Roadblocks on the Horizon

What are the major challenges ahead for China's dream of building an innovation-driven country? First, China's traditional research funding allocation process is influenced by seniority and personal connections rather than being merit based, resulting in unworthy projects being funded while truly innovative projects are ignored. Many Western-trained, China-born life science senior executives argue for a transparent, consistent, and merit-based government funding system where projects can be judged by international experts in the field with little political ties to the system, and where sufficient funding can be given to worthy projects in need of longer-term investment, provided that clear milestones at specific timelines are given for periodic evaluation. Second, in China's pursuit of record-breaking economic growth, the desire to be the first, or the fastest, to develop new drugs without proper quality safeguards often backfires and causes harm to the health and well-being of patients. Contaminated blood transfusion products (in particular the Heparin case) have served as a wakeup call to regulators as well as a painful reminder to the government to reform its lax regulation and quality control system for food and drug products.

For foreign drug makers, an additional strategic challenge is managing a restive local work force. Many of the returning sea turtles are distracted employees, paying their dues while preparing to start their own businesses. "Everyone wants to be his or her own boss some day, and get rich," said Changyou Chen, a returnee who cofounded Hefei Lifeon Biotech, an antibody discovery and development company, with his college classmate. "However, it takes many years and tremendous cooperative efforts to create a successful drug."

Education: Will it Set China Free?

Finally, China's long-term future in innovation is ultimately dependent upon the talent and creativity of its youth. The continuing influx of sea turtles will help build a solid foundation of science and technology expertise and know-how. China's educational system is still designed around the Confucian ethos of standardized tests and memorizing facts, with little emphasis on developing a student's ability to think critically and to develop an independent capacity to create. Many teachers complain that students educated in Chinese schools know how to score high in tests, but lack the ability to solve real-life problems, not to mention invent new things. The 12th Five-Year Plan attempts to address this problem by proposing a comprehensive new approach to Chinese education that incorporates more exchanges with Western institutions, introduction of Western-style elements like the scientific method, and more freedom in shaping curriculum. This could be one of China's most challenging tasks yet, as it might require confronting the country's authoritarian legacy—an outcome that could shape China's future.

Zhu Shen is the CEO of BioForesight, a consulting firm on cross-Pacific licensing and PR/media. She can be reached at bioforesight@gmail.com