ones are:

1. High molecular weight proteins (> 10,000 molecular weight);

2. Extremely efficient – drive reactions 108 to 1020 times faster than normal;

3. Highly specific;

4. Can be extracellular or intracellular; and

5. Coded for DNA.

Using modern techniques of biotechnology, scientists are attempting to improve the yield of an enzyme by transferring the encoding gene to a microorganism capable of producing the enzyme in larger amounts. Because they are large and fragile molecules, enzymes tend to change their nature when exposed to heat, solvents, and other extreme conditions that characterize most industrial processes. To remedy these problems, the current research seeks to modify the genetic information coding for an enzyme in order to introduce new chemical properties into the molecule, such as new chemical bonds that stabilize its structure.

Recently, the Recombinant BioCatalysis Inc. of Sharon Hill, Pennsylvania began commercially offering kits of enzymes, called CloneZymes, which may be tailored to do biocatalysis in specific chemical processes. According to the manufacturer, the DNA of enzymes is screened in order to isolate those that have desirable qualities such as resistance to higher temperature and organic solvents. The DNA of a selected enzyme is copied, inserted into a host organism, such as E. coli, and then produced

by fermentation. The kits of enzymes offered by Recombinant BioCatalysis Inc., include:

1. Aminotransferases, for making chiral intermediates;

2. Esterases-Lipases, for resolving racemic mixtures of alcohol and carboxylic acids;

3. Glycosidases, which work on hydrolysis and synthesis of sugars; and

4. Phosphatases, for hydrolysis of phosphates

Polysaccharide

Polysaccharide has important application in the food, cosmetics, chemical, medical, and oil industries. Yeast, fungi, and bacteria produce polysaccharides and are also naturally available as cellulose, lignin, and chitin. Polysaccharides are used as lubricants, viscosifiers, flocculating and gelling agents in food processing, and for stabilizing liquid suspensions. At present, significant research is being conducted to apply modern techniques of biotechnology to the production of microbial polysaccharide.

Using advanced biotechnology, current research is also directed toward the conversion of biomass feedstocks to fermentable substrates, such as cellulose to glucose. While this generally requires relatively expensive microbial enzymes (cellulose) possessing desirable characteristics such as thermostability and high activity, manufacturers are also able to combine the desirable characteristics of several less optimal cellulose enzyme producers using recombinant DNA technology. Many laboratories are involved in the detection, identification, isolation, and gene transfer for strain improvement.

ENERGY INDUSTRIES

Biotechnology can play an important role in the production of fuels from organic matter via biomass conversion. Petroleum, the most prominent fuel presently, is a non-renewable source that poses environmental risks in its extraction and use. Biotechnology, by using available and abundant sources of biomass, could generate a renewable and less environmentally hazardous source of energy called bio-energy.

The biological processes involved in producing bio-energy include harvesting of energy (photosynthesis), improving of feedstock (biomass), and conversion to fuel (fermentation). Advanced techniques of biotechnology, including the use of tissue culture, protoplast fusion, single gene transfer, haploid, radiation-treated pollen transfer, chemical mutagen, transmission of chloroplast genome, etc. offer improved varieties of plants for increased productivity and improved microorganisms for the conversion processes. Bacteria consuming sewage sludge in anaerobic conditions may also produce bio-energy in the form of methane gas.

Modern techniques of biotechnology can also be used to enhance oil recovery. It is believed that conventional oil-extracting technologies are capable of extracting only 50% of the world's oil supply, while the remaining 50% is trapped in rock or is too thick to pump. To enhance the recovery of trapped oil, scientists have isolated a fatty substance produced by a bacterium that reduces the viscosity of crude oil. The injection of this substance into oil wells makes the pumping of thick oil possible.

MINING INDUSTRIES

The environmental and health hazards associated with traditional mining technologies have led many mining industries in the past few years to turn to a more efficient and environmentally risk-free method for extracting minerals from ores, which use microorganisms to leach metals from mine dumps. Currently, more than 10% of the copper produced in the United States is leached from ores by microorganisms. Also, microbial leaching to a more limited extent has been applied to extract uranium from pyritic ores. Microbial mining has improved recovery rates and reduced costs.

The iron-oxidizing bacterium Thiobacillus ferooxidans has been used for bacterium-catalyzed leaching. It is naturally present in certain sulfur-containing materials and sequesters energy by oxidizing inorganic materials, such as copper sulfide minerals. This process releases acid and an oxidizing solution of ferric ions, which can wash out metals from crude ores. Sulfuric acid-ferrous iron solution is applied to piles of crushed copper ore or mine waste, which encourages the growth of Thiobacillus ferooxidans. As the bacteria oxidize the ore the copper is released and the sulfuric acid-ferrous iron solution is recycled.

With the help of recombinant DNA technology, genetic modification of the iron-oxidizing leaching bacteria can produce microorganisms with desirable characteristics such as resistance to toxic metals and metalloids (which inhibit microbial activity), fixation of atmospheric nitrogen, resistance to chloride, and the ability to withstand high temperature conditions in mines. Using recombinant DNA technology, it may be possible to genetically engineer bacterial strains that are able to leach heavy metals such as mercury, cadmium, and arsenic that poison normal microbes and slow the bioprocessing. To resolve the problem of high temperature, researchers are turning to thermophilic bacteria found in hot springs and around oceanic vents. These bacteria could function in a high temperature oxidative environment.

The beneficial impact of biotechnology could be the use of modern biotechnology techniques to control pollution and reduce or eliminate toxic substances. The adverse effects of biotechnology on the environment, on the other hand, could involve the use of toxic materials and the generation of toxic by-products by the biotechnology industries. This section assesses the potential benefits and risks that biotechnology is capable of imparting to the environment.

ENVIRONMENTAL PROTECTION

The application of biotechnology in the area of environmental protection is not a new phenomenon – it was in the early part of the 20th century that an activated sludge process, utilizing microorganisms for mineralizing organic waste, was first developed. Since then, this process has become more complex and sophisticated, incorporating many modern technologies. Meanwhile, the use of anaerobic digestion processes for the treatment of wastes and the coincidental production of biogas (mainly methane and CO2) has become an important source of energy generation. It is believed that recent development in biotechnology could play an increasingly important role in pollution prevention and toxic waste treatment via bioremediation, biotreatment and biofiltration.

Bioremediation

Bioremediation may be defined as a process by which microorganisms degrade certain hazardous and toxic substances. Alternatively, bioremediation may be considered as a process by which microbes metabolically transform toxic organic compounds into harmless by-products. In general, microorganisms can be considered as biocatalytic agents, requiring organic and inorganic nutrients for food and energy sources. In most cases, bioremediation is considered to be safer than incineration or other treatment technologies and, according to EPA, is the most rapidly growing of the cleanup technologies.

Bioremediation is mostly an in-situ process, meaning that the treatment of contaminated groundwater and other subsurface contaminants is done at its original place without excavating the overlying soil. For in-situ bioremediation, the necessary process components such as microorganisms, electron acceptors, nutrients, etc. are delivered to the site of contamination. Equipment and systems generally include injection wells, extraction wells, wastewater treatment systems, pumps, instruments, and/or containment systems.

For bioremediation to occur the contaminant to be remediated must be biodegradable and there must be a sufficient number of naturally occurring microorganisms that are capable of degrading the contaminant. The subsurface conditions must be optimum to promote microorganism growth. Moisture levels should be appropriate – too much moisture inhibits gas diffusion into the soil, rendering the site anaerobic (eliminating aerobic microorganisms) and too little moisture in the soil prevents microbial activity and growth. Nutrients must be present, such as nitrogen, iron, potassium, and phosphorous, in relative amounts to meet the requirements of microorganisms. The temperature should be conducive to the normal growth of microorganisms, the soil pH should be maintained between pH 6-7.5, and if an aerobic subsurface condition is needed, the oxygen level may need to be augmented.

Sometimes, bioremediation does not result in the complete mineralization of the targeted organic compound. It may instead lead to the partial degradation of the compound to a point sufficient to render it environmentally acceptable.

Advances in Bioremediation Technology

In 1972, the bioremediation of petroleum hydrocarbons was developed and since then has been used in the treatment of contaminated soils and ground water. Bioremediation technology has been successfully applied in the clean up of oil spills and biodegradation of creosote, pentachlorophenol (PCP), and petroleum hydrocarbons. Originally, the technology used in-well aeration along with the high concentration of ammonium salts and orthophosphates. However, this method was limited by the system of oxygenation and as a result sites with high degree of contamination could not effectively be remedied.

The ultimate goal of the bioremediation field is to use existing and newly emerging technologies to treat and clean up contaminated sites efficiently and with relatively low cost. At present, advanced aeration technologies to improve the oxygenation are being used, such as soil vapor extraction (SVE), bioventing, and air sparging or oxygen release compound (ORC) technology, and have proved effective in cleaning up of contaminated zones.

Soil Vapour Extraction

At many sites, the limiting operating parameter for bioremediation is the lack of oxygen present in the subsurface. Through soil vapour extraction, the oxygen limitation is removed and the biomass activity increased. The process of soil vapour extraction includes the installation of vapor extraction wells, collection lines, and an extraction blower. At some sites, off-gas treatment equipment may be required. The extraction rates are managed to optimize biodegradation without excessive stripping or drying of the soil matrix.

Bioventing

Bioventing is used to remediate contaminants that are biodegradable under aerobic conditions. This technology introduces air into unsaturated subsurface soils to provide oxygen thus stimulating biodegradation of organic pollutants by aerobic microorganisms. Equipment used in bioventing consists of vertical injection wells, lateral trenches, piping networks, and a blower or vacuum pump for aeration or gas extraction. Bioventing technology, although potentially applicable to any aerobically degradable compound, has two practical limitations:

1. Compounds with a high vapor pressure volatilize too rapidly to be degraded with bioventing technology. Bioventing is most effective for middle distillate fuels that have low volatility and are aerobically degradable.

2. Hydrocarbons with high molecular weights take far too long to degrade with bioventing. The slow rate results in longer clean up time – frequently on the order of ten years or more – to reach standards acceptable under relevant environmental regulations.

Biosparging

Biosparging or air sparging technology injects air or pressurized oxygen into the saturated zone (groundwater). As it passes through the saturated zone, the oxygen is dissolved into the water and stimulates biodegradation. The air moves in channels from the injection point to the unsaturated (vadose) zone. With the biosparging system, it is possible to remove the highly volatile compounds from groundwater and transport them to the vadose zone. There, the contaminant may biodegrade or may be removed using soil vapor extraction or bioventing techniques.

Oxygen Release Compound (ORC)

As noted above, moisture and nutrients are generally present in sufficient quantities for aerobic bioremediation to occur, but oxygen is often the limiting factor. To stimulate aerobic microbial activity and growth, additional oxygen is required. The Oxygen Release Compound (ORC), developed by Regenesis Bioremediation Products Co., releases oxygen to enhance in-situ aerobic bioremediation of dissolved phase hydrocarbons. ORC is solid, insoluble magnesium peroxide that slowly releases oxygen when hydrated. The by-products of the magnesium peroxide-water reaction are oxygen and ordinary magnesium hydroxide.

Biotreatment

Biotreatment involves the detoxification of waste effluents, particularly hazardous and toxic wastes, prior to their release to the environment by appropriate enzymes or microbes capable of degrading specific compounds. Industrial wastes can be

classified into two broad categories: those generated by biologically based industries such as food processing and those generated by chemical industries.

Biological oxidation is used to treat wastes from biologically based industries, yet the method is relatively expensive and does not assist in reducing the volume of dilute wastes from this source. To help minimize residue, enzymatic treatment has been suggested. This process has been used in the treatment of starch-containing food wastewater with amylase and lactase for treating dairy wastes. For example, whey, a by-product of cheese making and a rich source of lactose, is used to produce commercial yeast by the enzymatic hydrolysis of lactose to glucose and galactose. The system employed is the immobilized lactase system, developed by Corning Inc., where the lactase enzyme is derived from Aspergillus niger.

Unlike the biologically based industries, the majority of wastes generated by the chemical industries require chemical or physical pre-treatment prior to the application of conventional biological effluent treatment. Common chemical waste effluents include dyes and pigments released into the environment by the textile and dyestuffs industries. With the notable exception of cationic dyes and benzidine, most dyes and pigments are not considered toxic or carcinogenic to fish or mammals. Microorganisms have been identified which are capable of degrading dyes of higher concentration, for example a number of microorganisms have been found to possess non-specific enzymes that catalyze the reductive fission of the azo group. Biofiltration

Biofiltration, developed fairly recently, is a biological air pollution control (APC) technology designed to treat off-gases containing biodegradable volatile organic compounds (VOCs) or inorganic air toxics. Although this APC technology has been used on a limited scale in the U.S. thus far [EPA established biofiltration as the best available control technology (BACT) for controlling air pollution], it has been successfully applied since the early 1980s in European countries, particularly in Germany and Holland. In these countries, biofilters are used to treat off-gases generated by industrial facilities (such as adhesive production, coating operations, chemical manufacturing, film coating, iron foundries, and print shops), food processing industries (such as coffee roasting, coca roasting, fish frying, fish rendering, flavor and fragrance, pet food manufacturing, and slaughter houses), and waste treatment industries (such as industrial and residential waste water treatment plants, composting facilities, landfill gas extraction, and waste oil recycling). The large volumes of off-gases emitted from these sources contain only low concentrations, typically less than 1,000 ppm methane, of the organic target pollutants. The primary application of an APC biofiltration system in food processing and waste treatment industries (Noorzad, 2001).