The next European leaders won’t emerge from the ecosystem that has all the answers. They will emerge from those that become exceptionally good at connecting the dots.
The distinction between international expansion and geographic architecture is important. For frontier tech, geography is increasingly something you design into the company from the beginning, not something you address once the domestic market has been conquered!
Great piece. The Innovent–Pfizer example made me think about the flip side, though. Running Phase I in China is fast, but that speed only helps if the data still counts later. And Washington is now openly questioning whether it should: draft appropriations language in May, then a letter in August pushing FDA to demand site audits. Nothing's law yet, but it's the exact dependency risk you describe with Covenant, just showing up in biotech. The fastest part of the chain might also be the most exposed.
Absolutely. And there is an interesting tension here. Geopolitics is increasingly about preventing China from turning its scale and capabilities into structural dominance in strategic industries, so regulatory portability itself becomes part of the chessboard.
But I would add one nuance. China has built capabilities that are difficult to ignore, particularly when time and cost matter. In biotech, where development cycles are exceptionally long, the arbitrage can be significant: if an early clinical step can be reduced by x3 in time and x2 in costs (which we start seeing on the market), some additional regulatory friction later may still be economically absorbable.
The value of that first study is not necessarily only that the data travels unchanged all the way to FDA approval. It can generate human data earlier, kill a weak hypothesis faster, strengthen the next financing round, and, if necessary, finance replication in another jurisdiction. In that sense, “fail fast” has geopolitical value too.
So perhaps the real question is not whether China-generated data will remain perfectly portable, but whether the speed/cost advantage remains greater than the expected cost of losing some of that portability. For many biotech companies, I suspect that calculation can still favour China in the short and medium terms.
I wonder whether this ultimately changes what we mean by a “European company.” If the IP and scientific core are European, validation happens in Asia, manufacturing in the US and capital comes partly from the Gulf, nationality becomes a much less useful way of describing the company.
Industrial policy becoming part of product strategy feels particularly consequential. A subsidy, procurement rule or localisation requirement can materially change unit economics. Geography is no longer simply an operating decision; in some sectors it effectively becomes part of the business model.
The biotech example is a good illustration of something broader: there is no particular reason discovery, validation, clinical development, manufacturing and commercialisation should all happen in the same ecosystem. We may simply have inherited that assumption from an earlier model of company building.
The distinction between international expansion and geographic architecture is important. For frontier tech, geography is increasingly something you design into the company from the beginning, not something you address once the domestic market has been conquered!
Great piece. The Innovent–Pfizer example made me think about the flip side, though. Running Phase I in China is fast, but that speed only helps if the data still counts later. And Washington is now openly questioning whether it should: draft appropriations language in May, then a letter in August pushing FDA to demand site audits. Nothing's law yet, but it's the exact dependency risk you describe with Covenant, just showing up in biotech. The fastest part of the chain might also be the most exposed.
Absolutely. And there is an interesting tension here. Geopolitics is increasingly about preventing China from turning its scale and capabilities into structural dominance in strategic industries, so regulatory portability itself becomes part of the chessboard.
But I would add one nuance. China has built capabilities that are difficult to ignore, particularly when time and cost matter. In biotech, where development cycles are exceptionally long, the arbitrage can be significant: if an early clinical step can be reduced by x3 in time and x2 in costs (which we start seeing on the market), some additional regulatory friction later may still be economically absorbable.
The value of that first study is not necessarily only that the data travels unchanged all the way to FDA approval. It can generate human data earlier, kill a weak hypothesis faster, strengthen the next financing round, and, if necessary, finance replication in another jurisdiction. In that sense, “fail fast” has geopolitical value too.
So perhaps the real question is not whether China-generated data will remain perfectly portable, but whether the speed/cost advantage remains greater than the expected cost of losing some of that portability. For many biotech companies, I suspect that calculation can still favour China in the short and medium terms.
I wonder whether this ultimately changes what we mean by a “European company.” If the IP and scientific core are European, validation happens in Asia, manufacturing in the US and capital comes partly from the Gulf, nationality becomes a much less useful way of describing the company.
Industrial policy becoming part of product strategy feels particularly consequential. A subsidy, procurement rule or localisation requirement can materially change unit economics. Geography is no longer simply an operating decision; in some sectors it effectively becomes part of the business model.
The biotech example is a good illustration of something broader: there is no particular reason discovery, validation, clinical development, manufacturing and commercialisation should all happen in the same ecosystem. We may simply have inherited that assumption from an earlier model of company building.