If he had not become a venture capitalist, Juan Enriquez might make a fine preacher. Pacing the stage at the annual TED “ideas worth spreading” Conference in Long Beach, California, agreeably rumpled, humorous yet urgent, Enriquez expertly plays an audience eager to hear his gospel of prosperity. The way for an individual to become rich, he says, is to be smart and get a good education. An audience of smart, well-educated people applauds. The way for nations to become rich is to invest in science and technology, and produce innovative, entrepreneurial solutions to global challenges in energy, agriculture, and medicine. An auditorium full of knowledge workers cheers.
He preaches to the choir at TED and similar venues, but the message that Enriquez conveys in books, boardrooms, and business conferences is shared by many economists. Knowledge is power. Nations and communities that invest in educating their people and unleashing their entrepreneurial drive in science and technology will triumph. But Enriquez goes further in his knowledge economy homiletics. To remain competitive in the global economy, he says, Americans need to radically alter the way they educate their children, fund science, and regulate business. They need to drop their squeamishness about patenting genes and commercializing discoveries. If your country considers patenting a gene a crime against humanity, he argues, you aren’t going to grow a flourishing life sciences industry. On stage and on the page, Enriquez argues that what’s good for biotech is good for the country.
Born in Mexico—though with Boston Brahman DNA on his X chromosome—the 50-year-old Enriquez earned a BA and an MBA at Harvard. He returned to Mexico to work in government, serving as CEO of Mexico City’s Urban Development Corporation and as coordinator general of economic policy and chief of staff for Mexico’s secretary of state from 1988 through 1994. In 2001, he became founding director of the Life Sciences Project at Harvard Business School. He is currently managing director of Excel Venture Management, which invests in companies, he says, with “the ability to program, read, and write cells.”
Though not a scientist himself, Enriquez has a positivist’s faith in scientific progress. He is passionate about the potential for life sciences to transform human life, and famous for roasting sacred cows. He is far from complimentary about the National Institutes of Health, for example. “It’s become a patronage system, rather than a discovery system,” he says dismissively. The pharmaceutical industry? “With a few exceptions, it looks like Detroit, circa 1977. They are committing slow suicide.” The American system of education? “Terminally stupid. The thing that drives me crazy about schools here is there is so much focus on equality.” If the United States were to follow the lead of Taiwan, Singapore, and South Korea, he says, we’d be much better off. Instead of hiring extra teachers to deal with disabled students or troublemakers, he argues, hire them to work with the five brightest students in the classroom. “You do that consistently for a decade and your economy is going to double.”
Pronouncements like these raise hackles. But Ari Patrinos, a genomics pioneer who helped run the Human Genome Project and now is president of Synthetic Genomics, a Maryland-based biotech company co-founded in 2005 by Craig Venter with backing from Enriquez, argues that they are necessary. “People like Juan are the safeguards of our system,” Patrinos says. “He is not afraid to bruise egos that need bruising. He’s made a huge contribution to airing issues that need to be aired and confronting sacred cows that need to be skewered.”
As an investor deciding where to place his bets, Enriquez backs companies developing technologies like nanotech, robotics, and the engineering of micro-organisms. He is interested in platforms rather than products, broadly applicable tools and methodologies that don’t need a thumbs-up—and can’t be destroyed by a thumbs-down—from the Food and Drug Administration. He has funded DNA chips that function like test tubes and “stapled peptides” that modulate protein interactions. “What you are going to see is more and more use of genomics by energy companies, by chemical companies, by textiles, by agriculture,” as scientists learn to write as well as read DNA, he says. “You are going to see big chunks of the economy adapt this code. It’s a little like the stage in the computer revolution when you move from computers being applicable only to other computer geeks and IT professionals to being part of everyday life.”
The model metropolis for this coming bio-revolution, Enriquez says, is zip code 02138—Boston-Cambridge. “I half-facetiously make the argument that Boston is the center of the universe,” he says. Just a few blocks from his Boylston Street office, Enriquez points out, at the corner of Center and Vassar, is MIT’s Stata Center, designed by Frank Gehry, “where they are doing the next generation of the Web, artificial intelligence, and advanced robotics. And you are going to generate economies from companies spun out of that building that are about the size of entire countries.” In Kendall Square, “you’ve got the Whitehead Institute, and they are doing some of the most advanced gene research on the planet, and spitting out dozens of companies we finance here.” At the corner of Vassar and Main is the Picower Institute for Learning and Memory, which focuses on brain research. “That’s not ready for prime time yet in terms of spitting out new companies, but if I were a grad student right now that’s where I’d be headed—toward this black box of the brain and the creation of life and how you build it from scratch.”
Other communities are blessed with a similar research-business synergy, he points out, though few can boast the intellectual firepower of 02138. Throughout the United States, he says, “we’re generating enormous amounts of wealth in a few zip codes and in a few states, places like Silicon Valley and Austin. And those are in states that tend to favor education, tend to have excellence in higher education, tend to have a rapid churn of industries.” By contrast, states like Michigan, West Virginia, and Ohio, which relied too much on manufacturing and have been blindsided by globalization, have sustained major economic losses. “There was a poll done in Michigan not long ago where 60 percent of UAW workers did not feel that it was important that their kids go to college,” Enriquez points out. “Well, if we had paid a little more attention to education in Detroit and West Virginia and said, OK, we’re really going to focus on this transition and put academic centers of excellence in those places, you would have had a very different story there.”
Similarly, in his native Mexico and other states south of the U.S. border, education, particularly science education, is a low priority. “Part of what’s happened in Latin America that’s an absolute tragedy is that the daily debate has nothing to do with ‘how do we make our kids smarter and better able to compete in this world?’” By contrast, countries like South Korea and China, which treat education, particularly math and science education, “like a varsity sport,” have managed “to pull people out of poverty to an extreme extent and generate a whole lot of wealth, lifting a billion-and-a-quarter people out of poverty, extreme poverty, in just over a decade or two.”
In the gospel according to Enriquez, social and economic progress is sparked by business and entrepreneurship, not government spending. He points to the Human Genome Project as his prime example of a situation in which, he claims, private enterprise was able to produce knowledge (mapping the human genome) faster, cheaper, and more thoroughly than government-funded efforts. “The public Human Genome Project was one of the great boondoggles of all time, used to finance labs built by friends and colleagues,” he says. He credits the private Celera Genomics, headed by Craig Venter, with finishing the job in half the time and for much less money.
“There are very good arguments for basic infrastructure being built by government,” Enriquez says. “The place that science and government get into trouble is when they create self-perpetuating bureaucracies that keep reinventing themselves to go further and further downstream. If you are going to do that, you should be held accountable for results.” He points to the war on cancer as “the perfect example of spending more and more money on stuff that has nothing to do with cancer and that is not really interesting or very important.” NIH increasingly is competing with private enterprise in some areas, he says, forcing competitors out of the system. “And that is really dangerous because it makes discovery harder, it makes building business harder, and it costs orders of magnitude more.” Enriquez cites bioinformatics as an area in which, he asserts, NIH has choked off private competition. “Very often when people started to have applied [bioinformatics] projects, there would be government funding for a competing project done by groups close to the [Human] Genome Project. And you just watched bioinfor- matics companies shut down.”
Excessive or wrong-headed regulation is another of Enriquez’s favorite targets. Take Big Pharma, for example. According to him, the pharmaceutical industry has moved from being discovery driven to being marketing and merger driven largely because of excess regulation leading to extreme risk-aversion. “Even the traditional research powerhouses have moved more to that model,” he says. “Somehow it got into the public’s head that what you were promised was absolute safety when you take a medicine. If that medicine isn’t 100 percent safe, if it has side effects, if it hurts some people, then you should spend the next two years testifying in court. Boy, does that hurt the discovery model.” At the FDA and within pharmaceutical companies, he says, “you are never faulted for asking for more tests, for putting more costs into the system. You are never faulted for not approving something and you can get really hurt for approving something. So the hurdle rate for bringing a medicine to market now is in the billions.”
Genomics is even more vulnerable to bioethical and regulatory bludgeoning, he says, pointing to England as the prime example of a place where he believes great science has been hamstrung by an anti-business bias. “The smartest people on the planet per capita in life sciences are probably the Brits. That’s where penicillin was discovered, where monoclonals were discovered, where DNA was discovered, where cloning was discovered. But there is an ethos there that you shouldn’t grow business out of this stuff.” It’s an infection he fears will spread to the United States, where some universities are held back by a sense that scientists should be motivated by the pure pursuit of knowledge and that commercializing discovery is somehow dirty.
Harvard overcame this handicap, Enriquez says, when Lawrence Summers was president. “Larry Summers had many foibles, but amongst the things he did really well was to take a university and refocus it on science, to grow that campus and to start thinking about why MIT was generating so much wealth, so many jobs, and Harvard was not.”
Chi Van Dang, vice dean for research at the Johns Hopkins School of Medicine, has helped spearhead a similar transformation in Baltimore, and under his leadership the school has streamlined its tech transfer process and doubled the number of patent applications. But he strongly objects to some of Enriquez’s assertions. “To say that public funding of research has failed is completely wrong,” he says, pointing to the important role played by NIH in developing new drugs and biologicals. As for the public vs. private human genome projects, “he’s got his facts screwed up,” Dang says. “While you have to give Venter credit for the technical approach Celera developed, they did not have the money to do it correctly. If you talk to people in the field, they’ll tell you that what Venter did with this information was very unreliable and fragmented. HGP [the publicly funded project] adopted [Celera’s] technique and was able to complete it, but they had to resequence and revalidate it. Now we have a real map [of the genome].”
Dang, a “venture scientist” who sits on the boards of a few biotech companies himself, says that private enterprise is not always the best guardian of the public interest. Most of the research data collected by companies is proprietary, he points out, and other investigators can waste millions of dollars following leads that they didn’t realize had already been proven as dead ends by others. “The downside of private investment is that it locks up knowledge, rather than advancing it. It’s the way capitalism works,” Dang says. “We just lock that knowledge away and if another company invests in an area that you know doesn’t work, you have an advantage over them.”
Ari Patrinos is a fan of Enriquez, calling him “a true Renaissance man, a big thinker, and a very smart risk-taker.” But he concedes that Enriquez’s promotional instincts run counter to his own more cautious and considered academic approach. “My interactions with him have not always been pleasant,” Patrinos admits. “He has challenged me, which I appreciate. When I joined Synthetic Genomics I was green in the ways of business and may have taken longer to deliberate, but Juan pointed out to me that we don’t have that luxury in business because the market will pass us by.”
Enriquez has supreme self-confidence, Patrinos says. “His impatience is a trait I appreciate. He epitomizes that urgency to act.” But urgency can often ignore problematic complexity—for example, what to do with the millions of people unsuited by temperament or training to work in the laboratories or cubicles of the knowledge economy. Enriquez’s answer tends to be, “Boy, they’d better find specific niches and do them very well, otherwise they are going to become quite poor.” Other advocates of the knowledge economy are more sympathetic to the fact that people without advanced degrees also need jobs that enable them to support families and create stable communities. Aris Melissaratos, former secretary of business and economic development for Maryland and special adviser for enterprise development to the president of Johns Hopkins, points out that the United States must soon make a big investment in rebuilding its crumbling infrastructure—roads, sewers, and water systems, as well as building the next generation of infrastructure like broadband, smart grids, and public transportation. A commitment to such massive public works projects will, Melissaratos says, provide thousands of jobs and revitalize U.S. manufacturing. “If the nation commits itself to a long-term infrastructure rebuilding effort, then the heavy basic manufacturing will come back,” he says. “Companies will invest and build the factories, build everything you need to put the system in place.”
Ignoring the need to provide jobs for all the nation’s citizens, not just the well-educated ones, could lead to a scenario that Enriquez himself discussed in his most recent book, The Untied States of America: Polarization, Fracturing, and Our Future—civic disorder fueled by extreme income inequality. At some point the United States as we know it may even cease to exist, Enriquez predicts. He wrote, “It is not a God-given right for any country to exist forever, even if in God it trusts.” Though he takes pains to clarify that he is not promoting secession or a fragmenting of the United States, Enriquez doesn’t seem particularly bothered by the prospect either.
Nor does he express much sympathy for young people whose career and educational prospects have been stunted by poverty or neglect. “All I want is for the rules in football, basketball, and hockey to be applied to education,” he says. “Just run your high schools the same way you run your sports teams,” by identifying talent and nurturing it. To win, a team needs the best players, he points out, and coaches need to push those talented athletes to excel. “If you are willing to say we will send out a football team with anybody who wants to play regardless of whether they’ve showed up for practices or have talent, all right.”
Enriquez spends a fair amount of time lecturing in schools, some of them science magnet schools and some of them regular public high schools. “What I really love sharing with kids is this incredible sense of adventure,” he says. “Here are these robots, these bacteria, people doing extraordinary things with science.” The kids get it, he says, even in subpar educational systems. “The tragedy is you can go into some of the worst public schools in Chicago and be in a room with two or three hundred of the most unruly kids you’ve ever seen. And within five minutes, everyone in that room is paying attention.”
His job in those places, as he sees it, is to motivate those brilliant students who will somehow make it out of their troubled school systems and into PhD programs, inspiring them to aim for a life something like his. He is avid about his venture capital work. He says, “It’s a little like living Christmas every day, with very smart people walking into your office saying, ‘I have a dream. I want to change the energy system. I want to change how we make food, I want to change how we make textiles.’ And you get to help them build that dream.”
