BrazilTaking Saudi Arabia's biotech sector to the next level
The global biotechnology industry is growing rapidly, and Saudi Arabia could develop a leading biotech cluster in the coming decade. Claudia Palme and Irfan Merali from Strategy& explore four actions that can drive the sector’s next level of development.
Biotechnologies harness cellular and biological processes to develop technologies and products used in everyday life, transforming everything from human health and food to agriculture and the chemical industry. These applications will shape the next era of human development, with an impact as significant as the computer revolution.
Given its importance to humanity and economy, biotechnology has risen to the top of national agendas in the post-pandemic era.
Saudi Arabia is well-positioned to become an industry-leading and globally competitive biotech ecosystem. Flagship institutions, such as the King Abdullah University of Science and Technology and the King Faisal Specialist Hospital & Research Centre, have made extensive investments in infrastructure.
State-of-the-art labs and innovation initiatives like the Saudi Human Genome Program and the Saudi Network for Clinical Trials are also helping clinician-researchers and commercializing potential technologies. Similarly, the National Biotechnology Strategy has helped streamline Saudi Arabia’s regulatory framework for trials, testing and bioethics.
While these efforts have partially laid a foundation for biotech clusters, there are several things Saudi Arabia can do to drive further momentum in the sector. Based on Strategy& research, we have identified four key enablers.
Commercialization
First, the Kingdom must invest more public and private funding into commercialization. Biotech innovation requires significant patient capital, especially in the medical sub-sector, where products must undergo trials and tests for up to seven years.
While the Kingdom has substantially invested in R&D, most funding is in basic research with little focus on translation and commercialization into marketable products.
As the biotech industry requires highly skilled and knowledgeable talent, Saudi Arabia must also expand human capital and the talent pipeline. Nearly half of the entry-level jobs in the sector require advanced degrees, compared to only a quarter of the jobs across other industries.
Human capital
While Saudi Arabia has a high annual output of healthcare professionals, there needs to be more focus on the skill sets required to sustain a substantial biotech cluster with roles like physician entrepreneurs, clinical researchers, trial administrators and intellectual-property specialists.
To grow and maintain the necessary talent pipeline, the Kingdom must attract a cadre of skilled foreign workers, which will require developing a targeted set of incentives to attract founders, scientists and researchers.
The country must also channel significant investments into promoting world-class education, particularly in science, technology, engineering and mathematics.
State-of-the-art infrastructure
While Saudi Arabia has made significant investments in developing infrastructure with core labs and facilities, it needs a broader set of assets to support biotechnology growth, particularly in digital.
These assets include an enhanced digital infrastructure of internal networks, cloud computing, cybersecurity, advanced artificial intelligence, analytics and robotics. Offering services tailored to small-scale researchers can provide specific value-added services for these companies to outsource rather than build in-house.
Regulatory framework
Finally, Saudi Arabia must create a solid regulatory and incentives framework. Regulatory bodies must proactively understand the sector’s needs to shape regulations that support innovation and protect patients, investors and intellectual property.
Other leading biotechnology countries are adopting new regulatory approaches to streamline processes, limit bureaucracy and address laws that are not “fit for purpose.” Many global peers are moving from a “one-size-fits-all” approach to one driven by regulatory sandboxes and accelerators to support unique inventions.
To compete with them, Saudi Arabia will also need attractive incentives, ranging from expedited import permits to single-window business establishment procedures, streamlined hiring, and tax privileges.
A productive biotech ecosystem can contribute to economic diversification and play a key role in supporting the ambitions of Saudi Vision 2030. Growth in the biotech industry also can contribute to tackling Saudi Arabia’s priorities in healthcare, food security and other strategic investments.
As a G20 economy, Saudi Arabia must undergo a rapid biotech transformation in the coming years. These initiatives and enablers can help the country accelerate innovation and become a biotech center for the region and world.
About the authors: Claudia Palme is a senior executive adviser with Strategy&, where Irfan Merali is a principal.
