BIOTECHNOLOGY is the latest buzzword in the investment community and, as usual, WA companies have leapt onto the bandwagon with gusto.
Entrepreneurial locals seem to have an uncanny ability to spot an opportunity over the horizon, harnessing the power of domestic investors who don’t have the temptation of too many pokie machines to spend their gambling dollars.
Easy money is a great lure for those seeking capital and WA’s ability to produce it certainly helps the State win new businesses.
But there are great risks for all of us in this latest industrial enterprise.
Scientists are not well known for their financial prowess and investors are not well known for their ability to navigate through the jargon of technological discovery.
Both are improving their skills in this department but the white shoe brigade always seem to sniff an opportunity when market information is lacking. Just look at the finance brokers fiasco and that was in the property development business, hardly something new.
Other examples include almost every sort of metal ever mined and, more recently, the Internet and the hype surrounding the world of e-commerce.
Biotechnology has some advantages over the Internet. Science has long been based on severe peer scrutiny and the publishing of findings in public.
But many scientists have worked for years without financial reward and, like their Internet cousins, may be blinded by the millions that can be made with a fudge here and fudge there.
Part of the restraint this market needs is a long-term view of investment in these risky R&D projects, and that will be helped by governments which put in place the sort of infrastructure needed.
In addition, regulators need to use the lessons of history to protect investors from future losses.
As they pick over the parched bones of technology stocks laid to waste, it would not hurt if they cast a cautious glance over the biotechnology business – even just to let the scallywags know they are looking.
