Almost a year ago, I did a brief summary of Thomas Friedman’s 2005 New York Times article titled “It’s a Flat World After All” and its impact on the world of biotechnology. After returning from my visit to India this year, Friedman’s thoughts brought new meaning to my perspective.
I have since begun to read another book that has given me further food for thought on its implications in general, but specifically for the world of Big Pharma and biotechnology.
The name of the book is “A Whole New Mind: Why Right-Brainers Will Rule the Future,” written by Dan H. Pink and published in 2005. It actually is reviewed by Friedman, who called it, “My favorite business book.”
So what is all the commotion about? Pink starts with an analysis of brain physiology and function, looking at the two separate parts, or hemispheres, of the brain, left and right. According to Pink, the typical brain has 100 billion cells, each of which connects and communicates with up to 10,000 colleagues. Talk about a network!
The original thinking on the brain was that the left hemisphere was the crucial half, the half that makes us human, while the right hemisphere is a remnant of our earlier stage of development. According to this theory, the left part is rational, analytic, and logical, while the right side was, as Pink says, “…mute, nonlinear, and instinctive – a vestige that nature designed for a purpose that humans had outgrown.”
At this point, you are most likely wondering: where is Rosen going with this and what does it have to do with either Friedman or biotech? Be patient and bear with me!
According to Pink’s analysis, the two sides of the brain are like two sections of an orchestra working together in a concert: if one side picks up and goes home, the orchestra still makes music but may not sound right. As he says: “Logic without emotion is a chilly Spock-like existence. Emotion without logic is a weepy, hysterical world where the clocks are never right and the buses always late.”
Pink concludes that our cerebral hemispheres represent a powerful metaphor for how individuals and organizations run their lives. Some people are more comfortable with sequential, logical, computer-like reasoning and become accountants, lawyers, engineers, computer experts, etc. Others are more comfortable with nonlinear, intuitive, and holistic reasoning, and become inventors, counselors, entertainers, etc.
Pink labels the left brain activity as “L-Directed Thinking” for the literal, sequential, functional, textual, and analytical processes, and the right brain activity as “R-Directed Thinking” for the simultaneous, metaphorical, aesthetic, contextual, and synthetic processes.
L-directed vs. R-directed thinking
Here is where it gets really interesting. L-Directed Thinking, according to Pink, has lead to abundance in our developed societies: we have a created a huge cadre of what Peter Drucker called “knowledge workers” that have produced a standard of living unknowable to our great grandparents.
The increased drive to maintain this affordability in developed nations has led to these products, in many cases, being outsourced to China, India, Brazil, and Russia, where it can be produced much cheaper.
According to Pink, India’s universities now produces about 350,000 engineering graduates per year; GE develops 48 percent of its software in India (more than 50 percent of the Fortune 500 companies now outsource software needs to India). More revealing is a Financial Times article that quotes the CEO of GE India as follows: “Any job that is English-based in markets such as the U.S., U.K., and Australia can be done in India. The only limit is your imagination.”
The driving force behind this is that a chip designer in the U.S. earns $7,000/month; in India about $1,000/month. A U.S. aerospace engineer earns about $6,000/month; in Russia, the salary is about $650/month. An accountant in the U.S. earns about $5,000/month, while in the Philippines, the same accountant makes $300/month.
It gets worse: one of 10 jobs in the U.S. computer, software, and information technology industries will move overseas in the next two years, and one in four jobs will be offshored by 2010. About 3.3 million white-collar jobs and $136 billion in wages will shift from the U.S. to India, China, and Russia by 2015.
More like Friedman
Sound like Friedman now? Pink argues that all of these jobs are L-Directed Thinking related-jobs that can be done cheaper in other parts of the world.
This also includes drug product manufacturing, drug development, and clinical trials. It is clear that many of the Big Pharma companies have realized this and are rapidly shifting activities to India, China, and other parts of the world. This cost savings is critical given the huge cost of drug development. Big Pharma spends over $1 billion per drug that successfully makes it to the marketplace.
So do we just pack it in and figure there is no hope for Western society? Pink believes that the solution for the U.S., Europe, and Japan is R-Directed Thinking, and that this already is happening to a large extent.
Implicit in this is both High Concept and High Touch. The former involves the ability to create artistic and emotional beauty, to detect patterns and opportunities, and to combine seemingly unrelated ideas into a novel invention, according to Pink. Likewise, High Touch involves the ability to empathize and to understand the subtleties of human interaction, says Pink.
Pink believes this concept is even beginning to shape how American medical schools are teaching young doctors: students are honing their powers of observation. Another example is that young physicians that paint are able to notice subtle details about a patient’s condition.
Pink makes the radical statement that it will not be the MBAs that will lead us forward in this process, but the MFAs (Masters in Fine Arts). In fact, the MFA will become this century’s MBAs. Some statistics to support this:
• Since 1970, the U.S. has 30 percent more people earning a living as writers and 50 percent more earning a living by composing or performing music.
• 240 U.S. universities have established creative writing MFA programs (up from 20 two decades ago).
• More Americans today work in arts, entertainment, and design than work as lawyers, accountants and auditors. In fact, there are more than 38 million Americans identified in this “creative class.”
This news is gratifying to hear, as much of the U.S. biotech industry is R-Directed Thinking, which is why the U.S. still is the worldwide leader in this industry. However, a caveat here is that certain components of the drug development process that lend themselves to L-Directed Thinking are the part of the industry that clearly have sprung up in India and China and are growing rapidly.
If the U.S. is to continue to stay as a leader in the field of biotechnology, it must continue to focus on the R-Directed Thinking, High Concept, and High Touch part of biotechnology, particularly interaction with sick patients who live difficult and pain-ridden lives. They will be the source of new innovation for companies that are capable of linking seemingly unrelated activities and mesh them into one cohesive idea for breakthrough products that meet the needs of these patients.
As I haven’t finished Pink’s book yet, I can’t give you any final conclusions, but I have been so impressed with what I have read thus far, and the implications for U.S. biotechnology and healthcare are so profound, that I had to share it with you.
See ya soon!
Previous articles by Michael Rosen
This article previously appeared in MidwestBusiness.com, and was reprinted with its permission. It is not meant to be a recommendation to buy or sell stocks!
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