Hugo Sigman, CEO, Grupo Insud: Interview

Interview: Hugo Sigman

What opportunities exist for Argentina’s biotechnology and pharmaceutical industries globally?

HUGO SIGMAN: Argentina started with biotechnology about 30 years ago, in the early 1980s. Over the decades we have seen two big waves of investments and development, resulting in a solid human capital base. This has been the foundation upon which our industry has grown, particularly in the field of biotechnology applied to generic drugs. However, Argentina did not take full advantage of great international opportunities available in developed markets such as the US and Europe. This has been mainly due to the lack of investments in operational standards in local manufacturing plants, which impeded our industry from receiving approvals from the US Food and Drug Administration and the European Medicines Agency. Similarly, our clinical studies did not quite meet the requirements of such agencies.

Argentine businesses in the pharmaceutical industry need to have greater international vision in order to expand their presence in highly regulated markets. The truth is, rather than companies focusing on regulatory issues, strong internal departments and highly qualified professionals in the field, we need to instead shift our focus – based on our strong human capital base – abroad, to international markets.

How do you view Argentina’s position in terms of R&D investments, and how can these be increased?

SIGMAN: Argentina’s total investment in R&D today represents about 0.6% of national GDP, behind the 2.2% of the EU, and much below Israel and South Korea, which invest more than 4% of their GDP in R&D. We have about 1100 scientists per one million inhabitants, which is half of what Australia has, for example. Clearly we have a long way to go in this respect.

Investments in R&D typically come from the private sector in these countries, whereas in Argentina, 85% of investments come from the public sector and only 15% from private sources. This is mainly due to a lack of both incentives for the private sector and fiscal policies to promote more R&D initiatives. This is something we urgently need to change. In China, for example, there are entire innovation and technology projects being financed by the government. We need to understand that investments in R&D are a fundamental path to gain competitiveness on a global scale, and that therefore our government needs to establish the right mechanism to promote private expenditure.

Another area that needs to be further reinforced is the link between the business, academic and scientific communities. Strengthening relations between these three domains would significantly advance innovation, a key focus for the current government.

What are the main growth prospects, and challenges, for the local agriculture sector in 2018-19?

SIGMAN: The agro-industrial sector has been, and should continue to be, a central pillar of our economy. Around 20% of the world’s soy beans come from Argentina, and our market is comparable to that of any developed market globally. The biggest challenge right now is to consistently lead the process of technological innovation to add value to our existing commodity base, and this is something we can only accomplish through greater investment in R&D.

Argentina’s agriculture sector presents many great opportunities for investments and development, biofuels in particular being one important area. The key is to foster a greater sense of a circular economy in our government and the private sector, so that companies start implementing projects in this direction. Another key growth sector is forestry and its sub-industries. Given its abundance of land, Argentina should be able to develop its agro industries much further, but of course we also need to ensure a clear agenda regarding sustainability and environmental protection. This comes through a well-grounded regulatory framework which promotes greater compliance from the private sector.