Ladies and Gentlemen,

Technology is the main engine of economic growth and structural change, and is transforming our countries from industrial economies to knowledge-based ones. And one of the most powerful driving forces is biotechnology.

Many believe that competitiveness in biotechnology will be a critical determinant of commercial success for different industrial sectors in Europe. Thus, we must harness biotechnology through dialogue, education and training and supportive policies. By doing this, we can secure for Europe the economic and societal benefits of this exciting technology.

The work the European Commission has started by developing "A Strategy for Europe in the field of Life sciences and biotechnology" will constitute a cornerstone, both at the European and the national level, in our efforts to make use of biotechnology in a beneficial and acceptable manner in Europe.

With new technologies, we will often face unforeseen use and even misuse, new dangers and unpredictable consequences. Concerns over potentially negative aspects can easily put a negative mark on biotechnology as such.

The New Strategy that the Commission provided earlier this year, addresses several crucial aspects. We hope it will make it easier to reach a common understanding and common attitudes regarding what we may deem to be acceptable, what might be considered a grey-area activity and what we want to avoid in the field of biotechnology.

We would like to include Norway as an active player in this game. We need to develop our technological capability. In order to achieve this, we will have to strengthen our efforts in many fields.

First – and most importantly – we must ensure competitive conditions for the industry as a whole. This will be crucial to maintain an international industry in Norway in the future. And without a competitive industry, there will be little research and development in the fields of life science and biotechnology.

For instance; Our high level on taxes is one obstacle for investments in new knowledge-based companies. An OECD study on the bases of five indicators in 21 OECD countries, clearly showed that Norway should change its policy in the field of taxation. In 2002 we have taken the first steps to do just that.

The need to strenghten private ownership and cutting red tape are important issues which need to be addressed in our industrial policy. As an example, a survey some years ago showed that 45 per cent of SMEs spent more time on administration due to public regulations than on the development of their own strategy and innovation activities.

A knowledge-based economy implies that an increasing amount of knowledge will have to be exchanged between the different operators. Consequently, it is of utmost importance that mechanisms meant to ensure that results from scientific research are transformed into commercial innovations, are functioning well. Therefore a well-functioning innovation system will be essential to secure the competitiveness of our economies.

We are now in the process of redesigning our national R&D- and innovation system. Historically, the schemes under the Ministry of Trade and Industry could be compared to the hunch of a camelback, slanting towards company-oriented research. Looking ahead, I think we may see a somewhat different approach. Still using metaphors, we should be more oriented towards the Asian camel and its two hunches. On the one hand we should support long-term and strategic research. And on the other, we should strengthen our efforts to support start-ups, entrepreneurship based on research results and commercialisation of R&D. The crown argument for this shift, is the perceived level of market failure in these last two areas that I mentioned. In addition, Norway introduced tax incentives for R&D from 2002 as a general tool for the industry to apply more R&D.

I am convinced that industry in the area of Life Sciences and biotechnology will benefit from these new efforts.

Through the EEA Agreement Norway take part in the Internal Market on the same bases as the EU member States. Given the over-all impact of Life Sciences and Biotechnology, it is vital for Norway to have a common platform with the Union in this area.

We would like to congratulate the Commission upon the Strategy document. The Strategy is a compact and focused document while on the other hand addressing many vital issues for the development of the Life sciences and Biotechnology in Europe. In my view, the value of the Strategy lies very much in its operability because it clearly identifies the specific tasks to be fulfilled, the implementers and the timeframe for the activities. And last but not least, the strategy is a very comprehensive one covering the vital subjects.

I believe the Strategy will represent a challenge both to the European Union, the research community, the private operators and the Member States, to mention some of the key operators

Norway wishes to be an active partner in the work in connection with the Strategy as well.

On this occasion, I would like to point at some themes that are important to all parties and relevant in the context of the EEA Agreement.

Life Science and biotechnology - A strategy for Europe

Research

(Action 3)

We strongly support the approach in the Sixth Framework Programme in establishing specific measures to encourage among others SME participation. To a small country like Norway, international co-operation and training and mobility of researchers are all very important to further co-operation.

Management and legal services

(Action 4)

It seems very useful to create networks of biotechnology managers at the national level. In Norway, we have actually created a biotech forum that in many respects has such functions.

Exploitation of intellectual property

(Action 5)

As I am sure you are all aware of, Norway has not yet transposed the biopatent directive into national law. The Directive has provoked a lively debate in Norway, and many are opposed to the directive. The debate in Norway continues, and we follow with particular interest the political process now taking place in the different EU Member States, especially in France and Germany who both strongly supported the directive when it was drafted and both have a growing biotech industry.

Regardless of our ability to adopt an official position regarding this directive, we do acknowledge the fact that the strategic use of intellectual property is a key requisite for the development of an export-oriented industry in the life sciences sector.

Networks in Europe

(Action 8)

The Commission proposes to create a commercial biotechnology web portal for Europe. Norway finds this very interesting and foresees further co-operation in this field.

(Action 9)

Networking is of paramount importance to our biotech community. This also means stronger interregional co-operation across Europe and establishing networks of biotechnology clusters, which of course also will be of interest to Norway.

Social scrutiny and dialogue

(Action 13)

The Strategy stresses the importance of Life Sciences and Biotechnology being applied in accordance with ethical values and the Common Good. Norway strongly supports this approach. Many new developments taking place in biotechnology and modern biomedicine have raised concerns. Therefore, it is of great importance whenever possible to set limits for activities deemed as being ethically unsound such as human reproductive cloning.

In Norway, stem-cell research is another field that has raised much concern. The Government is opposed to research on human zygotes and embryos, and on stem cell lines derived from them. We hope that research on stem cells donated by born individuals will become a substitute. In Norway, we have for some years also had laymen conferences dealing with biotech matters. Only by informing people and increase transparency will we succeed to reap the benefits of these technologies. In order to develop the contact across Europe, there is much to be gained by - among others - promoting networking of national ethical bodies.

Food production and the use of GMO-plants is a controversial matter in Europe. The Commission document reflects an open-minded approach to this complicated matter. We acknowledge that people in other parts of the world may have quite different views on these matters. In Europe there is a demand for detailed labelling requirements thus customers will have the opportunity to choose freely between food containing GMO material and food without GMO material. Our Government supports these demands for strict labelling requirements.

This leads me to the question of regulatory principles. On what kind of principles should our legislation be based?

We all agree that risk assessment is vital. However, it seems impossible to reach a common understanding of what might be an acceptable level of risk and in what kind of situations a Risk Analysis is needed and when not? Does an acceptable level of risk related to the use of biotech GMOs mean that there should not be any risk at all? And what about the varying shades of the Precautionary Principle, does the same go for that principle as well, meaning that the only acceptable level of safety is "zero risk"?

Risk assessment constitutes an indispensable tool for establishing regimes both for the approvals and the prohibition of products and processes.

On which bases may we take our decisions? I think we can agree that we face great challenges in this respect.

In Norway, we see that 99 per cent of the global R&D in biotechnology is taking place elsewhere.

There is no such thing as a globally accepted criteria for what kind of risk or what levels of risk should be accepted. For instance, what might be unacceptable in Norway may gladly be tolerated in China.

As the Commission Document also stresses, international co-operation is vital in a number of areas - food safety being one and genetic resources another.

We acknowledge that Foresight activities will give valuable insight into new emerging issues.

Finally, it is stated in the strategy that the Commission will present a regular Report on Life Sciences and Biotechnology. Norway intends to be a partner in this respect as well, and thus contribute to the goals put forward in the Strategy.

How can Norway contribute to Europe?

Norway has taken part in EU research as early as from the Third Framework Programme. This means that good connections have developed between Norwegian research communities in Norway and elsewhere in Europe.

This is the platform we build on today.

Norwegian Life Science and biotech research and industry are to a large extent linked to medicine and health-related research, in addition to research in the marine and agricultural sector.

Our activities in the area of industrial biotechnology build on our national strategy for business-oriented biotechnology that was adopted in 1998.

The Norwegian authorities have drawn up the legal framework for biotechnology so as to ensure that any commercial activity is conducted in an ethically sound and socially responsible manner, with no adverse effects on health or the environment. We have also stated that legislation will evolve in step with developments within the field of biotechnology. One future aim is to develop a flexible legislation that will ensure social management and sustainable use of biotechnology whilst creating favourable conditions for industry and research.

For the future, we will have to identify issues of key importance to our industry in the field of Life Science and Biotechnology.

Let me give you an outline of what may characterise Norwegian biotech companies.

First of all, most of our companies are very small. We also experience that Norwegian private investors find the Norwegian biotech community too small. Investing solely in Norwegian biotech companies seems far too risky.

Norwegian biotech industry has its roots in diagnostics and to a lesser extent in the marine sector, though the marine biotechnology is of newer origin.

Biotech companies have many common features with fragile plants. They appear not where and when you have suggested, even if you feel all preparations have been made. Why? Perhaps because their existence mostly depends upon entrepreneurs that have got the guts to out and create while at the same time they really understand the underlying technology. In some cases, a good infrastructure seems to be regarded as being less important than creative chaos.

With very few exceptions the history behind Norwegian biotech companies is the history about the entrepreneur who used to work in a research institution.

However, Norwegian biotech industry is maturing. Companies are now far more concerned about IPR issues and the economic value of their findings and inventions.

As in the rest of Europe, companies are beginning to recruit businessmen for their management positions. As investors are paying more attention to the return on their investments, biotech companies too will have to pay due attention to this rather than aiming to make technological breakthroughs "sometime in the future". To smaller companies the market may be felt like a tribunal without any mercy or appeal.

How can we contribute in Norway to the development of Life Sciences and Biotechnology in Europe?

Surely, we will do so if we succeed in developing our own industrial base in these areas.

I think, that there are four aspects we will have to deal with in particular, in order to succeed.

First, as the EU strategy also underline, we will have to safeguard the ethical values. From the very beginning there has been an open debate about modern biotechnology. The doors shall be kept open in the future too.

Secondly, we will have to secure the research base. That means that we will have to devote more resources to biotechnology. And in particular, we will have to strengthen basic research at our Universities. This year we have established a new programme in Functional Genomics that have got substantial funding for several years ahead. But this increase in the research base have to be followed-up by efforts in order to increase the commercial results of our university research. International co-operation will of course be of significant importance. Therefore we are looking forward to the next framework programme as well as the work for establishing The European Research Area.

Thirdly, in order to develop our biotech industry we will have to enlarge the capital base in Norway. Public money cannot be the most important source for venture and risk capital neither for biotechnology or any other knowledge-intensive companies. I think we face a great challenge in order to find out what might trigger the potential that private venture capital represent. In Norway, as in Europe, we still face many of the challenges and obstacles to industrial development that were identified in EU's White Paper on Innovation from several years ago.

And finally, we must look more closely into what we think represent valuable assets in the field of life sciences and biotechnology and how they can be utilised in a good and effective manner. In this respect, I have in mind in particular, our marine resources and our medical biobanks and our comprehensive public health registers.

The government and the public authorities have the overall responsibility for establishing a framework that allow a thriving industry based on scientific and technological developments to prosper while at the same time safeguarding ethical values and political goals. This is a great challenge to us all - in EU as in Norway.