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Can Hongneung area be reborn as 'bio cluster'?Korea's Bio Industry: Voices of the field ⑤ Korea Health Industry Development Institute
  • By Nam Doo-hyun
  • Published 2017.02.27 17:08
  • Updated 2017.06.19 14:59
  • comments 0

A biomedical industrial complex will open in Hongneung, northern Seoul, in July, setting itself up as the bio cluster of Northeast Asia. The Hongneung Biomedical Cluster (HBC) seeks to become the central “bio venture city” in this part of the world, making the most of the capital city’s geographical advantages and sufficient research capacity.

Despite its ambitious objective, visitors find HBC is starting on a far smaller scale than expected. Compared with the Boston Biotech Cluster that boasts an area of nearly 2 million square meters, for instance, the HBC compound is less than 22,000 sq. meters. The total floor area of its main edifice, new wing and – aside from a new research-oriented venture complex now under construction -- covers only 9,564 sq. meters. It is far smaller than even compared with the High-Tech Medical Complex in Osong, North Chungcheong Province, which sits on a land of 1.13 million sq. meters.

Nevertheless, expectations on HBC are quite high among experts, including bureaucrats, industrialists, and academics. Will it be able to live up to their expectations and write a new history for the nation’s biomedical industry?

The Korean Health Industry Development Institute (KHIDI) has beaten other research organs and industry associations to emerge as the organ to operate the proposed bio cluster. The Korea Biomedical Review inquired asked its operational plan, meeting with the two key officials -- General Director Eom Bo-young, head of KHIDI’s Department of Technology Business, and Director Kim Yong-u, the No. 2 person in the same department.

General Director Eom Bo-young(right) and Director Kim Yong-u. explain about KHIDI's plan to operate Hongneung Bio Cluster, during a recent interview with KBR.

Question: How has KHIDI come to spearhead HBC operations?

Eom: Foreign bio-clusters usually operate separate agencies that intensively develop, or “accelerate,” promising technologies. These are organizations that have intimate knowledge of the bio health industry. KHIDI has drawn up a substantive network in the bio industry by conducting the “Bio Korea” project and running research-oriented hospitals. Our institute also has sufficient capacity to help bio venture startups based on its profound understanding of the industrial situations, here or abroad. Since the institute can operate programs within the cluster, we anticipate a win-win result with the Seoul Metropolitan Government as well.

Kim: Not just pharmaceutical companies but bio businesses should conduct clinical and non-clinical (animal) experiments through medical institutions. Hospitals for their part are taking pains to move beyond treating patients and turning their work into money-making ventures. For its part, KHIDI had been racking its brain how to build a biotech cluster like that in Boston. Then the Seoul city announced a plan to operate a biotech incubator in Hoegi-ro, Dongdaemun District where the Korea Rural Economic Institute used to be. The timing was right. The city was worrying about the operation of HBC, and the institute just needed this complex.

Q: What advantages does KHIDI have in operating HBC?

Eom: Our institute’s Department of Technology Business been engaged in supporting startups, linking them to investment and commercializing new technology. In the pharmaceutical and medical equipment industries, clinical tests and licensing systems vary from track to track. KHIDI will be supporting these areas effectively.

Kim: That means our department will make the most of its capacity for the effective operation of HBC. Specifically, the department has business development team, research-driven hospital team, and technology evaluation team. Technology evaluation team, for instance, provides support for patents and helps to turn them into technologies. Business development team assisting startups is engaged in mediates business, including the transfer of intellectual property rights. It also matches clients with potential investors. The department has built various networks of contacts for inbound and outbound support, all of which are necessary to operate a bio cluster.

Eom: KHIDI has also consistently supported platforms for research-driven hospitals, establishing a well-developed infrastructure for supporting commercialization. Research-centered hospital businesses are experiencing smooth cooperation, which also is a key component of biotech clusters.

Kim: That’s right. The concept of a research-driven hospital is to shift its focus from treatment to research. KHIDI has aided skilled personnel to create foundations for developing new products based on their clinical experiences. We will continue to provide such support at HBC, too.

Q: Korea has several other biomedical clusters in Songdo, Incheon, Osong, North Chungcheong Province, and other areas. What sets HBC apart from the existing complexes?

Eom: HBC is the only cluster in Seoul. As known widely, hospitals perform essential functions in the healthcare sector, including clinical trials and intermediary researches. Most hospitals -- 90 percent of research-driven hospitals and 133 general hospitals -- are in Seoul and its vicinity. The same goes for investors.

Other clusters, like the ones in Osong or Daegu, are well equipped with clinical centers and other aspects of hardware. Seoul, on the other hand, is not suitable for building factories and other infrastructure. The startups in Seoul will find its advantage in incubating their ventures and receiving investment. The plan is to nurture bio ventures in Seoul, then connect them to other clusters in Wonju, Daegu, and Osong when they grow up and need factories or in-house laboratories. When HBC expressed its intention to play the role as a bio hub, people at other clusters responded favorably. If all things go as planned, Hongneung and other areas will form a consultative body among regional clusters.

Kim: Hongneung will support startups at their early stages. Of course, Osong also has many of the equipment these ventures need, but it may be weak in providing what the early-stage startups need. It’s also too far away from hospitals. Since we are planning to make Hongneung primarily an incubator center, it is our goal to incubate startups for three to five years and relocate them to startup centers in research-centered hospitals or somewhere else like Osong and Pangyo in Gyeonggi Province so that they can receive the support they need as bio companies. We wish to share these objectives with other clusters.

Q: Is there anything you hope to learn from clusters overseas?

Kim: After analyzing foreign bio-clusters, we concluded that their real strength lies in the hospitals. If you look at places like Boston, San Francisco and Texas that have active clusters, they have great business relationships with hospitals. It’s imperative that hospitals, bio and support services are all in smooth coordination with one another, but I don’t see a single cluster in our country that satisfies these three conditions. This is also where HBC can differentiate itself from other domestic clusters. As you know, competent workforce is concentrated in hospitals.

Q: How much human resources does KHIDI plan to move to HBC?

Eom: About 10-14 percent of its total staff. Our department intends to trickle down its networks and know-how into HBC. To be involved in it also will be the Department of Medical Device Industry and the Department of Pharmaceutical Industry within the Bureau of Health Industry Promotion. We will activate a task force exclusively responsible for HBC.

Q: How are you getting feedback from professionals?

Eom: We are holding advisory meetings item by item, including one on overall project plans. Now that each group has had discussions, we will gather them for a comprehensive discussion. It is only through discussing a variety of ideas that we can proceed and create a sense of participation. Each advisory board is made up of professionals in various fields, and there are also research hospitals who hope to contribute their experiences and knowledge. These abundant human resources are an important part of why KHIDI was chosen as the operational agency.

The Hongneung Biomedical Cluster

Q: Some experts claim Korea needs to leave investment concerning bio-clusters to the private sector. It is also true most of the overseas clusters have come into being spontaneously.

Kim: If the private market is large enough, clusters appear naturally, making it unnecessary for the government to step in. Under the local circumstances, however, the government needs to come forth to create infrastructure and provide networks.

Eom: The government plays a major role in fomenting the culture. In the intellectual property consulting area, for example, not a few companies conduct research and development, often for years, with very limited understanding of its problems. Large-scale pharmaceutical companies are not much different, either, beginning the R&D process without foreseeing problems that arise in patents. I’ve been doing IP consulting with eight to nine companies annually for four years and seen a culture formed to a certain extent. In the past, some companies wanted to save consulting fees. Now some voluntarily choose to invest in securing patent attorneys or IP consulting. In this way, the government can help create a culture the industry needs.

Kim: Also, how the companies acquired IPs is critical for their successful commercialization. Sometimes, technology itself is splendid but has been in progress to a considerable exte3nt by multinational pharmaceutical companies. In these situations, the company should change its direction (of R&D). It is crucial for them to analyze the right, demand and market of technology, but this isn’t always easy for companies to do on their own. KHIDI can help resolve these problems through the IP incubating project tailored to specific targets.

Q: What benefits can ventures expect if they move into HBC?

Kim: First of all, there would be spatial advantages, and they can use equipment at significantly lower costs than elsewhere. They can buy some of the devices with Seoul city’s budget or share the existing equipment. Most of all, they can create networks. When you start a company, it’s not easy to receive the consulting you need in accounting and management. We hope to create a program that will provide member companies, especially those in HBC, with necessary consulting and other benefits, such as seminars and forums held in Hongneung.

Q: When will HBC be in its complete shape?

Kim: Currently we have the main building, a new wing, and annex with another structure being planned. The main building will open in July 2017, with conference rooms, operational offices, and space for tenant businesses. We also anticipate supporting organizations to come in, such as patenting or CRO offices, investor institutions and logistical agencies, which can form networks in the main building and obtain the information they need.

There is not much space available for supporting organs. We will allocate five offices to them at most, but this won’t be much of a problem because all they need will be liaison offices for the time being. We’ve already given notice of invitation, and are expecting ventures five years old or younger. The new building will open around the end of 2017 and house 20-40 bio ventures, but the research-centered venture complex will likely open far later, sometime around 2020.

Q: There are high expectations for HBC. How do you plan to operate it?

Eom: We’ve communicating with other clusters to join forces to reinvigorate the nation’s bio industry. We will work with a resolve that there will be no future for the nation’s bio and healthcare sector if HBC fails. We will do our utmost with a sense of mission, and hope all people involved will trust and help us.


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