It’s always interesting when several different news stories point in the same direction. For several months now, we’ve seen announcements and industry gossip about how information technology companies such as Apple and Google are planning to up-end the life science industry by their use of data. And just as I wrote this, Novartis’s new CEO designate, Vas Narasimham, gave a Financial Times interview that stressed the use of AI and data to revolutionise research and development productivity.
For a geeky professor like me, this was music to my ears. Partly because it confirmed what I’ve been predicting in my various books and articles but also because it has strong parallels with evolutionary biology. As usual, let me delve into the science and then come back to the practical implications.
When Dr Narasimham said, “I really think of our future as a medicines and data science company”, he was, in effect, signalling a shift in the basic functioning of Novartis and many other research-led life science companies. I don’t think he would argue with me too much if I paraphrased it as “we’re going to compete with our data geeks as much as with our biologists and chemists”. This is a quite fundamental shift – one that I christened ‘The Information Shift’ in my book ‘Darwin’s Medicine’. Such transitions are very rare in the history of industries and it is hard to find parallels in other businesses. But, as readers of my work will know, the life science industry is just an example of a complex adaptive system and we can therefore look for important parallels in other such systems, such as biological systems.
In particular, we can learn something from the way that life on earth changed at the end of the Ediacaran period, about 541 million years ago. Evolutionary biologists’ latest thinking is that up until the end of the Ediacaran period, the earth was dominated by simple, single-celled organisms that thrived in the then oxygen-poor atmosphere. And then, it seems, atmospheric oxygen rose to near modern-day levels. Although the leading edge of this research argues over the detail of this change, it is agreed that it enabled an explosion of complex, multicellular species. It is a strong example of a change in the environment leading to a change in biological systems.
So how is this relevant to our understanding of present trends and the future of our industry? Well, shifting from anaerobic to aerobic metabolisms is a fundamental shift of the kind not seen often in complex adaptive systems. That’s a parallel to what Dr Narasimham was saying about becoming a data science company. In our industry, the availability of data is triggering a change in a way that is directly analogous to the changes triggered by the availability of oxygen. Later in his interview, he also described the need to form working relationships with other companies with expertise in data science. It is not a stretch to draw analogies between the building of complex networks of firms and the emergence of complex life forms that followed the Ediacaran period. We are moving from an industry dominated by firms to one dominated by such networks, a phenomenon I describe in my work as the holobiont shift.
So, there are strong parallels between the two complex adaptive systems of Ediacaran earth and today’s life science industry. Both show a changing environment, leading to a different way of competing and different forms and structures. But what are the practical implications of this? Can it tell us anything about how to thrive in our changing industry? I think there are three lessons to draw from this. The first is the most obvious. In a world where data is pervasive, learning to use data at scale and in an integrated, bidirectional manner is essential for survival. The second is that survival is likely to be within a holobiont, a network of symbiotic firms. Learning to do this will also be essential. The third lesson to be learned is less obvious but perhaps even more important. The Ediacaran period was followed by the Cambrian period, a time synonymous with the explosion of differentiated species that evolved to occupy every habitat and niche on earth. We should expect to observe the same explosive evolution in the life science industry as business models emerge to exploit every possible way of generating a good risk-adjusted return on capital. My work identifies no less than 26 such models, which I’ve described in earlier PME articles. The survival lesson to be drawn is that firms must work out which species they want to be and drive their evolution towards it. Undifferentiated, unspecialised business models will be outcompeted by new models.
Novartis and our other leading companies are led by very smart people. They know they are leading a transition into a very different future. I wonder if they know the lessons that can be drawn from 541 million years ago?
