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GLOBALOUTLOOK EXECUTIVEDECISION


‘Innovationis inourDNA’ T


he US pharmaceutical giant Johnson& Johnson becamethe first foreign-funded open platformto be accredited by the


Shanghaimunicipal government in February. This is in line with its plans to build an innova- tion ecosystemin the country. In November last year, Shanghai’smunici-


pal government set out regulations to encour- age foreign R&D centres to take root in the city. Policy support measures – ranging from


customs clearance facilitation for R&Dand tax cuts to talent acquisition and participation in government projects– came into effect on December 1, 2020, and will run until November 30, 2025. The open platform, spanning multiple loca-


tions, supports the development of an innova- tion ecosystem. It provides local and interna- tional start-ups with facilities, equipment and professional guidance to bring about more dis- ruptive healthcare solutions. The focus on China echoes a decision in 2019 from the com- pany’s executive committee to position the Chinese market as a “global innovation hub”.


Growingmarket Will Song, chairman of Johnson&Johnson China, tells fDi that “innovation is in ourDNA” and “in China, the power of innovation is espe- cially real”. As the world’s most populous country,


with an ageing population and a rising middle class with an appetite for healthcare products, “China is a market with hugeunmet health- care needs,” he says. Johnson&Johnson was one of the first


international healthcare companies to enter China in 1985 and is the largest international player in this market. Referring to the government’s latest R&D


push, Mr Song says:“We are encouraged by China’s determination to foster innovation and we are very confident that, in such an environment, we can make a real difference to transform people’s lives with innovation.” In its 14th five-year strategic plan, the gov-


ernment announced that it will increase R&D spending by 7% annually until 2025. Johnson&Johnson already has a network


of roughly 700 science professionals in R&D facilities across Beijing, Shanghai, Guangzhou, Suzhou and other Chinese other cities. Outside the US, China is its onlymarket to have end-to- end R&D capability across medical devices, pharmaceuticals and consumer health.


Digital future The company is looking to advance digital sur- gery in China. It has teamed up with Beijing- based start-up Changmugu to develop the first


14 Will Song (right): “We are encouraged by China’s determination to foster innovation”


AI solution for joint surgery pre-operative plan- ning. This has enabled surgeons to make the planning for procedures 30-times faster and increased operation accuracy by 20%, accord- ing to Mr Song. Xian Janssen, a pharmaceutical subsidiary


of Johnson&Johnson, has also signed a memo- randum of co-operation with the first affili- ated hospital of Xi’an Jiaotong University to deliver a new e-hospital model or virtual health services for patients.


Innovation for all Other foreign businesses might not be so bull- ish on China’s R&D boost, says Kyle Freeman, partner at lawfirm Dezan Shira&Associates in Beijing. Mr Freeman sayswhile some foreign com-


panies might look to “seize on some of the information” provided by the government and targets in the five-year plan, others—particu- larly technology businesses—may be reluctant to pursue such a strategy as this might also have a knock-on effect on operations in other overseasmarkets, such as the US or Europe. Johnson&Johnson declined to comment


on whether the life sciences sector would be spared the threat of US–China decoupling. “The biggest challenge remains howwe


meet the current and future needs of patients and consumers, and address the increasing unmet needs in a better and faster way,” Mr Songmaintains. “Innovation cannot be done by one com-


pany. It requires joint efforts and collaborative work frompublic and private sectors,” he says, including government authorities, industry partners, research institutions, entrepreneurs and local companies.■


www.fDiIntelligence.com April/May 2021 PROJECTPROFILE


JOHNSON&JOHNSON Location Shanghai


Accredited February 3, 2021


Sector Life sciences


JOHNSON & JOHNSON DRAWS CONFIDENCE FROM CHINA’S R&D BOOST. SETH O’FARRELL REPORTS


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