WRAL Tech Wire

Pharma Firms Join Rush to Invest in China; GSK Is Latest

By RICK SMITH

RESEARCH TRIANGLE PARK, N.C. – Look out. The rush by global pharmaceutical firms to invest in China is on.

GlaxoSmithKline, which operates one of its two U.S. headquarters in Research Triangle Park, said Monday that it will invest millions and hire 1,000 scientists in building a large research center in Shanghai.

Just as high tech firms ranging from Nortel to IBM, Cisco to Red Hat, have rushed to the land of the Great Wall and the Forbidden City to place their bets on economic opportunity, so too are the drug makers. Even the New York Yankees have set up shop in China, recently signing two Chinese prospects. If the NBA can land a Yao Ming in China, then Major League Baseball can search there for its next superstar.

And why not? The Chinese economy is booming. China is home to the world’s largest population. Many of its people are exceptionally bright. And while the government remains authoritarian, it certainly has embraced capitalism.

The decision by GSK also reflects the growing challenge the United States and other Western European countries face as more and more investment and jobs head to China, India, Brazil, Eastern Europe and elsewhere.

Business of all kinds is truly global in a flattened world. Adapt or die.

According to a report in the China Daily, the new center “will be the only one for the company focusing on neurodegenerative disorders like Parkinson's disease, Alzheimer's disease and multiple sclerosis.”

Given the growing wave of Alzheimer’s disease, the center could prove to be an especially important one.

Perhaps more importantly, the China Daily notes, GSK isn’t the first big pharma firm to pick China for expansion. Eli Lilly and Novartis had joined the China rush earlier. Eli Lilly, in fact, has set up a venture capital fund for investments in the country.

Even as China’s exports continue to swamp global markets and its economy grows at a rapid rate, U.S. companies from high tech to venture capital to pharma are looking for ways to grow on the massive economic boom.

The GSK investment will start with $40 million and the hiring of between 50 and 100 scientists, the China Daily said.

GSK made clear the importance of China’s market.

"China will not only be famous as the world's factory, but also attract (global attention) to its research and development for the pharmaceutical industry," Amy Huang, president of GSK operations on the Chinese mainland and Hong Kong, said, according to the Chinese newspaper.

Over 10 years, GSK said it would hire 1,000 scientists.

GSK also considered sites in India and South Korea before settling on Shanghai, with a company spokesman citing access to scientific talent as a major reason.

The China Daily also pointed out that the arrival of big pharma could be a boost to China’s education efforts and retention of its best-and-brightest. Of some 1 million Chinese who have left the country over the past 28 years, some 275,000 have returned home for their professional careers.

Given the global competition for highly trained workers as exemplified by the raging H-1B visa debate in the U.S., that’s another reason why the moves by GSK and other pharma firms are important.

Not only do they gain access to a mammoth market; they also could get an earlier crack at top talent. If the Yankees can do it, why not GSK?

The Skinny

WRAL Local Tech Wire Publisher and Editor Rick Smith dishes out tidbits from the local technology sector. Read more articles…