NUEVO LEON'S COLLABORATIVE MODEL FOR BUILDING ITS BIOTECH

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SIPDIS

E.O. 12958: N/A
TAGS: EAGR TBIO ECON EINV KIPR PGOV MX
SUBJECT: NUEVO LEON'S COLLABORATIVE MODEL FOR BUILDING ITS BIOTECH
INDUSTRY

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1. Summary. The State of Nuevo Leon has identified the
biotechnology industry as one of five key sectors for potential
growth, building on its comparative advantages of strong
universities, a business friendly climate and a tradition of
public/private partnerships. The state and its private sector
partners have promoted biotechnology through conferences, a
biocluster and a research center. Although Nuevo Leon's
biotechnology industry is very much at the beginning stages,
local experts believe that it has high potential, provided that
the sector continues to receive political support. End Summary.




Moving Towards a Knowledge Based Economy




2. Governor Gonzalez Paras has worked hard to move Nuevo Leon
from its traditional manufacturing-based economy to a higher
value added knowledge-based economy. Nuevo Leon's GDP growth
since 2003 has been 1.5% higher than the national average and
Nuevo Leon received the most foreign direct investment of any
Mexican state outside of the Federal District. As part of his
2004-2009 development plan, Gonzalez Paras focused on five main
areas: software development, healthcare, automotive
manufacturing, aerospace, and biotechnology. Of all the
industries, biotechnology is the newest and offers tremendous
potential for investment in Nuevo Leon. The state's efforts in
biotechnology are also a model of how the state has used
public-private cooperation to promote economic growth. Within
the biotechnology industry, Nuevo Leon is primarily focusing on
pharmaceuticals, healthcare, food security and biofuels. Only a
small percentage of Nuevo Leon's economy is agricultural,
although several important companies are in the processed food
industry. Note: As for public opinion of biotechnology in
Nuevo Leon, the prevailing view is that agricultural
biotechnology can help address increasing food productivity and
help alleviate poverty. There is no public controversy
surrounding biotechnology, as people consume imported biotech
food products without complaint. End Note.




3. Nuevo Leon has many advantages over other states in Mexico
in growing a biotechnology industry. A state with a large
number of manufacturing companies and a growing population of
4.5 million, Nuevo Leon is a big consumer of biotechnology
products. This demand is currently being met by imports primary
from the United States. Given the state's economic
sophistication, there is, however, a large pool of private
sector researchers and scientists to draw upon to develop
research in-house. Nuevo Leon also hopes to focus its over
150,000 university students to work in its targeted industries.
The state already has excellent hospitals with many doctors
trained in the United States. Monterrey TEC University and
Nuevo Leon's Universidad Autonoma, in particular, offer leading
biotechnology programs and, like many of the other universities
and hospitals in the state, have long standing partnerships with
companies and universities in the United States. For example,
companies such as Roche, Merck and Pfizer have already
outsourced clinical trials of drugs and medical devices to
hospitals and universities in Nuevo Leon.



A Collaborative Model




4. Nuevo Leon's plan to promote biotechnology features the work
of two state agencies, conferences, trade groups, and a research
center. These efforts are led by the Consejo de Ciencia y
Tecnologma del Estado de Nuevo Lesn (Cocytenl),headed by the
widely respected Luis Eugenio Todd, former state Health
Minister. Econoff and a trade specialist from the Foreign
Commercial Service met with Todd and he is eager to work more
closely with the Consulate to promote research in Nuevo Leon.
According to Todd, the industry is starting from a small base
but Cocytenl has been successful in meeting its goals for the
four years it has been in operation. Using the United States'
National Science Foundation as a model, Cocytenl is aggressively
promoting research in the state. The council has worked to
develop courses in the state's primary universities, and also
promoted exchange programs with U.S. universities and private
companies. One of its current projects is to help researchers
learn how to commercialize their work. In the past there has
not been a strong effort by universities to reward innovative
researchers or create patents. Infringement of intellectual
property rights is a major concern of companies operating in

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Mexico.




5. Cocytenl also organized BioMonterrey to increase
collaboration on biotechnology. The last such conference in
2008 was a three day event that attracted 800 scientists and
government policy makers from all over Mexico, Europe and North
America. The conference covered a wide variety of subjects
including sustainable development, agriculture, nanotechnology
and collaborative development. Governor Gonzalez Paras gave the
keynote address and called Nuevo Leon's transformation into a
hub of research a development "critical" in order to compete in
a globalized world.




6. The primary state agency charged with developing the
biotechnology industry is the Ministry of Economic Development
(SEDEC). Alongside Nuevo Leon, four other states are
competitive for biotechnology research: Morelos, Guanajuato,
Jalisco and Baja California. These other states also have
strong university systems and a high concentration of
researchers. SEDEC competes for investment in Nuevo Leon by
offering tax incentives, promoting strong public/private
partnerships, market research and assistance with state and
federal regulation compliance. Also, SEDEC works closely with
companies to propose laws and policies that promote growth
especially by commercializing research and the transfer of
technologies to the private sector.




7. The Monterrey Biocluster is a trade group started by SEDEC
to develop the industry. It is modeled after the successful
San Diego biocluster and officials from the San Diego Biocluster
advise their counterparts in Monterrey. The group is currently
funded entirely by SEDEC but has plans to start collecting dues
from its members this year to ensure its survival past Governor
Gonzales Paras' administration. Note. The Governor's term
ends in October 2009. While his successor is likely to continue
the state's pro-business agenda, it is unknown if he or she will
continue to emphasize the potential of biotechnology. End Note.
The association helps its members earn international
certification and provides a forum for members to address issues
such as intellectual property rights, funding and working with
universities. The biocluster also supports exchange programs
with U.S. companies and universities. There are only two dozen
registered members in the biocluster but it is only one year old
and there is strong buy-in from important institutions such as
the federal ministry of economic development and Monterrey TEC
University, one of Mexico's leading universities.




8. The FEMSA Biotechnology Center is another initiative
dedicated to biotechnology research. The center is privately
funded by the large food and beverage company FEMSA in
cooperation with Monterrey TEC University. The US$ 40 million
center is geared toward commercially viable research in the area
of agriculture and food safely. According to the director of
the center, Dr. Manuel Zertuche Guerra, the center differs from
other university research programs because of its business
focus. The work done at the center has helped a wide range of
companies, such as grocery store chain HEB in the area of food
transportation and Genentech in the area of anticarcinogens.
One of the center's current major projects is with Cemex to
develop biological compounds that are able to reduce pollutants
in the cement making process.




9. Comment. While the biotechnology industry is still in its
infancy, the government of Nuevo Leon has shown its commitment
to development of the industry and its eagerness to work with
private companies. For 2009, the U.S. Foreign Commercial
Service office in Monterrey has identified biotechnology as a
high growth industry and will work with American companies to
increase their presence in the market. If the state continues
to fund this effort despite the current economic climate and
political support continues, Nuevo Leon's biotechnology sector
bears watching. End Comment.
WILLIAMSON