A decision by Swiss pharmaceutical giant, Novartis, to make the Boston area its new global research hub has sent shock waves through Switzerland.This content was published on May 7, 2002 - 18:14
Novartis's announcement that it is to build a $250 million (SFr398 million) research facility in Cambridge, Massachusetts, has provoked a frenzy of soul searching in the Swiss scientific community, which fears losing its best brains to the United States.
Novartis CEO Daniel Vasella openly admits that he decided to relocate the company's research headquarters from Basel to Cambridge because of the latter's proximity to the "best medical researchers in the world".
The firm has already poached Dr Mark Fishman, a Harvard professor, to head the new institute - called the Novartis Institute for Biomedical Research (NIBR) - which will direct the research of all the company's scientists worldwide.
For Catherine Nissen-Druey, vice-president of the Swiss Council for science and technology, the move comes as no surprise. She told swissinfo that Novartis is merely following in the footsteps of countless young Swiss scientists.
Exodus to America
"Resources for research have not increased in Switzerland for ten years, and young Swiss are not interested in staying. They head off to the US because there are better work conditions and better prospects."
Competition specialist Stéphane Garelli of the IMD business school in Lausanne agrees. He told swissinfo that the oft-cited "brain drain" was a reality, particularly among young Swiss. "A lot of Swiss people are probably going to move to the US, even to work for Swiss companies, and whether they come back remains an open question."
He added that companies which invest heavily in scientific research also prefer the US as a base, partly because they can work unrestrained by legislation.
"There are a number of laws in Europe that are cautious about research and its consequences... particularly in the pharmaceutical sciences, and some companies have become very upset about that. They prefer to move to the US, which is a much more flexible and dynamic environment."
Quality of personnel
The quality of personnel is also a key attraction for companies, which say they often struggle to find the right people for the job in Europe. "For us, it's easier to recruit top scientists [in the US] than it is in Europe," Novartis spokesman, Felix Raeber, told swissinfo.
He said that Fishman had been head hunted from Harvard to lead the new institute because "He is based [in the Boston area], he is a celebrity there, and therefore he can really attract scientists."
Novartis denied that its Basel research facility - until now the company's biggest - would suffer as a result of the move to Cambridge.
Although the new operation will be the lead research centre, Raeber said "Basel will remain a safe and good place to work for our scientists".
Basel losing out
However, Catherine Nissen-Druey says Basel - home to Novartis and Switzerland's other pharmaceutical giant, Roche - is rapidly giving up its place as a leading research centre.
"The quality of research carried out in Basel's major institutes is dropping, or they are even being closed. This was the case last year when Roche shut down its immunology institute."
Novartis's move also reflects changes in its key markets. Just five years ago, Europe was its biggest, but today the US generates the lion's share of the firm's revenue, accounting for over 40 per cent of sales.
"There's no doubt that growth and profitability in a marketplace help determine where research investment goes," said Vasella.
All is not lost for Switzerland or Basel, though. Vasella confirmed that there were no plans to move any of the company's other activities to the US, and said the headquarters would remain firmly rooted in the Swiss city.
"[Moving] would be impossible because the company has so many advantages of being in Switzerland, notably the tax advantages," said Vasella.
Switzerland still home to niche research
Hans Widmer, president of a parliamentary commission for science, education and culture, told swissinfo the Boston decision was no reason for panic just yet.
He said such expansions were understandable, as Switzerland remains too small to contain a global player such as Novartis.
Switzerland would also continue to trade off its current research strengths.
"Switzerland is primarily a good location for niche research, particularly in the areas of bio-security and production," Widmer said.