Recent Research: Did Policies Alter French BioTech Landscape?

A study suggests policies enacted in 1999 to encourage cooperative research, establish tech transfer structures and provide venture capital contributed to a dramatic shift in the biotech topography in France. In “Start-ups, firm growth and the consolidation of the French biotech industry,” authors Eric Avenel, Frederic Corolleur, Caroline Gauthier, and Carole Rieu compiled an original dataset on biotech firms to test several growth models on the French landscape.

The study from the Grenoble Applied Economics Laboratory examines the biotech landscape from three location types: administrative regions, science genopoles, and clusters with more than 10 biotech firms within 20 kilometers. Administrative regions are comparable to states, while genopoles would be comparable to Metropolitan Statistical Areas in the U.S. with government established science parks.

Based on regression analysis, the authors found that firm size made a difference in growth, with smaller firms experiencing less growth than larger firms during both time periods. They also found location has a significant impact on growth – and that these locations varied greatly for time periods before and after the new 1999 legislation was enacted.

From 1999–2002, the authors identified the best soil for biotech growth was in Marseille and its surrounding region and Nonterre within the Ile de France region. These two cities may have benefited from new structures and relationships resulting from the 1999 Allegre Act. This law provided incentives to those participating in new firm creation and encouraged structures for technology transfer and valorization. At the same time, France established mechanisms for venture capital dedicated to biotechnology, created bio-incubators, and genopole science parks.

Before France passed the Allegre Act, the biotech terrain from 1996–1999 favored Strasbourg within the Alsace area and the Rhone-Alpes region with growth in both Lyon and Grenoble. The authors note that the Alsace region may have benefited from German funding offered biotech companies before 1999.

The authors note several limitations of their study. The data set examines firms, not establishments, crediting areas with headquarters' locations with all of the growth of that company. Due to this limitation, the authors cannot test the potential reasons for higher growth in some regions over others. The authors also found that size accounted for a larger part of firm growth before 1999 with smaller firms likely to have even slower growth. However, the study results offer limited explanations for this difference based on the model used.

Start-ups, Firm Growth and the Consolidation of the French Biotech Industry is available at: http://www.toulouse.inra.fr/centre/esr/wpRePEcGael/gael2005-03.pdf