The Welsh Healthcare Innovation Pipeline. Brian Lee Perkins

Transcription

1 The Welsh Healthcare Innovation Pipeline Brian Lee Perkins Director of Studies: Professor Marc Clement, Swansea University Supervisors: Dr Andrew Walters, Cardiff Metropolitan University Dr Peter Dorrington, Cardiff Metropolitan University Advisors: Dr Daniele Doneddu, Swansea University Dr Gareth Davies, Swansea University A thesis submitted in fulfilment of the requirements of Cardiff Metropolitan University for the degree of Doctor of Philosophy from the University of Wales

2 Abstract This investigation explored the Welsh Life Sciences (LS) sector through a Grounded Theory approach. Semi-structured interviews with senior stakeholders from academia, government, industry, NHS Wales, third sector and professional institutions were conducted. A conceptual framework was developed to help understand the complex interactions within the Welsh LS sector. Gap analysis was systematically applied to the data in order to design a model for potential interventions to positively influence the Welsh LS sector. The model was then compared with current and forthcoming policy and policy recommendations to produce an integrated intervention termed the Welsh Healthcare Innovation Pipeline (WHIP), to result in the adoption of new innovation within NHS Wales through sourcing, trialling, assessing, procuring, and adopting healthcare innovations through an integrated framework. The proposal is that the WHIP would be adopted across Wales after being piloted sub-regionally within the West Wales region. i P a g e

3 Acknowledgements Personal I would like to thank my partner Ina for being my guiding light and role model. Not only did she support me with encouragement and endless cups of coffee, she is actually responsible for bringing the Prince of Wales Innovation Scholarship to my attention and recruiting me to this lovely country. I never imagined we would evolve from simple lab geeks chatting endlessly about bioassays in San Diego to performing our PhDs together in Wales. I would also like to thank my father, mother and brother for keeping me grounded and giving me the motivation and inspiration necessary to press on with the PhD. Lastly, I would like to thank all of my friends who made sure that this journey was just as enjoyable as the destination. Professional First and foremost, I would like to thank my Director of Studies, Professor Marc Clement, who provided the much needed guidance and mentorship to perform this investigation. He served in roles within academia, government, industry and the third sector, which helped to inform me as a researcher. He also founded the Prince of Wales Innovation Scholarship that brought me to Wales. I would also like to thank Dr Daniele Doneddu and Dr Gareth Davies, who managed to join our 7 a.m. tutorials on a weekly basis from the onset of the research. Many thanks are also due to Daniele Doneddu, Jennifer Childs and Ina Laura Pieper for providing detailed feedback on my writing. Many thanks to those at the National Centre for Product Design & Development Research (PDR) at Cardiff Metropolitan University, especially Peter Dorrington, Andy Walters and Gavin Cawood. Peter, Andy, and Gavin provided continued support and feedback throughout the PhD. I would also like to thank Professor David Vincent Ford and everybody in his Health Informatics Group at Swansea University. It was inspiring to observe Professor Ford s leadership and forward thinking. Leading the Health Cloud and Life Science Exchange projects were truly learning, growing and rewarding experiences for my personal growth. These experiences also informed me as a researcher and helped to develop this investigation. This research would not have been possible without the support and input from those at University of Wales Trinity St. David, Cardiff Metropolitan University, Swansea University, the Life Sciences Sector Panel, NISCHR, MediWales, ABPI Cymru, NHS Wales and many other institutions for their data, reports, insight and support. Last, but not least, I would like to thank the anonymised interviewees who provided their time, thoughts and experiences that are at the core of this study. ii P a g e

4 Declaration This work has not previously been accepted in substance for any degree and is not being concurrently submitted in candidature for any degree. Signed... (candidate) Date... Statement 1 This thesis is the result of my own investigations, except where otherwise stated. Where correction services have been used, the extent and nature of the correction is clearly marked in a footnote(s). Other sources are acknowledged by footnotes giving explicit references. bibliography is appended. A Signed... (candidate) Date... Statement 2 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations. Signed... (candidate) Date... iii P a g e

5 Table of Contents Abstract... i Acknowledgements... ii Declaration... iii Table of Contents... iv List of Figures... viii List of Tables... x Abbreviations... xii Chapter 1. Introduction Origins of the Research Institutions Prince of Wales Innovation Scholarship Allerna Therapeutics Wider Scope to the Original Research Design Aim, Objectives and Research Questions The Investigation... 6 Chapter 2. Context The Welsh Economy Industrial Revolution ( ) The Modern Welsh Economy (1900-Present) Wales: A Lagging Region Micro, Small and Medium-Sized Enterprises (SMEs) SME Life Cycle The Effect of SMEs on the Economy Policy Supporting SMEs Life Sciences Definition of Life Sciences The Effect of Life Sciences on the Economy Policy Supporting Life Sciences Welsh Life Sciences Strategy Welsh Life Sciences Hub Welsh Life Sciences Fund Welsh Life Sciences Brand Welsh Life Sciences Ecosystem Chapter 3. Knowledge Economy and Systems of Innovation within Life Sciences iv P a g e

6 3.1. Knowledge Knowledge as an Input to Production Knowledge is More Important as a Product Itself Codified Knowledge is Valued More than Tacit Knowledge Advances in ICT Accelerate the Economy Knowledge Economy Pillars of the Knowledge-based Economy Diffusion of Innovation Innovation 1.0: Closed Innovation Innovation 2.0: Open Innovation Innovation 3.0: Embedded Innovation Systems of Innovation National Systems of Innovation Regional Systems of Innovation Sectoral Systems of Innovation Triple, Quadruple and N-tuple Helix Clusters and Competitiveness Chapter 4. Developing the Investigation Initial Research Literature Review Participatory Observation Pilot Interviews Internal Discussion Group Defining the Research Aims and Objectives Formulating the Research Questions Chapter 5. Research Design Methodology and Methods Grounded Theory Data Collection Semi-Structured Interview Questions Data Collection Process Sampling Data Analysis: Research Question Open Coding Theoretical Sampling v P a g e

7 Selective Coding Theoretical Coding Data Analysis: Research Question Data Analysis: Research Question Research Ethics Chapter 6. Results: Stakeholders Views of the Welsh Life Sciences Sector Open Coding: Emerging Core Themes Selective Coding: Core Categories Actors Networks Institutions Ecosystem Global Context Summary of Selective Coding Thematic Coding: Framework for the Welsh Life Sciences Sector Answering Research Question Chapter 7. Results: Stakeholders Areas of Weakness in Knowledge Qualitative Mapping of the Life Sciences Sector in Wales Quantitative Mapping of the Life Sciences Sector in Wales Answering Research Question Chapter 8. Results: Welsh LS Intervention Strategy Key Welsh LS Interventions Derived from TOWS Analysis Key Welsh LS Interventions Derived from TOWS Analysis Framework for Key Welsh LS Interventions Answering Research Question Outcomes of the Linear TOWS Framework Chapter 9. The Welsh Healthcare Innovation Pipeline Framework Overview of the Welsh Healthcare Innovation Pipeline Input Step 1: Welsh LS Sector Mapping Step 2: Documentation of Best Practice for LS Transformation Step 3: Source New Innovation Step 4: Clinical Trials Step 5: Healthcare Innovation Assessment vi P a g e

8 Step 6: Procurement and Adoption Output Output 1: Innovation, Health and Wealth Output 2: Case Studies Output 3: Improvement of Outward Perception Output 4: Wales Becoming More Globally Competitive Chapter 10. Discussion Research Question 1: Stakeholders Views of the Welsh Life Sciences Sector The Welsh LS Sector and the Knowledge Economy The Welsh LS Sector and the Diffusion of Innovation The Welsh LS Sector and Systems of Innovation Chapter 11. Conclusions and Further Work Contribution to Knowledge Strengths of the Research Limitations of the Research Conclusions Further Research Chapter 12. References Appendix 1. Interviewees Appendix 2. TOWS and Gap Analysis A2.1. SO Maxi Maxi Strategies A2.2. WO Mini Maxi Strategies A2.3. ST Maxi Mini Strategies A2.4. WT Mini Mini Strategies Appendix 3. Evidence Supporting the Welsh LS Intervention Model vii P a g e

9 List of Figures Figure 2-1. Map of the Convergence Area of West Wales and the Valleys Figure 2-2. Overall Process for a Start-up Knowledge-based Company Figure 2-3. Dead Mouse Model of Innovation Figure 3-1. Evolution of a Knowledge Economy in Modern Economies Figure 3-2. Patent Applications and Patent Grants Worldwide, Figure 3-3. US Unemployment Rates and Median Earnings by Education Level, Figure 3-4. OECD Fixed Broadband Subscriptions by Technology, Figure 3-5. Diffusion of Innovation: The Chasm and The Tipping Point Figure 3-6. Linear (or Stage Gate) Model of Innovation Figure 3-7. Chain-Link Model of Innovation Figure 3-8. Open Innovation Figure 3-9. Evolution of Embedded Innovation Figure Simplified Model for Embedded Innovation in the Life Sciences Figure 4-1. Networks Established through Participatory Observation Figure 4-2. Sample Pilot Interviews Data Coded into Themes Figure 5-1. Summary of the Research Design Figure 5-2. Sample of Field Note Data Transcription Figure 5-3. Stakeholder Interviews: Subsector and Geographic Stratification Figure 5-4. Glaser Grounded Theory Methodology Figure 5-5. Stakeholder Interviews: Grounded Theory Coding Figure 5-6. Example of Coding Process in NVIVO 10 Software Figure 5-7. TOWS Strategic Alternatives Matrix Figure 6-1. NVIVO Word Frequency for Interview Questions 2 to Figure 6-2. Core Category: SWOT Analysis for Actors Figure 6-3. Core Category: SWOT Analysis for Networks Figure 6-4. Core Category: SWOT Analysis for Institutions Figure 6-5. Core Category: SWOT Analysis for Ecosystem Figure 6-6. Core Category: SWOT Analysis for Global Context Figure 6-7. Grounded Theory-based Theoretical Framework of the Welsh LS Sector Figure 7-1. Stakeholders Areas of Weakness in Knowledge: Understanding Figure 7-2. Stakeholders Areas of Weakness in Knowledge: Benchmarking Figure 8-1. Linear TOWS Framework Applied to Welsh LS TOWS Analysis Figure 9-1. Richard Arvid Johnson s Systems Model of Action-Research Process Figure 9-2. Recommended Welsh LS Sector Intervention Framework viii P a g e

10 Figure MediWales Picture of Health Map ix P a g e

11 List of Tables Table 1-1. Research Questions... 5 Table 2-1. Economic and Political Timeline for Wales, Table 2-2. Economic and Political Timeline for Wales, 1900-Present Table 2-3. EU Structural and Cohesion Fund Support in Wales, Table 2-4. Timeline of WG Plans and Strategies for Innovation, 1998-Present Table 2-5. Sectors Identified in Flagship Welsh Government Policies, 2002-Present Table 2-6. European Union and United Kingdom Thresholds for SMEs Table 2-7. SME Share of Enterprises of the EU, UK and Wales in Table 2-8. UK BIS SME and Start-up Funding Schemes Table 2-9. Economic Impacts of the US Biopharmaceutical Sector, 2009 ($ in billions) Table Economic Impacts of the UK and Welsh Life Sciences Industry, Table Economic Impacts of the Welsh Life Sciences Industry, Table Three Pillars of the United Kingdom Life Sciences Strategy Table 3-1. Further Topics and Reading Table 3-2. Definitions of Knowledge-based Economy Table 3-3. Mapping the Four Pillars of the Knowledge Economy Table 3-4. Worldwide Corruption Perceptions Index (CPI) of Select Countries, Table 3-5. Involvement of Stakeholders in the Embedded Innovation R&D Process Table 3-6. Factors Affecting Learning and Catching Up in Different Sectors Table 4-1. Developing the Investigation Table 4-2. Researcher s Life Sciences Sector Participation Table 4-3. Pilot Interviewees by Gender, Location, Subsector and Interaction Type Table 4-4. Internal Discussion Group Members Table 4-5. Research Questions Table 5-1. Methodology and Methods Table 6-1. Open Coding of Interview Data Table 6-2. Selective Coding: Core Themes and Categories versus SWOT Analysis Table 6-3. Data Analysis Map: From Codes to the Basic Social Process Table 8-1. TOWS Analysis Codes Table 8-2. TOWS Category Scoring Table 8-3. Key Welsh LS Interventions Derived from TOWS Analysis Table Learning and Catching Up: Theory across Interview Data Table Clustering: Theory across Interview Data Table Summary of the Study x P a g e

12 Table A2-1. Interviewees by Location, Position, Subsector and Interaction Type Table A3-1. SO Maxi Maxi Strategies Table A3-2. WO Mini Maxi Strategies Table A3-3. ST Maxi Mini Strategies Table A3-4. WT Mini Mini Strategies Table A4-1. Evidence Supporting the Welsh LS Intervention Model xi P a g e

13 Abbreviations BBC = British Broadcasting Corporation BETS = Department of Business, Enterprise, Technology and Science (Welsh Government) BIS = Department for Business, Innovation and Skills (United Kingdom) BLS = Bureau of Labor Statistics (United States) BPIB = The Health and Wellbeing Best Practice and Innovation Board (Health and Social Services, Welsh Government) BRIC = Brazil, Russia, India, China CAGR = Cumulative average growth rate CE mark = Conformité Européenne mark (meaning European Conformity mark ) CMU = Cardiff Metropolitan University CRO = Contract Research Organisation CPI = Corruption Perceptions Index DH = Department of Health (United Kingdom) DVLA = Driver and Vehicle Licensing Agency (United Kingdom) FDA = Food and Drug Administration (United States) ECDA = European Diagnostics Cluster Association EHR = Education and Human Resources EIR = Economic Incentive Regime ERDF = European Regional Development Fund EMA = European Medicines Agency ESF = European Social Fund EST = Department of Enterprise, Science and Technology (Welsh Government) EU = European Union GDP = Gross Domestic Product GDP/Cap = Gross Domestic Product per Capita HE = Higher Education HR = Human Resources IB = Investigational Brochure ICH = International Conference on Harmonisation ICT = Information and Communications Technology IDG = Internal Discussion Group ILS = Institute of Life Science, Swansea University IT = Information Technology JEREMIE = Joint European Resources for Micro to Medium Enterprises KAM = Knowledge Assessment Methodology KBE = Knowledge-based Economy KEI = Knowledge Economy Index KTE = Knowledge transfer and exchange (KTE) KTN = Knowledge Transfer Network KPI = Key Performance Index LS = Life Sciences LSSP = Life Sciences Sector Panel (Welsh Government) LVAD = Left Ventricular Assist Device Mini-HTA = Mini Health Technology Assessment xii P a g e

14 MIT = Massachusetts Institute of Technology MPhil = Master of Philosophy NAICS = North American Industry Classification System NESTA = National Endowment for Science, Technology and the Arts NISCHR (AHSC) (CRC) (PCU) = The National Institute of Social Care and Health Research (Academic Health Science Collaboration) (Clinical Research Centre) (Permissions Co-ordinating Unit) NGO = Non-Governmental Organisation NHS = National Health Service (United Kingdom) NIH = National Institute of Health (United States) NSI = National Systems of Innovation NWIS = NHS Wales Informatics Service NWSSP = NHS Wales Share Services Partnership OECD = Organisation for Economic Co-operation and Development ONS = Office of National Statistics (United Kingdom) PhRMA = Pharmaceutical Research and Manufacturers of America PDR = The National Centre for Product Design + Development Research (CMU) PhD = Philosophiae Doctor ( Doctor of Philosophy ) PMA = Premarket Approval PMDA = Pharmaceuticals and Medical Devices Agency (Japan) POWIS = Prince of Wales Innovation Scholarship QuANGOs = Quasi-Autonomous Non-Governmental Organisation R&D = Research and Development RGDP(/Cap) = Real Gross Domestic Product (per Capita) RIS = Regional Innovation Systems SBA = Small Business Act (Europe) SEWAHSP = South East Wales Academic Health Science Partnership SIC = Standard Industrial Classification (UK) SIG = Special Interest Group SME = Micro, Small and Medium-sized Enterprises SWOT = Strengths, Weaknesses, Opportunities, Threats TBD = To Be Determined TOWS = Turning Opportunities and Weaknesses into Strengths TRL = Technology Readiness Level TSB = Technology Strategy Board (not to be confused with TSB Bank), now Innovate UK UK = United Kingdom UKTI = United Kingdom Trade and Investment US(A) = United States (of America) UWIC = University of Wales Institute Cardiff, also known as Cardiff Metropolitan University WEF = World Economic Forum WEFO = Welsh European Funding Office WAG = Welsh Assembly Government WG = Welsh Government WHSSC = Welsh Health Specialised Services Committee xiii P a g e

15 Chapter 1. Introduction The purpose of this chapter is to provide a brief introduction to the research. The sections below briefly outline the origins; the aims, objectives, and research questions; as well as the investigation itself Origins of the Research The development of this investigation was the result of multiple factors, including those related to the institutions involved, the scheme and company initially funding the project, as well as the researcher s personal interests with life sciences (LS) innovation. These themes will be described in further detail below Institutions From its onset, this PhD project was developed within a multidisciplinary team within three higher education institutions: University of Wales, Cardiff Metropolitan University and Swansea University. This research was conducted at Cardiff Metropolitan University (formerly the University of Wales Institute, Cardiff or UWIC) through The National Centre for Product Design & Development Research (PDR) according to the University of Wales Regulations (Wales, 2010). During the course of this research, Professor Marc Clement, the Director of Studies, was the Executive Director of the Institute of Life Science (ILS) at Swansea University, which facilitates both research and interactions between industry, government and academia Prince of Wales Innovation Scholarship This research was funded through the Prince of Wales Innovation Scholarship (POWIS), whose resources are provided by the European Regional Development Fund (ERDF), the Welsh Government (WG) and the participating company Allerna Therapeutics Ltd. Managed by the Global Academy at the University of Wales, the Prince of Wales Innovation 1 P a g e

16 Scholarship was designed to attract university graduates from across the world to conduct research and development projects within Welsh companies. These scholarships funded industrial PhDs, where each scholar was placed within a company to pursue an industriallydriven project together with a higher education degree Allerna Therapeutics Allerna Therapeutics Ltd (Allerna) was founded in 2006 to develop ground-breaking therapies for allergic diseases. The company is based in the ILS at Swansea University and within their extensive product pipeline, their lead candidate is indicated for the treatment of moderate to severe asthma. Allerna utilises antisense technology through small inhibitory ribonucleic acid (sirna) molecules. Antisense technologies are specifically designed to prevent a single gene from being expressed precisely targeting a single pathway involved with disease with the intention of having fewer side effects. As the POWIS scheme decreed, a research project was designed and submitted by Allerna for a scholar to design, execute and report a preclinical development package which would bring its lead candidates to clinical trials, as well as to perform further business development of the enterprise. An academic project with an industrial application, as the POWIS scheme intended. Although applying for a different position within the POWIS scheme, the researcher was selected from a pool of candidates based on his previous experience with academic research, antisense technologies, nonclinical development and the desire to undertake business development. As a former resident of the San Diego biotechnology cluster, the researcher brought with him a set of expertise, networks and know-how that could not be sourced within Wales at the time. Up to the end of this research project, Allerna continues to be the only Welsh company developing antisense technologies. As Allerna is a micro, private company limited by shares, there is not a robust amount publicly available data to provide further description of the company s business operations. 2 P a g e

17 Wider Scope to the Original Research Design As the research progressed within Allerna, the research topic grew to embrace a wider scope than originally intended due to four reasons: 1. The previous involvement of the researcher in a wide range of LS projects from San Diego, California 2. The general aims and objectives of the POWIS Scholarship 3. The involvement of the researcher in a wider range of LS projects within Wales during this investigation 4. The involvement of the Director of Studies with the Welsh LS ecosystem, influencing the researcher s interests and world view 5. The need for in-depth research in the Welsh LS sector, which was wider in scope than a confidential industrial science project at a single company. Prior to this investigation, the researcher has held multiple LS positions within academia and industry in San Diego, California (see Section 4.1.2). This led the researcher to the Prince of Wales Innovation Scholarship and to Wales, as well as influenced the wider scope to the original research design. Since the researcher was from outside of the Welsh LS ecosystem, it allowed for a new and impartial view to be applied to the LS sector in Wales. The POWIS scheme was designed to bring international expertise into Wales to drive forward the Welsh economy. Hosted events through the University of Wales Global Academy built a sense of community between the multidisciplinary POWIS scholars. These scholars were working in disparate fields such as engineering, marketing, transportation and information technology. Furthermore, tasks such as the CEO Academy, residentials and additional courses further exposed scholars to areas such as management, finance and strategy for critical discussion within this group. This ecosystem infused the topics of innovation, entrepreneurship, business development and regional development into the world view of the researcher and eventually injected these themes into the research itself. 3 P a g e

18 While performing the project as outlined by Allerna within the ILS, the researcher took on additional responsibilities at a biotechnology company and a medical device company. When the research funding came to an end, the researcher took on further salaried positions assisting a healthcare IT spinout project from Swansea University and the Life Science Exchange project. An outline of these positions is further elaborated in Chapter 4. These broad experiences opened up the researcher s world view, not only within innovation and entrepreneurship, but specifically within the context of the LS sector in Wales and its relation to the rest of the world. Concomitant to this project, Professor Clement also held active roles within academia (Vice- Chancellor of the University of Wales and Director of Enterprise and Innovation within the College of Medicine at Swansea University), industry (Chairman of Calon Cardio- Technology Ltd and Vice Chairman of CyDen Limited) and WG (Board Member of Arthurian Life Sciences, Board Member of Sêr Cymru, Board Member of the National Research Networks, Member of the Life Sciences Hub Task and Finish Group) to name a few. Professor Clement directly influenced the researcher s world view by exposing him to the wider needs of the wider Welsh LS sector. Furthermore, Professor Clement provided direct insight, knowledge, networks and introductions which helped to shape the research project within weekly tutorials. The research design, approach and methodology identified a greater need for a different type of research. This type of research was aimed at making an impact to the broader economic and innovation systems. Rather than researching and reporting on a single industrial project, the need to investigate the mechanisms at the foundation of the entire LS sector was identified. An in depth study into this sector and a contribution to knowledge that would assist the sector in progress within the knowledge-based economy was planned. The aim was that by investigating and reporting on the needs of Welsh LS sector, the Welsh Government would be better informed to design and implement a strategy or policy. This endeavour came at a 4 P a g e

19 critical time, given WG s efforts to build up the LS sector through initiatives further explained in Chapter 2 and allowed this research to affect the policy-making of the WG and associated innovation systems directly Aim, Objectives and Research Questions Based on the initial research, which is outlined in Chapters 2, 3, and 4, it was decided that this study would undertake an in-depth investigation of the LS sector in Wales. The aim of this research was to provide a contribution to knowledge by developing a framework for the LS sector. This framework would then be used to promote economic development in the region. In order to achieve this aim, a set of objectives was drafted: Develop a framework which highlights successful and unsuccessful attributes of Wales, with the intention of applying the lessons learned to accelerate the development of LS companies and innovation within the Welsh region through policy and practice. Develop a set of policy recommendations to help support the LS sector. Develop a single, practical intervention strategy to promote the LS sector. Research questions were developed in this study through an iterative process involving participatory observation, a multidisciplinary literature review (Chapter 2 and Chapter 3), pilot interviews and an Internal Discussion Group (IDG). The final research questions derived can be found in Table 1-1. Table 1-1. Research Questions Research Question 1 What are the stakeholders views regarding the current Welsh life sciences sector 1? Research Question 2 Research Question 3 What are the stakeholders gaps in knowledge regarding the Welsh life sciences sector? What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales? 5 P a g e

20 Table 1-1. Research Questions 1 Life sciences sector is defined as therapeutics, medical devices, diagnostics and ehealth for the purposes of human health. Please see Section for a more detailed definition and explanation The Investigation To answer these Research Questions, an investigation which explored the Welsh Life Sciences (LS) sector through a Grounded Theory approach was undertaken. Semi-structured interviews with senior stakeholders from academia, government, industry, NHS Wales, third sector and professional institutions were conducted. A conceptual framework was developed to help understand the complex interactions within the Welsh LS sector. Gap analysis was systematically applied to the data in order to design a framework for potential interventions to positively influence the Welsh LS sector. The framework was then compared with current and forthcoming policy and policy recommendations to produce an integrated intervention termed the Welsh Healthcare Innovation Pipeline (WHIP), to result in the adoption of new innovation within NHS Wales through sourcing, trialling, assessing, procuring, and adopting healthcare innovations through an integrated framework. The proposal is that the WHIP would be adopted across Wales after being piloted sub-regionally within the West Wales region. 6 P a g e

21 Chapter 2. Context In order to enable effective progression through the literature review, study design and study execution, this chapter is intended to provide some context regarding the Welsh Life Sciences (LS) sector. Its purpose is to highlight and describe further key concepts related to this field of research such as the knowledge-based economy, the Welsh economy, SMEs and the LS sector. Each of these concepts will contribute to laying the foundation for understanding the research questions introduced in section 4.3. Over the last three centuries, Wales has undergone significant changes, evolving from an industrialised region to become an active participant in both the post-industrial (service-based) and knowledge (information-based) economies (Falkus and Gillingham, 1987, Day, 2002, Davies, 2007, World Atlas, 2012). During the last two decades, it has undertaken a number of interventions and has received substantial financial support from the European Union (EU), aimed at closing the economic gap within Europe (European Commission, 2011c). Since the creation of the National Assembly in 1998, the Welsh Government (WG) has implemented a string of innovation-based initiatives in an attempt to invigorate the Welsh knowledge-based economy. However, to date the economy is still lagging behind the rest of the United Kingdom (UK), Europe and the rest of the world s developed economies. Top performing regions are now deeply infused with the globalised knowledge-based economy, driven by innovation and micro-, small- and medium-sized enterprises (SMEs). SMEs have been shown to create jobs, drive innovation and are considerable contributors to modern, successful economies (European Commission, 2005, Ayyagari et al., 2007, Beck et al., 2008, BIS, 2011b, European Commission, 2011a, European Commission, 2011b). Amongst the sectors which offer the substantial potential benefits to Wales lies LS, a high value sector able to facilitate the creation of quality jobs and to strengthen the a supply chain (BIS, 2011c, PhRMA, 2011). It drives economic growth through multiplier effects for 7 P a g e

22 employment, personal income, gross value added (GVA) and tax revenue, also generates products that benefit society and human health (PhRMA, 2010). One of the key features of the LS sector is the greater level of collaboration required between actors within academia, industry and government compared to other sectors [also known as the triple helix model (Leydesdorff and Etzkowitz, 1996)], which can result in increased research productivity and commercialisation activity (Campbell et al., 2004, Blumenthal et al., 1996). This consideration highlights the importance to any developed country of having a coherent framework, strategy and policy which enables a thriving and sustainable LS sector (Campbell et al., 2004) The Welsh Economy In order to reach a better understanding of the modern Welsh economy, it is important to take into consideration its evolution over time. The Welsh economy has evolved from industrial roots (Falkus and Gillingham, 1987) through the Industrial Revolution to modern times. The sections below will outline how the Welsh economy progressed from the mid-eighteenth century, its involvement with the EU and associated support mechanisms and WG policy to support economic growth in the region Industrial Revolution ( ) Until the mid-1700s, the Welsh economy was reliant on primary and secondary economic sectors such as agriculture and basic manufacturing. As the Industrial Revolution took root in Europe during the eighteenth century, the necessity for raw materials skyrocketed due to the demand driven by war, steamships and railways. Wales relied on internal resources such as commodities, rather than knowledge-based industries. Due to the availability of natural resources, including iron, copper, coal, tin and slate, Wales experienced sustained growth, especially within mining and refinement industries (Falkus and Gillingham, 1987). Table 2-1 outlines the major economic and political events of Wales from 1750 to 1900 (World Atlas, 2012). 8 P a g e

23 Table 2-1. Economic and Political Timeline for Wales, Year Event 1750 Industrial Age began; Wales became largest producer of iron and copper in the world 1800 First of great Welsh canals built 1801 The population of Wales and Monmouthshire was 587, Wales became a non-conformist nation and broke with the Church of England Coal fields in South Wales developed 1851 The population of Wales was about 1.2 million 1867 Great Reform Act gave vote to male householders; Welsh Liberal Party formed 1891 US passed McKinley Tariff, caused severe financial blow to Welsh industry SOURCE: Adapted from The World Atlas (2012) The Modern Welsh Economy (1900-Present) The growth from the eighteenth century was sustained until the beginning of the twentieth century, but by the 1920s, reliance on older heavy industry (such as mining and smelting) rather than light industry (such as manufacturing) led to economic difficulties. Starting in the early 1920s, a national identity for Wales began to grow rapidly, especially with the founding of the National Party (Plaid Cymru) in The Welsh export economy collapsed during the inter-war recession (1920s-1930s) as a result of increasing protectionism and the rise of foreign competitors. In the 1940s and onwards, the steel, tinplate and coal industries were consolidated and modernised. Due to this decline in the heavy industries, there was a major shift towards service sector employment, causing an imbalance in the employment sector distribution. To demonstrate this decline in the industrial economy, service jobs accounted for 60% of employment by the 1980s (Day, 2002) (also see Section 3.1.1). As the twentieth century progressed, the declining Welsh coal and metal industries were replaced by branch plant assembly facilities and administrative positions. Government agencies such as the Royal Mint in Llantrisant, Companies House in Cardiff, the Driver and 9 P a g e

24 Vehicle Licencing Agency (DVLA) in Swansea and the Intellectual Property Office in Newport became some of the major employers in Wales (Day, 2002). The Welsh Act of 1978 introduced the concept of a government assembly for Wales, but was defeated in A further referendum in 1997 resulted in the formation of a Welsh Assembly (Davies, 2007). Table 2-2 outlines the major economic and political events of Wales from 1750 to Table 2-2. Economic and Political Timeline for Wales, 1900-Present Year Event Strike at Penrhyn Slate Quarry, the longest labour dispute in history; 3000 workers walked out 1901 The population of Wales reached about 2 million 1913 Almost 250,000 men worked in the South Wales coal field 1916 Lloyd George, the first Welshman became British prime minister 1925 National Party (Plaid Cymru) founded 1927 Unemployment in Wales peaked at 27% 1976 The Welsh Development Agency was formed 1978 Welsh Act introduced in favour of government assembly for Wales 1979 Welsh Act defeated 1984 Year-long miner's strike virtually ended coal industry in the country Referendum passed, National Assembly for Wales created 1999 Tony Blair, British Prime Minister, opened Welsh National Assembly (first self-government in over 600 years) 2008 The last deep mine in south Wales, Tower Colliery, closed 2010 Unemployment rate in Wales was higher than any other UK home country at 9.2% SOURCE: (World Atlas, 2012) Wales: A Lagging Region Based on the most current data available at the time of this investigation, Wales is a lagging region within the UK and the EU in many metrics particularly gross value added (GVA) per capita (Welsh Government, 2014c, European Commission, 2011c), a metric which provides a crude overview of economic prosperity. Although there have been multiple initiatives and 10 P a g e

25 policies to improve the economic climate of Wales, the region has remained in the lower echelons of UK, EU and world rankings European Support for Wales West Wales and the Valleys have qualified for European funding interventions in both 2000 and 2007 through the Objective 1 and Convergence programmes, because their GDP lies below 75% of the EU average GDP per capita (see Figure 2-1 and Table 2-3). Furthermore, many WG initiatives have been enacted to promote the Welsh economy since its inception in Table 2-3. EU Structural and Cohesion Fund Support in Wales, Programme European Regional Development Fund (ERDF) Amount ( ) ,163,011,000 1,250,378,189 TBD European Social Fund (ESF) 615,220, ,585,460 TBD Total 1,778,231,000 2,083,963,649 TBD TBD = To be determined, SOURCE: (European Commission, 2011c) European Structural Funds were created by the Cohesion policy, also known as the Regional policy of the EU. The Structural Funds consist of the European Regional Development Fund (ERDF) and the European Social Fund (ESF). The aims of the ERDF and ESF are provided verbatim from the European Commission are: The ERDF aims to strengthen economic and social cohesion in the EU by correcting imbalances between its regions. In short, the ERDF finances: direct aid to investments in companies (in particular SMEs) to create sustainable jobs; infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport; financial instruments (capital risk funds, local development funds, etc.) to support regional and local development and to foster cooperation between towns and regions; 11 P a g e

26 technical assistance measures (European Commission, 2012a) Figure 2-1. Map of the Convergence Area of West Wales and the Valleys The area of Wales is depicted on the left with Convergence areas highlighted in yellow. The Convergence area contains the 15 Local Authorities of Isle of Anglesey, Conwy, Denbighshire, Gwynedd, Ceredigion, Pembrokeshire, Carmarthenshire, Swansea, Neath Port Talbot, Bridgend, Rhondda Cynon Taff, Merthyr Tydfil, Blaenau Gwent, Caerphilly and Torfaen. SOURCE: Welsh European Funding Office (WEFO, 2012) The ESF sets out to improve employment and job opportunities in the EU. It intervenes in the framework of the Convergence and Regional Competitiveness and Employment objectives. The ESF supports actions in Member States in the following areas: adapting workers and enterprises: lifelong learning schemes, designing and spreading innovative working organisations; access to employment for job seekers, the unemployed, women and migrants; social integration of disadvantaged people and combating discrimination in the job market; strengthening human capital by reforming education systems and setting up a network of teaching establishments (European Commission, 2012b). 12 P a g e

27 Objective 1 funding has been shown to have a positive impact within the EU. In their literature and data review of the impact of Structural Funds on economic growth, Mohl and Hagen (2010) argue that: Objective 1 payments in particular do, in fact, promote regional economic growth, whereas the total amount of Objectives 1, 2, and 3 do not have a positive and significant impact on the EU regions' growth rates... Our estimation results show that Objective 1 payments, in particular, have a positive and statistically significant impact on the regions' GDP. Broadly summarising, we find that a 1% increase of Objective 1 payments, i.e. those funds used for the poorest regions, leads to a small but positive impact on the regional GDP per capita by approximately 0.05%. Although growth in GDP per capital was observed, no significant employment growth effects were observed in Objective 1 regions (Becker et al., 2010). Although it may not represent the sentiment of the majority, some prominent scholars have made bold statements regarding the (in)effectiveness of said initiatives: Certainly, the lack of real and consistent [economic] strategy has had a major impact on the nation s economic potential and, consequently, much of the billions of European Structural Funding, as well as the money available from the Welsh Government s own funds, has been largely squandered, despite having the highest proportional spend of any region on economic development. Professor Dylan Jones-Evans, Director of Enterprise and Innovation, University of Wales (2011) An investigation by the National Assembly for Wales into the effectiveness of European Funding in Wales concluded that Wales was delivering on its key targets and requirements determined by Europe were being met (National Assembly for Wales, 2012b). However, this inquiry also suggested that there is considerable room for the Welsh Government - and specifically the Welsh European Funding Office - to improve in terms of co-coordinating and monitoring the outcomes being delivered by such projects (National Assembly for Wales, 2012b). Other studies have not been positive about the results and outcomes of such grant funding schemes. Reports have suggested that large amounts of grant support, such as those provided 13 P a g e

28 by EU Structural Funds, could lead to a grant dependency mentality (Telesis Consultancy Group, 1982, Culliton, 1992, Andreosso O'Callaghan and Lenihan, 2006), which is not always conducive to sustainable innovation (Leamon and Lerner, 2012, Abreu et al., 2011, Cooke, 2009). Furthermore, Bachtler and Turok (2013) argue in their book, The coherence of EU regional policy: Contrasting perspectives on the Structural Funds, that: Local authorities claim that this lack of innovation is largely because of the retrospective receipt of EU funding. They argue that because EU funding is not normally approved until after project have been implemented, they cannot risk applying for assistance for schemes which they are not already committed to proceeding with and which they are confident will meet the relevant eligibility criteria. Given this, and the bureaucratic delays which frequently occur between approval and payment of grant aid, authorities believe that they must inevitably play safe. This [in] turn encourages the development of patchwork quilt of ad hoc, unco-ordinated [sic], funding driven initiatives. Wales qualified for the first round of European Structural Funding from for a sum just under 1.8 billion. It qualified again for Structural Funding from for the sum of 2.0 billion. Despite these two rounds of Structural Funds, there are strong indications from WG and the EU that a substantial fraction of Wales will again qualify for a further round of funding during the period (National Assembly for Wales, 2012a, Welsh Government, 2012e). The exact amount of Structural Funds Wales has received to date is outlined in Table 2-3. Although there are mixed reviews on the economic effectiveness of European Structural Funds, both in Wales and in general, this study takes on the opinion that European funds have been very helpful in Wales in both tangible and intangible ways. Critical infrastructure, programmes supporting innovation and entrepreneurship, and the importation of international expertise has directly influenced the culture, skills, and outlook of those implementing or supporting in LS innovation. As suggested by the National Assembly for Wales investigation into European funding in Wales (National Assembly for Wales, 2012b), the researcher agrees 14 P a g e

29 that a greater level of practical planning, as well as inclusion of social impact assessments for both projects and programmes, be included in proposals for evaluation Welsh Government Policy Since the creation of the National Assembly in 1998, the WG has instituted a number of innovation initiatives in the attempt to invigorate the Welsh innovation and knowledge-based economy (Zhang and Pugh, 2011). As a brief outline, a timeline of relevant WG plans and policies is set out in Table 2-4. Table 2-4. Timeline of WG Plans and Strategies for Innovation, 1998-Present Year Title Description/ Details 1998 Pathway to Prosperity The first economic plan for Wales 1999 Education and Training Action Plan for Wales 1999/2000 Entrepreneurship Action Plan, Strategy and Implementation Emphasises the need for a skilled workforce to make transition into the knowledge economy. Aims to build a culture of entrepreneurship, give more people the skills and motivation to start a business, entrepreneurship education A Better Wales 10-year plan with targets for improving life for everyone in Wales 2001 The Learning Country Importance of learning and training to ensure long term sustainable economic growth and social development Reaching Higher Highlights key role of HEIs in both the economy and society A Winning Wales WG s first economic strategy: innovation and entrepreneurship are key themes Wales for Innovation Encourages business innovation through equipping people to innovate, improving support and maximising potential of HEIs Skills and Employment Action Plan for Wales 2004 Creative Success; a strategy for the creative industries in Wales 2004 Knowledge Economy Nexus; role of HE Brings issues of skills and employment together, addresses need to raise skills. Supports and encourages creative industries that could make a significant contribution to the Welsh economy Report encourages greater links between university and industry, views them as key strands of the Welsh innovation system 15 P a g e

30 Table 2-4. Timeline of WG Plans and Strategies for Innovation, 1998-Present Year Title Description/ Details 2004 The Wales Spatial Plan 20 year policy, promoting a sustainable economy is one of its key themes, different approaches across Wales Skills and Employment Action Plan for Wales 2005 Wales: A Vibrant Economy 2005 Social Enterprise Strategy for Wales Need for employers, employees and public sector agencies to work together to support high quality jobs in a growing economy. Strategic framework for economic development, builds on A Winning Wales, key objectives are to raise quality of jobs and increase employment rate. Underlines importance of social and community enterprise to the Welsh economy, especially in poorer areas and their potential to be innovative Science Policy for Wales Advances in science, engineering and technology drive the knowledge economy and have a positive impact on society, culture and economy One Wales Agreement Coalition government promises to create jobs, stimulate enterprise and business growth, promote tourism and enhance skills to the end of creating a prosperous society Commercialisation in Wales 2008 Skills That Work for Wales Report reviews commercialisation initiatives, suggests clearer strategy from government needed and fewer but more effective programmes. This strategy describes the One Wales ambition for a highly-educated, highly-skilled and highemployment Wales Spatial Plan Update Goals include: increasing employment rate, improving skills levels, regeneration programmes across Wales- all Wales approach to economic development For Our Future- Higher Education Strategy 2009 Social Enterprise Action Plan for Wales 2010 The Heart of Digital Wales Dual role of Welsh HEIs in economy: raising the skill levels of Welsh workforce, exploiting the knowledge base to support businesses. Explains role of social enterprises in the economy, highlights their innovation potential, business support. Review of creative industries, suggests creation of new creative industries fund, government should be supporting a wide range of businesses, not directing them. 16 P a g e

31 Table 2-4. Timeline of WG Plans and Strategies for Innovation, 1998-Present Year Title Description/ Details 2010 Economic Renewal: A New Direction 5 main priorities: investing in high quality and sustainable infrastructure; making Wales a more attractive place to do business; broadening and deepening the skills base; encouraging innovation; targeting business support 2012 Science for Wales A strategic agenda for science and innovation in Wales SOURCE: Adapted from WG and National Endowment for Science, Technology and the Arts (NESTA) documents (Welsh Government, 2002, Welsh Government, 2005, Welsh Government, 2010, Zhang and Pugh, 2011, Welsh Government, 2012d, Zhang and Pugh, 2012) Many of the plans and strategies put forth by the WG have been intended to promote the economy through technology, innovation and skills. Professor Jones-Evans argues that many of these plans and strategies have been unsuccessful (Jones-Evans, 2011), although no clear reason is provided. Over the years, the plans and strategies issued by the WG have changed focus on which specific sectors to support through policy, initiatives and resources. Many of these are high-value sectors to Wales, with LS explicitly introduced as a priority sector in Table 2-5 outlines the sectors of focus for each of the changing WG policies. For each of the nine priority sectors identified in Economic Renewal: A New Direction, a sector panel of five members and a chair has been appointed. These sector panels have no direct administrative or political powers. The purpose of these sector panels is, strictly, to advise the Welsh ministers and policy teams. 17 P a g e

32 Table 2-5. Sectors Identified in Flagship Welsh Government Policies, 2002-Present A Winning Wales, Aerospace - Automotive components - Food-related business - Optoelectronics Wales: A Vibrant Economy, Aerospace - Agri-food - Automotive - Creative industries - Financial services - High-tech - Tourism Economic Renewal: A New Direction, Advanced materials and manufacturing - Creative industries - Energy and environment - Financial and professional services - Information and Communications Technology (ICT) - Life sciences Additional Sectors, Construction - Food and Farming - Tourism SOURCE: Adapted from: (Welsh Government, 2002, Welsh Government, 2005, Welsh Government, 2010, Zhang and Pugh, 2011, Zhang and Pugh, 2012) In order to attract inward investment into Wales, the WG has launched the Just Ask Wales campaign on 13 March 2014 (Welsh Government, 2014a). The new marketing campaign is part of the Welsh Government drive to attract more foreign-owned companies looking to grow and expand to consider a future in Wales. The year-long campaign will initially focus on London, South East England, and the M4 corridor. It will include advertising at central London Underground stations, as well as rail stations at Paddington, Liverpool Street, Heathrow, Woking, Slough, Reading and Bracknell. A suite of sector-specific posters and marketing materials have been created for the Just Ask Wales campaign, directing businesses to the new website. Advertising will also appear in newspapers such as the Financial Times, Telegraph and London Standard The integrated marketing and communications campaign will run alongside the programme to develop international trade which supports businesses to access overseas markets. It includes traditional paid-for print, poster sites, digital activity, , and will be supported by sector specific business and media events in London and Cardiff at dates to be announced. Welsh Government (2014a). When launching the campaign, The Minister for Economy, Science and Transport (EST) stated (Welsh Government, 2014a): The foreign direct investment market is extremely competitive so in order to build on our successes and gain a competitive advantage, we have to differentiate what Wales has to offer. Our Just Ask Wales campaign emphasises our strengths and focuses on customer requirements what companies need in order to grow and how we can deliver for them. We are 18 P a g e

33 launching it in the South East of England as our proximity to London is a major advantage for many businesses. Among the other key elements we are highlighting are the skills, support, space and speed of decision making in Wales as well as the number of highly successful companies already based here that have benefited from Welsh Government support. We have a clear, coherent and consistent message running across the campaign based on our ability to deliver, our ambition to attract trade and investment to Wales and the can-do attitude of the workforce and Government. Minister for Economy, Science and Transport (EST) (2014) 2.2. Micro, Small and Medium-Sized Enterprises (SMEs) According to the European Commission, the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50m and/or an annual balance sheet total not exceeding 43m (Table 2-6). An enterprise is considered to be any entity involved in economic activity, regardless of its registration status. This includes self-employed persons and family businesses engaged in craft or other activities and partnerships or associations regularly engaged in an economic activity (European Commission, 2005). The UK uses the same thresholds to measure business activities for SMEs. Table 2-6. European Union and United Kingdom Thresholds for SMEs Enterprise Category Headcount: Annual Work Unit (AWU) Annual Turnover Annual Balance Sheet Total Micro < 10 2 million 2 million Small 10 to million 10 million Medium-sized 50 to million 43 million SOURCE: (European Commission, 2005) SME Life Cycle A gap between government-funded research and industry-funded applied research and development exists and has been described as the (cash flow) valley of death, which in many aspects parallels The Chasm in regard to innovation (Sensenbrenner, 1998). The concept of the valley of death focuses more on the lack of liquidity or solvency rather than 19 P a g e

34 the failure of a technology to become adopted. Furthermore, Evans has argued that the valley of death was attributed to the need for capital through the stages of research, development and commercialisation (Evans, 2002). As seen in Figure 2-2, the process from research to commercialisation runs at a loss until a new product is launched and is successful. Once a product s sales overcome the cumulative losses incurred during the research, development and launch of the product, a business is in profit and can be viewed as successful. This model is ideal when it comes to a one company, one product approach; however, it does have its limitations when a company has multiple products in development. Figure 2-2. Overall Process for a Start-up Knowledge-based Company SOURCE: Adapted from (Osawa and Miyazaki, 2006) SMEs are the largest number of companies in an economy, but they are under-researched in the open innovation literature (Gassmann et al., 2010). In relation to SMEs, open innovation has been identified as a necessary model to overcome hurdles, such as a lack of a personnel or capital goods. Aldrich and Auster described the lack of resources and tangible assets in SMEs as the liability of smallness (Aldrich and Auster, 1986). Although these hurdles and liabilities exist, SMEs do have the ability to overcome their liability of smallness through open innovation processes (Gassmann and Keupp, 2007, Van De Vrande et al., 2010). 20 P a g e

35 In a presentation given to the ILS (Clement, 2007), Professor Marc Clement described a company life cycle model which integrates many of the models of innovation and SMEs of Moore, Rogers, Gladwell and others described in Section above (see Figure 2-3). It is useful to note that this model is most applicable to a company developing a single product. Multiple products may be developed in parallel or in series, allowing for multiple Death Valleys to exist within a single company s product development pipeline. Also, for this model, it should be noted that although the x-axis represents time, the time necessary to move on to the next stage of maturity will be different for every company. Figure 2-3. Dead Mouse Model of Innovation This life cycle model represents revenue growth of a product over time. During this journey, an SME must overcome Death Valley as well as multiple stages of innovation to survive. Note: LE=Large enterprises, SME=Micro, small and medium-sized enterprises. SOURCE: Adaptation of Moore s Dealing with Darwin (2005) by Professor Marc Clement (2007) and author (minor modifications, formatting, labels, etc.) The Effect of SMEs on the Economy Micro, small and medium-sized enterprises (SMEs) are the engine of the European economy. They are an essential source of jobs, create entrepreneurial spirit and innovation in the EU and are thus crucial for fostering competitiveness and employment. (European Commission, 2005) 21 P a g e

36 According to Beck, cross-country comparisons suggest a strong, positive association between SME development and economic growth (2005). The European Commission s website states that the 23 million SMEs in the EU represent 99 percent of businesses and are a key driver for economic growth, innovation, employment and social integration (European Commission, 2012c). According to data from the UK s Department for Business Innovation and Skills (BIS), SMEs represent 99.9 percent of all enterprises, account for 58.8 percent of employment and 48.8 percent of private sector turnover in the UK, as seen in Table 2-7. SMEs are even more vital to the Welsh economy, accounting for 99.9 percent of enterprises, 74.8 percent of employment and 59.0 percent of all private sector turnover. Table 2-7. SME Share of Enterprises of the EU, UK and Wales in 2011 Region Enterprises Employment Turnover Europe 99.8% 66.9% 58.4% United Kingdom 99.8% 58.9% 48.8% Wales 99.9% 74.8% 59.0% SOURCE: Adapted from (BIS, 2011b, European Commission, 2011a) Data collected by Ayyagari, Beck and Demirguc-Kunt for 76 developed and developing countries indicate that, on average, SMEs account for close to 60% of manufacturing employment (Ayyagari et al., 2007, Beck et al., 2008), which is further corroborated by research undertaken by the European Commission (2011a) and UK BIS data (2011b). In 2011, the European Commission published a large study analysing the important role small and medium-sized enterprises play in creating more and better jobs, with the following conclusions (2011b): 85% of net new jobs in the EU between 2002 and 2010 were created by SMEs. This figure is considerably higher than the 67%-share of SMEs in total employment. During this period, net employment in the EU's business economy rose substantially, by an average of 1.1 million new jobs each year. With 1% annually, the employment growth for SMEs was higher than for large enterprises with 0.5%. A clear exception is the trade sector, in which employment in 22 P a g e

37 SMEs increased by 0.7% annually, compared to 2.2% in large enterprises. This is due to the strong increase of large trade enterprises, in particular in sales, maintenance and repair of motor vehicles. New firms (younger than five years) are responsible for the overwhelming majority of the new jobs. New enterprises operating in business services create more than a quarter (27%) of the new jobs, while the new firms in transport and communication contribute least (6%). According to the United Kingdom s Fact Sheet drafted by the European Commission, the UK s economy relies less on micro firms than other EU economies and, correspondingly, large enterprises play a more prominent role (European Commission, 2011e). Even so, according to the UK Office of National Statistics (ONS), SMEs account for almost 50% of turnover and almost 60% of employment as seen in Table 2-7 above. SMEs in Wales overtake both the EU and the UK in terms of the percentage of enterprises, turnover and employment. Although Wales exceeded Europe s employment numbers by 12 percent, turnover was higher by only 1 percent; possibly suggesting that the total gross value added (GVA) per capita was lower in Wales than in Europe Policy Supporting SMEs Europe SME Policy In Europe, arguments in support of the contribution of SMEs can be found in the Lisbon Strategy ( ) for economic growth as well as in its successor, the Europe 2020 ( ) strategy. Additionally, the Small Business Act (SBA) for Europe provides a framework for supporting SMEs throughout the region. The SBA sets in motion 10 principles to guide the conception and implementation of policies both at EU and Member State level (European Commission, 2008b), as follows: 23 P a g e

38 1. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded 2. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance 3. Design rules according to the Think Small First principle 4. Make public administrations responsive to SMEs needs 5. Adapt public policy tools to SME needs: facilitate SMEs participation in public procurement and better use of State Aid possibilities for SMEs 6. Facilitate SMEs access to finance and develop a legal and business environment supportive to timely payments in commercial transactions 7. Help SMEs to benefit more from the opportunities offered by the Single Market 8. Promote the upgrading of skills in SMEs and all forms of innovation 9. Enable SMEs to turn environmental challenges into opportunities 10. Encourage and support SMEs to benefit from the growth of markets. A progress report issued in 2011 by the European Commission praised the SBA, stating that it has made leaps forward in improving the business environment, increased the EU s role in access to finance, improved access to markets and placed entrepreneurship into the new innovation policy (2011d) United Kingdom SME Policy The UK has set up clear policies to assist with SME growth, mainly by providing access to otherwise inaccessible finance, as seen in multiple schemes listed to support SMEs financially. The BIS states that its aim is to attain more UK entrepreneurs and businesses to be able to access the finance they need to enable greater levels of enterprise, whether expressed through start-up or growth (BIS, 2012a). Financial support may constitute an initial enabler for SME support since, based upon the most recent survey of SMEs by the BIS, Ten percent of SMEs identified cash flow as their main obstacle and 51 per cent in total mentioned it as being an obstacle per se (BIS, 2012b). In addition to financial support, the UK has tried to provide other services such as business information and advice as well as a wide range of solutions for 24 P a g e

39 small businesses support (BIS, 2012a). Relevant SME and start-up funding schemes in the UK can be found in Table 2-8. Table 2-8. UK BIS SME and Start-up Funding Schemes Scheme Enterprise Finance Guarantee (EFG) Enterprise Capital Funds (ECFs) UK Export Finance Business Angel Co-Investment Fund The National Loan Guarantee Scheme (NLGS) Description EFG is a loan guarantee scheme designed to facilitate additional lending to viable SMEs lacking the security or proven track record for a commercial loan. It is not a replacement for commercial products and will account for 1%-2% of total lending to SMEs. The Government provides the lender with a 75% guarantee for each individual loan, subject to a cap on total claims arising from a Lender s portfolio. For many young innovative firms equity finance is the best option to reach their high growth potential; however, many struggle to obtain this form of finance. This is often because the relatively high costs of undertaking due diligence in early stage companies, in relation to the deal size, often means that investors prefer to make larger investments in later stage companies. This disconnect is called the 'equity gap'. Enterprise Capital Funds (ECFs) address this market weakness. The ECF uses government funding alongside private sector investment to bridge this gap. Eleven such funds have been launched since 2006 with million of public and private investment committed. This provides a range of services including: insuring UK exporters against non-payment by their overseas buyers; helping UK exporters sell goods and services by guaranteeing bank loans to overseas buyers; guarantees to banks issuing contract bonds on behalf of UK exporters; guarantees to banks providing working capital loans to exporters for specific export contracts; and insuring UK investors in overseas markets against political risks. The 50m Business Angel Co-Investment Fund aims to support angel investments into high growth potential early stage SMEs, particularly in the areas worst affected by public spending cuts. The fund has been created with a grant from the Regional Growth Fund and is able to make initial equity investments of between 100K and 1M in to SMEs alongside syndicates of business angels (subject to geographical restrictions and upper limit of 49% of any investment round). Investment decisions will be made by the independent Investment Committee of the fund based on detailed proposals put forward by business angel syndicates. Launched in March 2012 to reduce the cost of bank loans for smaller businesses. The scheme will allow banks to raise up to 20bn of funding guaranteed by the Government over two years, allowing the banks to lend directly to smaller businesses at a lower cost. 25 P a g e

40 Table 2-8. UK BIS SME and Start-up Funding Schemes Scheme Business Finance Partnership (BFP) Seed Enterprise Investment Scheme (EIS) Description The BFP will invest an initial 1.2bn in loan funds, alongside private sector co-investors. These funds will then lend to mid-sized businesses, helping to diversify the channels of finance available to them. The Government has already committed to spend 700 million through managed funds that lend directly to mid-sized businesses in the UK. The Government is also considering options for investing through other nonbank lending channels that reach SMEs. BIS has been allocated 100 million to invest through the Small Business Tranche of the BFP. EIS provides income tax relief of 50% for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of 100,000 and cumulative investment limit for companies of 150,000. In addition, the Government will offer a capital gains tax holiday for investments made into the new scheme. This will provide for a capital gains tax exemption on gains realised on disposal of an asset in and invested through SEIS in the same year. SOURCE: Adapted from BIS (2010a, 2012a) Furthermore, the UK government has supported technology transfer through the Technology Strategy Board (TSB, not to be confused with TSB Bank) and associated Knowledge Transfer Networks (KTNs), providing access to new technology, networks and opportunities. According to the TSB, KTNs aim to deliver the following benefits (Technology Strategy Board, 2014): Improving business performance through innovation and new collaborations by driving the flow of people, knowledge and experience between business and the science-base, between businesses and across sectors Driving knowledge transfer between the supply and demand sides of technologyenabled markets through a high quality, easy to use service Facilitating innovation and knowledge transfer by providing UK businesses with the opportunity to meet and network with individuals and organisations, in the UK and internationally Providing a forum for a coherent business voice to inform government of its technology needs and about issues, such as regulation, which are enhancing or inhibiting innovation in the UK 26 P a g e

41 Welsh SME Policy In a similar way to initiatives throughout the UK, Wales has also implemented support for SMEs. In March 2012, Business Minister Edwina Hart unveiled a 40 million Wales SME Investment Fund to support SMEs and create up to 4,000 new jobs. These funds will: Increase the number of SMEs eligible for investment from Finance Wales by more than 50% Allow the tens of thousands of businesses that sell directly to consumers to be eligible for Finance Wales investment Provide good value for Welsh Government funding by recycling investment returns to produce an evergreen fund for SMEs in the future Leverage in 2 of private sector funding for 1 of Welsh Government funding invested Provide a funding mix of loans, mezzanine and equity, typically ranging in size from 50,000 to 2 million. These funds complement an existing 150 million European-backed Wales Joint European Resources for Micro to Medium Enterprises (JEREMIE) fund (Welsh Government, 2012a) which provides the WG s main source of commercial finance for eligible SMEs Life Sciences Definition of Life Sciences In general, the term life sciences (LS) can cover any of the fields of science involving living organisms, including areas such as botany, immunology, neuroscience and bioinformatics. To further characterise LS within the scope of this research project, the term can be broken down into three main sectors: pharmaceuticals biotechnology medical technology businesses with wide ranging activities including research, testing, manufacturing and the provision of specialist services, as defined in 2010 by the WG s policy statement Economic Renewal: a new direction (Welsh Government, 2010). Each of these three sectors works together in combination with other 27 P a g e

42 industries, with the ultimate goal of producing an end-user product such as a biopharmaceutical drug, medical device, or a diagnostic test. Ultimately, this collaborative work benefits the end-user (the patient), but also has many positive spill-over effects for society. To complicate the semantics further, Dr Ronald Rader from the Biotechnology Information Institute claims, criteria for what is biotechnology and biopharmaceutical are unfixed, subjective, adaptable to the needs of the moment, presumed to be continually evolving and rarely defined (Rader, 2008). The same is true for the term medical technology businesses, which has already been given an ambiguous characterisation above. The focus of this specific research project will be LS companies involved within the biomedical industry and human health, in line with a definition that is much in line with the one provided by the State of California: The biomedical industry encompasses all life sciences based research and commercial organizations that are pursuing innovative research and technological development to benefit human health. (California Healthcare Institute et al., 2012) This definition has been selected in an attempt to reduce the ambiguity inherent in the term LS, as well as to satisfy the need to bind this research within a certain boundary. Although many of the policies and definitions in the UK and Wales include industrial biotechnology (encompassing agriculture, algae farms for renewable energy, amongst others) as part of the LS definition many of the relevant initiatives and support institutions within Wales focus specifically on human health. Examples of this include: MediWales, the Arthurian Life Sciences 100 million venture capital fund and the Life Science Exchange project. Lastly, the researcher s experiences before and during this research were all directly related to the advancement of the LS within the context of human health (e.g. biopharmaceuticals, biotechnology, medical devices and e-health). 28 P a g e

43 The biomedical industry is multinational and multidisciplinary. This has a tremendous impact on the world s economies, as well as on the individual health outcomes of patients. The industry involves a wide range of entities and stakeholders, including pharmaceutical companies, medical device companies, hospitals, doctors, patients and their families The Effect of Life Sciences on the Economy Life Sciences Globally The importance of the LS industry is recognised globally as a driver of innovation and economic growth of economies by regions around the world (Jones Lang LaSalle, 2011, OECD, 2012, Rosiello, 2008, Kasabov and Delbridge, 2008). The economic effects of the LS industry is far reaching, having tremendous impacts on economies and outperforming other sectors based on economic outputs (Battelle Memorial Institute, 2011, PhRMA, 2011). According to IMS Health, a leading healthcare market research group, world pharmaceutical sales reached almost 1 trillion US dollars or over 1.4 percent of the world s Gross Domestic Product (GDP). The pharmaceutical sector alone is forecast to grow at a three to six percent cumulative average growth rate until 2016, after adjusting for inflation (IMS Health, 2012). A similar forecast exists for medical devices. Furthermore, the medical device industry in the US and worldwide is immense in its economic impact (sales in 2009 were $260 billion worldwide, $120 billion in the US alone, $64 billion in the European Community and $45 billion in Japan; in 1998 the US medical equipment trade surplus was $18.2 billion) (Gad and Spainhour, 2011). As seen in Table 2-9, the biopharmaceutical sector in the US is directly responsible for $382.4 billion in direct economic impact and over 674,000 jobs. Further to this, due to indirect and induced multiplier impacts, the industry is responsible for a further $535.4 billion in output and an extra 3.3 million jobs in the US economy (PhRMA, 2011). The Pharmaceutical Research and Manufacturers of America (PhRMA) has concluded that the biopharmaceutical 29 P a g e

44 sector s direct contribution to US GDP in 2008 was approximately three and a half times the average contribution of the other sectors in the rest of the US economy. In a report titled Economic Contribution to the Nation produced by Battelle (the world s largest non-profit independent research and development organisation), the biopharmaceutical sector (a subsector of the LS sector) has indirect and induced impacts on 430 other sectors and subsectors. Additionally, each job in the biopharmaceutical sector contributed more than double the average contribution from jobs in the rest of the economy (PhRMA, 2010). Table 2-9. Economic Impacts of the US Biopharmaceutical Sector, 2009 ($ in billions) Impact Employment Personal Income Value Added Output State & Local Tax Revenue Federal Tax Revenue Direct Effects 674,192 $80.00 $ $ $4.40 $15.40 Indirect Impacts 1,403,511 $92.10 $ $ $12.40 $18.60 Induced Impacts 1,935,738 $85.90 $ $ $15.80 $18.50 Total Impact 4,013,441 $ $ $ $32.60 $52.50 Impact Multiplier Personal Income: Measures cash, benefits and non-cash payments to individuals in the company; Value-added: The difference between an industry s total output and the cost of the intermediary input; Output: The dollar value of production; Impact Multiplier: (Induced Impacts) (Direct Effects). SOURCE: Adapted from PhRMA (2011) Life Sciences in the United Kingdom The UK Department for Business, Innovation and Skills (BIS), in conjunction with the UK Trade and Investment (UKTI) and Department of Health (DH), has put together a nationwide database for the LS industry and related companies in order to enable key stakeholders to gain a better understanding of the landscape. BIS has determined that the UK LS sector generated a turnover of over 50 billion and employed 167,672 people in 4,578 companies in 2012 (BIS, 2012c). Details of the economic impacts of the UK LS industry can be found in Table The majority of the employment and turnover was a result of the pharmaceutical sector, yet 30 P a g e

45 almost 70% of the companies were in the medical technology sector. As explained in section 2.3.1, industrial biotechnology has not been included. Based on the figures, industrial biotechnology s effect on the UK s economy should be negligible, as this subsector accounts for less than one percent of overall turnover, employment and the number of companies. Table Economic Impacts of the UK and Welsh Life Sciences Industry, 2012 United Kingdom Wales Turnover ( billions) Number of Companies Turnover ( billions) Number of Companies Impact Employment Employment Pharmaceutical , Medical , , biotechnology Medical technology Industrial biotechnology ,144 3, , , Total ,672 4, , SOURCE: (BIS, 2012c) Life Sciences in Wales Europe and the UK have thriving LS sectors, but the size of this industry in Wales is not in proportion to the data described above (BIS, 2011d, BIS, 2012c), even after per capita adjustment. According to the most recently published data by MediWales in 2009, the Welsh LS sector consists of 322 companies employing over 15,000 people (MediWales, 2009). It is believed that these companies contribute more than 1.4 billion to the economy, not counting the spill-overs to academia and the public sector. Of these companies, 69 percent were medical technologies and 93 percent were SMEs (MediWales, 2009). As described in Table 2-10, the Strength and Opportunity 2012 report from the UK BIS department outlines the landscape of the medical technology, medical biotechnology, industrial biotechnology and pharmaceutical sectors in the UK, claims Wales has around 8,000 employees across 231 companies (BIS, 2012c). These numbers differ from the numbers reported by MediWales. 31 P a g e

46 Although Wales accounts for approximately 5% of the population of the UK, it is not pulling its weight in the pharmaceuticals sector because it accounts for only less than 1% of UK turnover, employment and the number of companies, as seen in Table As the data submitted to BIS is aggregated, anonymised data; it is difficult to identify which three Welsh pharmaceutical companies in Table 2-10 actually account for these numbers. Table Economic Impacts of the Welsh Life Sciences Industry, 2012 Impact Turnover ( billions) Wales Percentage of the UK (%) Employment Number of Companies Turnover ( billions) Employment Number of Companies Pharmaceutical % 0.5% 0.8% Medical biotechnology Medical technology Industrial biotechnology 0.3 2, % 8.6% 4.8% 1.0 5, % 7.3% 5.3% % 16.3% 16.9% Total 1.4 7, % 4.8% 5.0% SOURCE: (BIS, 2012c) For example, San Diego, California has a thriving LS ecosystem that evolved from a strong industrial base (Casper, 2007, Walcott, 2002). While Wales has a similar strong industrial component to its economy, it has not evolved a LS sector that is comparable to San Diego, in both size and activity. In order to boost the activity and the livelihood of the LS industrial sector, the WG created the Life Science Sector Panel (LSSP), one of nine panels created to support the identified nine priority sectors. This represents the most recent intervention at a government level. Further policy supporting the LS sector is further explained in the following sections Policy Supporting Life Sciences The considerable turnover of the LS industry in the UK and Wales, combined with the increasing spend on LS and the constantly evolving global landscape and economy call for a 32 P a g e

47 unified approach. From a global perspective, LS is a multi-disciplinary arena, where considerations pertaining to the entire spectrum of interrelationships within the triple helix model are exploited. LS enterprises have been shown to exhibit the tendency to be locally and internationally connected (Jones and Coviello, 2005), with the use of extensive, dynamic and varied partnership arrangements (Jones et al., 2011). Governments are providing more support to the LS sector through both policy and finance, albeit through different strategies (Cooke, 2008, Rosiello and Orsenigo, 2008, Rosiello and Mastroeni, 2010, Jones Lang LaSalle, 2011, Kaufmann, 2013). Policy within the UK and Wales is adapting to this ever evolving LS sector. A brief synopsis of the current policies is provided in the following sections United Kingdom LS Policy In a speech delivered in late 2010, Prime Minister David Cameron announced plans to make the UK the most attractive place in the world to start and invest in innovative technology companies (Cameron, 2010). Support for science and research is a top priority, to build upon one of the UK s notable strengths... We are therefore investing more than 200 million over four years in a network of Technology and Innovation Centres to support the commercialisation of new technologies by businesses. David Cameron (BIS, 2011a) On 5 th December 2011, Cameron launched the Strategy for UK Life Sciences to help LS businesses grow and succeed. It is a long-term approach, looking forward ten to 15 years and building on the March 2011 Plan for Growth. The UK Government will invest 310 million to support the discovery, development and commercialisation of research. This covers 130 million for Stratified Medicine and 180 million for a Biomedical Catalyst Fund. The Technology Strategy Board defines Stratified Medicine (also known as personalised medicine or precision medicine) as predicting in advance which groups of patients will respond to a particular therapy and providing treatment accordingly (Technology Strategy Board, 2011). 33 P a g e

48 The Biomedical Catalyst is an integrated translational funding programme that can support innovative ideas - from any sector or discipline - that demonstrate the potential to provide significant positive healthcare and economic impact. The Strategy for UK LS is based on three pillars (BIS, 2011c), as described in Table 2-12: Table Three Pillars of the United Kingdom Life Sciences Strategy Pillar Building a UK life sciences ecosystem Attracting, developing and rewarding talent Overcoming barriers and creating incentives for the promotion of healthcare innovation Description SOURCE: Adapted from BIS (2011c) The Government will make it easier for researchers to commercialise academic research, will place clinical research at the heart of the NHS and will empower patients to participate in research. The Government will introduce measures to ensure that the UK attracts and nurtures world-leading talent and develops scientific excellence, These measures will also ensure that the UK offers exciting and rewarding careers for clinicians, scientists and technicians from all around the world. The Government will introduce measures to incentivise early-stage investment and nurture the best innovations through the translational funding gap to a point at which they can secure followon investment. The Government will continue to reduce the bureaucracy of setting up clinical trials to ensure that patients have access to promising, cost-effective new treatments. On the same day that the LS policy was released by the UK Office for Life Sciences (OLS), the UK Department of Health (DoH) and National Health Service (NHS) released a policy document titled Innovation Health and Wealth, Accelerating Adoption and Diffusion in the NHS (Department of Health and NHS, 2011). As the name implies, this document outlines a strategy to identify, promote and ingrain innovative technologies into the healthcare system for the benefit of all stakeholders, including academia, the scientific community, industry, the NHS, representative bodies such as the NHS Confederation, the Technology Strategy Board, Royal Colleges and many others. This summary of actions includes eight key themes which promote innovation by changing the culture, systems and incentives within the NHS, including the new Academic Health Science Networks (AHSNs). These eight key themes are: 34 P a g e

49 1. We should reduce variation in the NHS and drive greater compliance with NICE guidance. 2. Working with industry, we should develop and publish better innovation uptake metrics and more accessible evidence and information about new ideas. 3. We should establish a more systematic delivery mechanism for diffusion and collaboration within the NHS by building strong cross-boundary networks. 4. We should align organisational, financial and personal incentives and investment to reward and encourage innovation. 5. We should improve arrangements for procurement in the NHS to drive up quality and value and to make the NHS a better place to do business. 6. We should bring about a major shift in culture within the NHS and develop our people by hard wiring innovation into training and education for managers and clinicians. 7. We should strengthen leadership in innovation at all levels of the NHS, set clearer priorities for innovation and sharpen local accountability. 8. We should identify and mandate the adoption of high impact innovations in the NHS. On 28 March, 2014, the UK government launched A bigger, better Office for Life Sciences (Office for Life Sciences, 2014). The Department for Business, Innovation and Skills (BIS) and the Department of Health (DH) are joining their life sciences functions to create a new, expanded Office for Life Sciences. The new joint Office for Life Sciences will lead the government s efforts to: make the UK the best place to invest in life sciences research take advantage of the UK s science base and unique NHS to improve healthcare and contribute to economic growth In July 2014, a reshuffle took place and the Prime Minister announced new ministerial appointments. George Freeman MP was appointed as Parliamentary Under Secretary of State for Life Sciences at the Department for Business, Innovation and Skills and the Department of Health on 15 July 2014 or Minister for Life Sciences. This move clearly shows a commitment by the UK government for the LS sector. 35 P a g e

50 LS policy and support within the Welsh context has similar themes, which will be described in the sections below Welsh LS Policy and Support Due to the devolved WG, not all UK policy directly affects Wales, yet many parallels can be observed between the two government strategies. Over the past decade, Wales has significantly increased the support for the LS sector, both through policy and the allocation of resources. LS has been recognised as being one of nine key priority sectors, detailed within the Government s policy initiatives, such as Wales: a vibrant Economy (Welsh Government, 2005) and others set out in Table 2-5. Early indications of the acknowledgement of this status are to be found within the approval and implementation of key strategic part-funded economic development projects such as the Institute of Life Science (ILS) Phase I (2004) and II (2008) in the College of Medicine at Swansea University. In 2010, the WG instituted a policy entitled Economic Renewal: A New Direction (Welsh Government, 2010), which specifically and for the first time named LS as a key sector for development to be nurtured by the Ministry for Economy, Science and Transport (EST) team. Most recently, in July 2013, the WG released an extensive consultation on the development of a new Innovation Strategy titled Innovation Wales (Welsh Government, 2013b, Welsh Government, 2014b). This strategy focuses on five key themes for innovation: improving collaboration, promoting a culture of innovation, providing flexible support for innovation, innovation in government and prioritising and creating a critical mass. Furthermore, the document suggests that a governance and implementation plan would also be required to ensure the results of the consultation to have a real impact on the region Life Sciences as a Priority Sector In 2005, the WG initiative Wales: A Vibrant Economy did not directly select LS as a sector to support. However, during this time, the WG did support the LS with infrastructure projects 36 P a g e

51 such as the aforementioned ILS building in Swansea and the Technium innovation centres across Wales. In 2010, the WG instituted a policy titled Economic Renewal: A New Direction which specifically and for the first time, names the LS sector as a key sector for development (Welsh Government, 2010). Recognition of the LS as a priority sector led to the establishment of a department within the WG s BETS team. According to their brief profile with MediWales, the focus of the Welsh Government s Life Sciences Team is on business growth and commercial success. [They] are coordinating a strategy for the life sciences sector in Wales that will enhance and develop our existing clusters of expertise and facilitate the creation of an ecosystem which is vibrant and dynamic. The Life Sciences Team has access to a range of funding mechanisms and related programmes and infrastructure to support the location, development and growth of businesses in Wales. [They] also have joined up routes across Government Departments to support academia and the NHS to pursue and share research excellence to benefit the economy and the people of Wales (MediWales, 2013d) MediWales Founded in 2005, MediWales has been a member-based non-profit organisation, which has acted to promote the LS sector. MediWales is the Welsh Life Sciences Forum the networking and representative body for the sector. MediWales is owned by its members and managed through a board of member-elected non-executive directors. Members are largely made up of academics, businesses and clinicians along with business support organizations and research centres. Partially funded by the Welsh Assembly Government, MediWales promotes and supports its members via an extensive events programme; a rapid publications schedule publishing both the quarterly MediWales Review and the biannual UK Life Science Industry magazine; the website; and lobbying to government in order to represent the sector s needs. (MediWales, 2013a). 37 P a g e

52 Science for Wales Policy In March 2012, the WG set up a strategic agenda for science and innovation in Wales titled Science for Wales. In this document, Life Sciences and health was named as one of the three Grand Challenge priority areas, along with Low carbon, energy and environment and Advanced engineering and materials (Welsh Government, 2012d). The Science for Wales policy also outlined the establishment of new initiatives such as National Research Networks (improving the research capacity of the region) and Sêr Cymru (in English, Welsh Stars ), which is aimed at bringing leading international scholars and researchers to Wales Welsh Life Sciences Strategy In 2013, the Chair of the Arthurian Life Sciences Fund stated: The coming together of such great private enterprise talent and significant government support in this way opens a new and exciting chapter in the development of not only the Welsh Life Sciences industry but beyond The immense experience of this team will be invaluable in assisting the Welsh Government and the life sciences sector panel in fully implementing its excellent vision of creating a new fund, a unique life sciences hub, a thriving and vibrant ecosystem of Welsh life sciences businesses and a powerful new, commercial Welsh life sciences brand that will achieve international recognition. Chair of Arthurian Life Sciences (Western Mail, 2013) The increased focus on LS has inspired the Directorate for Economy, Science and Transport (EST; formerly known as the Ministry of Business, Enterprise, Technology and Science, or BETS) to establish an LS sector team of civil servants (covering many of the roles of the former Welsh Development Agency) as well as a sector-specific LS Sector Panel (LSSP) in March This LSSP comprises leading bio-entrepreneurs and scholars and serves as an advisory panel to the WG EST Minister on matters related to LS. The future of the sector in Wales is outlined in the LSSP s draft strategic paper in support of LS, Life Sciences Sector: Summary Advice from the Sector Panel. This document details the Panel s vision of the Welsh LS sector as follows: 38 P a g e

53 In Wales, business, government, the NHS and universities understand each other and communicate at every level. There is excellent research, some really good technology, and both are being turned into big profitable businesses surprisingly quickly. If I were starting a Life Sciences business today I would want to locate in Wales. Welsh Government (2012c) In order to support the LS sector and fulfil the LSSP s vision, a delivery plan has been drafted by the WG s LS sector team within EST (Welsh Government, 2013c). According to the chair of the LSSP: The Welsh Government and Life Sciences Sector Panel have committed to making Wales the best possible environment for Life Sciences innovation and business growth focussing the Life Sciences strategy on four elements Gareth Morgan (2013) The four elements introduced by the LSSP chair are: 1. The Hub 2. The Fund 3. The Brand 4. The Ecosystem These elements are at the foundation of the LSSP s Delivery Plan. Thus far, detailed plans for the Brand or Ecosystem have not been released publicly. The Fund was launched in the first half of 2013 and the Hub launched in The following sections describe the principles and rationale behind each of these four elements Welsh Life Sciences Hub According to a recent presentation from the Hub s Task and Finish Group, The Hub will act as a central resource for the whole of the LS sector in Wales including academic, business, clinical and funding organizations to stimulate interaction, innovation, networking and collaboration (Mark Bowman Ventures, 2013). The nine functions of the Hub will be to: 1. Connect and concentrate LS in Wales 2. Attract new LS Opportunities and Investment 3. Accelerate the growth of LS in Wales 4. Create growth, money and jobs 39 P a g e

54 5. House the Arthurian Fund and the LS Team 6. Host LS support organisations 7. Host international visitors 8. Run major events and training 9. Host a myriad of LS support. The Hub will host entities from all subsectors actors, including representatives from government, industry, academia, professionals, third sector and the NHS institutions. The physical location of the Hub is in Cardiff Bay, providing high quality spaces and an environment to stimulate the strengthening of networks and the interaction within the LS national and international business community (Mark Bowman Ventures, 2013). The Life Sciences Hub was launched by the Welsh Minister for Economy, Science and Transport on 18 July As described on their website, the Life Sciences Hub Wales, based in Cardiff Bay, is the focal point for the sector in Wales stimulating interaction, innovation, networking and collaboration. A nerve centre for the whole of the Life Sciences sector, including academic and healthcare organisations, business, expert advisers, clinical and funding organisations, it helps bring about investment, commercialisation and ongoing business success (Life Sciences Hub, 2014) Welsh Life Sciences Fund The 100 million Arthurian Life Sciences Fund (Arthurian) has been established and most recently provided with 50 million of co-funding by the WG, with the aim of transforming the LS sector in Wales. According to the EST Minister, it will make Wales an even more attractive location for LS R&D, and an even better place in which to start and grow an LS business. It also makes it absolutely clear that Wales is now open for business in the LS sector (Welsh Government, 2013a). Arthurian s Board of Directors is composed of former senior scientific officials within government, as well as pre-eminent scientists and entrepreneurs with significant experience within the international LS arena. 40 P a g e

55 At the time of writing, the fund has already invested in a handful of companies to date, including Simbec Research Limited (a contract research organisation performing Phase I/IIA studies) and ReNeuron (a stem cell company in Phase II clinical trials). Arthurian Life Sciences continues to develop a strong deal-flow pipeline (Morgan, 2013) Welsh Life Sciences Brand The Brand is the international profile of the Welsh LS sector, focused on developing international trade, developing international networks and collaborations and foreign direct investment (FDI). Currently, the LSSP, WG and UK Trade & Investment (UKTI) are working to provide a targeted programme of trade and investment in Wales. According to the Chair of the LSSP, a strong trade activity programme was scheduled for 2014/2015 and an FDI campaign was scheduled for late The objective for these activities was to encourage sector growth (Morgan, 2013). This trade campaign has emerged as the Just Ask Wales media campaign from the WG, briefly outlined in Section This campaign describes the Welsh LS sector as: the only nation with a 100m dedicated Life Sciences Fund. Plus worldleading academic expertise, a talent-drawing 50m initiative and a central Life Sciences Hub. Our researchers lead the world in areas including wound healing, stem cells, neurosciences, e-health, in vitro diagnostics, medical devices and more. Our eight universities are home to 12,000 Life Sciences students, and their excellent knowledge transfer and commercial capabilities offer attractive partnering opportunities for Life Sciences businesses with potential to access considerable European funding. Wales is home to Europe s first Centre for NanoHealth, the Institute of Life Science, and the UK s largest department in land-based sciences. Add to this the development of the Welsh Life Sciences Hub: based in Cardiff, it s a Government-backed central resource for the whole sector in Wales, connecting commercial, academic, clinical and funding organisations. And, thanks to our devolved National Health Service, clinical trials here can access over 3 million people with a single, co-ordinated permissions process. Just Ask Wales (2014) 41 P a g e

56 Welsh Life Sciences Ecosystem Within the WG LS sector strategy, the ecosystem has not been clearly or formally defined. According to the chair of the LSSP s sector update in late 2013, the Ecosystem is being developed to ensure academics, businesses, clinicians and the investment community are well connected and able to seize new opportunities more quickly in Wales than elsewhere (Morgan, 2013). This includes BioWales (the annual Welsh LS sector Signature event); the formalised link with Medicon Village located in Lund, Sweden; and the strong links with the European Diagnostics Cluster Association (ECDA), of which Welsh Government is a member. 42 P a g e

57 Chapter 3. Knowledge Economy and Systems of Innovation within Life Sciences This chapter discusses the concepts and theories that lead to an understanding of the systems underpinning the Welsh Life Sciences (LS) sector. The aim of the following sections is to: 1. Add further context to this research project 2. Inform the reader of the academic literature underpinning this research 3. Assist the reader in understanding the research approach, design and execution. In this chapter, theory and models on the following topics are discussed: Knowledge Knowledge-based economy Diffusion of innovation Systems of innovation It is important to delineate these topics in the order presented, as they are inter-related and also follow a logical progression. These topics progress in a series, ultimately coalescing to promote a better understanding of the theories of systems of innovation. Theories relating to systems of innovation are particularly important, since they directly influence the comprehension of both the context of the Welsh LS sector and the intervention strategy proposed to help support the Welsh LS sector. Although many other topics could be covered within the scope of the research, this chapter is confined to the outlining of knowledge and innovation particularly in the context of this specific study. Further reading on related topics, such as regional development, innovation management and policy development can be found in Table P a g e

58 Table 3-1. Further Topics and Reading Topic Innovation Management Policy Development Regional Development Further Reading Title Innovation management and new product development (Trott, 2008) The Open Innovation Journey: How firms dynamically implement the emerging innovation management paradigm (Chiaroni et al., 2011) The innovator's dilemma: when new technologies cause great firms to fail (Christensen, 2013) The innovator's solution: Creating and sustaining successful growth (Christensen and Raynor, 2013) Cultivating Development: An Ethnography of Aid Policy and Practice (Mosse, 2005) Guidance for evidence-informed policies about health systems: linking guidance development to policy development (Lavis et al., 2012) Theories of the policy process (Sabatier and Weible, 2014) Pathways to industrialization and regional development (Scott and Storper, 2005) The Case for Regional Development Intervention: Place Based Versus Place Neutral Approaches (Barca et al., 2012) Regional development and spatial planning in an enlarged European Union (Alden et al., 2012) 3.1. Knowledge Before describing the complex theories of knowledge economies, diffusion of innovation and innovation systems, it is important to take the time to understand their building blocks. This section describes knowledge in its basic form, its relation to production and its effects on innovation and the wider economy. Data (or more accurately a datum) is a value By itself this has no meaning. When data is placed in a context it acquires meaning Information that is structured and organized as the result of cognitive processing and validation becomes knowledge. Knowledge answers the how questions. Knowledge usually splits into two kinds explicit, for example written guidelines, that are readily available and can be easily passed on to others, and implicit, being internalized, gained by experience or intuition that the individual may not be consciously aware they possess and often much harder to formalize Wisdom is an extrapolative process which includes knowledge in an ethical and moral framework. Wisdom is the process by which we discern right from wrong and good from bad. Paul Cooper (2014) 44 P a g e

59 Smith describes the lack of a definition of knowledge-based economy, which possibly results from a failure to define the term knowledge (2002). The Organisation for Economic Cooperation and Development (OECD) has attempted to codify knowledge into four groups (OECD, 1996): 1) Know-what: Knowledge of facts and information 2) Know-why: Knowledge of scientific principles or laws of nature 3) Know-how: Knowledge contained in skills and capabilities, usually through experience 4) Know-who: Knowledge of people who have access to further knowledge. Whilst these four groups are useful in understanding how different types of knowledge exist, they may not be so clear regarding in how they are used within the context of a knowledgebased economy. Smith (2002) attempts to capture four new approaches to knowledge in the context of the emerging knowledge-based economy: 1) Knowledge is more important as an input to production 2) Knowledge is more important as a product itself 3) Codified (documented or explicit) knowledge is valued more than tacit (experiential or personal) knowledge 4) Advances in information and communications technology (ICT) accelerate the economy. These four areas are explored further in the following sections Knowledge as an Input to Production According to Smith (2002), knowledge is, quantitatively and qualitatively, becoming more important as an input to production than the other economic inputs such as the traditional primary factors of production labour, capital and land. In his book, From Capitalism to Knowledge Society, Drucker (1998) even describes knowledge as becoming the one factor of production, side-lining both capital and labour. As seen in Figure 3-1, the evolution of the knowledge economy focuses on a gradual progression from an agricultural economy to that of 45 P a g e

60 a knowledge economy. In other words, as an economy becomes more modernised, a shift in the labour force takes place. Manual workers producing goods and providing services are replaced with knowledge workers contributing ideas, knowledge and information (Drucker, 1966). Figure 3-1. Evolution of a Knowledge Economy in Modern Economies Over time, modern economies have evolved from basic agricultural economies producing food to more evolved economies providing manufactured goods and services. This process takes place over a vast period of time. Once an economy has sustained a higher standard of living through this modernisation process, the economy evolves to one that is knowledgebased, using knowledge as both an input and output of production. SOURCE: Author adaptation of (Drucker, 1968, Bell, 1976, Masuda, 1980, Blackler, 1995, Cortada, 1998) Knowledge is More Important as a Product Itself Describing SMEs, Chetty and Wilson (2003) have suggested that the only real (intangible) asset of modern day SMEs is knowledge, which could be represented by a publication or patent. Bell (1976) proposed that knowledge would be key in a post-industrial society, supporting Drucker s assertion (1968) on the growing importance of knowledge as a product: The new emerging industries... embody a new economic reality: knowledge has become the central economic resource. Industries which rely on knowledge include: the LS industry, the ICT sector, the field of market research and academic institutions. 46 P a g e

61 Figure 3-2. Patent Applications and Patent Grants Worldwide, The data above are the non-cumulative number of worldwide patent applications and grants worldwide. SOURCE: (WIPO, 2011) According to the World Intellectual Property Office (WIPO) (2014), intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish. Just like other forms of property, IP can be assigned a market value, enabling its trade, purchase and sale. To illustrate the growth of knowledge as a product over time, Figure 3-2 demonstrates the great increase in the number of patent applications since the late nineteenth century. From 1883 to 2011 a 38-fold and 18-fold increase, respectively, in applications filed and patents granted can be observed. Although not conclusive, the sharp rise in patent applications after 1990 may be attributed to globalisation (Chun, 2012). Others believe it reflects the increase in innovation spurred by changes in management of research in the knowledge-based economy (Kortum and Lerner, 1999, Powell and Snellman, 2004). For example, in China, nanotechnology patent applications appear to be 47 P a g e

62 promoted primarily by the public sector rather than being driven by industry and market forces (Huang and Wu, 2012), suggesting that policy and strategic knowledge management can play a role in increasing knowledge output Codified Knowledge is Valued More than Tacit Knowledge Codified (documented or explicit) knowledge, as opposed to tacit (experiential or personal) knowledge, has become more significant over time in modern knowledge-based economies. Codified knowledge is captured in a document, such as an encyclopaedia, patent, or instruction manual. In contrast, tacit knowledge is gained through personal experience, such as the ability to ride a bike or perform calculus. According to Drucker, The systematic acquisition of knowledge has replaced experience as the foundation for productive capacity and performance (Drucker, 1968). For example, a biological researcher entering a new field of research would not start from experience, but would rather start by conducting a deep and thorough search of the literature, in order to capitalise on earlier successful endeavours and to minimise the risk of repeating failures. A researcher can only be as good as their ability to assimilate the existing codified knowledge, understand the gaps of knowledge that exist and build upon these gaps. Efforts to codify knowledge have orientated major commercial and non-commercial endeavours. Since it was founded in 1998, Google has designed its entire 200 billion dollar enterprise around a platform for the delivery of knowledge and knowledge services; with an official company mission to organise the world s information and make it universally accessible and useful (Google, 2012). Although not widely accepted as accurate or unbiased, Wikipedia has operated solely by the knowledge contributions of volunteers; providing codified knowledge, however generalised, to the world - free of charge (Wikipedia, 2012). An example of codified knowledge captured in the LS is the Human Genome Project (HGP). According to the Battelle Memorial Institute, the HGP is the largest single undertaking in the history of biological science and stands as a signature scientific achievement (2011). In 48 P a g e

63 this report, they describe how the U.S. federal investment of $3.8 billion in the HGP from ($5.6 billion in 2010) generated a return on investment (ROI) to the U.S. economy of 141 to 1 every $1 of HGP investment has helped to generate $141 in the economy (Battelle Memorial Institute, 2011). The increased focus and importance of codified knowledge should not detract from the important role tacit knowledge still plays in a knowledge economy, especially for the individuals who possess the said knowledge. Labour force and skills do play a major role in the development of knowledge economies (Powell and Snellman, 2004, Cooke, 2001, De Ferranti et al., 2002, Brown and Hesketh, 2004) Advances in ICT Accelerate the Economy. It is believed that technological changes in information and communications technology (ICT) drive the knowledge economy. Advances in technology reduce the hurdles to learn, produce and share new knowledge such as physical constraints, geographical constraints and cost (Christiaanse and Kumar, 2000). A study performed by the OECD in 2000 concluded that ICT capital goods have been important contributors to economic growth in G7 countries (Canada, France, Germany, Italy, Japan, the UK and the US), particularly in the US (Schreyer, 2000). ICT s contribution to growth was identified in nine other countries, showing this phenomenon is not just isolated to the US and that ICT diffusion plays a key role and depends on the right framework conditions, not necessarily on the existence of an ICT producing sector (Colecchia and Schreyer, 2002). The World Bank asserts that ICT crosses all sectors and that research shows that investment in ICT is associated with economic benefits, such as higher productivity, lower costs, new economic opportunities, job creation, innovation, and increased trade and exports (World Bank, 2009). Massachusetts Institute of Technology s (MIT) Sloan Management Review outlines four roles for ICT, which succinctly integrate the importance of knowledge as an input and output, the 49 P a g e

64 importance of codified knowledge and the role of ICT in the knowledge economy (Zack, 1999): 1. capturing knowledge 2. defining, storing, categorizing, indexing and linking digital objects corresponding to knowledge units 3. searching for ("pulling") and subscribing to ("pushing") relevant content 4. presenting content with sufficient flexibility to render it meaningful and applicable across multiple contexts of use Knowledge Economy In this study, knowledge economy is defined as the production and services based on knowledge-intensive activities that contribute to an accelerated pace of technical and scientific advance, as well as rapid obsolescence. The key component of a knowledge economy is a greater reliance on intellectual capabilities than on physical inputs or natural resources" (Powell and Snellman, 2004). The knowledge economy (also known as knowledge-based economy ) was a concept made popular by Peter Drucker in his 1968 book, The Age of Discontinuity. Drucker attributes the phrase to Fritz Machlup, but gives the credit for the concept to Frederick Winslow Taylor, who is regarded as the father of scientific management and one of the first management consultants (Drucker, 1968). The term knowledge economy describes the idea that knowledge plays an increasingly critical role in modernising economies; yet a clear, consistent definition of knowledge-based economy (KBE) does not exist across the different entities performing economic analysis, including the EU, OECD, World Bank and WG. In his seminal paper What is the 'Knowledge Economy'? Knowledge intensity and distributed knowledge bases, Keith Smith believes that the weakness or even complete absence of definition [of knowledge economy], is actually pervasive in the literature this is one of the many imprecisions that make the notion of knowledge economy so rhetorical rather than analytically useful (2002). The Organisation for Economic Co-operation and Development (OECD), an international 50 P a g e

65 organisation of 34 countries founded in 1961 to stimulate world trade and economic progress, has attempted to formulate a definition, as described in Table 3-2. The WG has adopted the OECD s definition. Table 3-2. Definitions of Knowledge-based Economy Organisation European Union (EU) Organisation for Economic Cooperation and Development (OECD) & Welsh Government World Bank Definition The term "knowledge economy" is commonly used to describe economic activity that relies not on "natural" resources (like land or minerals) but on intellectual resources such as know-how and expertise Economy which is characterised by the recognition of knowledge as a driver of productivity and economic growth, leading to a new focus on the role of information, technology and learning in economic performance A knowledge economy is one where organisations and people acquire, create, disseminate and use knowledge more effectively for greater economic and social development SOURCE: (OECD, 1996, European Commission, 2008a, Welsh Government, 2009, World Bank, 2012) Pillars of the Knowledge-based Economy The OECD has suggested that although the pace may differ, all OECD economies are moving towards a knowledge-based economy (OECD, 1999). As this gradual transition occurs, the workforce, companies and governments must align their focus upon this new economy to ensure that they are relevant, competitive and resilient over time. The World Bank has identified four significant elements which are necessary to participate in the knowledge economy. These four elements, referred to as pillars, are outlined in Table P a g e

66 Table 3-3. Mapping the Four Pillars of the Knowledge Economy Pillar Education and Human Resources (EHR) Information and communications technology (ICT) Economic Incentive and Institutional Regime (EIR) Innovation SOURCE: (World Bank, 2005) Description An educated and skilled population is needed to create, share and use knowledge. A dynamic information infrastructure, ranging from radio to the internet, is required to facilitate the effective communication, dissemination and processing of information. A regulatory and economic environment that enables the free flow of knowledge, supports investment in Information and Communications Technology (ICT) and encourages entrepreneurship is central to the knowledge economy. A network of research centres, universities, think tanks, private enterprises and community groups is necessary to tap into the growing stock of global knowledge, assimilate and adapt it to local needs and create new knowledge. Further description of these four pillars will attempt to flesh out their respective importance and provide initial considerations towards capturing a number of interventions which can be deployed to enable further development. It is important to understand them, since they will be taken into consideration when developing the research questions, the methods to answer these questions and the generation of the answers to these questions in future chapters Education and Human Resources A well-educated and skilled population is essential to the efficient creation, acquisition, dissemination and utilization of relevant knowledge, which tends to increase total factor productivity and hence economic growth. World Bank (2005) Education is becoming more important in knowledge-based economies. According to Smith, the only employment categories that are rising across OECD economies are those accessible to individuals holding higher education qualifications (Smith, 2002). Although this statement dates back to 2002, data from the US Bureau of Labor Statistics from calendar year 2011 clearly shows that higher education levels correlate well with lower unemployment rates and higher median weekly earnings, which can be observed in Figure 3-3 (BLS, 2011). Whilst those with less than a high school diploma had about twice the unemployment rate and 52 P a g e

67 roughly half the earnings compared to the average US citizen, those with professional degrees had an unemployment rate about three times lower and a median income twice the average of the average US citizen. Countries such as Finland, Norway and Sweden currently have programmes that offer either free or heavily subsidised higher education opportunities to residents of the EU. Although it cannot be definitive that this education policy is directly responsible for their successes, it appears that their higher education strategies have worked, as these countries have all been in the upper echelons of the KEI rankings, as seen in the World Economic Forum s (WEF) global competitiveness rankings (WEF, 2010). The WEF claims: Quality higher education and training is crucial for economies that want to move up the value chain beyond simple production processes and products. In particular, today s globalizing economy requires countries to nurture pools of well-educated workers who are able to adapt rapidly to their changing environment and the evolving needs of the production system. WEF (2010). Figure 3-3. US Unemployment Rates and Median Earnings by Education Level, 2011 In the US, a trend can be seen between education levels, unemployment rate and earnings. In general, as higher degrees of education are obtained, unemployment rate decreases and earnings increase. Note: Data are for persons age 25 and over. Earnings are for full-time wage and salary workers. SOURCE: US Bureau of Labor Statistics (BLS), 2011 Current Population Survey (BLS, 2011) 53 P a g e

68 Human resources are also being taken more seriously by policy makers around the world. Companies that engage in human capital management, also known as talent management, are calculated and careful in how they attract, recruit, train, develop, maintain, promote and move employees through the organisation. Research has shown that successful human capital management leads to economic benefits such as increased revenue, customer satisfaction, productivity and market capitalisation (Parvatiyar and Sheth, 2001, Lewis and Heckman, 2006, MacMillan, 2008). Variables considered for education include: literacy rates; average years of schooling; secondary and tertiary enrolments; standardised test results; and percent of GDP spending on education. For the human resources component, the World Bank's Knowledge Assessment Methodology (KAM) scoring system (World Bank, 2005) considers values from unemployment rates, pay, talent retention and training services across multiple industries and demographics Information and Communications Technology (ICT) Information and communications technologies (ICT) infrastructure in an economy refers to the accessibility, reliability and efficiency of computers, phones, television and radio sets, and the various networks that link them. The World Bank Group defines ICT to consist of hardware, software, networks, and media for collection, storage, processing transmission, and presentation of information in the form of voice, data, text, and images. They range from the telephone, radio and television to the Internet. World Bank (2005) Pelgrum states that, ICT is not only the backbone of the Information Society, but also an important catalyst and tool for inducing educational reforms that change our students into productive knowledge workers (2001). The ICT sector is crucial to knowledge-based economies, accounting for approximately 10 percent of GDP in OECD countries (OECD, 2004). The World Bank and World Economic Forum measure the proliferation of ICT through variables such as telephones, internet users, internet bandwidth, televisions and newspapers 54 P a g e

69 per capita; as well as percent GDP expenditure on ICT and availability of government services online (Dutta et al., 2003). Further data from the OECD (2010) confirms that the total ICT sector has contributed to economic growth at a steady pace, led by the ICT services. Even more recent data confirms this idea, by concluding that there is a positive relationship between real GDP growth and ICT development for 153 countries over the world (Kooshki and Ismail, 2011). The modernisation of telephones, the internet and media outlets has revolutionised the act of sharing information (Baym et al., 2004). For example, messages that would have taken weeks to spread across a multi-nation corporation 40 years ago can now be sent out via , reaching employees, managers, suppliers and clients (Mehta and Sivadas, 1995). Political uprisings, such as the Arab Spring phenomenon in the Middle East ( ), were being organised in real-time media such as Facebook and Twitter (Howard et al., 2011, Lotan et al., 2011, Huang, 2011). Figure 3-4. OECD Fixed Broadband Subscriptions by Technology, 2011 This chart displays the level of fixed (wired) broadband subscription penetration in OECD countries. Many countries in the top ranking KEI index countries are also near the top of this list. It is noteworthy that Korea and Japan lead the world in the largest subscribers of fibre and LAN connections per capita. SOURCE: OECD (2011) 55 P a g e

70 Personal computers are becoming increasingly important tools for the knowledge worker. Computers have paved the way, not only for communication over the internet, but also for the capture and retrieval of codified information. This in turn leads into a self-perpetuated cycle of knowledge consumption and creation. Likewise, investments into ICT in the US have been shown to be directly correlated with a boom in labour productivity growth (Oliner and Sichel, 2000, Stiroh, 2001, Gordon, 2003, Marrano et al., 2009). Many of the top performing countries now have greater than twenty five broadband subscriptions per 100 inhabitants (Figure 3-4). This signifies a dramatic increase in high speed internet uptake, considering that just 15 years ago the fastest consumer-based dial-up internet connection was running at 56 kilobits per second, or roughly 500 to 1000 times slower than currently available within an OECD country today. Based on OECD data, the top five KEI ranked countries rank within the top 15 internet download speeds in the world (2011) Economic Incentive and Institutional Regime A regulatory and economic environment that enables the free flow of knowledge, supports investment in Information and Communications Technology (ICT), and encourages entrepreneurship is central to the knowledge economy. World Bank (2005) The economic incentive regime within a country plays a key role for its future economic development. It not only describes the free flow of knowledge, but sets the stage for how investors, workers and collaborators are willing to work in these environments. The World Bank measures the Economic Incentive Regime by dividing it into two main categories: economic regime and governance. The economic regime covers metrics involving costs of company formation and enforcement of business contracts; economic indicators such as gross capital formation and exports as % of GDP; soundness of banks; and local competition measurements. The governance category includes measurements such as regulatory quality, 56 P a g e

71 rule of law, government effectiveness, voice and accountability, political stability, control of corruption and freedom of the press. Corruption is increasingly becoming a barrier to economic growth, especially within a knowledge-based economy. The Corruption Perceptions Index (CPI) by Transparency International ranks 183 countries on thirteen assessments and business opinion surveys carried out by ten independent and reputable institutions, such as the World Bank, World Economic Forum and Global Insight (Transparency International, 2010). The surveys and assessments used to compile the index include questions relating to the bribery of public officials, kickbacks in public procurement, embezzlement of public funds and questions that probe the strength and effectiveness of public-sector anti-corruption efforts (Transparency International, 2011). According to Wilhelm, a highly significant correlation between real gross domestic product per capita (RGDP/Cap), a measure of economic productivity and CPI exists; explaining over 75 percent of the variance of RGDP/Cap (2002). As seen in Table 3-4, countries ranking in the top five of the 2012 KEI index ranked in the top seven (least corrupt) of the CPI index below. The UK, US and BRIC countries also generally scored similarly when compared to their KEI indexes. 57 P a g e

72 Table 3-4. Worldwide Corruption Perceptions Index (CPI) of Select Countries, Country 2011 Rank Index New Zealand Denmark Finland Sweden Singapore Norway Netherlands United Kingdom United States Brazil China India Russia CPI is based on expert assessment and opinion surveys. A country/territory s score indicates the perceived level of public sector corruption there on a scale of 0-10, where 0 means that a country is perceived as highly corrupt and 10 means that a country is perceived as very clean. A country s rank indicates its position relative to the other countries/territories included in the index. The top five ranked countries in the 2012 KEI index are in the top seven in this 2011 CPI index, with New Zealand and Singapore. SOURCE: (Transparency International, 2011) Innovation Innovation is a tricky concept that can sometimes be difficult to quantify and measure (Smith, 2005) as it does not have one single meaning. A widely accepted definition of innovation is given by Schumpeter in The Theory of Economic Development (1934), which defines innovation as one of five things (or combination thereof): The introduction of a new good or a new quality of the good The introduction of a new method of production The opening of a new market The conquest of a new source of supply The carrying out of the new organisation of an industry. 58 P a g e

73 The Oslo Manual, developed by both Eurostat and the OECD, defines innovation as the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations and lists only four types of innovation, similar to the five listed by Schumpeter (OECD, 2005). According to the UK s Department for Business, Innovation, & Skills (BIS), Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value (2011a). This study adopts on the BIS s definitions as it is broader in scope and, although a devolved nation, Wales exists within the context of UK government Diffusion of Innovation Although innovative leaps forward in technology can occur, they are not always adopted by mainstream society. The exploitation component of innovation is essential to understanding the concept. Gabriel Tarde (1903), also known as the founding father of innovation diffusion research, outlined an innovation-decision process describing how innovations must be adopted by society in an s-shaped curve. Everett Rogers took this work further in Diffusion of Innovation, where he plotted the innovation diffusion curve in terms of a Gaussian distribution over time; where only a slim 16 percent of the population will be innovators or early adopters, until the time technology becomes widely accepted in society, as seen in Figure 3-5. According to Rogers, early adopters are visionaries, whereas the early majority are pragmatists ; communication between these two groups is not developed (Rogers, 1962). Geoffrey Moore defined the gap between the early adopters and early majority as The Chasm (2002), essentially a do-or-die moment for an innovation either to be accepted or to fail. Malcolm Gladwell identified this moment as the Tipping Point, or the point where the early majority begins to adopt the innovation and sales increase dramatically. 59 P a g e

74 2.5% 13.5% 34% 34% 13.5% 2.5% Figure 3-5. Diffusion of Innovation: The Chasm and The Tipping Point Once the The Tipping Point has been reached, the marketing of high-tech and innovative products requires a leap across The Chasm. If successful, product sales will increase dramatically after reaching the Tipping Point. If not, the product will most likely not reach the mainstream consumer. SOURCE: Adapted from Roger s Diffusion of Innovation (1962), Moore s Crossing the Chasm (2002) and Gladwell s The Tipping Point (2000) A series of theories regarding diffusion of innovation describe this process as closed, open or embedded, as described in the following sections. These definitions of the diffusion of innovation are rather rigid and digital, whereas in practice, organisations could operate within all of, a range of, or none of them, depending on the level of innovation and confidentiality required for the innovation. For example, a small pharmaceutical company may have discovered a disruptive innovation [see (Christensen et al., 2008, Bower and Christensen, 1995)] Innovation 1.0: Closed Innovation Traditional theories suggested that innovation is a linear process, as shown in Figure 3-6. In this view, innovation begins with new scientific research, increases in a step-wise manner through development and production and ends once a product is sold to the end consumer. 60 P a g e

75 Figure 3-6. Linear (or Stage Gate) Model of Innovation SOURCE: (OECD, 1996), (Cooper, 1990) Newer models of innovation argue that innovation can come from multiple sources. In their chain-link-model of innovation (see Figure 3-7), Kline and Rosenberg countered this linear model by stressing three basic aspects of innovation (1986): innovation is not a linear process but one involving many interactions and feedbacks in knowledge creation innovation is a learning process involving multiple inputs innovation does not depend on invention processes and such processes tend to be undertaken as problem-solving within an on-going innovation process rather than an initiating factor. Innovation is measured by the World Bank through variables relating to foreign direct investments, royalty and licence fees, science and engineering enrolment rates, number of researchers, articles published, international article co-authorship, article citations, patents filed and granted, university-company collaborations, venture capital availability and intellectual property protection. 61 P a g e

76 Figure 3-7. Chain-Link Model of Innovation SOURCE: Adaptation of Kline and Rosenberg s An overview of innovation (1986) Innovation 2.0: Open Innovation Open Innovation describes an emergent model of innovation in which firms draw on research and development that may lie outside their own boundaries. Henry Chesbrough (2008) Although the concept of open innovation has been around since the 1960s, it was made popular by Professor Henry Chesbrough at University of California Berkeley in his book titled Open Innovation: The new imperative for creating and profiting from technology. His book argues that, Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology (2003b). By opening up the boundaries of a firm for both research and development to new firms, new products can be delivered to new markets. Furthermore, it allows firms to specialise, such as in research, development, marketing and sales. Essentially, open innovation enables cost, talent, knowledge, risk and reward sharing. 62 P a g e

77 Figure 3-8. Open Innovation Open innovation requires a firm to open its boundaries with other firms in order to research and develop new projects and reach new markets. It allows companies to bring new products to market by sharing cost, talent, knowledge, risk and rewards. SOURCE: Adapted from Chesbrough (2003a) In relation to LS companies, open innovation has become one of the standard modes of research and development. According to Gassmann, Enkel and Chesbrough, the pharma and biotechnology sectors too have a broad spectrum of open innovation models. Open innovation starts with simple outsourcing deals with contract service organizations to reduce overcapacities, cut costs, grow through complementary assets or reduce risks. More strategic modes of open innovation have already become a standard in the pharma industry (2010) Innovation 3.0: Embedded Innovation Embedded innovation appears to be the next step in evolution of innovation, deemed Innovation 3.0 by Joachim Hafkesbrink and Markus Schroll (2011a). The evolution of Innovation 3.0 can be seen in Figure 3-9. Embedded innovation is defined by Hafkesbrink and Schroll as the fundamental ability of a firm to synchronise organizational structures, processes and culture with open collaborative learning processes in surrounding communities, networks and stakeholder groups so as to ensure the integration of different external and internal knowledge, i.e. competences or technological capabilities, and to exploit this knowledge to commercial ends (2011a). In 63 P a g e

78 other words, extending collaboration is done by extending the organisational boundary around the company to incorporate a greater number of stakeholder groups. Figure 3-9. Evolution of Embedded Innovation SOURCE: Adapted from Hafkesbrink and Schroll (2011a) The goal of embedded innovation is to include all individuals in the research and development process (Asheim and Isaksen, 1997). These individuals would include innovators, researchers, experts and pro-sumers as seen in Table 3-5 (Hafkesbrink and Schroll, 2011b). Pro-sumers are individuals who both produce and consume knowledge and/or knowledge-based products; they consume the products and produce new or modified products by providing continuous feedback to the research and developers. A prime example of this would be beta testers for software. They are given access to pre-release software with the purpose of finding bugs and suggesting product features (Beizer, 2003). 64 P a g e

79 Figure Simplified Model for Embedded Innovation in the Life Sciences SOURCE: Adapted by the author from Hafkesbrink and Schroll (2011a). Presented by the researcher at the Celtic Alliance for NanoHealth, Dublin, 17 October As the name suggests, embedded innovation relies on embedding its actors into Communities of Knowledge for collaborative learning (Konstapel, 2010), where they can gain access to the key stakeholders described in Table 3-5. The greater these communities of knowledge, or knowledge networks, the greater level an enterprise can utilise the access to knowledge. 65 P a g e

80 Table 3-5. Involvement of Stakeholders in the Embedded Innovation R&D Process Coideation Codesign Codevelopment Co- Production Consumption Innovators Researchers Experts Pro-sumers SOURCE: Adapted from Hafkesbrink and Schroll (2011a) 3.4. Systems of Innovation An innovation system refers to the network of institutions, rules and procedures that influences the way by which a country acquires, creates, disseminates and uses knowledge. World Bank (2005) The system of innovation (SI or innovation systems ) approach has been used and endorsed by a wide range of international organisations for the derivation of policy frameworks such as the OECD (Numminen, 1996), the World Bank (Padoan, 1997) and the EU (Hauknes, 1996), as well as non-governmental organisations (Morel et al., 2005, Godø, 2008) and governments in both the developed (Freeman, 1995) and emerging countries (Alcorta and Peres, 1998). With regard to the approach to systems of innovation, scholars differ on whether they should be analysed at a national (Nelson, 1993, Nelson and Rosenberg, 1993, Patel and Pavitt, 1994, Edquist and Johnson, 1997), regional (Cooke et al., 1997, Braczyk et al., 1998, Cooke, 2001), sectoral (Breschi and Malerba, 1996, Cooke, 2002a), or technological (Carlsson and Stankiewicz, 1991) level. Although each of the approaches has a different view on innovation, Edquist argues that all of these perspectives can be grouped into the systems of innovation approach (Edquist, 2005). Fagerberg argues that a system of innovation provides a framework enabling firms to innovate not in isolation, but rather in collaboration and interaction with other organisations and institutions, or through a system of innovation (Fagerberg, 2004). Edquist and Johnson state that a system of innovation is more than an R&D system (Edquist and Johnson, 1997), 66 P a g e

81 but rather all the important economic, social, political, organisational, institutional, and other factors that influence the development, diffusion, and use of innovations (Edquist and Johnson, 1997). Systems of innovation conceptualizes innovation as an evolutionary and social process (Doloreux and Parto, 2005) in a system of interconnected players and stakeholders (Braczyk et al., 1998). According to Deoloreux, the flow of information and knowledge is of the upmost importance to drive forward an innovation system (Doloreux, 2002). Lundvall describes an innovation system as consisting of elements and relationships that interact in the production, diffusion and deployment of new and economically useful knowledge (Lundvall, 1992). Edquist describes three types of learning systems of innovation: innovation (by firms), R&D (by universities) and competence building through the creation of human capital (Edquist, 2005). Conway and Steward (2009) argue that the systems of innovation approach was originally implemented to understand national innovation systems, but is commonly being employed to understand innovation at the regional and sectoral levels. Edquist (2005) argues that an innovation system can take on supranational, national, regional and sectoral forms at the same time. This study draws from the systems of innovation literature as the study of the Welsh LS sector takes on the attributes of a handful of these approaches namely national (UK), regional (Wales) and sectoral (LS) systems of innovation, as well as the triple/quadruple helix and clusters and competitiveness models. Within the context of the knowledge-based economy, as well as regional and sectoral innovation systems, clusters and competitiveness greatly influence thinking and policymaking, especially in the LS sector (Sainsbury, 1999, Cooke, 2002b, Cooke, 2002a, Coenen et al., 2004, Casper, 2007, Breznitz et al., 2008, Casper, 2008, Valentin et al., 2008, Papaioannou and Rosiello, 2009, Su and Hung, 2009, Zechendorf, 2011). The terms biocluster and bioregion have entered the lexicon of academics, politicians and industrialists. Politicians 67 P a g e

82 and academics concede that their terminology can be unclear where a cluster or region starts or finishes (Sainsbury, 1999, Cooke, 2002b, Cooke, 2002a). The concepts of national systems of innovation, regional systems of innovation, sectoral systems of innovation, triple and quadruple helix and clusters and competitiveness are described in more detail National Systems of Innovation National Systems of Innovation (NSI) is used interchangeably in the literature with National Innovation System in the literature. Freeman (1988) coined the term National Innovation System, although it could be argued that Friedrich List s The National System of Political Economy (List and Colwell, 1856) was the first to describe innovation systems at the national level. The OECD (1997) quotes a range of academic authors defining NSI as a framework for understanding how innovation occurs within a national boundary: The elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge... and are either located within or rooted inside the borders of a nation state (Lundvall, 1992).... A set of institutions whose interactions determine the innovative performance... of national firms (Nelson, 1993). The national institutions, their incentive structures and their competencies, that determine the rate and direction of technological learning (or the volume and composition of change generating activities) in a country (Patel and Pavitt, 1994). That set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artefacts which define new technologies (Metcalfe, 1995). The network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies (Freeman, 1995). 68 P a g e

83 Many of these definitions provided by the OECD revolve around the institutions within a nation s border and how they influence the organisations and stakeholders in the innovation system, especially within the context of the knowledge-based economy outlined previously in this chapter. Edquist explains the difference between organisation and institution as: Organisations are formal structures that are consciously created and have an explicit purpose. They are players or actors ; (Edquist, 2005) Institutions are sets of common habits, norms, routines, established practices, rules, or laws that regulate the relations and interactions between individuals, groups, and organisations. They are the rules of the game (Edquist, 2005). The NSI approach stresses that the flows of information and technology between people, enterprises and institutions are key to the process of innovation (OECD, 1997). Further to this, the OECD argues that innovation and technology development are the result of a complex set of relationships among actors in the system, which includes enterprises, universities and government research institutes, which can be measured through four types of interactions (OECD, 1997): interactions among enterprises, interactions among enterprises, universities and public research institutes, diffusion of knowledge and technology to enterprises, personnel mobility. Edquist and Furman et al describe NSI through the idea of national innovation capacity (also described as innovativeness (Mairesse and Mohnen, 2002)) where countries have unique knowledge stocks evidenced by different levels of outputs, such as patents, publications, etc. (Edquist and Johnson, 1997, Furman et al., 2002). These outputs are influenced by shared norms, routines and established practices within a country s borders (Isaksen, 2001). To promote innovation, Chung suggests that actors must have high levels of strong linkages based on trust; trust which should be supported and promoted by the government (Chung, 69 P a g e

84 2002). Dodgson et al also suggest that the government should coordinate and facilitate connectivity to enable complex economic systems (Dodgson et al., 2011) Regional Systems of Innovation Rather than viewing systems of innovation at the national level, some scholars believe that they are better suited to be analysed at the regional level. This belief led to the concept of regional systems of innovation or regional innovation systems (RIS) (Cooke et al., 1997, Braczyk et al., 1998, Isaksen, 2001, Muller and Zenker, 2001). Asheim and Gertler describe how regional differences can influence the interaction between firms and describe how innovation policy is taking place at the regional level through case studies in the EU (Asheim and Gertler, 2005). Furthermore, they state that, the regional innovation system can be thought of as the institutional infrastructure supporting innovation within the production structure of a region (Asheim and Gertler, 2005). Cooke et al believe that the regional level is the most appropriate to plan networking approaches (Cooke et al., 1997). Specific knowledge can accumulate in certain regions giving them individual knowledge capabilities making them attractive places to tap into these resources (Cooke et al., 2007). Authors Asheim & Coenen (2005) argue: Through the regionalisation of innovation policy more accurate consideration can be paid to the region s specific context and circumstances in terms of the industrial structure, institutional set-up and knowledge base. Thus, it contains the potential for innovation policy to be more focused by providing support that is needed given the demands generated by industrial specificities. In this the distinction between analytical and synthetic knowledge and its important consequences for innovation policy are an example of such sharper focus that can be catered for at the regional level. Notwithstanding this, regionalisation should not be understood as regionalism by neglecting the embeddedness of regions in a national and trans-national framework. This argument provides a rationale for adapting the regional and sectoral (further described in the next section) systems of innovation approach specifically to the Welsh region within the framework UK and EU. 70 P a g e

85 Sectoral Systems of Innovation Unlike national or regional systems of innovation, sectoral systems of innovation focus on a specific sector of the economy rather than a fixed geographic area. Malerba, a seminal author on sectoral innovation systems, proposes that: a sectoral system is a set of products and the set of agents carrying out market and non-market interactions for the creation, production and sale of those products. A sectoral system has a specific knowledge base, technologies, inputs and demand. Agents are individuals and organizations at various levels of aggregation. They interact through processes of communication, exchange, co-operation, competition and command, and these interactions are shaped by institutions. A sectoral system undergoes change and transformation through the co-evolution of its various elements. Malerba (2002). Similar to national and regional systems of innovation, sectoral systems of innovation look at the institution, actors, networks and dynamics of their interactions (Breschi and Malerba, 1996, Malerba, 2001, Wengel and Shapira, 2001, Cooke, 2002a, Malerba, 2002, Bergek et al., 2005, Malerba, 2005, Patel et al., 2008, Malerba and Mani, 2009). Unfortunately, there is not a one-size-fits all approach different sectors in different regions require different policies supporting them within the sector ecosystem (Conway and Steward, 2009, Malerba and Nelson, 2011, Malerba and Nelson, 2012), especially when a sector is catching up with similar sectors in other regions. Malerba and Nelson (2011) identify the common and differentiating factors affecting learning and catching up across sectoral systems, which are outlined in Table P a g e

86 Table 3-6. Factors Affecting Learning and Catching Up in Different Sectors Factors Similar in Varying Sectors Across all sectoral innovation systems: Learning and capability building by domestic firms Access to foreign knowledge Education and human capital Active government policy SOURCE: Adapted from (Malerba and Nelson, 2011) Factors Different in Varying Sectors Pharmaceuticals: Universities doing research Institutional policy toward intellectual property rights Policies supporting targeted R&D Automotive: Suppliers (both MNCs and local companies) Software: Training organisations and a skilled labour force Venture capital Telecommunication equipment: Targeted R&D support policies Public research organisations Agro-food: Agricultural research organisations Market institutions Semiconductors: Policies supporting targeted R&D Lastly, some of the work in (sectoral) systems of innovation focuses on system failure (Klein Woolthuis et al., 2005, Godoe and Nygaard, 2006, Klerkx and Leeuwis, 2009). By introducing this alternative view on innovation, the [Systems of Innovation] literature has given way to the identification of new rationales for government intervention, the so-called system failures (Klein Woolthuis et al., 2005). This concept employs categorisation of failures within a nation, region and/or sector that can serve as a rationale for innovation policy design and generating a policy framework Triple, Quadruple and N-tuple Helix The term Triple Helix was first described by Lowe in 1982 (Lowe, 1982) and further investigated by Leydesdorff in 1995 (Leydesdorff, 1995). The objective of the Triple Helix theory and practice is the creation and consolidation of knowledge-based regional innovation systems (Etzkowitz and Ranga, 2010). It has been used to design and implement policies in a 72 P a g e

87 variety of regions such as Sweden (Jacob, 2006), Brazil (Etzkowitz et al., 2005), Malaysia, Algeria and Ethiopia (Saad et al., 2005). As the name implies, the key feature of the Triple Helix theory is the interaction between three actors in the innovation ecosystem: government, industry and academia. The model describes how gaps between research, market and policies are crossed through the interaction between these actors (Leydesdorff and Etzkowitz, 1996). Leydesdorff and Zawdie suggest that: on the normative side of developing options for innovation policies, the Triple Helix model provides us with an incentive to search for mismatches between the institutional dimensions in the arrangements and the (hypothesized) social functions carried by these arrangements. The frictions between the two layers (knowledge-based expectations and institutional interests), and among the three domains (economy, science, and policy) provide a wealth of opportunities for puzzle solving and innovation. (Leydesdorff and Zawdie, 2010) Active policymaking is a necessary ingredient of a Triple Helix system, giving the government a clear role (Leydesdorff, 2000). This role is to facilitate greater frequency of interactions and to improve the level of interaction into collaborations and partnerships (Inzelt, 2004). The Triple Helix model analyses the interconnected actors and stakeholders within a national and/or regional innovation system and occupies a prominent position in the learned literature (Lowe, 1982, Leydesdorff, 1995, Bunders et al., 1999, Etzkowitz and Leydesdorff, 2000, Campbell et al., 2004, Park et al., 2005, Jacob, 2006, Smith and Bagchi-Sen, 2010). It is assumed that government, industry and academic interaction within Wales would be just as important as other national and regional innovation systems. The Quadruple Helix emphasises the importance of also integrating the perspective of the media-based and culture-based public. What results is an emerging fractal knowledge and innovation ecosystem, well-configured for the knowledge economy and society (Carayannis 73 P a g e

88 and Campbell, 2009). Government, academia, industry, and civil society are seen as key actors promoting a democratic approach to innovation through which strategy development and decision-making are exposed to feedback from key stakeholders, resulting in socially accountable policies and practices (Carayannis and Campbell, 2012a). Further to the triple and quadruple helix, it has been suggested that additional actors and interactions beyond the traditional three (academia, government and industry) might be more applicable, robust and appropriate (Afonso et al., 2010, Carayannis and Campbell, 2012b, Leydesdorff, 2012) such as end users and non-governmental organisations (NGOs) (Bunders et al., 1999). Leydesdorff states, Empirical studies inform us whether more than three helices are needed for the explanation. The Triple Helix indicator can be extended algorithmically, for example, with local global as a fourth dimension or, more generally, to an N-tuple of helices (Leydesdorff, 2012). Without claiming any limitation on the Triple Helix model, Systems of Innovation with N-tuple or an alphabet of (20+) helices can be envisioned (Leydesdorff, 2012). This study adapts both the core Triple Helix and N-tuple Helix models by incorporating the views of other important actors, stakeholders, institutions and organisations within the framework of the institutions existing within the Welsh LS sector Clusters and Competitiveness Michael Porter at Harvard Business School first introduced the idea of clusters (also known as industry cluster, competitive cluster, or Porterian cluster) and competitiveness in his seminal work titled The Competitive Advantage of Nations (Porter, 1990). Studies demonstrate that companies operating within a cluster are more innovative than companies not associated with clusters (Baptista and Swann, 1998, Bell, 2005). Others argue that it is not only when clustered with other innovative companies that the likelihood of innovation increases (Beaudry and Breschi, 2003). Porter argues that clusters provide a competitive advantage 74 P a g e

89 through three methods: 1) increasing productivity, 2) driving innovation and 3) stimulating new businesses (Porter, 1998). One prime example of a cluster often cited is that of Silicon Valley, California, which emerged as a computer technology cluster in the late 20 th century (Arthur, 1990, Saxenian, 1996, Bresnahan et al., 2001, Bresnahan and Gambardella, 2004). According to Bresnahan and Gambardella (2004), established clusters of high-tech industry, such as the Silicon Valley of today, have a number of well-documented advantages for innovation, such as: Entrepreneurs find access to capital more easily Venture capitalists and investment bankers find it easier to locate new investment opportunities Universities with strong technical research capabilities are closely linked to commercial activities Firms participate in thick markets for technical labour, managers and other inputs Information about new technical and market opportunities flows through networks rapidly Lowered costs of invention and growth at the large scale. The concepts outlined above are related to knowledge, the knowledge-based economy, diffusion of innovation and systems of innovation, which help to inform the development of the investigation, which is described in the following chapter. 75 P a g e

90 Chapter 4. Developing the Investigation Chapter 2 and Chapter 3 lay out the context and theoretical underpinnings to this research, within the context of the Welsh LS sector. This chapter describes the first stage of the research, Developing the Investigation. Within this stage, initial research was performed to help define the research aims, objectives and questions. This study progressed in four stages, as described in Table 4-1. Table 4-1. Developing the Investigation Stage of Research Sub-stage of Research Activities Developing the Investigation Initial Research Participatory observation Contextual research Literature review Pilot interviews Internal Discussion Group* Define Research Aims and Objectives Internal Discussion Group Formulate Research Questions Internal Discussion Group * The Internal Discussion Group (IDG) consists of supervisors and advisors who operate within the LS sector. Please see Section below for further details. These stages are further broken into sub-stages and activities. Although Table 4-1 describes the methods in a linear manner, the development of the theory and methodology for this study were iteratively refined. In the initial research phase Developing the Investigation, participatory observation, multidisciplinary literature review (Chapter 2 and Chapter 3), pilot interviews and discussions within the Internal Discussion Group (IDG) were undertaken to assist with defining the research aims, objectives and questions. Both the researcher and the members of the IDG have had a range of experiences and networks which extended across the LS sector, which helped to inform the research. After the gaps in knowledge were identified, the research aims and research questions were selected and refined within the IDG. 76 P a g e

91 4.1. Initial Research As described in Chapter 2, LS has received much support from both the UK government and WG, which has prompted a wide range of activities and initiatives. However, the early findings from the literature review, participatory observation, pilot interviews and the IDGs (consisting of the researcher and of supervisors and advisors who operate within the LS sector) demonstrate the need for a coherent, integrated approach to developing the LS sector within a regional as well as an international context. Although the WG is making efforts to provide an integrated solution, there is an absence of research-informed assessment of the LS sector, which could adopt a holistic approach extending beyond mere quantitative assessment of businesses (number of firms, turnover, etc.). This holistic approach considered past policy interventions and additional aspects of policy development, including the stakeholders perceptions of the sector Literature Review A literature review and desk study were performed for both the contextual and academic literature. Due to the evolving, multidisciplinary aspect of the Welsh LS sector, both literature reviews were expanded upon through all subsequent phases. The literature review was undertaken in order: 1. to concentrate on a clearly defined literature review based upon a focused taxonomy adapted from Cooper et al (Cooper, 1988) 2. to follow a clear, yet straightforward methodology for data collection and analysis as described by Cooper et al (Cooper, 1984) These methods clearly defined the literature review before its outset, with the goal of producing a more robust, accurate and representative literature review for the LS sector in Wales. 77 P a g e

92 Participatory Observation In this study, ethnography in the form of participant observation was employed so that the researcher might provide more robust understanding of the field. Participant observation is accepted almost universally as the central and defining method of research in cultural anthropology but in the twentieth century has become a common feature of qualitative research in a number of disciplines (DeWalt and DeWalt, 2002). Ethnography, through participatory observation, was employed passively, actively and completely through experiences in the Welsh LS sector. This assisted with understanding and interpreting data through the eyes of an insider or researcher immersed in the field. Participant observation can represent a range of involvement into the population or field the researcher wishes to study (Spradley, 1980, DeWalt et al., 1998). Spradley outlines five levels of participatory observation (Spradley, 1980): non-participatory, where there is no contact with the population or field of study passive participation, where the researcher is only a bystander moderate participation, where the researcher maintains a balance of objectivity and participation active participation, where the researcher becomes a member of the group by embracing the actions, skills and customs of the population or field of study complete participation, where the researcher is already completely integrated or a member of the population or field of study This research spans the complete participation (from past experiences in the US) and active participation (from experiences in Wales) paradigms. The researcher s roles held in the US prior to this research project and in Wales during this research project are captured in Table P a g e

93 Table 4-2. Researcher s Life Sciences Sector Participation Years Company Location Ownership Size Industry Subsector Job function B P MD D eh Res Dev Com San Diego NASDAQ Small San Diego Private Large San Diego NASDAQ Medium San Diego NASDAQ Large San Diego Private Micro Wales Private Micro Wales Private Micro Wales Private Micro Wales University Micro Wales University Company ownership: NASDAQ = Publicly listed company on NASDAQ exchange. Subsectors: B = Biotechnology, P = Pharmaceuticals, MD = Medical devices, D = Diagnostics, eh = ehealth. Job Functions: Res = Research, Dev = Development, Com = Commercialisation This complete participation experience provided an insider point of view that has assisted with determining the gaps in knowledge, shaping the research aims and research questions and providing a unique world view from within Wales, as described in Sections and The complete participation comes from work experience in the LS sector before commencing this research in 2010 in San Diego, California in a range of company sizes, subsectors and job functions. This amounted to seven years experience of performing research, development and commercial activities in the LS industry in the US primarily from a nonclinical perspective for pharmaceutical and biotechnology companies. Both active participation and complete participation took place in the Welsh LS sector concurrently with this research. Data was obtained through embedding the researcher within LS start-ups and micro companies and through active participation in the LS ecosystem over the three years of this research project, as described by Spradley (Spradley, 1980). The researcher was able to work in five separate roles within the Welsh LS industry. Although the researcher had relevant experience in the LS sector before commencing this research, the 79 P a g e

94 researcher has had no prior experience within the Welsh, British, or European LS industry, with the exception of a general understanding of the regulatory environment for drug development. These roles crossed a range of subsectors including projects researching, developing and commercialising biotechnology, pharmaceutical, medical device, diagnostic and ehealth products. All five roles included job functions embracing commercialisation of the products and included writing business plans, raising public and/or private funds and/or handling intellectual property portfolios. Although data from this active participation was crucial to understanding the sector and obtaining interviews, no data was used either directly from these companies formally engaged with the researcher or from the roles undertaken within them. This research does not mention the research or activities of these companies, but has given the researcher contextual knowledge. This decision was made after careful ethical and practical considerations, both to respect the confidentiality of the companies and to prevent introducing bias to the data collection. However, these experiences have affected the world view of the researcher and will have had an influence on the analysis and interpretation of the data collected. In addition to the industrial roles undertaken in Wales, some passive and moderate participation did take place with other industrial, academic, government, third sector, professional and NHS personnel and groups. Relationships were built with individuals, departments and organisations throughout Wales and the UK by working across the industrial positions. Public and confidential research, operational and strategy meetings spread across multiple stakeholder groups were attended and observed. Building the relationships and attending the meetings allowed greater access to (sometimes confidential) data, reports, interviewees and other sources of data throughout this research. The researcher also participated in wider-reaching events and programmes within the ecosystem, including those from MediWales, WG and the Life Sciences Exchange project. 80 P a g e

95 Figure 4-1 provides a purely illustrative example of the networking and connections that occurred from the beginning to the end of this study. Images were captured through LinkedIn (a professional social networking site), which has an experimental feature titled InMaps. InMaps enables users to visualise their connections and their connections interconnectivity. The researcher had approximately 50 contacts in Wales as of 25 September 2012, consisting primarily of other academic PhD scholars at the University of Wales Global Academy. These contacts were made through induction processes, events and other scholarly interactions. By the end of this project, the researcher had established a network of over 500 individuals in the UK, with a majority of these involved directly in the LS sector in Wales. It must be noted that this data set was not collected in an academic or systematic manner. Although the use of social networking sites, such as LinkedIn, has increased dramatically over the previous two years, the researcher s networks in the US from two biopharmaceutical companies (depicted in the top left and top right of each figure in dark blue and green) remained relatively constant during the seventeen months these two figures were captured. Figure 4-1 is to be used only to gain perspective of the degree of the participatory observation in Wales that occurred during the length of this study. Electronic mail, field notes and discussions involved with participatory observation were reviewed to refresh general themes around the issues involved with the Welsh LS sector. The information and knowledge gathered were used to inform and provide context to the research design by offering insight into the day-to-day activities, requirements and challenges of actors, networks and institutions within the Welsh LS ecosystem. 81 P a g e

96 (a) 25 September 2012: (b) 04 Feb 2014: Amylin Pharmaceuticals Life Sciences in Wales Favrille BioTox Sciences Isis Pharmaceuticals Scripps Research Institute San Diego Science Centre Other connections Amylin Pharmaceuticals University of Wales Favrille Isis Pharmaceuticals Life Sciences in Wales ILS2, Swansea, Wales ILS1, Swansea, Wales Other connections Figure 4-1. Networks Established through Participatory Observation Each dot represents an individual connection with the researcher and lines represent their connections with each other. Individuals are located more closely based on their interconnectivity. The top eight clusters are colour-coded automatically (legends provided for each figure). (a) The LinkedIn InMaps figure on the left represents the researcher s network on 25 September 2012 (Welsh network circled in red). (b) The LinkedIn InMaps figure on the right represents the researcher s network as of 04 February 2014 (Welsh network circled in green) Pilot Interviews Pilot interviews were performed during this initial research stage to help inform the research beyond the participatory observation and literature review. Eight stakeholders within the Welsh LS sector were interviewed in order to help guide the shaping of the research aims, objectives and questions. A list of the pilot interviewees can be found in Table 4-3. Table 4-3. Pilot Interviewees by Gender, Location, Subsector and Interaction Type 82 P a g e

97 Interview Number Subsector Location Position A G I 3 rd NHS P Interaction Pt01 Cardiff Professor, Interview Chief WG Officer Pt02 Cardiff Professor Interview Pt03 Cardiff Director Interview Pt04 Cardiff Director Interview Pt05 Swansea Sr. Manager Interview Pt06 Swansea Sr. Manager Interview Pt07 Swansea Director Interview Pt08 Swansea Director Interview Pt = Pilot, A = Academia, G = Government, I = Industry, 3 rd = Third sector, NHS = National Health Service, P = Professional, + = Role in subsector, - = No role in subsector, WG = Welsh Government The pilot interviews included data gathered from eight interviewees operating in the LS sector in Wales, who were selected to represent six subsector groups. These subsectors included those from the triple and quadruple helix (see section 3.4.4) and two others altogether: academics, industry, government, third sector, the NHS and professional groups. Senior members of staff were targeted for interview recruitment, this included senior managers, directors and professors. The pilot interviews included a Chief Officer of WG, a Director of a LS incubator in Cardiff, a professor in LS, a Director of a UK-wide third sector LS organisation, two senior managers of an LS incubator, a former director of an international bank headquartered in the UK and the CEO of a start-up LS company. The pilot interviewees were given a brief introduction to the study with the investigation s definition of Life Sciences, followed by a semi-structured interview. Pilot Interview Question 1: What is your view of the Life Sciences sector in Wales? Pilot Interview Question 2: Where are the gaps in knowledge for you as a stakeholder with regard to the Life Sciences sector in Wales? Pilot Interview Question 3: Which stakeholders in Wales should be interviewed for this study? If possible, could you please introduce me to them? 83 P a g e

98 Figure 4-2. Sample Pilot Interviews Data Coded into Themes Eight pilot interviews were conducted with stakeholders within the Welsh LS sector. Stakeholders were asked in semi-structured interviews regarding their viewpoints on the Welsh LS sector. Key themes were extracted and organised into the Strengths, Weaknesses, Opportunities and Threats above. References to interviews are in parentheses to the codes found in Table P a g e

99 During Pilot Interview 6, it was identified that progressing through a Strength, Weakness, Opportunity and Threat (SWOT) analysis would help guide the interviews in a more semistructured manner (see Section ). Semi-structured SWOT analysis questions were incorporated into the semi-structured interview questions for both subsequent pilot and main study interviews. Furthermore, SWOT analysis was used as an embedded framework to perform the data analysis from all pilot and main study interviews. Figure 4-1 represents the coded data from the main themes and codes extracted from the pilot interviews related to the Welsh LS sector. From the coded field note data and transcriptions, responses were coded into themes around SWOT analysis. The interview data pointed to the need for a larger investigation into the Welsh LS sector due to the range of themes that emerged Internal Discussion Group The research aims, objectives and research question for this project were developed with input from the IDG, consisting of a multidisciplinary membership of academics involved within the LS sector in Wales. Selection was based on convenience sampling and relevant experience in the sector. This group was utilised to plan, discuss, design and refine the conceptual framework, the research design, data collection, data analysis and planning time and resources on a weekly basis. The IDG discussed and refined the literature review, interviews, focus groups, case studies and all other aspects of the research. Although this group did not represent the six subsector groups stratified within the study, the IDG was able to provide straightforward and timely feedback to ensure that the work undertaken by the author was relevant to the LS sector, allowing for a more robust outcome in developing and designing the study. Although efforts were made to reduce bias and group think, the IDG most likely introduced bias into the research design and research project. The bias of the IDG was mitigated in the 85 P a g e

100 main study by the triangulation of multiple interview data sources, all outside of the IDG (please see Chapter 5 below). Table 4-4. Internal Discussion Group Members Subsector Code Position A G I 3 rd NHS P IDG 01 Researcher IDG 02 Director IDG 03 Manager IDG 04 Manager A = Academia, G = Government, I = Industry, 3 rd = Third sector, NHS = National Health Service, P = Professional, + = Role in subsector, - = No role in subsector The IDG operated with the Welsh LS sector in close proximity to the researcher, operating as part of the researcher s academic supervisory and advisory team, as well as interacting in the ecosystem with the industrial roles of the researcher. It was clear that bias must be considered when interacting with the IDG. The IDG was used to validate findings and conclusions from the pilot phase of the research and progress with discussions on defining the research aims, objectives and questions Defining the Research Aims and Objectives As described in Chapters 2 and 3, research has been undertaken in the areas of the Welsh economy, innovation and the LS in general. Although recent and relatable work could be discovered (Zhang and Pugh, 2012, Welsh Government, 2012d, European Commission, 2011c) that explores or analyses the LS sector in Wales [including supply chain voids (Whitehead, 2010), biotechnology clusters (Sainsbury, 1999), skills (KESS, 2012) and entrepreneurship (Thompson et al., 2012)], no previous study could be found exploring policy specifically in the LS through a wider reaching stakeholder engagement exercise. The novelty of this work lies in providing evidence for the health of the LS sector in Wales and designing interventions to promote the flourishing of the LS sector in an underperforming European 86 P a g e

101 region. Ideally, this framework can be adapted to accommodate other regions focusing on evaluating and supporting their regional and sectoral innovation systems. Based on the initial research, it was decided within the IDG that this study would undertake an in-depth investigation of the LS sector in Wales. As outlined in Section , Wales has instituted multiple policies and strategies as well as receiving billions of pounds worth of financial support. Despite this, the Welsh economy has been lagging behind other British, European and world economies. Top performing regions are now becoming more involved with the globalised knowledge-based economy, driven by innovation. Furthermore, it has been shown that the LS companies create jobs, drive innovation and are considerable contributors to modern, successful economies (PhRMA, 2010, PhRMA, 2011). The initial research questions drafted for this study focused on benchmarking the sustainability of the Welsh LS micro-, small- and medium-sized companies (SMEs), primarily from a quantitative perspective, i.e. a benchmarking study into the Welsh LS sector. After preliminary research and discussions between the researcher and the IDG, it became evident that many of the key performance indicators and identifiers (such as turnovers, employment, number of companies, and accurate SIC codes) were not obtainable due to the emerging nature of the LS industry in Wales and SIC code methodology. Following further literature review, pilot interviews and IDG discussions, the final set of research questions was selected as listed in Table 4-5. These research questions focused on investigating the Welsh LS sector from a qualitative perspective followed by developing an appropriate intervention strategy. The aim of this research is to provide a contribution to knowledge by developing a framework for the LS sector. This framework would then be used to promote economic development in the region. In order to achieve this aim, a set of objectives was drafted: Develop a framework which highlights successful and unsuccessful attributes of Wales, with the intention of applying the lessons learned to accelerate the 87 P a g e

102 development of LS companies and innovation within the Welsh region through policy and practice. Develop a set of policy recommendations to help support the LS sector. Develop a single, practical intervention strategy to promote the LS sector. To address the needs of the LS sector in Wales, this research has been conducted to help inform policy makers operating within the LS space in Wales (i.e. Welsh Government). Investigations were undertaken utilising a systematic and holistic approach, by interviewing a wide range of stakeholders and stakeholder groups. Given a landscape of changing policy within the Welsh LS sector, there is a need to design, implement and maintain sustainable policy to support the LS. Three Research Questions were drafted in parallel to these three research objectives, which can be found in Section Formulating the Research Questions The themes derived from the pilot interviews data were used to rationalise the research questions developed in this study through an iterative process involving participatory observation, a multidisciplinary literature review (Chapter 2 and Chapter 3), pilot interviews and an IDG. The final research questions derived can be found in Table 4-5. Table 4-5. Research Questions Research Question 1 Research Question 2 What are the stakeholders views regarding the current Welsh life sciences sector 1? What are the stakeholders gaps in knowledge regarding the Welsh life sciences sector? Research Question 3 What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales? 1 Life sciences sector is defined as therapeutics, medical devices, diagnostics and ehealth for the purposes of human health. Please see Section for a more detailed definition and explanation. 88 P a g e

103 These three Research Questions followed a logical order with the intention of gaining an understanding of the Welsh LS sector and the knowledge gaps of the stakeholders, in order to define an intervention strategy that would be suitable and realistic. The first research question of this study was descriptive, thus allowing elements and themes to be discovered throughout the process. The second research question was exploratory, describing stakeholders gaps in knowledge of the sector. The findings of research questions one and two could then be integrated to help answer the third research question, which was more policy-orientated in nature. 89 P a g e

104 Chapter 5. Research Design Chapter 4 describes Developing the Investigation and how the research questions were derived. The current chapter builds on this to outline the research design of the main investigation into the Welsh LS sector through Grounded Theory (GT) methodology. Figure 5-1 provides an overview of the epistemology, ontology, methodology and research methods used in this study. After reviewing a range of options, this study took on the epistemological viewpoint of constructivism and the ontological viewpoint of interpretivism. GT methodology through open-ended stakeholder interviews was selected for use in this study, as it was most suited to develop a theory to answer the qualitative research aims, objectives and questions proposed. The rationale for why these perspectives were taken are justified in future sections in this chapter. Epistemology Objectivism Constructivism Subjectivism Ontology Positivism Interpretivism Phenomenology Symbolic interactionism Realism Hermeneutics Naturalist inquiry Critical inquiry Feminism Postmoderism Methodology Experimental research Survey research Grounded theory Heuristic inquiry Action research Discourse analysis Ethnography Methods Statistical analysis Questionnaire Interview Focus group Document analysis Content analysis Figure 5-1. Summary of the Research Design The epistemology, ontology, methodology and methods are outlined above. Each of these were evaluated from Doing Research in the Real World (Gray, 2009) and associated references. Options not implemented in this study are listed above with a strikethrough. Other epistemologies, ontologies, methodologies and methods, including, but not limited to, those listed in Figure 5-1 from Gray s (2009) Doing Research in the Real World were 90 P a g e

105 evaluated for suitability to the study. Those not used were listed with a strikethrough. For example, hermeneutics was not chosen as the appropriate ontology for this study, so it was struck through Methodology and Methods Chapter 4 outlines the first stage of this research project, Developing the Investigation. This section describes the development of the methodology. In summary, this investigation consisted of 74 interviews based on Grounded Theory. From the interviews, data was analysed using traditional Grounded Theory methods (Research Question 1), semiquantitative methods (Research Question 2), and Turning Opportunities and Weaknesses into Strengths (or TOWS) analysis (Carson et al., 2001). Building on Table 4-1, Table 5-1 outlines the processes involved in Developing the Methodology, Study Execution, and Study Interpretation. 91 P a g e

106 Feedback Table 5-1. Methodology and Methods Stage of Research Sub-stage of Research Activities Developing the Investigation Developing the Methodology Initial Research Literature review Participatory observation Contextual research and Pilot interviews Internal Discussion Group Define Research Aims and Objectives Formulate Research Questions Develop Research Approach Develop Research Methodology Internal Discussion Group Internal Discussion Group Consider suitable research methods Feedback to context and literature Development of constructs Revised methods Study Execution Data Collection 74 Semi-structured interviews Study Interpretation Data Preparation Transcription of data Coding of data for analysis Data Analysis Grounded Theory analysis Semi-quantitative analysis TOWS analysis Results/Conclusions Summarise findings Interpret findings Define future work Creswell (2007) defines and compares five distinct research approaches, which he describes as representative discipline orientations. These five approaches include GT, ethnography, case studies, phenomenology and narrative research. Each of these five approaches has its own specific focus, use, unit of analysis, data collection forms, data analysis strategies and report formats. Of these five approaches, GT was selected for its appropriateness to the research, as explained in the following section Grounded Theory In developing the research methodology, the ontological and epistemological considerations were reviewed. From these deliberations, research methodologies and methods were 92 P a g e

107 evaluated, with the goal of choosing methods which were the most suitable and relevant to the research aims and research questions. Grounded Theory (GT) was used in order to piece together the in-depth research and model development in order to remove some of the bias normally introduced through the scientific method, such as implicit bias (Greenwald and Krieger, 2006), confirmation bias (Mynatt et al., 1977) and publication bias (Duval and Tweedie, 2000a, Duval and Tweedie, 2000b, Scargle, 2000). The data used in this study includes any and all data obtained through semi-structured interviews. GT is the discovery of theory from data systematically obtained from social research (Glaser and Strauss, 2009), which is sometimes described as the opposite of the scientific method (Glaser et al., 1968, Strauss and Corbin, 1998). Traditionally, this method employs data collection through a range of techniques; the information is then marked with codes, grouped into concepts, further grouped into categories and finally into theories. It is mainly used in qualitative research, but can also be applied to quantitative data (Glaser et al., 1968). GT was originally developed by Barney Glaser and Anselm Strauss (Glaser and Strauss, 1967), but eventually diverged into two schools of thought: the Glaser school and the Strauss school (Glaser, 1992, Corbin and Strauss, 1990). A detailed comparison of these two schools is provided by Jones and Alony (2011). Similar to the methodology used by Jones and Alony (2011), this research adopts the GT as described by Glaser school over that of Strauss school, as the Glaser method is more emergent and one of the de facto standards in qualitative research (Stern, 1994). Glaser s GT has been used in a range of studies comparing stakeholders perspectives in order to advise policy or best practice. For example, GT has been used as a methodology to explain tensions between policy makers and general practitioners (Kumar and Gantley, 1999), to evaluate supply chain management (Flint et al., 2012), to post-evaluate innovation policy (Bing et al., 2012, Bakhshi et al., 2015), to investigate professional clinical credibility (Kennedy et al., 93 P a g e

108 2009), to gather multi-sectoral views in order to inform policy (Wegener, 2011, Decoster et al., 2012), and many other purposes Data Collection Grounded Theory (GT) methodology was used to gather and analyse data to answer Research Question 1. A further semi-structured interview question with a more quantitative approach (see Interview Question 6, Section 5.2.1) was piggy-backed onto GT methods to answer Research Question 2. Data and analysis from the interviews was analysed with TOWS analysis through the world view of the researcher to hypothesise an intervention strategy for the Welsh LS sector to answer Research Question Semi-Structured Interview Questions The semi-structured interviews provided a basic framework to gain information from key stakeholders, while also allowing for further exploration of subjects, topics and themes to be raised through discussion. This meant that not only could data be gathered on the semistructured questions, but also the interpretive account of these themes could be expanded upon by the stakeholders. The interviews were initially piloted with eight senior stakeholders operating in the Welsh LS sector; however, little change was made to the interview questions with the exception of adding in a line of questioning structured through SWOT analysis. The interviewees were given a brief introduction to the study with the investigation s definition of Life Sciences, followed by a semi-structured interview. Interview Question 1: Interview Question 2: Interview Question 3: Interview Question 4: Interview Question 5: What is your view of the Life Sciences sector in Wales? What are the strengths of the Life Sciences sector in Wales? What are the weaknesses of the Life Sciences sector in Wales? What are the opportunities of the Life Sciences sector in Wales? What are the threats to the Life Sciences sector in Wales? 94 P a g e

109 Interview Question 6: Interview Question 7: Where are the gaps in knowledge for you as a stakeholder in regard to the Life Sciences sector in Wales? Which stakeholders in Wales should be interviewed for this study? If possible, could you please introduce me to them? The first interview question asked was a generalised and open-ended enquiry into the stakeholders views of the LS sector. Subsequently, Interview Questions 2-5 revolved around Strengths, Weaknesses, Opportunities and Threats to of the sector (SWOT analysis) were asked. These were followed by an interview question relating to what additional information they would like to have about the Welsh LS sector (Interview Question 6). Finally, an interview question relating to identifying and obtaining referrals to other interview subjects was also asked (i.e. snowball sampling) Data Collection Process Due to the broad range of information, viewpoints, data and cases within the Welsh LS industry, the researcher chose to use stakeholder interviews as the main primary data for this investigation. Writers on qualitative research frequently stress the importance of direct experience of social settings and fashioning an understanding of social worlds via that contact (Bryman and Bell, 2007). Secondary sources were used to validate statements or to provide background as well as relevant viewpoints. These sources include policy documents, market research reports and academic literature. For interviews, removing bias from both the interviewee and interviewer is key to attaining the true data and meaning from this method of data collection (Rice, 1929, Williams Jr, 1964, Williams, 1968). To limit bias from any individual or subgroup of stakeholders, numerous and highly knowledgeable informants who view the focal phenomena from diverse perspectives were interviewed to increase the validity of the data (Eisenhardt and Graebner, 2007). This method does have its drawbacks, however, as multiple interviews lead to the multiple perspectives that correspond to the multiplicity of coexisting, and sometimes directly 95 P a g e

110 competing, points of view (Bourdieu, 1999). Although semi-structured interview data is more complex to interpret than collection methods such as surveys and structured interviews, it is believed that by incorporating the viewpoints of multiple cross-sector stakeholders from different subsectors within the sector, the validity of the data is increased through the use of data triangulation (Van de Ven Vernon, 2000, Lindlof and Taylor, 2010). Questions were asked in a semi-structured open-ended manner in order to avoid leading the interviewee into any particular theme or subject. The interviewees were asked to elaborate on themes where more clarification was needed. The captured data was prepared and analysed by transcribing and then coding. The data were then analysed through a grounded theory approach by performing pattern matching and emerging theme analysis. The themes extracted from the data were interpreted and summarised. Knowledge gaps that were not addressed through this research were identified and captured, and reserved for exploration in future work Field Notes As outlined in Section 5.1.1, Glaser s version of Grounded Theory is adopted as the methodology for this study. Further to his original works (Glaser and Strauss, 1967, Glaser et al., 1968), Glaser has discussed his version of GT (Glaser, 1992, Glaser, 1998, Glaser, 2004, Glaser and Holton, 2004) with relatively strong conviction and language. In contrast to the norms of qualitative research, Glaser states, Taping and transcribing interviews is common in qualitative research, but is counterproductive and a waste of time in GT which moves fast when the researcher delimits her data by field-noting interviews and soon after generates concepts that fit with data, are relevant and work in explaining what participants are doing to resolve their main concern (Glaser, 1998). Recording and transcription are considered best practice by many qualitative studies (Richards, 1996, Aberbach and Rockman, 2002, Berry, 2002, Mikecz, 2012). Recording 96 P a g e

111 interviews does have its advantages. It is argued that by having a verbatim script of the interview through recording, the interviewer can focus more on engaging with the respondent (Richards, 1996). Also, recording removes the difficulty of making clear decisions about the next question if taking notes (Berry, 2002). Within the context of this study, due to the seniority of the interviewees, many, if not all, of the interviewees were considered elite, leading to special considerations being taken in regards to the interview methods. The whole notion of an elite, implies a group of individuals, who hold, or have held, a privileged position in society and, as such, as far as a political scientist is concerned, are likely to have had more influence on political outcomes than general members of the public endnote (Richards, 1996). In general, academics prefer to record rather than not record interviews because they do not have to focus on conducting the interview. In the case of elite interviews, scholars disagree on whether they should be recorded (Mikecz, 2012). Even with elite interviews, in some studies it has been shown that few elite members refused to be recorded (Aberbach and Rockman, 2002). Furthermore, for elite interviewees who agreed to be recorded, it has been demonstrated that those who expressed initial discomfort with recording lost their inhibitions quickly (Aberbach and Rockman, 2002). However, in the case of the interviews for this investigation, recording was not considered best practice for many reasons. Both methodology literature and pilot interviews revealed that field notes were a better strategy to implement for this study due to the sensitivity of the data shared and the seniority of the interviewees (Peabody et al., 1990, Byron, 1993, Ostrander, 1993). These senior interviewees included chief officers within WG and local authorities; Chancellors and Vice-Chancellors of universities; directors within industry, third sector and NHS; as well as serial entrepreneurs. Field notes were used to help interviewees provide more robust feedback in a less identifiable manner. 97 P a g e

112 Notes and recordings were taken of pilot stakeholder interviews and few discrepancies were observed between the hand-written notes and the coded transcripts. Furthermore, the interviews were held under the Chatham House Rule, with responses not to be attributed to individuals or their organisations, in order to encourage the interviewees to be more open and share sensitive information and views. The Chatham House Rule is as follows: When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed The world-famous Chatham House Rule may be invoked at meetings to encourage openness and the sharing of information. The Royal Institute of International Affairs (2014) Instead, the responses would be attributed to the respondents sub-sector groups to preserve anonymity. For ethical considerations, the names of individuals mentioned in the interviews were also removed from the reporting of these results. Thin description was used to capture the data in the field notes, with few direct quotes logged. In The Need for Thin Description, Wayne Brekhus states, Qualitative researchers of various persuasions marginalize some forms of richness to make a case for other forms and if perhaps unwittingly, in the process they make good on a related need for thin description Some qualitative studies are thick where others are rightfully thin. (Brekhus et al., 2005). Brekhus further maintains: Qualitative researchers always know more about the lives, events, and settings they study than appears in their notes and texts. In some measure, this applies to all forms of scientific inquiry, but the distinctive in situ character of qualitative inquiry where participation itself serves as the inquiring instrument results in extensive undocumented knowledge, not just unused information. If the participant-observer presents information in the form of interview transcripts, fieldnotes, archival material, and available documents, data also are stored in the memory of having been there, of having been part of the action under consideration. Wayne Brekhus (2005) Further to using field note transcriptions, thin description allowed for the inclusion of a greater quantity of information from senior stakeholders (at the expense of rich data that 98 P a g e

113 could have been extracted through thick description), as described above. In line with the purpose of exploratory nature of this investigation, the thin description allowed many more themes to be discovered through the time-limited interviews. The gaps in thin description are overcome by the basic foundations of Grounded Theory methodology. In Clarification of the Blurred Boundaries between Grounded Theory and Ethnography: Differences and Similarities, Aldiabat and Navenec state, ethnographers may be overwhelmed by huge quantities of disconnected data that often results in thin description or perhaps lists of unrelated categories This gap is closing as in recent years ethnographers are increasingly using the constant comparative strategy in their studies. As described in Section 5.1.1, constant comparison was used to close any gaps in the data. Furthermore, thin descriptions of phenomena discovered from the interviews were crossreferenced to literature, reports and other codified forms of data. Thick descriptions of the themes discovered through this investigation can and should be further investigated in future studies Transcription of Field Note Data Field note data was transcribed to Microsoft Word 2013, capturing the descriptions of the interviewees in a bullet point format. An example of this transcription is provided in Figure P a g e

114 Strengths o Lifestyle and geography Stable population Good work ethic E.g. In Cambridge, poor service at supermarkets In Wales, friendly and work to make the sale Societal difference: People more valued for what they are doing Regional differences Genuine o Reflection on things being tough Decrease in coal industry Both 20 s/30 s and 80 s a depression People working pleased to be there Big population with Unemployed for generations in an unemployable sitation If looking at the high tech side o Pool of talent (e.g. XXXX) looking in Wales Opportunities o Importance on ideas Everything else follows Difficult further than that Techniques can follow from an idea Nevertheless, breakthrough ideas that make it Need to actually make biotechnology Ecology: No guarantee on company with good ideas will make it o Problems, competition, change in circumstance o Entrepreneurs looking for mold breaking change Think that the only way to compete is to (as a small person) out-think others Figure 5-2. Sample of Field Note Data Transcription Interview data was transcribed from the field note data in a hierarchical pattern. Sample data is from interview I24. Names have been redacted for confidentiality Sampling Interpersonal contact between researchers and decision makers is an oftcited fundamental ingredient in successful [knowledge transfer and exchange] KTE initiatives (Thompson, Estabrooks, and Degner 2006). To date, however, gold standard approaches to KTE seem to be based, at best, on anecdotal evidence but mostly on experience and even rhetoric rather than on rigorous evidence. Mitton et al (2007) 100 P a g e

115 In total, 74 interviews were conducted by the single researcher as outlined in Table A1-1. Eight interviews (Pt01 to Pt08) were undertaken in the pilot phase of the study (see Section 4.1.3) and 66 (I01 to I66) for the main study data collection. The interviewees were anonymised and categorised by location, position, subsector and interaction type. Data was obtained through in-depth, semi-structured interviews across the Welsh LS ecosystem (N=66 main study interviews), which were conducted solely by the single researcher. All data collection was performed until theoretical saturation was achieved, where the densified core categories were saturated and little to no new information was being obtained through the interviews. Although every effort was made to stratify interviewees, the majority were males (n=53 out of 66) due to the scarcity of females in senior positions across all subsectors, which is consistent with the literature (Oakley, 2000, Linehan, 2002). Purposive sampling was used to target, initially, senior stakeholders, with their experience through operating within one of the stratified groups, or a combination thereof and most often at a senior level. Examples of interviewees included stakeholders such as directors, Chief Executive Officers (CEOs), Chief Financial Officers (CFOs), academic professors and senior managers all having acted within the Welsh LS sector in an informed capacity. The interviewees were initially identified by their involvement within the LS sector at a senior level. Identification and engagement was followed by a snowballing methodology. This so-called elite interview process has been performed through the utilisation of openended, high level questioning (Peabody et al., 1990, Ostrander, 1993, Richards, 1996, Aberbach and Rockman, 2002, Berry, 2002, Mikecz, 2012), which was implemented in order to mitigate the potential risks associated with research quality (see Section 5.2.1). Furthermore, the inclusion of numerous and highly knowledgeable informants who view the focal phenomena from diverse perspectives has helped to limit bias (Eisenhardt and Graebner, 2007). 101 P a g e

116 Both the subsector and geographical stratification can be found in Figure 5-3. Best efforts were made to spread the interviews evenly across the six identified subsectors (academic, government, industry, NHS, third sector and professions). However, interview access to the policy makers (government and NHS officials) proved difficult. Although the case, this investigation was focused on providing evidence to policy makers from a range stakeholders, so it was reasoned that this did not compromise the integrity of the study. Furthermore, it could be argued that the combined numbers of policy makers (~22%) was in proportion with the other subsector groups. The preference was for one hour face-to-face interviews (n=42), but interviews were also conducted via phone (n=21) and (n=3) when availability was limited. Figure 5-3. Stakeholder Interviews: Subsector and Geographic Stratification a) The interviewed stakeholders (66 main study interviews) are stratified within six subsector groups, which includes academia, industry, government, third sector, the National Health Service (NHS) and professional groups (law firms, accountants and consultants). Values are expressed as a percentage to take into account multiple positions held by many of the interviewees. b) These same interviewees are also stratified across the geography of Wales. It must be noted that the Third sector sub-sector also includes actors which operate within academia, government, industry and quasi-autonomous non-governmental organisation (QuANGOs). 102 P a g e

117 5.3. Data Analysis: Research Question 1 GT was used as a framework to analyse the data to answer Research Question 1. GT follows a step-wise approach to collecting and analysing data in parallel and in series. The three major steps include open coding, selective coding and theoretical coding. Jones and Alony provide a clear and concise description of Grounded Theory in their work: The process of Grounded Theory encompasses an acknowledgment of the researchers bias, the selection of a data collection site, the data collection process, the process of coding and analysis, and the compilation of results. Coding and analysis includes three stages: open coding, selective coding, and theoretical coding. Open coding employs constant comparison and memoing and results in themes, sub-categories, and core categories. These results guide the subsequent sampling of participants through theoretical sampling. The next stage of coding selective coding also employs constant comparison and memoing. This stage results in dense, saturated core categories. The core categories are then sorted, written, theorized, and crossreferenced with literature, during theoretical coding. The results of this last stage of coding are a basic social process and a theoretical model. This is the final product of Grounded Theory research. Jones and Alony (2011) This process is further conceptualised in Figure P a g e

118 Theoretical Sampling Figure 5-4. Glaser Grounded Theory Methodology Glaser s Grounded Theory Method calls for three stages of research: open coding, selective coding and theoretical coding. Both open coding and selective coding are performed through constant comparison and memoing. The final output of this methodology is the Basic Social Process and theoretical model. SOURCE: (Glaser and Strauss, 2009, Glaser, 1992, Glaser and Strauss, 1967, Glaser et al., 1968, Jones and Alony, 2011) In line with Glaser s GT dictum, emerging core themes were extracted from the eight pilot interviews (Pt1-8) and the first fifteen main study interviews (I01 to I15), as described in Section Pilot interview data was combined with the main study interviews for analysis, since the pilot data was relevant to the study, as well as having been collected using similar methodology. 104 P a g e

119 8 Pilot Interviews 15 Main Study Interviews 51 Main Study Interviews Open Coding Selective Coding Theoretical Coding Figure 5-5. Stakeholder Interviews: Grounded Theory Coding Eight pilot interviews were used to refine the Research Questions and Interview Questions. 66 main study interviewees were asked a fixed set of interview questions. The first 23 interviews of the study were used for the open coding of GT. The last 51 interviews were used for the selective coding of GT. All of the interview data were used for the theoretical coding. After using pilot data to refine the research aims, objectives, and interview questions; it was decided that pilot data would also be used as part of the open coding process. This is in line with GT s fundamental dictum all is data whereas whatever comes the researcher's way while studying a substantive area (Glaser and Strauss, 1967) can be used for analyses Open Coding Open coding was performed during the pilot interview stage of this study (see Section 4.1.3). A pilot round of interviews was conducted utilising a small sample (N=8). Initial findings from pilot research informed the refinement of the design and the execution of the main study. Through constant comparison and memoing, field note data from the pilot and early main study interviews were transcribed, coded and organised into emerging core themes NVIVO Software Further to the initial coding of the data, qualitative data analysis software NVIVO SP4 (64.bit) for Windows was used to organise, code and extract themes from the data gathered. Field note data for each interview were then transcribed, coded and analysed and 105 P a g e

120 the themes were extracted, an approach adapted from a GT methodology, as described by Glaser and Strauss (Glaser and Strauss, 1967, Glaser et al., 1968). Although other methods software packages could have been used, NVIVO has proven to be reliable, consistent and the de facto standard for qualitative and mixed methods research (Richards, 1999, Johnston, 2006, Bazeley and Jackson, 2013). The software proved to be appropriate when used for this research. The thematic coding with NVIVO software allowed a large amount of data to be gathered, collated and analysed to make generalisations and statements based upon the data. An example of the coding process in NVIVO can be found in Figure P a g e

121 Figure 5-6. Example of Coding Process in NVIVO 10 Software Transcribed field note data was imported into NVIVO 10 software for Windows and coded by question and codes. Transcriptions are in the left pane and the coding in the right pane. 107 P a g e

122 Initial coding of the data resulted in 108 basic codes. The researcher reviewed these codes within NVIVO software, using constant comparison and memoing to place the data into subcategories (see Figure 5-4). For example, comments such as small, a lot of growth to go through, and doesn t take much to grow were combined into the subcategory size. These subcategories were then further condensed into categories through constant comparison and further condensed into four core emerging themes. For example, the subcategories geography and size and life science specialties were further condensed into one of the four major emerging themes, namely ecosystem. The anonymised codes, subcategories, categories and themes were reviewed with the IDG, which provided feedback on combining, clarifying, or separating codes within the data. This feedback was incorporated into the coding system and tested for reliability. Raw data was reanalysed using the new coding system and tested by seeing if the data could be reproducibly placed into the codes which were derived, leading to a more robust coding methodology Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis SWOT analysis is an established method for assisting the formulation of strategy The application links SWOT analysis to resource-based planning, illustrates it as an iterative rather than a linear process and embeds it within the overall planning process. (Dyson, 2004). Although many approaches have been taken to improve strategy development, SWOT analysis has proven to be one of the most popular methods to implement when developing strategy (Hill and Westbrook, 1997, Pickton and Wright, 1998, Houben et al., 1999). It has been used in a range of academic studies looking into a range of fields, including business (Houben et al., 1999), regional policy (Narayan, 2000, Karppi et al., 2001) and healthcare (Christiansen, 2002, Alappat et al., 2007, van Wijngaarden et al., 2012). SWOT analysis aims to identify the strengths and weaknesses of an organisation and the opportunities and 108 P a g e

123 threats in the environment. Having identified these factors strategies are developed which may build on the strengths, eliminate the weaknesses, exploit the opportunities or counter the threats (Dyson, 2004). Interviewing stakeholders regarding their view on the LS industry in an open-ended manner elicited a wide range of responses. Enquiring further through SWOT analysis helped to overcome the tendencies of some stakeholders to describe only positive, negative, internal, or external aspects of the sector. The results of these interviews were axially coded to develop the SWOT analysis and framework found in Figure 6-7. In line with Glaser s GT methodology, data from interviews were sequentially openly coded, selectively coded and finally thematically coded. Interview data were coded into core categories and then major categories. Emerging core themes were identified and further interviews were used to elaborate on densified and saturated core categories for the Strengths, Weaknesses, Opportunities and Threats in accordance with Grounded Theory methodology as described in section A Basic Social Process was constructed using these core categories and placed into a framework found in section Theoretical Sampling Glaser argues that, the analyst jointly collects, codes, and analyzes his data and decides what data to collect next and where to find them, in order to develop his theory as it emerges (Glaser, 1978). Draucker states that, Theoretical sampling is often distinguished from selective sampling. Whereas theoretical sampling is guided by emerging theory, selective sampling is the identification of populations and settings prior to data collection... Sampling in grounded theory is thus sequential, beginning with selective sampling and moving into theoretical sampling when concepts begin to emerge. Researchers must decide when to shift from selective to theoretical sampling (Draucker et al., 2007). In order to develop the theory, reduce bias and achieve data validity, a combination of selective sampling and theoretical sampling was used. As codes, themes and categories emerged from the data, future 109 P a g e

124 stakeholders were interviewed in a stratified manner to ensure that a range of subsector stakeholder were included. A list of those sampled can be found in Section and Table A Selective Coding Further to the emerging core themes obtained in the open coding of the interview data, Densified and Saturated Core Categories were developed by using theoretical sampling (described above) to obtain further information from the interviews. The conceptualization of data through coding is the foundation of [GT] development. Incidents articulated in the data are analyzed and coded, using the constant comparative method, to generate initially substantive, and later theoretical, categories (Glaser and Holton, 2004) Theoretical Coding Theoretical coding involves identifying a Basic Social Process and applying a theoretical model to the data. Conceptual elaboration concludes when the relationships among individually elaborated concepts emerge through the identification and use of appropriate theoretical codes to achieve an integrated theoretical framework for the overall grounded theory. Theoretical codes conceptualize how the substantive codes may relate to each other as hypotheses to be integrated into the theory. They help the analyst maintain the conceptual level in writing about concepts and their interrelations. (Holton, 2010). The process and framework can be found in Section Data Analysis: Research Question 2 Further to the data collected from the Semi-Structured Interview Questions outlined in Section 5.2.1, a more quantitative approach was taken to outline the gaps in knowledge in the Welsh LS sector. Data from Interview Question 6: Where are the gaps in knowledge for you as a stakeholder in regard to the Life Sciences sector in Wales? was coded in a manner similar to the Open Coding analysis outlined in Section Rather coding the data 110 P a g e

125 selectively and theoretically, the data was coded in a quantitative manner to describe the stakeholders gaps in knowledge. This quantitative coding was then summarised and simplified into charts, found in Figure 7-1 and Figure Data Analysis: Research Question 3 In order to answer Research Question 3 ( What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales? ), data and analysis from Research Question 1 and Research Question 2 was integrated by the researcher through Turning Opportunities and Weaknesses into Strengths analysis (also known as TOWS analysis or situational analysis). This analysis was performed through the world view derived from participatory observation within both the American LS sector and Welsh LS sector (see Section 4.1.2). A TOWS analysis, or matrix, can be thought of as the corollary or reciprocal of the SWOT analysis. TOWS stands for Turning Opportunities and Weaknesses into Strengths. When employing a TOWS analysis, one creates a classic two-by-two table with four cells. Data, or lists, generated in a SWOT analysis are then viewed through the lens of the TOWS matrix. The four cells that are formed allow planners to think about strategies, as [(Hunger and Wheelen, 2003)] point out, that take strengths and turn them into opportunities (so), that employ strengths to avoid or avert threats (st), that attempt to take advantage of opportunities by overcoming weaknesses (wo), and that act to minimise weaknesses and avoid threats (wt). James F. Trainer (2004) A brief outline of how TOWS Strategy is carried out is provided in Figure 5-7. The purpose of the TOWS analysis is to provide strategic insights from the Strengths, Weaknesses, Opportunities and Threats identified through the interviews. The advantage of SWOT analysis or the TOWS matrix is its attempt to connect internal and external factors to stimulate new strategies. Hence resource and competency-based planning can enrich SWOT analysis by developing the internal perspective whilst keeping internal and external perspectives in play simultaneously. Rather than seeing SWOT analysis as an outdated technique therefore it is possible to see it as a firm foundation for resource and competency- 111 P a g e

126 based planning. (Similarly scenario planning is superficially a rather different technique. However, scenario analysis focuses on the external environment and identifies key external factors in a similar way to the external appraisal of SWOT analysis (Dyson, 2004). TOWS Strategy Actions Strengths Weaknesses Opportunities SO Maxi Maxi Strategies WO Mini Maxi Strategies Threats ST Maxi Mini Strategies WT Mini Mini Strategies Figure 5-7. TOWS Strategic Alternatives Matrix SO = Strategies that utilise strengths to maximise opportunities; WO = Strategies that utilise opportunities to minimise weaknesses; ST = Strategies that utilise strengths to minimise threats; WT = Strategies that minimise weaknesses and avoid threats. SOURCE: (Weihrich, 1982) 5.6. Research Ethics Cardiff Metropolitan University s Ethics Committee was established to safeguard the general principles laid down in the University s Ethics Framework and for ensuring that all research involving human participants carried out by staff and students whether within the University, or at other locations, conforms to the highest ethical standards. The Ethics Committee is chaired by the Dean of Graduate Studies. Its membership comprises individuals from across Cardiff Metropolitan University s schools and discipline areas as well as an independent lay member. After consultation with academic supervisors, an assessment was performed on the project using Cardiff Metropolitan University s Application for Ethics Approval form. The completed Ethics Approval form was ed to the Director of Research and circulated to the appropriate research staff. The Ethics Approval form included supporting documentation, such as participant information sheets and summary interview questionnaires. The Ethics 112 P a g e

127 Approval form was reviewed at The National Centre for Product Design & Development Research s (PDR s) monthly research meeting and approved (UWIC, 2010) on October 31, Although NHS staff members were interviewed for this study, the research did not require review by the NHS National Research Ethics Committee. Following the guidance titled Does my project require review by a Research Ethics Committee? published by the NHS in 2012, there was no legal requirement (all questions in Section B were answered No ) and no policy requirement (all questions in Section C were answered No ) for REC review of the research (NHS Health Research Authority, 2012). Furthermore, this research project fell within the exemptions ( 4. Research involving staff and 5. Healthcare market research ) set out in the Supplementary notes on research not requiring REC review of Does my project require review by a Research Ethics Committee? (NHS Health Research Authority, 2012). 113 P a g e

128 Chapter 6. Results: Stakeholders Views of the Welsh Life Sciences Sector The purpose of this chapter is to address the Research Question 1: What are the stakeholders views regarding the current Welsh life sciences sector? This research question is descriptive, in order to allow elements and themes to be discovered throughout the study through grounded theory methods and interview methodology. Participatory observation provided insight into the LS sector in Wales. By operating within a localised LS incubator, the experiences of companies other than those related to the interviewees were also observed. In order to respect the privacy and confidentiality of the companies involved, data was not associated with any particular individual or organisation in this section, according to the Chatham House Rules. Data and its integration through Grounded Theory (GT) (see Figure 5-4) is presented in this chapter. Any relevant explanation, interpretation and bridging to secondary literature for relevant topics is dealt with in the Discussion chapter (7.3). Quotes and references to specific interviews are followed by the Interview Number (see Table A1-1) in parenthesis, similar to Harvard style referencing used in this work for literary references. For example, a paraphrase from the first pilot interview would be followed by (Pt01). It must also be noted that many of the quotes may be paraphrased due to use of coded field notes and the lack of verbatim transcriptions. The open coding, selective coding and theoretical coding of these interviews led to the development of the framework found in Figure Open Coding: Emerging Core Themes A total of 74 interviews were transcribed, resulting in 165 pages of transcriptions consisting of 32,235 words captured in shorthand notation. Interview Questions 2 to 5 were not 114 P a g e

129 explicitly asked in the Pilot Interviews Pt1 to Pt8, however they were implicit within the semi-structured interviewing of the stakeholders (see Figure 5-2). GT provides a qualitative summarisation of the interview data gathered, as opposed to quantitative analysis. To perform a semi-quantitative analysis of keywords, NVIVO s Word Frequency Analysis query tool was used to extract the keywords from the data collected related to SWOT Analysis (Interview Questions 2-5), which can be found in Figure 6-1. Typically, in SWOT analysis, strengths and weaknesses are considered internal to the entity under analysis, whereas opportunities and threats are considered external. However, in this analysis, opportunities and threats also include items which may be internal, albeit in the future what can be termed as temporally external (Mendola, 2008, Nelson, 1942, Miller and Eilam, 2008). Some key words for determining opportunities or threats in the future, which are internal to the Welsh LS sector, can be preceded by keywords such as needs, could, can, would, and will. For example, an interviewee stated Wales needs to focus on regenerative medicine (I41), which would be included as an opportunity for regenerative medicine. 115 P a g e

130 Strengths Weaknesses Opportunities Threats Figure 6-1. NVIVO Word Frequency for Interview Questions 2 to 5 NVIVO s Word Frequency query tool was used to extract the keywords for the SWOT analysis. To allow for general themes to be pooled, the query tool was applied to raw data coded for each interview question using the setting including synonyms. The size of the word is directly correlated to the number of mentions in all interview transcripts. Colour schemes are for aesthetic purposes only. For the purposes of anonymity, names of individuals and institutions have been filtered out. NVIVO s word frequency tool was used to generate a brief quantitative, visual overview of the data. This quantitative word frequency analysis alone does not provide the qualitative insights into data which were considered early on in the analysis. The resulting diagrams provided context and a starting point for the coding of data into subcategories and categories. 116 P a g e

131 Data from the interview field notes was coded and separated into four segments: strengths, weaknesses, opportunities and threats (SWOT analysis). Although Interview Questions 2 to 5 (see section ) were directly related to the SWOT analysis, they were asked in a semistructured sequence. Data following each question was not always directly attributed as a strength, weakness, opportunity, or threat following the respective Interview Questions. Instead, data from the interviews was taken in its context through the lens of the researcher s world view. For example, in Interview Number I09, the interviewee s response to Interview Question 2 was that there was a willing population happy to be in trials to aid science, although the quality of healthcare is low (paraphrased). The willing population was coded as a strength and the low quality of healthcare was coded as a weakness. Emerging core themes relating to the Welsh LS sector included Actors, Networks, Institutions and Ecosystem. These were coded in a matrix according to the categories (and their subcategories) according to whether they were perceived as a Strength, Weakness, Opportunity, or Threat (or combination thereof). An explanation and a few examples of the subcategories for each of the categories can be found in Table 6-1 below. Table 6-1. Open Coding of Interview Data Emerging Core Theme SWOT Categories Subcategories Actors S Culture An innovative, creative, determined culture with pride and a desire to develop Skills LS-related skills Stable population Clinical trials W Culture Entrepreneurism Tribalism Skills Poor management Lack of experts O Culture Entrepreneurism Trust 117 P a g e

132 Table 6-1. Open Coding of Interview Data Emerging Core Theme SWOT Categories Subcategories Engagement Pharmaceuticals Single portal for business T Skills People leave Networks S Collaboration Conferences Strong and small networks W Collaboration Conferences Fragmented Lack of joined up thinking Poor collaboration Critical Mass Lack of critical mass Engagement Clinical engagement Industry engagement O Collaboration Greater collaboration between all stakeholders Engagement Increase engagement Self-knowledge A description of the ecosystem How to collect and disseminate the information Which information to collect o What o Who T Critical Mass Critical mass not achieved Fragmentation of the sector Institutions S Companies SMEs Third Sector ABPI Cymru MediWales Government Company engagement Inward investment Regulatory framework NHS Wales Clinical trials Integrated health Universities Life Sciences Reputation 118 P a g e

133 Table 6-1. Open Coding of Interview Data Emerging Core Theme SWOT Categories Subcategories W Companies Remoteness of decision-makers Small number of anchor companies Underdeveloped Government Does not engage private sector Dominated by public sector NHS Wales Complicated Disengaged clinicians Procurement Quality of healthcare Universities Academics Intellectual property policy O Government Initiatives Internal communication Third Sector Health Research Wales Universities Expansion T Government Bureaucracy Changes in funding Loss of political will Ecosystem S Access to Information Demographic information Health economics Funding Angel investors Arthurian Life Sciences fund Finance Wales Private equity Sêr Cymru Geography & size Agility LS Infrastructure ILS Medicentre Hub LS Specialties Clinical trials Health informatics Medical technology NanoHealth Neuroscience Size Small size, therefore agile Allows for quick growth 119 P a g e

134 Table 6-1. Open Coding of Interview Data Emerging Core Theme SWOT Categories Subcategories W Funding Lack of funding Under-capitalisation of SMEs Geography & size Poor location and geography LS Infrastructure Insufficient LS Specialties Pharmaceuticals Size Small size O Funding External funding Geography & size Growth LS Specialties Pharmaceuticals Regenerative medicine Technology Health informatics In silico modelling T Access to information Danger of repeating history Global Context O External, regional role models California, China, Israel, Ireland, Scotland, Singapore and Sweden. Outward perception Proof-of-concept achieved Working with others T Competitiveness Cannot close the gap Other countries doing the same S = Strengths; W = Weaknesses; O = Opportunities; T = Threats After the interview codes were placed into subcategories, categories and emerging core themes, the researcher reviewed the full data set to test the codes for clarity and reliability. Random transcripts were selected to see if the same codes would apply to the data. This testing ensured that a consistency was developed in applying the codes to the data. With a reliable coding system established, these emerging core themes were further developed with densified and saturated core categories during the selective coding stage. A brief description of the categories found in these emerging core themes can be found in the following section. 120 P a g e

135 6.2. Selective Coding: Core Categories The five key emerging core themes, which evolved into the core categories, are the Actors, Networks, Institutions, Ecosystem and Global Context. Interviews coded I16 to I66 were further analysed according to the coding system derived from the open coding exercise, performed on an initial group of 23 interviews and reviewed within the IDG (see Section 6.1). These additional 51 interviews were conducted to ensure sufficient data validity and data reliability through geographic and subsector coverage. This section outlines the core categories which emerged from the open coding session, supplemented by the data and insights into these densified and saturated core categories. The purpose of the following five sections is to summarise and communicate the vast amount of interview data collected, rather than to elaborate on each and every code found in the data. Although much more detail has been provided in the individual interviews for each of the codes, subcategories and categories, only key field notes and quotations are presented in order to describe the categories and subcategories in sufficient detail to bring understanding to the reader. These core categories and associated subcategories are then used at the thematic coding stage to construct the Basic Social Process and Theoretical Framework for this study (see Section 6.3). Themes, subcategories and subcategories will be Capitalised and Italicised from this point of the document onwards Actors The first core category (presented in no particular order) grounded in the data is that of the Actors in the Welsh LS ecosystem. This theme centres on the individual stakeholders within the Welsh LS sector, including their attributes and interactions with the other core categories. A brief outline of the categories which emerged for the Actors core category, segmented by SWOT analysis, can be found in Figure P a g e

136 Strengths Culture Population Skills Weaknesses Culture Skills Actors Opportunities Culture Population Threats Skills Figure 6-2. Core Category: SWOT Analysis for Actors Although not necessarily the least important, the core category Actors had the fewest codes, subcategories and categories. It is assumed by the researcher that this is due to the nature of this investigation and the interview questions, which were focused on the more encompassing LS sector and its associated Networks, Institutions and Ecosystem (the other three core categories). The categories and subcategories that were extracted from the interview data are described, in alphabetical order, in the following sections Culture The culture category was described as a strength, weakness and opportunity. In relation to the strengths of the Actors, the Welsh culture was described as an innovative (I09), creative (I05), determined (I12) culture with pride (I12) and a desire to develop (I06, I10). Evidence of these positive cultural attributes include the track record of a few select serial entrepreneurs (I15), the drive to build infrastructure (such as the Institute of Life Science in Swansea and the LS 122 P a g e

137 Hub in Cardiff) by key individuals (I16) and the establishment of initiatives such as Sêr Cymru (I18) and the LS Fund (I60). However, these positive statements were countered by opposing Weaknesses of the Actors, described as having poor entrepreneurism (I05, I07, I09, I10, I13, I14) and experiencing tribalism (Pt04, Pt08, I05, I06, I07, I08). Poor entrepreneurism was interpreted from interviewees describing an inherent lack of risk-taking and company start-ups, and a history of failure to reward success (socially). Tribalism is defined by the Collins English Dictionary (2014) as 1. the state of existing as a separate tribe or tribes, 2. the customs and beliefs of a tribal society 3. loyalty to a tribe or tribal values. Tribalism, more in the sense of the third definition of loyalty, was primarily perceived as a divide between North Wales and South Wales (I15), as well as between Swansea and Cardiff within the South Wales region (I09); however, it was not confined to these examples. Although not crucially detrimental to the development of the region, tribalism was described as leading to little interaction (e.g. North Wales and South Wales) and/or irrational (I52) competition between regions within Wales (e.g. Swansea vs Cardiff). Opportunities were identified for Culture including entrepreneurship (I07) initiatives such as LEAD Wales (I14), a 10-month Leadership Development programme designed for ownermanagers of small and medium sized businesses and social enterprises. Furthermore, creating trust between the Actors was identified as another opportunity. It was suggested that trust needs to increase in the Actors interactions with the Networks, Institutions and Ecosystem, especially within the context of the perceived tribalism, as well as the scepticism of industry (I36), NHS Wales procurement pathways (I22) and WG policy initiatives (I42) Population Many of the interviewees described Wales stable Population (I11, I16) as a strength and opportunity. The stable population category has multiple implications affecting skills (see 123 P a g e

138 section above) and clinical trials (see Section below). As described by a clinical academic, Wales has a stable, homogenous population that suffers from chronic disease, such as obesity, heart failure and diabetes, which makes it a great laboratory (I08). It was observed that the population was happy to be in [clinical] trials to aid science (I09). The small turnover in the population was attributed to the low cost of living, higher quality of life and better child-bearing [ecosystem] (primary schools are good) (I11). Further to the strengths, the stable Population was also described as an opportunity within the Welsh LS sector. According to a professor of diabetes research and NHS Wales health board clinical director of research and development, this leads to the potential to do large clinical trials (I24) (see Section ), especially in the previously identified disease areas of obesity, heart failure and diabetes (I08, I24) Skills Skills were identified as a key strength, weakness and threat to the Welsh LS sector Actors. It must be noted that skills are different from education. In a very general sense, education promotes dissemination of theory and best practice, while the term skills is the learned ability to carry out a task with pre-determined results. According to I25, When it comes to workforce issues [Wales has] very good skills. It was gathered that Wales has a highly trained population (I11). Furthermore, [there is] lots of talent in Wales [We] tend to underplay skills and how good we are at things (I73). Poor management and lack of experts were listed as weaknesses for the Skills subcategory. Management was identified as a subcategory, with interviewees saying: CEO and management teams aren t internationally competitive [in Wales] (I10); [There is] no significant management [in Wales] (I14); and Few companies [in Wales] can find management (I51). Similar themes were captured from interviewees on access to expertise: SMEs [in Wales] don t have access to experts (I05); The [Welsh Development Agency] 124 P a g e

139 WDA had expertise, but [the expertise was] in people s heads and not written down (I14); [We are] helping R&D companies gain access to the NHS. [The companies] are struggling with clinical access and expertise (I28); Very few gaps in academic knowledge but lack of experience due to difficulty in recruiting (I32); and [Wales LS sector] need expertise on project management (I46). The threat related to Skills was primarily due to people leaving Wales and taking their acquired skills with them, the so-called brain drain (I15, I18, I19). The director of a university technology transfer unit said, Over the last 12 years, highly skilled, motivated people [are] now gone (I26). Issues related to skills include Actors leaving [Wales] quickly (I33), wanting security in big companies (I18) and going to other centres of excellence such as Cambridge (Pt08). The CEO of a small medical device company identified that LS sits with people and people are mobile. If better funding in London, France, etc., [people leave] (I38) Networks The second core category grounded in the data was that of the Networks within the Welsh LS ecosystem. This core category centres on the interactions between the Actors and Institutions in the Welsh LS ecosystem. A brief outline of the categories which emerged for the Actors core category, segmented by SWOT analysis, can be found in Figure P a g e

140 Strengths Collaboration Weaknesses Collaboration Critical mass Engagement Networks Opportunities Collaboration Engagement Self-knowledge Threats Critical mass Figure 6-3. Core Category: SWOT Analysis for Networks The categories and subcategories that were extracted from the interview data include Collaboration, Critical Mass, Self-knowledge and Support. These categories are described in alphabetical order below Collaboration The Collaboration category was coded as a strength, weakness and opportunity in the network of the Welsh LS sector. Strong and small networks were also identified as a strength, specifically between the Actors and Institutions within NHS Wales, industry, academia, third sector and WG (I01, I02, I09, I10, I18, I23, I24, I32, I36, I37, I41, I44, I47, I51) (see Section 6.2.3). One form of collaboration identified as a strength was the conference BioWales (I01, I45). BioWales was described as a key event in the calendar (I60) which makes Wales a recognizable industry (I58) and where many initiatives within Wales are launched (I23, I45, I50). Furthermore, MediWales was described as an effective umbrella trade organisation with reasonable amount of cohesion (I22), which is knowledgeable (I36), a positive 126 P a g e

141 influence (I37) and as the only body trying to pull together various companies (I39). Similar high functioning, low cost activities [like MediWales] are required (I53). Although listed as a strength, Collaboration was also cited as being poor (Pt04, Pt06). Conferences, specifically the aforementioned BioWales, were also described as being an element of the poor collaboration in terms of magnitude and number. For example, it was described as the only trade fair for life sciences for investors and companies (I20). A second weakness identified was the perceived fragmented nature of collaboration (Pt06, I08, I11, I14, I41, I59, I62). The CEO of a pharmaceutical SME labelled the LS sector as a difficult story to tell, [as it is] focused on medical devices instead of a holistic life science sector. [It is] worth supporting if integrated more fully (I59). This quote bridges to the next weakness in the collaboration category, a lack of joined up thinking (I13, I16, I41, I52, I64). A Professor of Innovation stated [there is a] lack of joined up thinking between triple helix (academia, government and industry), mostly a result of academia and government (I13). A medical professor asserted, [there is a] cultural gap between academics, industry and NHS. Neither understand [each other] (I22). Further to the identification of Collaboration as a strength and a weakness, it was also seen as a key opportunity for the LS sector. Interviewees acknowledged the need for greater collaboration between all stakeholders (I02, I04, I07, I08, I10, I15). Initiatives such as the ILS (I23), MediWales (I35), Health Research Wales (I28), Medicentre (I47), Cardiff and Swansea (I24) were described as providing this opportunity for collaboration and it was believed that future ones should be considered. A professor of innovation stated, Open Innovation gives a small action and small actors unique opportunities Because Wales is small, it s less of a threat. Wales can become an important node (I08). The Plant Manager of a large diagnostics company stated that the opportunity is in collaboration and partnering, [because there are] so many technologies (I60). A professor of medicine and chairman of a contract research organisation argued that, Welsh Government initiatives need to support all the parts (I46). 127 P a g e

142 Further to this subcategory, a stakeholder questioned, [What are the] collaboration models? [Wales] can build a bridge between academics and industry, but will they connect? Hubs work in San Diego, Singapore and Boston; can it work without a hub? (Pt04) Critical mass Lack of Critical Mass was described as being a weakness of the Welsh LS network (I10, I11, I12, I13, I14, I15). Critical mass is defined by the Random House Dictionary as an amount necessary or sufficient to have a significant effect or to achieve a result: [e.g.] a critical mass of popular support (Random House, 1989). A partner within an intellectual property firm stated, [We] don t have critical mass, unless you count the NHS (I11). An academic professor argued, [There is] not enough critical mass for companies and academics (I13). General critical mass issues were summarised by a former Director of Operations of a stem cell company, stating [Actors and Institutions] want to be close to talent pool, companies, users, potential buyers, patients, etc., [but we] don t know inflection point (I34). Although Critical Mass was mentioned as an opportunity in a couple of interviews (I40, I52), it was interpreted by the researcher within the context of a threat that needs to be addressed. Critical Mass was listed as a threat by an academic professor, who argued, Critical mass needs to be achieved; [the] risk is it s never achieved (I10). This threat is further exacerbated by the fragmentation of the sector (I11) (see Section ) Engagement Engagement was coded as both a weakness and an opportunity within the Welsh LS sector. The managing director of a start-up LS company stated that the WG will not engage private sector (Pt8) and that WORD [now NISCHR] had no engagement with companies (I28). The managing director of a start-up medical device company said, [I] don t think [the] clinical side in Wales is engaged enough (I44), as well as the business schools are not engaged in life sciences (I44). The head of a medical testing laboratory within the NHS 128 P a g e

143 stated, Communication is one issue [The] level of engagement [is] wrong [with clinicians] (I64). In terms of opportunities, increasing the level of Engagement was the key subcategory. A professor of medicine argued that there was a need for a How to for industry [on] how to engage with government [and] how to engage with NHS (I22). A senior manager within a WG debt and equity funder said, Network strategy is critical to understand internal networks to share the ecosystem of Wales to the world. Wales can then connect to the world (I02). The managing director of a consultancy stated that Wales needs to bring people in, bring [them] together and discuss problems, maintain a self-help network (I14), which also links with the self-knowledge category (see Section ) Self-knowledge One of the most robust opportunities identified was that of Self-knowledge within the LS sector in Wales. Early interviewees described the need for a description of the ecosystem (I03, I06, I08, I09). A director of finance for a government funder stated that a gap in knowledge is the need to understand [the] shape of the industry [through a] company list, academics list, commercial list, [and] finance available (I02). Interviewees suggested how this information should be collected and disseminated (I06, I07, I08, I09, I14), including through a database, personnel, website and a document. For example, the director of a technology centre suggested this could be done through a hypothetical Wales PLC. Come in, get a list of 270 companies, list of academics. Information available, drawn out and integrated Consultants pull in companies. Life sciences team should have an interest in getting all 270 companies there. How to create this life sciences portal? (I19). Stakeholders further shared information that would be most relevant to collect (I06, I07, I08, I09, I14, etc.), which would include the What (e.g. information on the Networks and the Ecosystem) (I08, I09, I11, I12, I15, etc.) as well as the Who (e.g. information on the Actors and the Institutions) (I02, I07, I10, I11, I12, I14, I15, etc.). A plant manager for a large diagnostics 129 P a g e

144 company proposed that Wales, Map what our key competencies are: GE [Healthcare]: great stem cell manufacturer; Norgine: Bottling; BioMet: Orthopaedics; Penn: pharma[ceutical] manufacturing (I52). A senior manager of a technology assessment group suggested it would be fantastic if [there] was a database; medicines developed by Welsh companies [and their] pipelines (I62). A professor of medicine stated that a useful start would be (might sound elitist), [a] list of academics in Wales; [their] publications, citations, impact factors, who are world class, who s who and what s what (I07). Similar codes, categories and themes were further elaborated by interviewees throughout other interviews. A professor of innovation stated, Wales can become an important node [We need to] understand the internal networks to share the ecosystem of Wales to the world. Wales can then connect to the world (I08) Institutions The third core category grounded in the data was that of the Welsh LS Institutions. This theme centres on the interactions between the Actors and Institutions in the Welsh LS ecosystem. A brief outline of the categories which emerged for the Institutions core category, segmented by SWOT analysis, can be found in Figure P a g e

145 Strengths Companies Government Third Sector NHS Wales Universities Weaknesses Companies Government Universities Institutions Opportunities Government Third Sector Universities Threats Government Figure 6-4. Core Category: SWOT Analysis for Institutions The categories and subcategories that were extracted from the interview data are described below, in alphabetical order. These categories include Companies, Government, Third sector, NHS Wales and Universities. This section does not necessarily describe the full summaries of each and every institution, but rather the themes extracted from the stakeholders point of view Companies After reviewing the interview data, the companies were primarily listed as both a strength and a weakness within the Welsh LS sector. The strengths of the Welsh LS companies category are their embryonic (I19), cluster of micro companies (I09), small companies (I14, I26, I34) and medium-sized companies (Pt03, I10, I28); or SMEs. Also, a handful of strong anchor/large companies were identified as operating in Wales, such as 3M, Convatec, EKF Diagnostics, GE Healthcare, Norgine, Ortho Clinical Diagnostics, Penn Pharmaceuticals [now a PCI company], Siemens Diagnostics and Unilever (I10, I14, I19, I20, I32, I41, I46, I47, I52, 131 P a g e

146 I56, I61). According to the director of a technology centre, Anchor companies [are] important to Wales (I19). These great companies based in Wales (I55) have useful ideas and technologies (I58). This information coincides with previous reports from BIS, MediWales and the LS sector team. The specialties of these companies (and of other Actors and Institutions) can be found in Section In terms of weaknesses, one of the key subcategories identified was not in the companies themselves, but the perception that there were only a small number of established companies (I11) and anchor companies operating in Wales (I10, I11, I13, I14, etc.), such as, GE [Healthcare] (formerly Amersham), Unilever, Johnson and Johnson, (I08) Norgine, BioMet, Penn [Pharmaceuticals, now a PCI company], (I52), Siemens and Ortho Clinical [Diagnostics] (I19). Further to the theme of the anchor companies, another related weakness identified was the remoteness of decision-makers of these anchor companies (Pt6, I03, I04). A partner of a large law firm, heading up their LS team, argued [many] companies in Wales are subsidiaries of bigger companies. Decisions of/about the companies are made abroad (I03). This includes all of the previously listed companies, with the exception of Penn Pharmaceuticals [now a PCI company], which is headquartered in Wales. Some of the companies which were not part of the multinationals were described as underdeveloped (I04, I07, I11, I14). It was a perception that Companies are small, grow, then are eaten up (I09) Government Many mixed sentiments were gathered about the Government (including UK, WG and local councils). Stakeholder described Government as a strength, weakness, opportunity and threat. In relation to strengths, a managing partner at a major professional firm stated, [there is a] massive advantage from Welsh Government. [Wales is an] advantageous place to do business (I60). Furthermore, a Director of an ehealth company argued, Welsh Government successful to bring new companies [to Wales] (I40). According to a senior official in the WG s LS sector team, [Welsh] Government have single portal for business, raised a fund to assist the 132 P a g e

147 companies over Death Valley (I08). Moreover, a professor of medicine and the clinical director of an all-wales medical research group stated, [Welsh] Government was anticompany for years back. Now NISCHR is keen to industry [Now there is] lots of government support, [such as] finance [and the] new facilitative role of NISCHR, [which is] pro- rather than anti-industry [an] attitudinal shift. (I24). The R&D manager for a local Health Board stated, NISCHR has increased research and development through significant investment. Performance [is] now measured by [the] number of days to approval and [the number of] days to first patient recruitment (I22). Lastly, the UK government provides a regulatory framework through the MHRA (I09) and BIS from UK Government, [which] worked on governance and IP policy (I30). Government was also cited as a weakness, although not so forcibly as its description as a strength. Stakeholders described the LS in Wales to be dominated by public sector (I10), which leads to an over-involvement with government in industry (I29). The CEO of a few small companies stated there were poor Welsh Assembly Government skills and expertise in understanding the challenges of growing this sector (I56). Moreover, a former director in Welsh Government argued, Welsh Government struggles to promote the sector. [It is] underfunded to equivalent in England (I22). The opportunities related to the WG were related to a range of support initiatives. The former operations director of a regenerative medicine SME stated that Wales needed to capitalise on momentum that s starting to build within [Welsh] Government, [such as] government funding, infrastructure, ties to hospitals, [and] Sir Chris Evans and [Arthurian LS] fund in Wales (I34). New initiatives and strategies outlined in Sections , and 2.4 were mentioned at length as opportunities, including Health Research Wales (I22, I23, I28, I29, I30, I38, I44, I48, I49, I55), Science for Wales strategy (I11, I12, I18, I22, I28), the Hub (I01, I21, I22, I27, I29, I54, I55, I68), the Arthurian Life Sciences (Pt01, Pt04, I01, I02, I13, I19, I23, I27, I29, I34, I36, I47, I61.), among others. Another opportunity identified was that of greater 133 P a g e

148 government internal communication and horizontal integration. A professor of medicine stated all tiers of government need to work together (UK, Wales, local) (I24), as the director of a large academic translational unit shared that he was surprised Welsh Government doesn t talk to each other (I41). Threats within government were identified from the stakeholder interviews. Although the long term strategy was not politically motivated (I56), interviewees felt that the loss of political will within the [WG LS] team (I06) could lead to a change in Welsh Government priorities (change in policy) (I15), such as changes in funding (I15), changes in the regulatory landscape (I28), or a change within the government itself (I36). Another threat identified was the excessive bureaucracy (I06, I39, I42, I52) combined with the government expect[ing] companies to be proactive (I39) with identifying support and obtaining it from WG. A few interviewees expressed a need [for WG] to get more [involved on an] individual basis and get off ticking boxes (I42). Some firms who had engaged with government expressed disappointment that government officers would meet you face to face and give you a form (I42), with not much follow-up (I39) Third Sector The third sector was described as a key strength within the Welsh LS sector. Although the third sector would not normally include government organisations, groups funded by or that directly answer to the government (such as Health Research Wales and MediWales) are included in this category. The two key third sector institutions identified within the sector were the Association for British Pharmaceutical Industry Cymru (ABPI Cymru) (Pt1, Pt4) and MediWales (I10, I15, I22, I28, I29, I36, I37, I39, I41, I44, I48, I50, I53). The role of ABPI Cymru was minor in Wales, as one interviewee stated there was almost no presence of biotech[nology] or pharma[ceuticals] in Wales (See section ) (Pt4). MediWales role in the sector was more robust throughout the interviews (see Section ). MediWales started as the Welsh Medical Technology Forum and was founded by Sir Roger Jones (Penn 134 P a g e

149 Pharmaceuticals, now a PCI company) and Virginia Chambers (WDA) (I10). Its six selfdefined roles are advocacy, clinical access, communications, market intelligence, recognition and trade support (I28, I29) (MediWales, 2013b). MediWales was described as an effective umbrella trade organisation with a reasonable amount of cohesion (I22) and a positive influence (I37). A member described MediWales as the only body trying to pull together various companies. [It is a] network of other companies offering services (I39) and provides a portal for good working relationships (I44). The single opportunity identified for the third sector category was the entity branded Health Research Wales. Although it answers to NISCHR within the WG, it is branded like an independent third sector organisation. It was founded by the NISCHR Academic Health Science Collaboration (AHSC) with the purpose of providing companies with a one-stop source of information and support when undertaking Research & Development activities in the NHS in Wales (I31). Its functions include sign-posting, mapping of NHS Wales and assisting with the development of clinical trials (I23, I36). Since Health Research Wales was launched at the same time that the interviews were conducted, interviewees were not able to comment on its operational capacity NHS Wales NHS Wales was described as both a strength and a weakness within the Welsh LS sector (I08, I09, I12, I29, I36, I49, I52, I56). Its strengths were seen as its integrated service (I02), birth to death record (i.e. SAIL Databank) (Pt05, I09, I10, I52), the fact the Minister of Health has control of the Health Boards (I02) and provides access to [an] enormous market (I49). Furthermore, an interviewee stated that NHS Wales works well within Welsh Government. [NISCHR are] proactive to promote their role within NHS [Wales] they are very approachable and easy to ring up (I50). Clinical trials were also named as a key strength, which is described in Section P a g e

150 NHS Wales was also listed as a weakness as the following points illustrate. The managing director of a medical device company stated the quality of healthcare [is] low (I09); a theme also mentioned by others (I29, I35). Another managing director of a medical device SME described NHS Wales as remote, complicated, [and the] clinical side in Wales is not engaged enough (I44). This was verified by a technology evaluator within the NHS stating, NHS not in those loops particularly well Attendance by clinicians [to events] is sporadic (I50). Procurement was also described as a weakness not as in the procurement process per se, but as in the understanding of how the procurement process works by industry and clinicians (I22, I23, I28, I37, I44, I50, I54, I64). Industry think procurement is at fault. A key gap in knowledge is how to get industry to work with NHS and procurement (I50). A director within NHS Wales involved with procurement also cited it as a key barrier as industry doesn t know how to access the NHS appropriately, [which is] seen as a barrier Procurement isn t one size fits all (I64) Universities Universities were identified as a strength, weakness and opportunity within the sector. In terms of strengths, academics (I11), social sciences (I12) and Universities (I15, I20) were described as taking LS more seriously (I13). Examples of this include Cardiff [recruiting] Sir Martin Evans, Swansea with the new medical school and the possibility of a medical school in North Wales by the end of the decade (I13). A managing director of a start-up supply chain company stated, life sciences [is] valued by universities, [which leads to] value in health research, contribution[s] to health, investment into country [i.e. Wales] and money brought into Wales once successful (Pt8). A professor of medicinal chemistry argued that within the 2007 Research Excellence Framework exercise, Cardiff [University] and Swansea University both four-star (I11), meaning world-leading in terms of originality, significance and rigour. A technology transfer officer in North Wales argued, Universities [are] working 136 P a g e

151 together where possible to join together strengths with industries with lots of interdisciplinary action (I18). Universities were also described as a weakness by interviewees. A director of a university s research and innovation department said that there are only a few hundred academics [in Wales] and maybe a few dozen really good [ones] (I12). A professor of innovation maintained that [academics in Wales were] never traditionally strong. [They are] not having as many products which are commercialise-able More funding [is] going in, but based on the rankings, Wales is not strong. If there were more scientists, there would be more spinouts. The number of scientists in Wales is comparable to a medium-sized biology department at one large institution. There are more STEM submissions from Bristol than all of Wales (I13). Furthermore, an industrially-active professor of medicine commented that there are very few academics who market themselves (Pt04). The opportunities for Universities were expansion (I12) and increased level of industry interaction. A director of a third sector organisation and former director of a diagnostics company mentioned that [Wales is in] transition of being small to something bigger; for example, knowledge of expansion including infrastructure, finance and human resources (I21). Another stakeholder stated the Opportunities lie with how to make things bigger, for example with expanding universities (I20). Examples of this include validation for development of innovation campus at Swansea University (I06) and a second medical school [in Wales] on Swansea University s campus (I07). The director of a pharmaceutical regulatory consultancy argued, The Welsh LS industry is thriving and has grown over the last twenty years. Cardiff University is a centre of excellence for pharmacy and medicinal chemistry and the ILS Swansea has the potential to grow if managed properly (i.e. with a balance of academic and commercial experts) (I32). A former director of operations at a biotechnology company in Wales argued, If you want to improve LS industry and region, [Wales must be] providing for and generating novel life sciences from academics (I34). The 137 P a g e

152 CEO of a medical technology company in South Wales said, [Wales] needs more opportunities to spinout companies from Universities (I38) Ecosystem The fourth core category (in no particular order) is Ecosystem. This theme centres on the attributes of the Welsh LS Ecosystem itself. The ecosystem is not necessarily captured in the Actors, Networks and Institutions themselves, per se. A brief outline of the categories which emerged for the ecosystem core category, segmented by SWOT analysis, can be found in Figure 6-5. Strengths Funding Geography and size LS infrastructure LS specialties Weaknesses Funding Geography and size LS infrastructure LS specialties Ecosystem Opportunities Funding Geography and size LS specialties Threats Funding Figure 6-5. Core Category: SWOT Analysis for Ecosystem The categories and subcategories that were extracted from the interview data are described in alphabetical order below. These categories include funding, geography and size, infrastructure and LS specialties. 138 P a g e

153 Funding The funding subcategory was identified in all categories as a strength, weakness, threat and opportunity. Strengths were identified in Welsh funding streams such as angel investors (I02, I04, I26), Arthurian Life Sciences fund (Pt1, Pt3, Pt4 Pt6, I01, I02, I13, I19, I23, I27, I29, I33, I35, I47, I61), Finance Wales (I01, I02, I15, I26, I27, I28, I38, I41, I47), private equity (I02, I40, I57), Sêr Cymru (Pt3, I11, I12, I18, I22, I27, I49) and SMART Cymru (also known as RD&I) (Pt07, I05, I26, I28, I55). A senior member of WG stated that there was a lot of interconnectedness, finance, [including from the] Hub in Cardiff, [Arthurian] Life Sciences Fund, [and] Welsh Government and NISCHR cooperation (I01). A senior investment executive in the LS sector felt that finance was a strength due to the potential grant system, [which] was robust and cohesive [and is] now getting back [to its original state]. Finance Wales as an investor [has] no caps (I02). The director of a medical technology SME stated that the grant funding [is] extremely useful, [such as the] RD&I non-repayable funding, [innovation] voucher scheme ( 10,000), European money and [other] ring-fenced funds (I03). Support from the UK government has also been appreciated by the managing director of a UK-wide LS consultancy: British government have taken risks, [such as with the] Enterprise Investment Scheme (EIS). [They have] raised limits on those, pumping money into the sector. [It is] easy to raise late phase fund[ing] (I43). The weaknesses related to a lack of funding (Pt6, I06, I07, I09, I11, I13, I14, I15, I16, I17, I18, I19, I21, I24, I26, I27, I28, I29, I30, I31, I35, I41, I42, I46, I49, I56, I57, I58, I60, I61, I63) including grant, equity and debt financing. This was in relation to both academic research and under-capitalisation of SMEs (Pt3, I08, I11). The Managing Director of a contract research company argued, [It] comes down to funding from the government. Academia [is] bad at getting cash from anywhere. Wales [is] not good at getting funding from industry or government (I35). A professor of medicine with experience spinning out ventures stated, Concept funding [is] limited. As a nation, [Wales has] less performance at research 139 P a g e

154 funding such as the MRC and TSB. Valley of Death felt desperately (I11). The managing director of a start-up medical company stated, [It is] difficult to access funding, even though schemes [are] available from government. [There are] too many exclusions, too many difficulties (I13). In relation to SMEs, an academic director of strategic collaborations argued, [People would] rather do business in the [United] States. [There is] more willingness to invest (I09). The managing director of a few start-up biotechnology companies argued, [A weakness is a] lack of access to funds for new start-ups/spin-outs: seed funding (I56). The director of a LS incubator stated that there was an undercapitalization in SMEs (too many rounds of funding). [We] need appropriate seed funding (Pt03). The opportunities in funding existed within the subcategory of external funding (Pt7, I06, I09, I11), especially within the context of Arthurian Life Sciences. A professor of medical innovation said, Maybe [the Arthurian] LS fund makes a difference. Large venture capital [could] take the project for leverage. [In] theory, a good idea. Sounds like a lot of money, but Singapore LS Fund is 3 billion. [It s a] step in the right direction. Nice to see (I41). [Wales needs to] capitalise on momentum that s starting to build within government, [such as] government funding [The Arthurian] fund in Wales (I34). A director of a technology centre stated, Investment can accelerate the life sciences. Maybe this is what the [Arthurian] 100 million fund is about (I19). A consultant working on large-scale life sciences projects stated, Lack of money for development and growth leads to a number of hidden gems waiting to be unearthed (I14). In terms of a threat to the Welsh LS sector, changes in government support also included changes in funding. An academic technology transfer officer identified a threat in the change in Welsh Government funding (I15). The managing director of a biotechnology company cited a lack of funding to assist start-up companies (I56) or in other words, seed funding as a threat. Further to this statement, a partner at a large intellectual property law firm said a threat could be next stage of funding [It is a] difficult time for companies to get money 140 P a g e

155 (I60). The former CEO of a medium-sized biotechnology firm stated that the venture capital side and early stage industry. A lack of funds (I61) was a threat. A former director of a large diagnostics firm warned that, Getting funding can be huge problem at an early stage. [There are] lots of risks (I21) Geography and Size The geography and size of Wales were listed as a strength, a weakness and an opportunity by stakeholders. Although listed as relatively small when compared to other regions (Pt06, I06, I12), the small environment (I06) results in the region being more agile (Pt06), as well as able to move fast and be flexible (I06). The CEO of a medical technology company stated, Wales is a village (tiny). [LS is a] government targeted sector, [with a] huge degree of influence. [It is] easy to find requirements and how to help. [A] small company can be more quick, flexible and get assistance for the best characteristics (I38). The director of a health board in South Wales stated, [Wales is] quite small, [and can] use [this] to [its] advantage. [One] can t go far without knowing somebody, [or find the correct contact through a] few phone calls or s (I48). The geography and size of Wales were also identified as a weakness within the sector. Wales was described as having poor location and challenging geography (Pt4, I11, I12, I24). One of the key issues extracted from the interviews was that of transportation to and from Wales. A director of a LS incubator stated, Airports and transportation infrastructure are not adequate [in Wales] (Pt03). A partner at an intellectual property law firm argues, [The] roads and railways [in Wales are] poor. Wales is an island if [the] railway [is] cut off (I12). A professor of medicine argued, [Wales is in the] Western-most part of Europe. Proximity is a challenge (I24). The North-South Wales physical divide has also been identified as an issue by others (I15, I33, I39, see Section ). The north-south connection [is] not great [Wales is] losing companies to Bristol and Cambridge [because of this] (Pt03). A senior financial manager of a large diagnostics company in North Wales argued, People not 141 P a g e

156 happy to travel [to North Wales]. [A weakness is in the] logistics of getting product exported. The airport, dock and roads are good, [but there are] occasions when [it] hasn t been good, [such as with] floods or snow the A55 [dual carriage way] is a lifeline (I33). The opportunities related to size include growth opportunities, improvements in infrastructure and more cohesive networks (see Section 6.2.2). In a small place [such as Wales, it] doesn t take much money to double the size (I12) and this would allow for quick growth (I12). A senior manager of a LS incubator argued that being small can lead to being clever at identifying openings (Pt06). [Wales is] transforming based on connectivity, [such as] electrification [of the railway], airport, roads, etc. (I25). Electrification of the railway from London to Swansea [is] important (Pt06). A senior manager of a university technology transfer office stated, [There are a] lot of universities in a small geographical space, [which] leads to lots of translation. Because the region is small, there is a good network of researchers established. [There is an] opportunity to grow and to pass on knowledge and experience (I15) LS Infrastructure LS infrastructure was identified as a key strength and threat to the Welsh ecosystem. These strengths lie with infrastructure such as the Institute of Life Science (ILS) (Pt4, Pt6, Pt7, I01, I03, I04, I06, I09, I16, I23, I24, I32, I44, I51, I58, I63), Medicentre (Pt3, I03, I42, I47, I57) and Welsh LS Hub (I01, I21, I22, I26, I29, I36, I46, I60). [There is a] new central push to support Welsh Government life science infrastructure (I46) Government invested in infrastructure, for example ILS1, ILS2 and ILS3. Investment is the catalyst for the sector (I04). The managing director of a medium-sized medical device company said, [Wales is a] great place to do business. ILS helped to provide support (I44). The director of strategic collaboration at a university stated, ILS and Cardiff Medicentre are key [to the LS in Wales] (I03). The managing director of a micro biotechnology company stated, Medicentre is excellent. For a small start-up, it s perfect (I42). 142 P a g e

157 The weakness identified for LS infrastructure includes insufficient facilities. A senior manager of a third sector organisation stated, [Wales has] no science park. [The] Techniums have a bad reputation. [The] Institute of Life Science (ILS) the closest thing [to a science park]. [The] Medicentre is full. (I28). This was further corroborated by the CEO of a medical device firm, who stated, [There is] no science park hub and lack of suitable lab space accommodation for new start-ups [in Wales] (I38). Although described as a strength by a few (I47, I60), the Techniums were primarily perceived as a weakness in the ecosystem (Pt03, Pt04, Pt07, I24, I40). [The] Techniums that survived, [were the] right facilities, wrong place. [It] will be tough repeating [the] Technium initiative (Pt03). The director of a third sector organisation stated, pharma[ceutical companies] won t fill [the] Techniums (Pt04) LS Specialties Life science specialties were coded as a strength and weakness within the LS ecosystem. Strengths were identified as clinical trials (I07, I08, I09, I12, I22, I23, I31, I34, I41, I51, I58), health informatics (Pt05, I06, I09, I10, I15, I28, I29, I52), medical technology (Pt03, Pt06, I01, I03, I09, I10, I11, I12, I14, I17, I19, I20, I22, I27, I29, I30, I31, I36, I38, I55, I56, I58, I65) and neuroscience (I01, I06, I11, I15, I27, I29, I30, I43). A senior manager of a health board research and development office said, Academic institutions and big pharma[ceutical companies] can execute clinical trials [in Wales] [There are] strong links between NHS, academia and industry. For example, [NISCHR Academic Health Science Collaboration] (AHSC) has regional models, [which are] good models to go with. There is a possibility of clinical trials with 2,000 patients all in Wales (I23). A professor of medical innovation stated, [A strength in Wales is] clinical trials. A lot has happened recently [Health Research Wales] has made a difference [and] NHS [Wales] is going to be a big driver (I41). The majority of large scales trials [in Wales are] from bigger pharma, such as Novo Nordisk, GSK, etc. (I23). A clinical director of a health board research and development office stated, Wales has a stable population [see Section ], with the potential to do large clinical 143 P a g e

158 trials, for example in diabetes. [There are] not great schisms with clinicians; [they] get on well (I24). Further to the clinical trials, health informatics was also described as a strength. Informatics is information systems, information technology and data systems [in] relation to health related research. [It is] turning data into results (I10). NHS Wales [is a strength], with informatics and birth-to-death records (I09). The senior manager of a LS incubator stated, SAIL Database is making great progress in health informatics (Pt05). Furthermore, through the Life Science sector team Academic for Business (A4B) programme ehi 2, Wales is getting a reputation for ehealth (I10). Medical technology, including diagnostics and medical devices, was also listed as a strength. A consultant in the LS stated a strength in the Welsh LS sector is medical technology (engineering based), which includes medical equipment design and manufacturing (I14). A medical professor stated, Most successful companies are, (by number of employees, sustainability and longevity) metal bashers : making syringes, mattresses, wheelchairs all low tech[nology] (I10). The managing director of a small biotechnology company stated, [Wales LS sector is] dominated by low tech medical device manufacture, e.g. wound dressings, special beds, wheel chairs, etc. (I56). A director of a LS third sector organisation argues, In terms of medical devices, the area is relatively disparate in terms of the types of industries, but I would say buoyant and a real area of strength. WAG recognition of this would attract industry to see Wales as an environment in which to progress to trial-based validation of devices for NICE/FDA type acceptance In terms of diagnostics there is I believe a real potential for exploitation in Wales (I53). The director of a technology centre emphasised that the strengths of the LS sector lie with diagnostics, diagnostics, diagnostics (I19). A professor of medical innovation and managing director of a diagnostics company stated, Diagnostics [are] very strong [in Wales]. [There are] big companies (GE Healthcare and Ortho-Clinical Diagnostics) and small (MLT, RSR, British Biocell, Protherics and Mologic) (I46). The director of a 144 P a g e

159 biotechnology company argued, In terms of diagnostics there is I believe a real potential for exploitation in Wales but currently insufficient pull from NHS Wales. (I53). Neuroscience was also identified as a key strength for research and development (I01, I06, I11, I15, I27, I29, I30, I43), as outlined at the beginning of this section. A professor of medicine said that neuroscience is big in Cardiff and well represented in the ILS. [The level of] translation is small and notoriously difficult (I06). Cardiff and Swansea University both four star [research in] neurosciences (I11), with world class neuroscientists (I29). Pharmaceuticals was identified as the key weakness in the LS specialties. The director of a pharmaceutical third sector organisation argued, [There is] almost no presence of biotech[nology]/pharma[ceuticals] in Wales, due to practicalities of being in Wales Pharma has a small footprint in Wales. [Wales is] not going to increase unless we re concentrating on it (Pt04). The managing director of a biotechnology company stated, In terms of pharma[ceuticals], it is difficult to see how [the Welsh LS industry] can establish a real presence beyond service type industries. Home grown drug candidates appear to leave the academic sector and do not benefit the development of the Welsh pharma[ceutical] sector [There is a] lack of representation in critical aspects of the drug discovery and development pipeline. This would take some 15 to 20 years to develop and in the meantime I feel that WAG does not appreciate the current changes in big pharma capacity and philosophy to R&D and trials (I53). Pharmaceuticals and regenerative medicine were identified as key opportunities. The managing director of a pharmaceutical manufacturing company stated, [We] need to see Wales-based/owned [pharmaceutical] companies; discovery and developing new treatments. [There needs to be a] cleaner path forward for the sector The challenge is to sell Wales as a one stop shop for technology/drug[s]; funding, support and investment; and support for the life sciences service providers (Penn, BioTec, Simbec, Institute of Life Science, etc.) [from] contract research organisation to manufacturing (I62). A professor of medicine stated that 145 P a g e

160 an opportunity lay with, big pharmaceutical networks If [there were] more funding for research activity, more funds for centres of pharma[ceutical clinical] trials and more trained nurses, [Wales] could get 10 patients [recruited] at each site easily (I24). The opportunities in regenerative medicine focused on stem cells and wound healing. A director of a technology centre argued that a key opportunity lay with investment in stem cells (I19). A professor of enterprise and innovation stated, [The] university sector is starting to take life sciences more seriously than the past; for example, Cardiff [University] poaching Sir Martin Evans [from Cambridge] (I13), who is known for his Nobel prize and his work with stem cells. A managing director of a biotechnology firm said, This area is exploding...tissue regeneration, stem cell therapeutics, minimal residual disease detection, circulating tumour cells, in vivo mimetic cell systems for drug evaluation and discovery etc. In Wales, we should fill the gaps in knowledge to support this area (I53). Further to stem cells, wound healing was also considered an opportunity within regenerative medicine (I01, I06, I20, I35, I43). The managing director of a LS company argued, Wound research in Wales [is] ground breaking. [A professor in Wales] is good at sourcing money out of the industry [and] much of the research is close to the NHS (I35). Furthermore, the Welsh Wound Innovation Centre, launched at BioWales in 2013, was described as a collaboration between academia, businesses and clinicians to coordinate wound healing and set policy procedures for outcomes with data (I45) Global Context The fifth core category (in no particular order) is global context. This theme centres on the context of the LS sector outside of Wales, i.e. on an international scale. A brief outline of the categories which emerged for the Global Context core category, segmented by SWOT analysis, can be found in Figure P a g e

161 Strengths Weaknesses Global Context Opportunities External role models Outward perception Threats Competitiveness Figure 6-6. Core Category: SWOT Analysis for Global Context The categories and subcategories that were extracted from the interview data are described below, in alphabetical order. These categories include competitiveness, external role models and outward perception. As the global context is inherently external to the Welsh LS sector, only opportunities and threats were identified Competitiveness Competitiveness was identified as a threat to the Welsh LS sector. Further to Section External role models, these regions also compete against Wales in the global context (Pt06, I06, I09, I10, I16, I27, I56). A professor of medical innovation said, [The] world is moving on. If Wales doesn t keep in touch, [it] can t close the gap. [The] very best will go where [the] opportunities are. [A threat is if we] lose global context (I08). The director of a third sector organisation stated, [Wales is] competing with established countries, universities and science parks around (I20). The managing director of a medical diagnostics company stated, Wales has to be global player to succeed. [We] need to compete globally (I27). The CEO of a 147 P a g e

162 medical technology company argued that, [Wales] needs a package that is competitive on a global scale (I38). A director of a LS technology centre argued, [Wales] can t be insular. [It] must be global. Many are, some aren t (I19). A professor of medicine claimed there are better regions [than Wales]. Look at Scotland (I09). A professor of innovation said, [The] problem is every other region is saying the same [about LS]. [For example,] Scotland, Northwest England, Spanish regions How can Wales differentiate? (I13) External role models External, regional role models were described as a key opportunity within the Welsh LS sector. Regional, sectoral LS hubs in California (Pt04, I11, I17, I34, I46,, I49, I56, I66), China (I10, I14, I19, I31, I49), Israel (I02, I03, I13, I17, I52), Ireland (I13, I31, I41, I57), Singapore (Pt04, I34, I41, I45, I49, I56), Scotland (Pt05, I01, I02, I07, I09, I13, I14, I16, I31, I34, I39, I48, I50, I55, I56, I59) and Sweden (I01, I56). The managing director of a small biotechnology company stated, look outside of Wales: talk to the people in the buzz areas, for example California, Cambridge, Scotland, Singapore, Holland, Sweden (I56). A professor of innovation suggested, look at what s happening in other places, [such as] similar small countries. What differentiates? What are common success factors? Why [do] clusters work? Borrowing from other sector models, for example manufacturing and creative industries Big things to know: user-driven innovation. How to get innovation from users. Who are the users? Clinicians, patients, general public (I13). The head of IP commercialisation of a university in North Wales said, Wales tries to reinvent the wheel; don t do things done elsewhere (I15). It was suggested that stakeholders in the Welsh LS sector should go to best places and learn (I49), turn to best practice elsewhere (I57) and follow achievements (I02). 148 P a g e

163 Outward perception Outward perception was identified as an opportunity for the Welsh LS sector. A consultant in the Welsh LS sector argued, [Wales is] not perceived as very significant in size from outside or inside (I14). A senior manager at an LS incubator suggest that Wales should obtain [a] perception of Wales from those who don t have [a] stake, including strengths, weaknesses, opportunities and threats. Are product development times longer? [Obtain the] factors to promote/inhibit investment from venture capital firms and banks for life science companies (in Wales) What is the impact to global visibility [and] human health (Pt06). Further to this statement, a partner at a large law firm stated, [The] most important thing in business is selfknowledge and outward perception. Usefulness [would be to determine the] overview, structure, strengths, weaknesses and perception [of Wales] from the outside (I03). A professor of innovation argued it was necessary to define a narrative for the life sciences sector in Wales. [It would be] useful to do more external market [research on the] perceptions [of Wales]. If [Wales is viewed as] fragmented, [it] doesn t help with being strong, attracting investment or talented people. Locate what is happening in Wales with [an] ecosystem approach to innovation: eco-innovation, practice from [the] academic perspective Triple Helix, but more general (I59). The former operations manager for a biotechnology company relocated to London stated he would like to see the reputation/reach [of the Welsh] epicentre/hub. What percentage of billions lead to surviving companies in Wales? What percentage to UK/globally? Interested in seeing how much of that are companies that have relocated to Wales, for example WG gives money to [a] manufacturing [company], although [its] HQ [is] somewhere else [What] type of people/quality of people attracted to region, such as scientists (PhD in research) (I34). A partner at an intellectual property law firm mentioned, Useful info[rmation would be] looking into a combination of technology and geography, for example around Bridgend, diagnostics, or Aberystwyth, agricultural. Help to show a strong base. Could be helpful as a marketing tool for Wales (I17). 149 P a g e

164 Summary of Selective Coding Each of the five core themes and core categories were described in the sections above. In order to provide a brief overview of this coding, a summary of the selective coding process is provided in Table 6-2 as a matrix of core themes and SWOT analysis. A complex description of the Welsh LS sector was provided by the interviewees. This is evidenced by a majority of subcategories being coded within more than one SWOT category, with the exception of engagement, self-knowledge, external role models, outward perception and competitiveness. As previously described, no strengths or weaknesses were identified for the Global Context Theme, due to the extrinsic nature of the theme. 150 P a g e

165 Table 6-2. Selective Coding: Core Themes and Categories versus SWOT Analysis Core Themes SWOT Actors Networks Institutions Ecosystem Global Context Strengths Culture o Creative o Desire to develop o Determined o Innovative o Pride Population o Stable population Skills o Highly trained Collaboration o Strong and small networks Companies o SMEs o Large/anchor Government o Company assistance o Inward investment o NISCHR o Regulatory framework Third Sector o MediWales NHS Wales o Clinical trials o Integrated records o Integrated service Universities o Value LS Funding o Angel o Grant o Venture capital o Tax schemes Geography and size o Fast and flexible o Networks LS infrastructure o ILS o Medicentre LS Specialties o Clinical trials o Health informatics o Medical technology o Neuroscience 151 P a g e

166 Table 6-2. Selective Coding: Core Themes and Categories versus SWOT Analysis Core Themes SWOT Actors Networks Institutions Ecosystem Global Context Weaknesses Culture o Poor entrepreneurism o Tribalism Skills o Lack of experts o Poor management Collaboration o Conferences o Fragmentation Critical Mass o Lack of critical mass Engagement o Business o Clinical Companies o Few large/anchor o Remote decisionmakers Government o Over-involvement o Poor skills and expertise o Underfunded NHS Wales o Low quality o Poor procurement Universities o Low number of scientists o Poor self-marketing Funding o Lack of funding Geography and size o Challenging geography o Poor location o Transportation links LS infrastructure o Insufficient facilities LS specialties o Pharmaceuticals 152 P a g e

167 Table 6-2. Selective Coding: Core Themes and Categories versus SWOT Analysis Core Themes SWOT Actors Networks Institutions Ecosystem Global Context Opportunities Threats Culture o Entrepreneurship o Trust Population o Stable population Skills o Brain drain Collaboration o New initiatives Engagement o Network strategy o Self-help network Self-knowledge o Qualitative mapping o Quantitative mapping Critical Mass o Critical mass required Government o Integration o Internal communication o Support initiatives Third Sector o Health Research Wales Universities o Expansion o Industry interaction Government o Change in priorities o Excessive bureaucracy Funding o External funding Geography and size o Growth opportunities o Infrastructure o Networks LS specialties o Pharmaceuticals o Regenerative medicine Funding o Change in funding External role models o California o China o Israel o Ireland o Singapore o Scotland o Sweden Outward Perception o Improve perception Competitiveness o Being insular o External regions Emerging core categories of the Ecosystem, Actors, Networks and Institutions are placed in the table above and listed in a matrix along Strength, Weakness, Opportunity, or Threat analysis. Subcategories which were unique in SWOT categories are underlined. 153 P a g e

168 6.3. Thematic Coding: Framework for the Welsh Life Sciences Sector Core categories were densified and saturated for the Strengths, Weaknesses, Opportunities and Threats according to Grounded Theory methodology described in Section A Basic Social Process was constructed using these core themes and core categories grounded in the data (found in Table 6-3) and was then used to derive the framework, visually depicted in Figure 6-7. The Basic Social Process provides a simple overview of how the Welsh LS sector operates. To some, this result might be quite obvious to somebody working inside the Welsh LS sector or to somebody working in a regional innovation system of similar size in another part of the world. The researcher concurs with this sentiment, but this Basic Social Process provides the foundation for understanding of the Welsh LS sector. It provides a framework to gather and store data. It tells a story from the associated themes, categories, and codes gathered during the interview. After speaking with the interviewees and others in the sector, the researcher feels this offers an accurate picture of the Welsh LS sector. Wales performs well in certain subsectors, there is a general spirit of innovation, and it is relatively cohesive. By leveraging its strengths, Wales could become quite economically competitive for its size in the global LS landscape, as well as make a difference to its local population. To follow the data on how the Basic Social Process was derived is straightforward. Interview data was collected in the field into written field notes. These notes were then digitised and coded through the GT Open Coding process into themes or variables in NVIVO software (Section 6.1). These were also coded based on simple SWOT analysis. These early themes or variables were then combined into Core Categories (Section 6.2) and ultimately themes. 154 P a g e

169 Table 6-3. Data Analysis Map: From Codes to the Basic Social Process 4. Basic Social Process Influences: The Welsh LS sector is relatively small, yet cohesive, innovative and has the desire to develop. The Welsh LS Actors and Institutions interact in a very complex manner through the Networks within the Welsh LS sector. Each of these three themes contributes to the overarching Ecosystem within Wales. All themes have unique strengths, weaknesses, opportunities and threats, which require bespoke support for growth and/or improvement. Outcomes: As a result of the Influences (the Actors, Networks and Institutions), the Welsh LS Ecosystem is constantly changing and evolving over time, including categories such as funding, size, infrastructure and specialties. The main LS specialties are clinical trials, health informatics, medical technology and neuroscience. The Ecosystem at a national level must interact with other ecosystems within a Global Context in order to remain competitive, learn best practice and maintain visibility. The Global Context directly impacts the Influences, creating a positive feedback loop for growth. 3. Themes Actors Networks Institutions Ecosystem Global Context 2. Categories Culture Collaboration Companies Funding Competitiveness Population Critical Mass Government Geography And Size External Role Models Skills Engagement NHS Wales Infrastructure Outward Perception Self-knowledge Third Sector LS Specialties Support Universities 1. Codes Based on initial interviews (See Section 6.1) 155 P a g e

170 Figure 6-7. Grounded Theory-based Theoretical Framework of the Welsh LS Sector The Actors, Networks, Institutions, Ecosystem and Global Context are arranged according to the Basic Social Process identified from the interview data and Grounded Theory Methodology. Although not directly from the interview data, Life Sciences Policy and the Welsh LS Strategy were included for added context, which are illustrated in the boxes with grey backgrounds. 156 P a g e

171 The Grounded Theory-based Theoretical Framework of the Welsh LS Sector framework in Figure 6-7 outlines the interactions between the five different Themes within the context of the UK and Welsh LS policy and/or strategy. Again, although this framework might be intuitive to those operating in the Welsh LS sector, even at a superficial level, it provides an answer to Research Question 1, as well as provides a framework for analysis of data to answer Research Questions 2 and Answering Research Question 1 The purpose of this chapter is to address Research Question 1: What are the stakeholders views regarding the current Welsh life sciences sector?. The answer to this question lies within the Basic Social Process (Table 6-3) and the Theoretical Framework (Figure 6-7) derived from the interview data and Grounded Theory methodology. It should be taken into account that the purpose of Research Question 1 was to understand the Welsh LS sector landscape from the stakeholders perspective, utilising a Grounded Theory methodology. The snowballing sampling methods proved effective in providing access to an adequate number of stakeholders in order to reach theoretical saturation of the data. A total of 74 interviews were performed over a nine month period an average of about one interview every three days. These stakeholder interviews provided a series of findings which led to a scenario remarkably consistent with knowledge-based economy, innovation and policy literature. The sentiments revealed through the stakeholder interviews were fairly consistent with the reports issued by the WG s LS Sector Panel (Morgan, 2013, Welsh Government, 2012c), MediWales (MediWales, 2009, MediWales, 2010, MediWales, 2011b, MediWales, 2011a, MediWales, 2012a, MediWales, 2012b, MediWales, 2013c) and UK BIS Strength and Opportunity reports (BIS, 2009, BIS, 2010b, BIS, 2011d, BIS, 2012c, BIS, 2013). However, the interviews did also highlight key Weaknesses and Threats to the sector, which were not found in the aforementioned reports, as many of these reports focus on the Strength 157 P a g e

172 and Opportunity of the sector (as the title of the UK BIS s report suggests). The sentiments derived from the interviews were further analysed in 7.3. As a result of the interviews, a Basic Social Process was derived and which consists of a grouping of Influences and Outcomes. The Influences include the Welsh LS Actors and Institutions, which interact in a very complex manner through the Networks within the Welsh LS sector. The Actors, Institutions and Networks are themes which contribute to the encompassing Ecosystem in Wales. All themes have unique strengths, weaknesses, opportunities and threats, which require bespoke support for growth and/or improvement. As a result of the Influences (the Actors, Networks and Institutions), the Welsh LS Ecosystem and its characteristics are constantly changing and evolving over time, including Categories such as funding, size, infrastructure and specialties. The main LS specialties are clinical trials, health informatics, medical technology and neuroscience. The Ecosystem at a national level must interact with other ecosystems within a Global Context in order to remain competitive, learn best practice and maintain visibility. The Global Context directly impacts the Influences, creating a positive feedback loop for growth. The Basic Social Process was then integrated into a framework to represent the Welsh LS sector. UK and Welsh LS Policy, as well as Welsh LS Strategy, were also included in this framework as they play a vital role in the sector. This framework, by itself, provides a simplified overview of the Welsh LS sector. In order to gain a more in-depth view into each of the themes or categories, the corresponding descriptions from the interview data were provided in Section 6.2. One of the main goals of this study is to reduce this information to a key summative understanding of the sector, which would be used to produce recommendations for the Welsh LS sector. Each of the themes, categories and codes could be described in great length (most of this information having been identified in Section 6.2), however further discussion of this would be outside the remit of this study. 158 P a g e

173 Chapter 7. Results: Stakeholders Areas of Weakness in Knowledge The purpose of this chapter is to address Research Question 2: What are the stakeholders gaps in knowledge regarding the Welsh life sciences sector?. Research Question 2 is exploratory in nature, with semi-quantitative data extracted from the interview data. The most relevant themes were extracted from Interview Question 6: Where are the gaps in knowledge for you as a stakeholder in regard to the Life Sciences sector in Wales?, although data was also utilised from other Interview Questions. It must be noted that Interview Question 6 was an open-ended interview question, in contrast to a structured interview question or survey. The responses to the question were unprompted, with the intention of identifying the true areas of weakness in knowledge of the sector. This section is directly related to the category Self-knowledge (see Section ) within the core category Networks. Self-knowledge was a robust issue arising from the research where stakeholders described how they were not able to gain information regarding the Welsh LS sector. There was an explicit need within the data for a transparent, easy-to-access platform which would allow for the sharing of sector information, ideally following a detailed mapping exercise. This mapping exercise would be a consultation to effectively capture the information regarding the sector for dissemination to the stakeholders. The key areas of weakness in knowledge within the Welsh LS sector, based on stakeholder interviews, revolved around two major themes: Understanding of the sector (n=48/60) and Benchmarking of the sector (n=33/60). The former entailed a qualitative evaluation of the LS sector in Wales, whereas the latter required a more quantitative approach. Each of these themes is described further in the sections below. GT provides a qualitative summarisation of the interview data gathered, as opposed to quantitative analysis. To perform a semi-quantitative analysis of keywords, NVIVO s Word 159 P a g e

174 Frequency Analysis query tool was used to extract the keywords from the data collected related the stakeholders gaps in knowledge (Interview Question 6) Qualitative Mapping of the Life Sciences Sector in Wales The responses of 60 interviewees to Interview Question 6 were recorded; pilot interviewees were not asked Interview Question 6 (n=8) and others declined to answer (n=6). 48 of these 60 responses (i.e. 80%) suggested that they would like to have a greater understanding of the actors (n=37) and processes (n=43) within the Welsh LS ecosystem. These responses are depicted in further detail in Figure 7-1. Stakeholders were mainly interested in having further information on the actors within industry (n=25), academia (n=16) and the NHS (n=12). The professionals (n=8), government (n=6), leadership (n=7) and Third Sector (n=2) were also identified as having support roles to the primary actors and processes within the sector. In relation to the processes within the Welsh LS sector, there was an identified need for knowledge regarding early stage development, especially regarding the understanding of collaboration (n=23), finance (n=21), industrial development (n=20), knowledge transfer (n=19), academic research (n=17), skills (n=15) and industrial research (n=9). Topics such as business support (n=4), infrastructure (n=6), clinical trials (n=5), regulatory (n=2) and policy development (n=3) were of less interest, counting for ten percent or less of the stakeholders. Lastly, although unprompted, the interviewees also proactively suggested methods for collection and dissemination of the information collected in a mapping exercise; these included a website (n=6), using personnel (n=6), a database (n=3) or a document (n=1). 160 P a g e

175 Academics Government Industry NHS NGOs Professionals Leadership Education/Skills Academic Research Knowledge transfer Collaboration Industrial research Industrial development Finance Business support Infrastructure Clinical trials Regulatory approval Percent of Respondents Policy Database Document Personnel Website 50% 40% 30% 20% 10% 0% Actors Processes Dissemination Figure 7-1. Stakeholders Areas of Weakness in Knowledge: Understanding Stakeholders (N=66) were asked Where are the gaps in knowledge for you as a stakeholder in regard to the LS sector in Wales? 80% of respondents requested knowledge regarding understanding the sector. The figure above describes the percentage of respondents identifying each topic mentioned by stakeholders, divided among the actors, processes and a suitable method for dissemination. The processes are loosely ordered based upon technology readiness level (TRL) or commercialisation timeline, from basic research to regulatory approval. 161 P a g e

176 7.2. Quantitative Mapping of the Life Sciences Sector in Wales Although unprompted through the open-ended interview question, interview data also supports the need for a benchmarking exercise of the LS sector in Wales from a quantitative perspective. This need was shared by over half of the respondents (n=33/60). For example, interviewees described not being able to understand if claims of being world class in the Welsh LS sector were actually true (I08). As outlined in Figure 7-2, the stakeholders expressed a desire to benchmark the quality of what currently exists in the Welsh LS sector, either alone or against other players within the UK, Europe, or the rest of the World. Although the need for understanding the sector was spread over a broad range of topics, the request for benchmarking was polarised towards the LS industrial subsector. All 33 stakeholders mentioning benchmarking requested that the industrial subsector be benchmarked (n=33), with others requesting benchmarking of academic institutions (n=5). The evaluation of both qualitative (n=18) and quantitative (n=19) measures was requested across all stakeholder subsectors (see Section 5.2.3), with the primary request for these to be measured within the industrial subsector (See Figure 7-2). 162 P a g e

177 Figure 7-2. Stakeholders Areas of Weakness in Knowledge: Benchmarking Stakeholders (N=66) were asked Where are the gaps in knowledge for you as a stakeholder in regard to the LS sector in Wales? 55% of respondents desired the Welsh LS industry to be benchmarked, greater than the desire for academia or other subsectors. In terms of the type of benchmarking, 32% requested a qualitative SWOT approach to be taken and 25% requested a quantitative approach measuring Critical Success Factors (CSFs) and Key Performance Indicators (KPIs). 163 P a g e

178 7.3. Answering Research Question 2 The purpose of this chapter is to answer Research Question 2: What are the stakeholders gaps in knowledge regarding the Welsh life sciences sector? This research question is exploratory, with data grounded in the interview data. The most relevant themes were extracted from Interview Question 6: Where are the gaps in knowledge for you as a stakeholder with regard to the Life Sciences sector in Wales?, although data was also utilised from other Interview Questions. The key gaps in knowledge within the Welsh LS sector, based on stakeholder interviews, revolved around two major themes: Understanding of the sector (n=48/60) and Benchmarking of the sector (n=33/60). Whilst the former entailed qualitative evaluation of the LS sector in Wales, the latter required a more quantitative approach. Mapping knowledge has been shown to be an useful technique to support knowledge translation (Ebener et al., 2006). Not only is the mapping process important, but also the dissemination (i.e. knowledge transfer and exchange) of the outputs. Furthermore, best practice for knowledge transfer and exchange has not been fully evaluated, with many of the academic systematic reviews stating that it has yet to be discovered. Knowledge transfer and exchange (KTE) is as an interactive process involving the interchange of knowledge between research users and research producers. Despite many strategies for KTE, it is not clear which ones should be used in which contexts. Mitton et al (2007) The stakeholders expressed a need for more qualitative information in the earlier commercialisation process, including basic research, technology transfer, collaboration and finance. Qualitative Welsh LS mapping is already under way. The Life Science Exchange, funded by the European Regional Development Fund through Welsh Government s A4B (Academic for Business) programme, is currently undertaking a mapping exercise for the Actors, Networks, Institutions and Ecosystem aspects of the Welsh LS ecosystem in a qualitative sense. This data has been generated by the engagement of key stakeholders 164 P a g e

179 through quarterly focus groups. Health Research Wales is also mapping capabilities by engagement of key stakeholders in the sector. The criteria used include clinical specialties, clinical trials and funding, which have proved (anecdotally) relatively successful. To date, Health Research Wales has generated a Research Route Map, a Funding Map, a Commercial Research Register, and a Directory of Resources on its website (Health Research Wales, 2014). The stakeholder interviews indicate a clear awareness of the need for systematic and robust mapping of the Welsh Life Science ecosystem, particularly in the context of early stage pipeline activity. There is also evidence of the need to improve dissemination processes and sectoral access to mapping information, which can be observed in Figure 7-1. The researcher held roles within the Welsh LS sector in industry and academia (i.e. Life Science Exchange), which provided key insights into the need for information within the sector. The researcher acted as editor for the Life Science Exchange Opportunities for Growth 2014 (Life Science Exchange, 2014) report, which concluded that, The need for an accessible, cost-effective, up-to-date source of sector specific information relating to funding, regulation, international trade and market intelligence has been consistently expressed by the stakeholder Focus Groups. This represents a significant and ongoing opportunity to provide Welsh life science organisations with a valuable resource offered in addition to what is currently available. The stakeholder interviews indicate a clear awareness of the need for systematic and robust benchmarking of the Welsh Life Science ecosystem, particularly in the context of the Welsh LS industrial subsector. The UK Strength and Opportunity Report provides a general overview of the Welsh LS sector, but there are limitations to this data. One issue is that the Standard Industrial Classification (SIC) codes used to identify LS companies in the UK are not as robust as other classification codes. For example, North American Industry Classification System (NAICS) or Global Industry Classifications Standard (GICS) SM coding systems more clearly identify companies operating in the LS sector (Bhojraj et al., 2003). This has been confirmed through interview data and participatory observation. The SIC codes 165 P a g e

180 used to define the LS industry include a range of companies outside the realms of human health, including advanced manufacturing, renewable energy and agriculture (Cogent, 2010), but probably exclude some companies which are operating in the LS sector. As mentioned in Section 4.2, the initial research questions drafted for this study focused on benchmarking the sustainability of the Welsh LS micro-, small- and medium-sized companies (SMEs), primarily from a quantitative perspective. After preliminary research and discussions between the researcher and the IDG, it became evident that many of the key performance indicators were not measurable due to the emerging nature of the LS industry in Wales. The stakeholders requested benchmarking from both a quantitative and qualitative perspective, as observed in Figure P a g e

181 Chapter 8. Results: Welsh LS Intervention Strategy This chapter aims at answering Research Question 3, What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales? This question is more policy-orientated in nature. Chapter 6 provides the stakeholders views of the Welsh LS sector and their recommended changes for the sector, within the Grounded Theory methodology. TOWS/SWOT analyses uses a cross-functional matrix comparing the data to develop appropriate strategies. SWOT analysis lists the content of the four dimensions Strengths, Weaknesses, Opportunities, and Threats. Then, TOWS analysis was conducted to perform across-matrix match considering the following combinations, Strengths/Opportunities (SO), Strengths and Threats (ST), Weaknesses and Opportunities (WO) and Weaknesses and Threats (WT). TOWS analysis is an effective way of combining a) internal strengths with external opportunities and threats, and b) internal weaknesses with external opportunities and threats to develop a strategy. (Alsaggaf et al., 2012) TOWS analysis approaches have been taken to identify successful strategies in a systematic way (Wu et al., 2009, Magnier et al., 2012). Building upon such data and its analysis, this chapter provides the outcomes of the TOWS strategy analysis applied to the Grounded Theory analysis performed in Chapter Key Welsh LS Interventions Derived from TOWS Analysis The TOWS analysis in this study involved four stages: 1. Using the results from SWOT analysis and GT coding in Chapter 6, a matrix was created (Strengths and Weaknesses vs Opportunities and Threats) to list all potential TOWS interventions (please see Table 8-1) 2. These potential TOWS interventions were scored for need, availability and feasibility (please see Appendix 2) 167 P a g e

182 Top scoring potential TOWS strategies were listed as Key Welsh LS Interventions (please see Figure 8-1). The Strengths, Weaknesses, Opportunities and Threats for each of the five Core Themes were placed in a sub-matrix within the TOWS analysis, as outlined in Table 8-1. Although using SO, WO, ST and WT matrices can make the analysis much more complex (an 8-by-9 matrix in this analysis versus a 2-by-2 matrix in traditional TOWS analysis), the goal was, systematically and robustly, to review all aspects of a Welsh LS sector and propose strategy actions for each. Each of the intersections within the sub-matrices were coded to provide descriptions of each. For example, where the Strengths (S) for the Actors (A) theme intersected with the Threats (T) for the Networks (N) theme, it was given a code ST-AN within an ST matrix. Strategies for each of these coded intersections were then derived, as described in the sections below. Using the same example from the paragraph above, ST-AN, the strengths for the Actors category identified in Section (innovative culture, stable population and LS skills) were cross referenced to the threats in the Networks category in Section (achieving critical mass) to derive the strategy Utilise Actors innovative culture, stable population and LS skills to achieve critical mass. Detailed TOWS analysis according to these codes is provided in Appendix 2. TOWS and Gap Analysis. 168 P a g e

183 Table 8-1. TOWS Analysis Codes TOWS Strategy Actions Strengths Weaknesses Actors Networks Institutions Ecosystem Global Context Actors Networks Institutions Ecosystem Global Context Opportunities Actors SO-AA SO-NA SO-IN SO-EA WO-AA WO-NA WO-IN WO-EA Networks SO-AN SO-NN SO-IN SO-EN WO-AN WO-NN WO-IN WO-EN Institutions SO-AI SO-NI SO-II SO-EI WO-AI WO-NI WO-II WO-EI Ecosystem SO-AE SO-NE SO-IE SO-EE WO-AE WO-NE WO-IE WO-EE Global Context SO-AG SO-NG SO-IG SO-EG WO-AG WO-NG WO-IG WO-EG Threats Actors ST-AA ST-NA ST-IN ST-EA WT-AA WT-NA WT-IN WT-EA Networks ST-AN ST-NN ST-IN ST-EN WT-AN WT-NN WT-IN WT-EN Institutions ST-AI ST-NI ST-II ST-EI WT-AI WT-NI WT-II WT-EI Ecosystem Global Context ST-AG ST-NG ST-IG ST-EG WT-AG WT-NG WT-IG WT-EG A TOWS matrix was created for each of the core categories. A code was created to identify each intersection within the matrix. These codes were used to identify each TOWS strategy action in the sections below. SO = Strategies that utilise strengths to maximise opportunities; WO = Strategies that utilise opportunities to minimise weaknesses; ST = Strategies that utilise strengths to minimise threats; WT = Strategies that minimise weaknesses and avoid threats; A = Actors; N = Networks; I = Institutions; E = Ecosystem; G = Global Context. 169 P a g e

184 The systematic strategy derivation described in the paragraph above resulted in a list of interventions that was too large to implement into a single intervention for the LS. In order to narrow down the list of strategies from the comprehensive approaches derived from the TOWS analysis, gap analysis was then performed on them. Each strategy was given a score for Current Need, Current Availability, and Feasibility, adapted from Zechendorf in Regional biotechnology The EU biocluster study (Zechendorf, 2011). Informed by the interviews and researcher s world view, these strategies were scored as either low, medium, or high within these three categories, as described in Table 8-2. Current Need assesses the necessity of the strategy, Current Availability assesses if current resources or programmes exist to support the strategy and Feasibility assesses the ability for the strategy to have a likely impact within the Welsh LS ecosystem. Table 8-2. TOWS Category Scoring Score Current Need Current Availability Feasibility 1 Low High Low 2 Medium Medium Medium 3 High Low High The sum of the three category scorings were utilised to derive a proposed intervention. A cumulative score of 9 across the sum of the category scorings was identified as a key Welsh LS intervention Key Welsh LS Interventions Derived from TOWS Analysis Key Welsh LS interventions identified in Appendix 2. TOWS and Gap Analysis which had a cumulative score of 9 are listed in Table A2-3 below. 170 P a g e

185 Table 8-3. Key Welsh LS Interventions Derived from TOWS Analysis Code Strategy SO-AA Utilise Actors innovative culture, stable population and LS Skills to participate in clinical trials SO-AE Utilise Actors innovative Culture, stable Population and LS Skills to develop pharmaceutical and regenerative medicine LS specialties SO-NE Utilise strong and small Networks to develop pharmaceutical and regenerative medicine LS specialties SO-IE Utilise SMEs, Government, Third Sector, NHS Wales and Universities to develop pharmaceutical and regenerative medicine LS specialties SO-IG Utilise SMEs, Government, Third Sector, NHS Wales and Universities to discover best practice from External Role Models Utilise SMEs, Government, Third Sector, NHS Wales and Universities to build up Wales Outward Perception SO-EA Utilise LS specialties to support Clinical Trials SO-EI Utilise funding, agility and flexibility, LS Infrastructure and LS Specialties to increase industry engagement and growth within the Universities SO-EE Utilise agility and flexibility, LS infrastructure and LS specialties to stimulate growth Utilise agility and flexibility, LS infrastructure and LS specialties to develop pharmaceutical and regenerative medicine LS specialties WO-AA Utilise potential for Clinical Trials excellence to increase Skills in management and LS Expertise WO-AE Utilise opportunities in pharmaceuticals and regenerative medicine to increase skills in management and LS Expertise WO-NG Utilise best practice from External Role Models to increase Collaboration and build Critical Mass Utilise the opportunity to build Wales Outward Perception to increase Collaboration and build Critical Mass WO-IN Utilise potential for Clinical Trials excellence to grow the number of Companies in Wales Utilise potential for Clinical Trials excellence to increase levels of translational academic research WO-IE Utilise opportunities in pharmaceuticals and regenerative medicine to grow the number of Companies in Wales Utilise opportunities in pharmaceuticals and regenerative medicine to increase levels of translational academic research WO-EA Utilise potential for Clinical Trials excellence to increase levels of funding Utilise potential for Clinical Trials excellence to increase LS facilities Utilise potential for Clinical Trials excellence to increase pharmaceuticals as a LS specialty WO-EE Utilise opportunities in pharmaceuticals and regenerative medicine to increase levels of Funding Utilise opportunities in pharmaceuticals and regenerative medicine to increase LS 171 P a g e

186 Facilities Utilise opportunities in pharmaceuticals and regenerative medicine to increase pharmaceuticals as a LS Specialty ST-EG Utilise agility and flexibility to remain competitive globally Utilise LS Specialties to remain competitive globally WT-AG Increase skills in management and LS Expertise to remain competitive globally WT-NG Increase Collaboration and build Critical Mass to remain competitive globally WT-IG Grow the number of Companies in Wales to remain competitive globally Increase levels of translational academic research to remain competitive globally WT-EG Increase pharmaceuticals as a LS Specialty to remain competitive globally 8.3. Framework for Key Welsh LS Interventions From the strategies derived from the TOWS analysis, an analytical framework was created to provide a visual aid to interpret the overarching strategies. This framework can be found in Figure 8-1 below. In order to understand this framework in more detail, it may be easier to look at the framework through an example, taking the Growth of pharmaceutical LS specialty under Overcome weakness in Figure 8-1 as an example and follow how it arrived in the final framework from the data. Pharmaceuticals were listed as a weakness (W) within Ecosystem core theme (E) in the Welsh LS sector GT interviews (Table 6-2). Based on the basic premise of TOWS analysis, this single weakness was compared with all other coded opportunities and threats in the Welsh LS sector, leading to both potential WO mini maxi strategies (strategies that utilise opportunities to minimise weaknesses) and potential WT mini mini strategies (strategies that minimise weaknesses and avoid threats). These were scored for need (Appendix 2), availability and feasibility; those that scored full marks were added to Table 8-3. There were three strategies which scored full marks which included the pharmaceuticals weakness: 172 P a g e

187 WO-EA: Utilise potential for Clinical Trials excellence to increase pharmaceuticals as an LS specialty WO-EE: Utilise opportunities in pharmaceuticals and regenerative medicine to increase pharmaceuticals as an LS Specialty WT-EG: Increase pharmaceuticals as an LS Specialty to remain competitive globally The opportunities were in the Actors (A) and Ecosystem (E) core categories and the threat was in the Global competition (G) core category: hence the WO-EA, WO-EE, and WT-EG codings from Table 8-3. The four TOWS categories followed a somewhat linear progression: with strengths pointing at opportunities and threats, opportunities pointing at weaknesses, and weaknesses pointing at threats. In this case, the opportunities (clinical trials, pharmaceuticals, and regenerative medicine) of the WO strategies pointed an arrow in the framework at the weakness (pharmaceuticals) and the weakness (again, pharmaceuticals), pointed at the threat (remain competitive globally). 173 P a g e

188 Figure 8-1. Linear TOWS Framework Applied to Welsh LS TOWS Analysis The outcomes of the TOWS analysis (Section 8.2) were placed within a linear framework to simplify and visualise the key Welsh LS interventions identified, which has been named the Linear TOWS Framework. 174 P a g e

189 8.4. Answering Research Question 3 The purpose of this section is to discuss the data and analysis gathered to answer Research Question 3, What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales?. Chapter 6 provides stakeholders views of the Welsh LS sector and their recommended changes for the sector, within this Grounded Theory-based study. The steps outlined in this section is not serendipitous discovery from this investigation. Instead, it is a collation and synthesis, through a robust research framework, of practical sentiments and information gathered from across the Welsh LS sector through stakeholder interviews, participatory observation, reports available to the public and existing strengths and opportunities within the sector. As a disclaimer, although these interventions were identified as having the greatest possible impact, it must be noted that there are a plethora of individual categories and subcategories that require continued or further support within the Welsh LS sector (see Section 6.2 and Appendix 2) Outcomes of the Linear TOWS Framework TOWS analysis was systematically applied to the gathered data in order to construct suggestions for key Welsh LS interventions based on gap analysis. This resulted in the development of a new framework called the Linear TOWS Framework, which was used to present the results of the gap analysis. Interview transcriptions were processed from the stakeholder interviews to derive the LS interventions through TOWS analysis found in Appendix 2. These interventions were then systematically reviewed through gap analysis by the researcher. This gap analysis was performed by scoring each of the 200 individual strategies based on need, availability and feasibility on a 3 point scale (see Appendix 3). Strategies which were of high need, low 175 P a g e

190 availability and high feasibility were selected as 31 key Welsh LS interventions, which are outlined in Section 8.2. This list of Key Welsh LS Interventions was then used to construct a framework found in Section 8.3, which has been named the Linear TOWS Framework. As the name implies, the TOWS analysis was organised in a logical linear order, which in this investigation happens to be Strengths, Opportunities, Weaknesses and Threats. Although not immediately obvious, this framework allows the TOWS analysis to be seen as a progression through time, rather than a 2-by-2 matrix. When the TOWS analysis and Linear TOWS Framework was applied to the Welsh LS sector, a simplified narrative was derived from stakeholder interview data, as follows: The strengths within the innovative culture, stable population, LS skills, strong and small networks, LS specialties and institutions should be leveraged to support the growth of clinical trials, universities, pharmaceuticals and regenerative medicine. This could result in a multitude of spill-over effects, including higher levels of management skills and LS expertise, growth of LS companies and higher levels of translational research. The Institutions (Companies, Government, Third Sector, NHS Wales, and Universities) should also focus their strengths on documenting best practice for LS and the improvement of outward perception of the Welsh LS sector. This could result in higher levels of collaboration and the possibility of achieving critical mass. Each of the above points would result in Wales becoming more globally competitive. 176 P a g e

191 Chapter 9. The Welsh Healthcare Innovation Pipeline Framework The Welsh LS intervention framework was derived by the researcher based on an adapted version of Johnson s systems model of action-research process (1976) and Nadler and Tushman s (1980) congruence model. Johnson s systems model of action-research process advances in three steps with feedback loops at each stage: Input, Transformation and Output. Inputs, which form the pre-diagnostic planning stage, include the determination of diagnostic process, diagnostic methods and feedback approach. Transformation consists of key elements for diagnosis and the diagnostic information to be collected. Outputs are the goals of the diagnosis, i.e. diagnostic results and suggestion (Lin et al., 2009). Figure 9-1. Richard Arvid Johnson s Systems Model of Action-Research Process Adapted from (Johnson, 1976, Viktor, 2008). Within the three Stages of Action-Research Process, a ten-point intervention framework was derived using triangulation from literature review, results from the Research Questions, and Policy and policy recommendations review. Each of the ten points developed for the LS intervention model were derived directly from: 177 P a g e

192 The Literature Review (Chapter 2 and Chapter 3) Results: o Results from Research Question 1 (Chapter 6) o Results from Research Question 2 (Chapter 7) o Results from Research Question 3 (Chapter 8) Policy and policy recommendations review (Appendix 3), which includes, but is not limited to: o Innovation Health and Wealth, Accelerating Adoption and Diffusion in the NHS (Department of Health and NHS, 2011) o Evidence from Welsh Government MT 40 (National Assembly for Wales, 2013) o Technology Adoption Systems Guidance (Health and Wellbeing BPIB, 2013c) o Recommendations on Health and Wealth in Wales (Health and Wellbeing BPIB, 2013b) o Final Report of the Health and Wellbeing Best Practice and Innovation Board (Health and Wellbeing BPIB, 2013a) o Opportunities for Growth 2014 (Life Science Exchange, 2014) o Industry Engagement in Wales (NISCHR, 2012) o NISCHR Support Centre: Outline of role and functions (NISCHR, 2014) o Mobilising the use of research into practice for impacts on health and wealth (NISCHR AHSC Knowledge Transfer Task and Finish Group, 2014) o Achieving excellence - The quality delivery plan for the NHS in Wales (Welsh Government, 2012b) o Economic Renewal: A New Direction (Welsh Government, 2010) o Science for Wales (Welsh Government, 2012d) o Draft New Health Technologies Assessment Policy (WHSSC, 2014) For the full list of evidence used to triangulate each point derived in the Welsh LS Sector Intervention Framework below, please see Appendix 3 at the end of this document Overview of the Welsh Healthcare Innovation Pipeline The research described in the earlier chapters has generated an evidence base which leads to a proposed framework containing a number of interventions designed to accelerate the 178 P a g e

193 development and impact of the LS sector in Wales. The outcomes of the Linear TOWS Analysis detailed in Chapter 8 were used to generate the following ten point framework: Stage 1. Stage 2. Stage 3. Input: Resource Planning Step 1: Welsh LS Sector Mapping Step 2: Documentation of Best Practice for LS Transformation (or Action): Welsh Healthcare Innovation Pipeline (WHIP) Step 3: Source New Innovation Step 4: Clinical Evaluation Step 5: Healthcare Innovation Assessment Step 6: Procurement and Adoption Output: Excellence Output 1: Innovation, Health and Wealth Output 2: Case Studies Output 3: Improvement of Outward Perceptions Output 4: Wales Becoming Globally Competitive This framework is not linear, but iterative, as successful case studies can be used to promote and market the WHIP to both a Welsh and international community. A figure outlining this framework is provided in Figure 9-2 and a description of each of the stages of this framework is provided in the following sections. Further research will be required to determine an optimal configuration. 179 P a g e

194 Figure 9-2. Recommended Welsh LS Sector Intervention Framework Richard Arvid Johnson s (1976) Systems Model of Action-Research Process was adapted to create an intervention for the Welsh LS Sector. The Input is represented by a Mapping Exercise of the Welsh LS sector and documentation of best practice in the LS. The Transformation, the Welsh Healthcare Innovation Pipeline (WHIP), would promote new innovation adoption within NHS Wales through sourcing, trialling, assessing, procuring, and adopting healthcare innovations through an integrated framework. The WHIP would result in positive Outputs for the Welsh LS sector, including Innovation, Health and Wealth, as well as the Welsh LS sector becoming globally competitive. 180 P a g e

195 9.2. Input Step 1: Welsh LS Sector Mapping [Please see Appendix 3 for literature and data supporting this intervention]. The information available regarding the Welsh LS sector to date has not lived up to the requirements of its stakeholders. There was an explicit need for data in the sector and mapping has been shown to be a useful technique to support knowledge translation (Ebener et al., 2006). At the time of writing, Health Research Wales has already initiated mapping of clinical trials, but a full mapping of the Welsh LS sector has not been performed robustly. A mapping exercise of smaller proportion, funded by the WG in 2012, was performed by Oxford Bioscience Network, but the results were not disseminated to the public for unknown reasons (Interviews I15, I28 and I29). The Life Science Exchange has also performed a mapping exercise more broadly across the Welsh LS sector, yet this does not contain all existing information, was stakeholder populated, and does not exist as an evolving database. Interview I19 suggested that From the industrial perspective, Wales needs to look at what is available, such as what s coming out of academia. [There are] lots of companies to assist. [There could be a] hypothetical Wales PLC. Come in, get a list of 270 companies, a list of academics. Information is available, drawn out and integrated Consultants pull in companies. The [WG] life sciences team should have an interest in getting all 270 companies there. How to create this life sciences portal? Current policy supports the concept mapping of the Welsh LS sector, especially in regard to funding, universities, research institutes and industry (NISCHR, 2012, Welsh Government, 2010, Welsh Government, 2012d). However, as described in Chapter 7, current mapping and benchmarking exercises do not currently satisfy the needs of the Welsh LS sector stakeholders, as mapping and benchmarking were both identified as gaps in their knowledge. 181 P a g e

196 Considering the evidence from previous sections and participatory observation by the researcher, it is recommended that the new mapping exercise include the following: Personnel and funding: Secure staff to carry out the mapping exercise and provide them with the necessary resources. Engagement: Utilise staff to engage key stakeholders and identify all relevant data sources. Data: Sources of data could include reports, websites, Companies House filings, academic publications, social media (e.g. LinkedIn), press releases and stakeholders. This data should include all previous mapping exercises and resources relevant to the LS sector, including research, development, translation and commercialisation. Organisation: A framework should be developed where each resource in the mapping could be logically ordered. Accuracy: Allow additions, deletions and edits to be offered by the general public/stakeholders with moderation. Transparency: Data sources must be cited in the mapping. Additions, deletions and edits should be tracked. Moderation: Ensure that the contents of the mapping are maintained, edited, updated and checked for factual accuracy. Dissemination: Have both a live web version and a yearly print version of the mapping exercise that is widely marketed and distributed. In order for a mapping exercise to reflect the needs of the Welsh LS sector, it may be necessary to provide resources to a group, department, or project to carry out a larger version of the mapping exercise including both quantitative and qualitative measurements. With the intention of ensuring a robust picture, it would be important for this resource to engage key stakeholders to identify all relevant data sources and to ensure that these are accurate and upto-date. Although similar mapping exercises have been performed in the past by institutions 182 P a g e

197 such as Health Research Wales, The Life Science Exchange, MediWales, NISCHR AHSC South West Wales Regional Hub, and others, these exercises have not been integrated into one over-arching framework. The data collected should comprise any material relevant to the growth of the LS sector in Wales, including funding, infrastructure, networks, companies, research groups, etc. It must be organised to allow quick access to desired information by stakeholders, for example, through research field or Technology Readiness Level (TRL). Efficient organisation will enable effective presentation of a broad and robust data set. The data should be transparent, with each piece of data having a relevant data source cited, in order to establish pedigree, provenance and veracity. Lastly, it would be beneficial if this mapping exercise were made available to the public not only via a web platform, but also as an annually disseminated report, similar to the LS reports issued formerly by the WDA (Interview I11) or MediWales Directories/Reviews (MediWales, 2013b, MediWales, 2011a, MediWales, 2012a). By providing a living mapping exercise as described above, both internal and external stakeholders could be allowed to engage at a higher level within the sector. Stakeholders within the Welsh LS ecosystem could focus on the advancement of their respective LS specialty, instead of trying to locate resources outside of their immediate spheres. Furthermore, this mapping exercise could be used as a marketing tool to drive inward investment into Wales. One solution could be as simple as a wiki page, moderating and disseminating this information from a mapping exercise. At its most complex and robust form, this may be spun out as a commercial project funded by private equity or venture capital. Although these issues have been identified in this study of the Welsh LS sector, other regions and/or sectors could benefit from similar mapping exercises. Crowdsourcing of data (i.e. Web 2.0 platforms) should be considered, as this could lead to more comprehensive data. Platforms such as LinkedIn, Facebook and Twitter have already reached valuations in the billions (The Wall 183 P a g e

198 Street Journal, 2013). Whatever solution is derived, it would need to evolve with the changing needs of the stakeholders in the Welsh LS sector and evolution in technology (e.g. changes in preference for access, editing and moderation of the mapping). A second possible solution has been piloted through MediWales Picture of Health project. In the MediWales Annual Review & Directory , it states, One of our strategic objectives is to raise the profile of Wales on both the UK and the international stage and our project Picture of Health will be one of the factors to help us achieve this. Launched at BioWales 2013, the Picture of Health portal allows us to actively illustrate the strength of our life science network to those who are not yet a part of it. It enables us to show not only the depth of our national network but also to demonstrate the strong connectivity between organisations that make Wales uniquely well networked across life science (MediWales, 2013b). Although this project has been populated with MediWales s member data and by some voluntary participants, this system has not reached a level of information that is fully comprehensive. Nevertheless, it is still the most advanced, publicly facing, interactive mapping exercise available to date. Key finding 1: The need for a mapping exercise of the Welsh LS sector has been identified in the research, policy and policy recommendations review Step 2: Documentation of Best Practice for LS [Please see Appendix 3 for literature and data supporting this intervention]. The Basic Social Process derived in Section 6.3 states that This [Welsh LS] Ecosystem at a national level must interact with other ecosystems within a Global Context in order to remain competitive, learn best practice and maintain visibility. The best practice theme was also incorporated in the outcomes of the Linear TOWS Framework (Section 8.4.1): The Institutions should also focus their strengths on documenting best practice for LS and the improvement of outward perception of the Welsh LS sector. This could result in higher levels of collaboration and the possibility of achieving critical mass. Furthermore, policy from NISCHR and Welsh 184 P a g e

199 Government suggest that documenting and disseminating best practice regarding industry engagement, commercial research, NHS Wales service delivery and healthcare innovation would be best practice in itself (Welsh Government, 2010, Welsh Government, 2012b, Health and Wellbeing BPIB, 2013a, NISCHR, 2012). Best practice is defined in the Merriam-Webster Dictionary as a procedure that has been shown by research and experience to produce optimal results and that is established or proposed as a standard suitable for widespread adoption (2004). Documented best practice (e.g. innovations) could be communicated through channels over time among members of the ecosystem, as described in Diffusion of Innovations by Everett Rogers (2010), sometimes described as market pull (Roberts, 1988). Alternatively, best practice could be actively researched, disseminated and implemented, an approach sometimes described as technology push (Roberts, 1988). In order to maximise opportunities entering the WHIP transformation, it would be ideal to take both a technology push and a market pull approach. The process for documentation of best practice for LS could be similar to the mapping exercise outlined above, with the exception that this exercise would be looking at best practice for the life sciences both inside and (especially) outside Wales. In his seminal work Global competition, institutions and the diffusion of organisational practices: The international spread of ISO 9000 quality certificates, Guler states, In the global economy, organisations wishing to adopt the most innovative practices should look to the state, multinational firms and their foreign trade partners and competitors for new models and opportunities (Guler et al., 2002). In a system without robust government support for capturing and disseminating best practice (as some might describe the Welsh LS sector), stakeholders would learn of these best practices gradually, adopting and implementing them over time. In order to expedite the adoption process, it is recommended that a systematic method is implemented across the Welsh LS sector, either informally through task and finish 185 P a g e

200 groups, or more formally through standards and/or management practice. These formal processes, a selection of which are provided below, could be incorporated into a recognised Welsh Government Life Sciences Sector Team which would collect and disseminate best practice across all sectors to both private and public sectors: Total Quality Management (Kanji et al., 1999, Porter and Parker, 1993, Powell, 1995, Yusof and Aspinwall, 2000) ISO 9000 (Hoyle, 2001, Guler et al., 2002, Anderson et al., 1999) Six Sigma (Pyzdek and Keller, 2003, Neuman and Cavanagh, 2000, Coronado and Antony, 2002, Antony and Banuelas, 2002, Kwak and Anbari, 2006) Lean Enterprise (Keyte and Locher, 2004, Jones and Mitchell, 2006, Kennedy and Ward, 2003, Womack and Jones, 1994, Hines et al., 2004). A formalised approach could allow for systematic review of best practice within LS systems of innovation. It is difficult to determine what aspects of best practice are required by either the public or private sectors for different scenarios at different times. Possible starting points include those outlined on the x-axis of Figure 7-1, which include Actors (Academics, Government, Industry, NHS Wales, Third Sector, Professionals and Leadership) and Processes (Education & Skills, Academic Research, Knowledge Transfer, Collaboration, Industrial Research, Industrial Development and Finance). Other possible starting points leading to identification of best practice can be identified through the mapping process described in the Step 1: Welsh LS Sector Mapping. Other key themes identified by the MediWales, ABPI, Life Science Exchange and NISCHR AHSC may also be relevant to best practice, including, but not limited to collaboration, networks, intellectual property policy, clinical access and funding. Key finding 2: The need for documentation of best practice in LS for the Welsh LS sector has been identified in the research, policy and policy recommendations review. 186 P a g e

201 9.3. Transformation The four transformation interventions are named the Welsh Healthcare Innovation Pipeline (or WHIP) in this framework. This Pipeline takes in all of the themes derived in the Linear TOWS Framework (Figure 8-1), with the exception of identifying best practice from External Role Models (found in Section 9.2.2). It focuses on increasing the outward perception and making Wales more competitive in the global landscape. The motivation for the WHIP was captured in one interviewee statement: [We] need to see Wales-based/owned [pharmaceutical] companies; discovery and developing new treatments. [There needs to be a] cleaner path forward for the sector The challenge is to sell Wales as a one stop shop for technology/drug[s]; funding, support and investment; and support for the life sciences service providers (Penn, BioTec, Simbec, Institute of Life Science, etc.) [from] contract research organisation to manufacturing (I62). The Life Science Exchange concluded in its Opportunities for Growth 2014 (Life Science Exchange, 2014) that,: The vital role that the Welsh NHS plays in providing access to clinical expertise, facilities and ultimately as a customer has been widely expressed. While the relationship between the NHS, academia and industry in Wales is considered to be a significant national strength, there is a need to improve the evaluation and adoption of new Welsh innovations when they can demonstrate the opportunity for improved patient outcomes and cost savings. Furthermore, academics and industry expressed a strong desire for NHS Wales to increase its level of engagement and receive clinical access for research and development. This proposed transformation would take an additional step: not simply pitching Wales as a one stop shop for research and development, but also for technology procurement and adoption within NHS Wales. As outlined in Figure 9-2, the WHIP takes the form of an evaluation and adoption of technologies into NHS Wales, with the ultimate goal being to improve Innovation, Health and Wealth within the Welsh context. The UKTI has already commenced marketing Wales and the rest of the UK with a Bench to Bedside approach. The UKTI recognises the need to support every component of the pathway. From bench to 187 P a g e

202 bedside, we are making it easier to discover, develop and deliver healthcare innovation in the UK (UK Trade & Investment, 2014). Overall Transformation: The need for a Welsh Healthcare Innovation Pipeline has been identified in the literature review, research, policy and policy recommendations review Step 3: Source New Innovation [Please see Appendix 3 for literature and data supporting this intervention]. The need to incorporate innovation and new technologies into practice in order to support economic growth is a theme found in the literature review, interviews, policy and policy recommendations review. The UK and WG policy is currently supporting commercialisation of life sciences and healthcare innovation with the Technology Strategy Board, Biomedical Catalyst Fund and the Life Sciences Hub in Cardiff, and the Arthurian Life Sciences Fund. Furthermore, academic literature relating to Systems of Innovation revolves around innovation and new technologies to support economic growth. Quoting WG policy, new innovations could assist patients in living independently for longer (NISCHR, 2012, Health and Wellbeing BPIB, 2013a), support clinical unmet needs (NISCHR, 2012), generate revenue and added value (Welsh Government, 2010), and result in both patient benefit and business opportunities (Welsh Government, 2012d). Interviewees are of the opinion that Wales has useful ideas and technologies (I58) which are untapped (I09) and that the opportunities lie with collaboration and partnering in regard to these technologies (I60). However, one interviewee stated: Wales [is] a little bit behind when compared with England [in] getting technology and innovation adopted (I54). The sourcing of new technologies for evaluation and adoption in NHS Wales could be a key driver to support Wales becoming competitive on a global scale. These technologies could include, for example, pharmaceutical and regenerative medicine technologies identified in P a g e

203 An interviewee posed a difficult question: [Is therapeutic adoption within NHS Wales] a technology push versus market pull? Some might argue drugs [are] made in response to market pull. It s a real conundrum. If it is a technology push, [then] all money goes to research and development and products emerge from the process. If it is a market pull, it s a lifestyle/health issue. How [do we] develop medicines to deal with them? (I13). This intervention step does not take a position on this question on technology push versus market pull, but rather poses both as possible methods for sourcing technology within NHS Wales. These two components, technology push into NHS Wales (by industry) and market pull into NHS Wales (by healthcare professionals), are outlined below Technology Push into NHS Wales In order to achieve both domestic and inward investment into Wales, the WHIP process could be used to recruit internal and external LS companies, Universities and other healthcare innovation-generating entities. Either of these healthcare-generating entities could approach NHS Wales itself, or NHS Wales could find new technologies to evaluate. NISCHR s Industry Engagement in Wales states that, NISCHR will work to ensure the research it supports is recognised and captured through effective horizon scanning processes (NISCHR, 2012). A useful example might be Proteus Digital Health, an innovative company located in San Francisco, California, working to create a new category of products and services called Digital Medicines with the potential to significantly improve the compliance and effectiveness of existing pharmaceutical treatments. Proteus has patents protecting its technology which is FDA approved in the US and CE marked in the EU. This company could potentially look into Wales and see an opportunity to utilise the cohesive evaluation and procurement mechanisms of the WHIP to pilot and/or launch its technology into a selfcontained market. If the company s technology was deemed the most cost-effective solution, their product would be procured and adopted nationwide. This evaluation and adoption 189 P a g e

204 process could be used as an evidence base to other national healthcare systems to consider, evaluate, and procure Proteus technology where value is added. This in turn could be used by Wales as a successful case study in recruiting future companies to evaluate their products in Wales Market Pull by NHS Wales According to NISCHR s Industry Engagement in Wales policy, it will promote innovation by supporting funding schemes that focus on patient facing research and clinical unmet needs, with a clear aim to advance the translation of healthcare technologies for increased patient benefit (NISCHR, 2012). In this aspect of sourcing new technologies, NHS Wales could identify which technologies were required by the healthcare system. In order to deliver products which solve unmet clinical needs, NHS Wales could announce specific priorities or specific products required for development or procurement. Health economics groups could constantly horizon scan for new technologies based on cost-effective healthcare demand. Furthermore, innovation platforms could be set up to gain insights from clinicians, patients, researchers and other stakeholders. The WG has professional advisory committees that provide a mechanism to bring new healthcare technologies to WG (National Assembly for Wales, 2013): Welsh Dental Committee Welsh Medical Committee Welsh Nursing and Midwifery Committee Welsh Optometric Committee Welsh Pharmaceutical Committee Welsh Scientific Advisory Committee Welsh Therapies Advisory Committee. One example of good practice is pre-commercial procurement of innovation (National IST Research Directors Forum Working Group, 2006), originally trialled in the United States. In 190 P a g e

205 their report to the European Commission, the National IST Research Directors Forum Working Group (2006) stated: Pre-commercial public procurement schemes in other parts of the world such as the US and some Asian countries have proven their ability to provide the missing link between private sector R&D investment and the public sector as 'first buyer' of new technologies. This invaluable experience in refining the first-buyer strategy reveals that the pay-off in terms of creating truly sizeable lead markets for new technologies is only going to be significant when applied in Europe if our pre-commercial procurement strategy respects two fundamental principles: (1) willingness of public procurers to share risks and benefits of high-tech R&D procurements with future suppliers, (2) bundling of demand to reduce market fragmentation and narrow the R&D public procurement investment gap between the EU and the US. We also need incentives to overcome risk aversion of public procurers. This has been piloted in the UK through the Small Business Research Initiative (SBRI) hosted by the Technology Strategy Board. WG has partnered with the Technology Strategy Board to support the SBRI development procurement challenges. Over 2 million of funding was provided for two challenges to develop innovative technology solutions for NHS Wales (National Assembly for Wales, 2013). At the time of writing, six companies in each SBRI competition have been awarded contracts to find the best way to 1) use data from Swansea University s SAIL databank to improve services and to 2) help nurses to spend more time with patients in direct care and improve the patient journey in Betsi Cadwaladr University Health Board. This can be done through analytical research (e.g. analysing NHS Wales Shared Services Partnership data with SAIL Databank healthcare outcomes), facilitating identification of unmet clinical needs through innovation platforms (e.g. SEWAHSP Health Technology Challenge), and incentivising innovation for unmet clinical needs (e.g. integrated NHS Wales intellectual property policy with the Universities). To identify unmet clinical needs, a range of methods could be offered. NISCHR has suggested that procurement services are well placed to provide insight into the product gaps or clinical unmet needs that exist in the NHS and have a clear role to play in encouraging the 191 P a g e

206 market to propose new solutions before specifications for tendering are announced (NISCHR, 2012). Comparing procurement data with healthcare outcomes, such as are found in the NISCHR-funded SAIL Databank, may provide valuable insights into the use of technology within NHS Wales. The Life Science Exchange Medical Technology focus group suggested that Clinical specialists could be helped to engage with suppliers specific to their clinical specialty in order to address unmet technology needs (Life Science Exchange, 2014). Furthermore, unmet clinical needs could be identified by the wider healthcare innovation community such as in the South East Wales Academic Health Science Partnership s (SEWAHSP) Health Technology Challenge Scheme. The scheme was [a] two-step process with the first being the establishment of an interactive website where participants could post their challenges and could view, comment and vote on all ideas posted (Health and Social Care Committee, 2014). An expert panel was convened to select a subset of these challenges; seven challenges were selected and a call for applications issued, with four challenges being funded. As an example of technology pull into NHS Wales, Calon Cardio Technologies Ltd (Calon), located in Swansea, was set up to address a clear unmet clinical need for cost-effective left ventricular assist devices (LVADs) in the UK. Currently, VADs have yet to make significant impact on the world market due to high device costs, significantly invasive surgery and higher than expected complication rates factors which Calon aims to address in Wales, the UK and Europe with its MiniVAD and why Calon was founded. If Wales were more explicit regarding its need for technologies such as Calon s, both local and foreign companies might emerge in Wales to develop products which address these unmet clinical needs. Key Finding 3: The need for sourcing new innovation into NHS Wales, from both a technology push and market pull perspective, has been identified in the literature review, research, policy and policy recommendations review. 192 P a g e

207 Step 4: Clinical Trials [Please see Appendix 3 for literature and data supporting this intervention]. The need for Wales to carry out high quality clinical trials in order to test the safety and efficacy of newly sourced innovations was demonstrated in the literature review, interviews, policy and policy recommendations review. Key efforts are already underway to improve the current regulatory and governance environment for clinical research in the UK (Rawlins, 2011). Wales has both a stable population willing to partake in clinical trials (see Section ) and a key strength in executing and supporting clinical research (see Sections and ). Welsh Government policy clearly supports clinical research and aims to focus on the translation of healthcare innovation into practice (Welsh Government, 2010, NISCHR, 2012, Welsh Government, 2012d). Wales has developed robust clinical support mechanisms through Health Research Wales, a Joint Clinical Research Facility in Swansea, NISCHR Clinical Research Centre (CRC), NISCHR Permissions Co-ordinating Unit (PCU), Simbec-Orion Group and MediWales newly forming Pharma Special Interest Group. As the result of a Wales-wide NISCHR consultation, Health Research Wales has recently been set up by NISCHR AHSC in order to assist companies with information and support for clinical research and to enhance collaboration between NHS and industry. They provide mapping, costing, sign-posting, and contract facilitation services free of charge. MediWales newly forming Pharma Special Interest Group (SIG) is a group of clinical trials service providers including specialists in packaging, manufacturing and compliance. The first meeting of this group, arranged and chaired by MediWales and co-hosted by Life Science Exchange, was held at Norgine on 6 th June 2014 to discuss the strong desire for [Wales ] pharma and clinical trials community to work more closely together and collaborate on projects for example to present a strong marketing message that Wales has an excellent clinical services, trials and research capability (MediWales, 2014b). The main objective to improve the profile and reputation of [Wales ] cluster as a significant and sophisticated 193 P a g e

208 partner to undertake clinical trials The cluster is capable of delivering a full clinical trials service including formulation, manufacture, [and] packaging distribution and through Health Research Wales and the NHS, Principal Investigators and sites for multi-centre trials and clinical studies (MediWales, 2014a). Moreover, Arthurian Life Sciences has recently invested in clinical contract research organisation (CRO) Simbec Research, which has recently acquired Orion Clinical Services in a 12.5m deal. With Simbec specialising in early stage trials for big pharmaceutical companies and Orion specialising in later stage tests the new merged business Simbec-Orion will be well placed to capture a larger share of what is a lucrative, but until now a very much fragmented drug trial market (Western Mail, 2014). With a plethora of support and a desire to improve clinical trials service delivery in Wales, both public and private institutions can work to deliver quality clinical trials for companies and other institutions wishing to evaluate their new innovations (identified in Intervention 3) in a cost- and time-effective manner. Key Finding 4: The need for leveraging the Welsh strengths in clinical trials to evaluate new innovations has been identified in the literature review, research, policy and policy recommendations review Step 5: Healthcare Innovation Assessment [Please see Appendix 3 for literature and data supporting this intervention]. Although not mentioned in the literature review chapters or interviews, innovation assessment is clearly defined in the policy and policy recommendations. Innovation (e.g. technology) assessment plays a critical role between clinical trials and innovation adoption (Jennett, 1992, Turchetti et al., 2010, Spiegelhalter, 2000, Royle and Waugh, 2003). In a British Medical Journal article, Professor Bryan Jennett (1992) provided the tag line in relation to technology evaluation in the NHS: The rule should be no evaluation no technology. As a small example, policy 194 P a g e

209 from the UK Department of Health and NHS (2011) recommends that the NHS should promote the use of local showcase hospital programmes (a programme for selected hospitals to test a range of new technologies prior to wider diffusion), which evaluate the effectiveness of medical technologies that are safe but do not yet have evidence of effectiveness. The aim of these programmes is to avoid the need for repeat local assessment thereby supporting the rapid spread of proven innovation across the NHS. According to the Health and Wellbeing BPIB (2013c), Despite the increasing use of technology, there is no consistent approach in place across NHS Wales to consider, adopt and monitor technology. Pharmaceuticals, larger IT systems, and models of care and care protocols currently have methods for considering and adopting new innovations through the All Wales Medicines Strategy Group, NWIS, and National Institute for Health and Care Excellence (NICE), respectively. The Life Science Exchange Medical Technology focus group stated, There is an opportunity for Welsh NHS to introduce a clear and appropriate access point for new technology appraisal and adoption and to use procurement to encourage adoption of innovations where better patient outcomes or reduced costs can be achieved. The BPIB (2013c) proposed the mini-hta as a solution for evaluation of new innovations, with the exception of the aforementioned ones related to pharmaceuticals, larger IT systems, and models of healthcare. The mini-hta is a simplified, time efficient, decision support tool that will support NHS Wales organisations in assessing the usefulness, cost effectiveness and appropriateness of new technology, and in making decisions regarding their adoption. The aim of the mini-hta is to verify whether a new technology is safe and effective (e.g. CE marked, as necessary), evaluate if the new technology is more cost-effective than existing technologies and provides clarification on whether a technology should be introduced/adopted into practice (Health and Wellbeing BPIB, 2013c). Once a new innovation was evaluated in the clinic, a Healthcare Innovation Assessment (e.g. mini-hta for a medical device or a full Health Technology Assessment for a pharmaceutical) 195 P a g e

210 could be carried out to determine the cost-effectiveness of the intervention concerned. Whether the funding for this Healthcare Innovation Assessment would be met by the owner of the technology or NHS Wales is for further investigation. Evaluations of pharmaceuticals and models of care and care protocols, as well as larger IT systems, should still be carried out by NICE or NWIS respectively. Some of these themes are touched upon in the Draft New Health Technologies Assessment Policy from the Welsh Health Specialised Services Committee (WHSSC) (WHSSC, 2014), however this policy does not address healthcare innovation from the commercial perspective. Key Finding 5: The need for a Healthcare Innovation Assessment guidance document providing integrated, clearly defined commercial healthcare innovation evaluation pathways has been identified in the policy and policy recommendations review Step 6: Procurement and Adoption [Please see Appendix 3 for literature and data supporting this intervention]. The need for the streamlined procurement and adoption of healthcare innovations was found in the literature review, interviews, policy and policy recommendations review. The literature review identified that the EU is in support of increased participation by SMEs in public procurement processes (European Commission, 2008b). Furthermore, the NHS in England has made it a key drive for procurement in the NHS to drive up quality and value and to make the NHS a better place to do business (Department of Health and NHS, 2011). Within the interviews coding for NHS Wales, procurement was described as a weakness not as in the procurement process per se, but as in the understanding of how the procurement process works by industry and clinicians (I22, I23, I28, I37, I44, I50, I54, I64). Industry think procurement is at fault. A key gap in knowledge is how to get industry to work with NHS and procurement (I50). A director within NHS Wales involved with procurement also cited it as a key barrier as 196 P a g e

211 industry doesn t know how to access the NHS appropriately, [which is] seen as a barrier Procurement isn t one size fits all (I64). Review policy and policy recommendations also revealed that NHS Wales procurement and adoption need improvement (Life Science Exchange, 2014). WG has taken steps to improve public procurement of goods and services through Sell2Wales and Buy4Wales (Welsh Government, 2010). In regard to NHS Wales, Local Health Board teams have been integrated into NHS Wales Share Services Partnership (NWSSP), which provides procurement services for the greater NHS Wales, to drive further value for NHS Wales and put NHS Wales in a position to contribute to the priorities of the Welsh economy. NISCHR states that procurement plays a strong role in driving innovation through new ideas; it is well placed to provide insight into unmet clinical need (Welsh Government, 2010). Furthermore, BPIB argues that technology procurement and adoption should be integrated and be more collaborative with industry, even though this might be at odds with NWSSP s procurement function (Health and Wellbeing BPIB, 2013c) Following positive Healthcare Innovation Assessment, the NWSSP could initiate a procurement exercise either at the hospital, trust, or at an all-wales level, depending on the evidence and risk associated with the health or social care intervention. This procurement event would not automatically ensure purchasing of the said technology into NHS Wales, but would guarantee the evaluation of new technologies to be evaluated against the competition within the Welsh, UK and EU procurement guidelines. Each organisation [in the BPIB] has nominated a senior lead official to drive the implementation of the [Technology Adoption Systems] Guidance, and to develop a networked approach, in which NHS Wales Shared Services Partnership will also be a key stakeholder (National Assembly for Wales, 2013). If the product evaluated through the Healthcare Innovation Assessment were found to be the most cost-effective, it would logically be procured into NHS Wales. 197 P a g e

212 After procurement, there would need to be an appropriate adoption of the innovation (i.e. change management would need to be implemented). Nathan Rosenberg (Rosenberg, 1972) stated that, in the history of diffusion of many innovations, one cannot help being struck by two characteristics of the diffusion process: its apparent overall slowness on the one hand, and the wide variations in the rates of acceptance of different inventions, on the other. According to Hall and Khan (Hall and Khan, 2003), there may be delays in innovation adoption due to the initial cost sunk (both time and money) relating to said adoption. Awareness, training, and implementation of new innovations would need to take place to ensure NHS staff are aware of and are using the most cost-effective technologies for diagnosis, treatment, monitoring, etc. NISCHR AHSC recently commissioned a Knowledge Transfer Task and Finish Group that produced recommendations to NISCHR in mid The recommendations (NISCHR AHSC Knowledge Transfer Task and Finish Group, 2014) relevant to adoption of new technologies included, but were not limited to: providing policy leadership integrating R&D, innovation, knowledge mobilisation and quality improvement creating a National Coordinating Centre for Innovation and Knowledge Mobilisation to lead on strategy and implementation within the context of the quality and safety improvement agenda requiring NHS Wales organisations to have strategies and a knowledge broker building capacity and networks in implementation research ensuring knowledge mobilisation is included in education, training and mentorship. Key Finding 6: The need for an integrated healthcare innovation procurement and adoption framework has been identified in the literature review, research, policy and policy recommendations review Output According to this framework, if the six interventions described above were implemented, then the following four outputs would result: innovation, health and wealth; case studies; 198 P a g e

213 improvement of outward perception; and ultimately, Wales becoming more globally competitive in LS Output 1: Innovation, Health and Wealth [Please see Appendix 3 for literature and data supporting this outcome]. Evidence for the output of Innovation, Health and Wealth was found in the literature review, interviews, policy and policy recommendations review. The earlier chapters of this thesis describe how the LS sector has large impacts on world economies, as well as how it promotes better health as a product. As a managing director of a start-up supply chain company stated, life sciences [is] valued by universities, [which leads to] value in health research, contribution[s] to health, investment into the country [i.e. Wales] and money brought into Wales once successful (Pt8). The Department of Health and NHS (2011) argue that, Searching for and applying innovative approaches to delivering healthcare must be an integral part of the way the NHS does business. Doing this consistently and comprehensively will dramatically improve the quality of care and services for patients. It will deliver the productivity savings we need to meet the growing demand for services, and it will also support our role as a major investor and wealth creator in the UK. The promotion of clinical trials and healthcare innovation adoption could in turn improve the overall health and wealth of the Welsh population, as well as improve levels of innovation in the Welsh LS sector. Better health could be achieved by improving the standard of care in commercially-funded clinical trials [possibly through the Hawthorne effect (Braunholtz et al., 2001, McCarney et al., 2007)]. Recruitment and clustering of clinical expertise and the adoption of the newest technologies into the health and social care systems could result in a reduction in healthcare costs. Wealth could be increased by improving growth in inward investment, skills, jobs, infrastructure, networks and institutions. Lastly, levels of innovation could grow within NHS Wales as well as other Institutions including Universities, public sector, Third Sector and companies. 199 P a g e

214 Output 2: Case Studies [Please see Appendix 3 for literature and data supporting this outcome]. Evidence for the output of Case Studies was found in policy and policy recommendations review. For example, WG s Economic Renewal: A New Direction (Welsh Government, 2010) suggests that case studies are already being compiled to help raise the profile of Wales, as well as to raise funding for projects: We recently reviewed Research Council income within Wales. Insight from this study has helped us to develop strategies to improve the flow of income to Wales. Actions taken included: compiling a comprehensive overview of the current positions in Wales, including existing collaborations [and] showcasing existing research collaborations to the Research Councils and other funders of research. Specific case studies of successes within Innovation, Health and Wealth could be used by the WG, UKTI and NHS Wales to entice stakeholders to engage with the Welsh LS sector, either to source new innovations into Wales (Step 3 of the WHIP) or to raise funds to support activities before (i.e. research and development) or within the WHIP (i.e. clinical trials, healthcare innovation assessment, etc.). The more success stories that exist, the more they could drive further sourcing of new technologies, and in turn create a positive feedback loop to Step Output 3: Improvement of Outward Perception [Please see Appendix 3 for literature and data supporting this outcome]. The need for the improvement of outward perception was found in the literature review, interviews, policy and policy recommendations review. In order to attract inward investment into Wales, the WG launched the Just Ask Wales campaign on 13 March The new marketing campaign is part of the Welsh Government drive to attract more foreign-owned companies looking to grow and expand to consider a future in Wales. The year-long campaign will initially focus on London, South East England, and the M4 corridor (Welsh Government, 2014a). Furthermore, NISCHR have taken steps in their industry engagement policy to have Health 200 P a g e

215 Research Wales serve as the main communications vehicle to Industry nationally and internationally and, promote Wales as an attractive place to do research (NISCHR, 2012). This sentiment is strongly captured in the Welsh Government s Economic Renewal: A New Direction (Welsh Government, 2010) with the statement: Wales image and reputation is an important influence on and reflection of the business environment in Wales. We need to elevate the significance of Wales competitive identity and to re-invigorate the Welsh brand to highlight our successes and tackle any negative perceptions of Wales. As part of this we need to recognise the importance of London as a key location where opinions are formed. In particular, we need to develop a clearer narrative around the business proposition. In other words we need to tell the Wales story better. We also need to develop a more coherent approach to international engagement that brings together business-facing sales, dialogue with European institutions, Higher Education partnerships, and other diplomatic relationships. The International Business Wales brand is not strong or recognised internationally as the Massey report found and it will no longer be used. In future organisational branding will reflect the fact that the focus of marketing will be the Wales brand. We will develop the Wales brand, particularly around the business proposition, to highlight the successes that underpin our offer and to counter any negative perceptions about Wales. The increased Innovation, Health and Wealth case studies resulting from the WHIP could be used within marketing materials employed by Health Research Wales, Visit Wales, WG, UKTI and other institutions. The intended purpose of these marketing activities would be to increase the perception of Wales, leading to an increase of inward-investment by companies performing research and development into Wales, ideally participating in the WHIP framework. With continued success of raising the international profile and perception of Wales as a place to perform healthcare innovation would ideally result in Wales becoming more globally competitive within the LS sector Output 4: Wales Becoming More Globally Competitive [Please see Appendix 3 for literature and data supporting this outcome]. Evidence for the output of Wales becoming more globally competitive was found in the interviews, as well as the policy and policy recommendations review. Competitiveness, especially within the global 201 P a g e

216 context, was clearly found in the interviews (Section ), the Basic Social Process (Section 6.3), and the key LS interventions (Sections 8.2 and 8.3). The Basic Social Process integrated the stakeholder views of the Global Context into a single statement: The Ecosystem at a national level must interact with other ecosystems within a Global Context in order to remain competitive, learn best practice and maintain visibility. NISCHR s Industry Engagement in Wales recognises the need to engage in the Global Context by stating: Proposed areas for action can be found throughout this document and focus on the following overarching ambitions: For NHS R&D offices to build on existing strengths and consistently deliver commercial research studies in a competitive, global environment (NISCHR, 2012). Similar themes are expressed by WG s Science for Wales (Welsh Government, 2012d) policy: To succeed in a globalising world economy we must play to our scientific and business strengths To achieve this we will focus our energies through our education and business support systems, concentrating on key sectors to promote an economy where science is a major generator of wealth and prosperity. We will launch a programme of targeted interventions to help place Wales on a global stage. The WHIP was derived as one of these targeted interventions described by Science for Wales. It has been designed to leverage strengths and opportunities within the Welsh LS ecosystem. By promoting a pipeline of innovation, focusing on delivering better healthcare through clinical trials excellence and innovation adoption, Wales has a chance to build a global reputation and become more competitive, having created its own specific place in the market. 202 P a g e

217 Chapter 10. Discussion The purpose of this chapter is to discuss and explain the data gathered in Chapter 6 to 7.3 within the context of the original Research Questions and the related analytical frameworks. The Research Questions are as follows: Research Question 1: What are the stakeholders views regarding the current Welsh life sciences sector? Research Question 2: What are the stakeholders gaps in knowledge regarding the Welsh life sciences sector? Research Question 3: What intervention strategy could be developed which would be both effective and delivered practically within the framework of the devolved government of Wales? A discussion of the results addressing each of these questions is provided in the sections below Research Question 1: Stakeholders Views of the Welsh Life Sciences Sector In the sections below, a brief description of how the stakeholder interviews relate to the literature surrounding knowledge-based economies, diffusion of innovation and systems of innovation is given The Welsh LS Sector and the Knowledge Economy Based on the interview data, the Welsh LS sector can be described within the framework and the definitions of a knowledge economy provided by the EU, OECD, WG and World Bank (Table 3-2). The WG defines a knowledge economy as an economy which is characterised by the recognition of knowledge as a driver of productivity and economic growth, leading to a new focus on the role of information, technology and learning in economic performance 203 P a g e

218 (Welsh Government, 2009). This is clearly represented by the categories found within the Networks (see Section 6.2.2) and Global Context (see Section 6.2.5) themes. Furthermore, the descriptions of the sector provided in Section 6.2 align with the Four Pillars of the Knowledge Economy: Education and Human Resources, Information and communications technology (ICT), Economic Incentive and Institutional Regime (EIR) and Innovation. The first of the aforementioned four pillars, namely Education and Human Resources, is further characterised in the World Bank s definition through the statement: An educated and skilled population is needed to create, share and use knowledge (World Bank, 2005). According to Interview I11, Wales has a highly trained population. Other interview data is also consistent with the World Bank s definition of Education and Human Resources. This includes interview categories Culture, Population and Skills within the Actors theme (see Section 6.2.1), as well as the Collaboration, Critical Mass, Engagement and Self-knowledge categories within the Networks theme (see Section 6.2.2). Therefore, stakeholders appear to have a view of the LS sector in Wales that is consistent with a strong performance the first Pillar of the Knowledge Economy (EHR). In regard to the second pillar, the data gathered from the open-ended interviews does not enable as robust a mapping as the other three pillars. For example, although not coded within a category or theme during the Open Coding analysis, Interview I57 described how the city of Cardiff had invested 11 million into superfast broadband, a fact which was verified (Wales Office and The Rt Hon David Jones MP, 2012), resulting in the highest penetration of superfast broadband in the UK. Additionally, ICT was identified as a priority sector within the WG s Economic Renewal: A New Direction in 2010 (see Section ). Furthermore, High Performance Computing (HPC) Wales was launched in 2010 as a five year joint venture between Wales six Universities, working in partnership with a variety of academic and industrial stakeholders and funded by the EU, UK and Welsh Governments. The aim of 204 P a g e

219 HPC Wales is to deliver a pan-wales HPC infrastructure: primarily to assist with economic regeneration in the Principality of Wales (which has a population of approximately 3.6 million) through the up-skilling of individuals and by promoting uptake of HPC in Welsh businesses, but also open to collaborations from outside Wales (Redfern, 2013). In addition to HPC Wales, the sector has access to the High End Computing Terascale Resource (or HECToR), which was implemented as the UK s high-end computing resource, funded by the UK Research Councils. The service ran from 2007 to early 2014 and has now been superseded by ARCHER (HECToR, 2014). The aforementioned evidence, in combination with the absence of mentioning ICT as either a Strength or a Weakness in the stakeholders interviews, it leads to the preliminary conclusion that ICT existed at an adequate level for the stakeholders within the Welsh LS sector. Therefore, stakeholders appear to have a view of the LS sector in Wales that is consistent with a strongly performing second Pillar of the Knowledge Economy (ICT). The third pillar, Economic Incentive and Institutional Regime (EIR), was well represented in the interviews. The Government category coded from the interviews (see Section ) is consistent with the World Bank Definition of EIR: A regulatory and economic environment that enables the free flow of knowledge, supports investment in Information and Communications Technology (ICT), and encourages entrepreneurship is central to the knowledge economy. Although not representative of Wales on its own, the United Kingdom ranked 16 th among 183 countries evaluated by the World Bank (see Section ). Likewise, the WG has made many efforts to support the Welsh economy and institutions through both broad interventions (such as Economic Renewal: A New Direction and Science for Wales, see Section ) and LS specific interventions (Welsh LS Strategy, see Section 2.4). Although policies have been put in place, the interview data revealed entrepreneurship as a key weakness within the Culture of the Actors. Further interventions may need to be pursued in order to change this reality (or perception of reality). Therefore, stakeholders appear to have a 205 P a g e

220 view of the LS sector in Wales to be weak within the third Pillar of the Knowledge Economy (EIR), conflicting with data from the UK that the EIR is relatively strong. Last but not least, the fourth pillar, Innovation, was well represented within the interview data. The definition of the Innovation pillar is A network of research centres, universities, think tanks, private enterprises and community groups is necessary to tap into the growing stock of global knowledge, assimilate and adapt it to local needs and create new knowledge (World Bank, 2005). This definition is represented by the Networks and Institutions themes presented in Section and Section 6.2.3, respectively. The Global Context theme (see Section 6.2.5) describes how these institutions and networks engage with the ecosystem(s) outside Wales, especially in the context of innovation. Based on the overall views of the stakeholders, Wales needs to improve this pillar more than the other three pillars, especially if it wishes to be competitive in the globalised LS sector. Therefore, stakeholders appear to have a view of the LS sector in Wales that is strongly performing within the fourth Pillar of the Knowledge Economy (Innovation), yet could use much improvement The Welsh LS Sector and the Diffusion of Innovation The Welsh LS sector has a range of institutions that operate in a range of models, which can be described as closed innovation, open innovation, embedded innovation, or somewhere in between. Based on the researcher s participatory observation, there does appear to be an overarching desire by a majority of Actors, Networks and Institutions to move towards the embedded innovation model described in Figure A prime example of this is the Institute of Life Science, where innovators operate within academia, government, industry, and the third sector. Embedded innovation is further evidenced in Wales by the creation of institutions such as The National Institute of Social Care and Health Research (NISCHR) Academic Health Science Collaboration (AHSC), Health Research Wales, the Welsh Wound Network, the Welsh Wound Innovation Centre, MediWales, NHS Wales Informatics Service (NWIS) Research Labs and many more. These organisations promote networks, collaboration 206 P a g e

221 and embedded innovation. Within the interviews, strong, small networks (specifically between the Actors and Institutions) were identified as a strength by a large number of interviewees from a range of backgrounds (see Section ). Although there might be a desire to increase the levels of open or embedded innovation within the Welsh LS sector, a few shortcomings were identified. These included weaknesses in the Actors (Culture and Skills), Networks (Collaboration and Critical Mass), Institutions (Companies, Government and Universities) and Ecosystem (Funding, Geography and size, LS infrastructure and LS specialties). In order for Wales to grow its open/embedded innovation capacity, it appears it would need to focus on its Opportunities in the Networks theme (Collaboration, Engagement and Self-knowledge). Self-knowledge (such as mapping of resources and best practice) could be a catalyst to identify and engage in the most productive collaborations, yet this claim must be further explored. This explanation is at the heart of Research Question 2 with regard to where the gaps in knowledge exist for the stakeholder, which could in turn lead to greater levels of innovation The Welsh LS Sector and Systems of Innovation Components of open innovation and embedded innovation overlap with the systems of innovation approach suggested by Edquist (2005) and Fagerberg (2004), including collaboration and interaction with other organisations and institutions. Due to the devolved status of WG, it could be argued that Wales should be analysed at a national level; however, as Wales is not recognised as an independent country by the EU or UN, but is described as a region within the UK national system within this study. Throughout the literature, the sectoral systems of innovation approach appears to be the most applicable to this investigation into the LS sector in Wales. This approach seems also to be in agreement with scholarly literature, when considering comparable sets of constraints. 207 P a g e

222 National, Regional and Sectoral Systems of Innovation The national innovation systems (NIS) framework can be applied to both Wales as a devolved nation, the greater UK, or the EU as a governing body. Due to the size and scale of the EU, it may be more appropriate to apply NIS at the UK and WG levels. Although NIS might be the theory that was originally adopted across the world, systems of innovation have been increasingly employed in research and policymaking focused at the regional and sectoral levels (Conway and Steward, 2009). In the case of biotechnology, universities are key magnets. But to transfer science from the laboratory bench to the market involves complex, interactive chains of transactions among scientists, entrepreneurs, and various intermediaries. Chief among the latter are investors and lawyers. Proximity to such services and, in biotechnology, research hospitals for clinical trials creates an innovation system. This is best analyzed regionally and locally. Cooke (2002a) Cooke argues that biotechnology (and by extension the LS) is a multi-actor innovation system that can (and should) be confined to a regional level rather than the national level. Regional innovation system (RIS) models can be applied directly to Wales as a region within the UK. The Welsh LS industry is particularly concentrated along the M4 corridor in South Wales and Northeast Wales. These can lead to local or regional innovation systems to be applied to these regions of Wales. Many of the national level WG policies already support the LS regional innovation systems through policy and funding of SMEs (see Section ). Although this may be the case, LS may require more bespoke support than other sectors and a sectoral approach may be more appropriate (see Section 3.4.3). In the case of Wales, both regional and sectoral approaches are being taken by WG (see Section and Section 2.4). A subset of sectoral systems of innovation (such as the Welsh LS sector, for example) focuses specifically on lagging regions or countries catching up with other regions or countries which may be ahead in terms of economic outputs or innovation (Malerba and Nelson, 2008, Albuquerque, 2001, Jung and Lee, 2010, Malerba and Nelson, 2011). This has direct 208 P a g e

223 applicability to the economic conditions of Wales and to the prospect of looking into the LS sector directly. Furthermore, Malerba argues that sectoral analyses should focus on systemic features in relation to knowledge and boundaries, heterogeneity of actors and networks, institutions and transformation through co-evolutionary processes. As a consequence, the understanding of these dimensions becomes a prerequisite for any policy addressed to a specific sector (Malerba, 2005). This investigation into the Welsh LS focused on bringing understanding of these characteristics as outlined by Malerba, identifying the key stakeholders and their interactions. Malerba suggests that factors affecting learning and catching up can be universal across all sectors or unique to LS. The interview categories align with the themes identified by Malerba (see Table 3-6). Table Learning and Catching Up: Theory across Interview Data Sector Specificity Universal Malerba s Learning and Catching Up Themes Learning and capability building by domestic firms Associated Welsh LS Interview Subcategories Companies Third Sector Universities Access to foreign knowledge External Role Models Education and human capital Culture Population Skills Universities Active government policy Government Life Sciences Universities doing research Universities Institutional policy toward intellectual property rights NHS Wales Third Sector Universities Policies supporting targeted R&D Government LS infrastructure LS Specialties NHS Wales Subcategory content was compared with Malerba s Learning and Catching Up themes, based on universal or LS specificity. SOURCE: (Malerba and Nelson, 2011) 209 P a g e

224 Individual sentiments from interviews indicate a recognition that individual components of Learning and Catching Up require support, however, these analysis is outside the scope of this work. Further analysis could be performed on the interview data within the framework of Malerba s Themes and could be an opportunity to analyse in future research directions Triple, Quadruple and N-tuple Helix The triple helix is academia, government, and industry. The Triple Helix indicator can be extended algorithmically, for example, with local global as a fourth dimension or, more generally, to an N-tuple of helices (Leydesdorff, 2012). The triple and N-tuple helix models identify the need for an open search process which allows space for testing some new thoughts and approaches across different phases, including the mapping of key stakeholders; systemic meetings of triple helix communities to debate and shape the way forward in terms of selection of new combinations ; and the development of governance to provide for strategic leadership of innovation and development programmes. (Leydesdorff and Zawdie, 2010). The stratified interviews in this investigation reflected these views in the opinions expressed by senior stakeholders operating within the sector. These included views from the traditional triple helix, as well as other stakeholders from the N-tuple helix within the ecosystem (professionals, NHS Wales and Third Sector). However, the views of individuals from civil society encouraged in the Quadruple Helix literature (patients, laymen, citizens, etc.) were not included in this study as this framework was not as applicable to this study. As a result, the views of civil society were not considered as relevant at the outset of this study by the researcher this research was designed to focus on entrepreneurs, industry, and policy makers. Further work could be undertaken to incorporate the third sector, laymen, patients, etc. by future researchers. The interview data suggests that individual Actors (Culture, Population and Skills) and Institutions (Companies, Government, Third Sector, NHS Wales and Universities) within the Welsh LS sector need to improve interactions through the Networks (Collaboration, Critical 210 P a g e

225 Mass, Engagement, Self-knowledge and Support) available, which may result in a more robust Welsh LS Ecosystem (Funding, Geography and size, Infrastructure and LS Specialties) (see Figure 6-7). Stakeholder views support the opinion that current policy formulation is based primarily on the Triple Helix and consideration should be given to incorporating the N- tuple helix models into policy development Clusters and Competitiveness In relation to the Welsh LS sector, LS clusters have already emerged in South Wales in areas around Cardiff, Swansea and Bridgend, as observed in Figure Figure MediWales Picture of Health Map MediWales Picture of Health initiative has mapped key academic, industry and clinical organisations in the Welsh LS sector and grouped them into clusters by location. A great majority of this activity is occurring in South Wales. Yellow circles indicate larger clusters of organisations in Cardiff, Swansea and Bridgend. Blue circles indicate small clusters near Merthyr Tydfil, Pontypool, Newport and Chepstow. SOURCE:(MediWales, 2014c) Based on the literature, South Wales could be deemed a bioregion (where regional, sectoral policy might be applied) and/or a biocluster (where clusters and competitiveness theories might be applied). From the world view of the researcher, it could be argued that Wales is a bioregion consisting of a number of bioclusters (South Wales, Cardiff, Swansea, Bridgend, Northeast Wales, etc.). 211 P a g e