Can COVID Actually Turbocharge Parts of the Economy? This VC Says Yes

By Lilly Milman |  June 22, 2020

The COVID-19 pandemic illuminated the need for the life sciences industry in the US to innovate at lightning speed, according to author and venture capitalist Juan Enriquez, as scientists across the world scramble to create an effective vaccine and to test possible treatments. Now, Enriquez contends that there are two paths that the life sciences industry could take: Innovators can make it to the finish line fast, or get bogged down by bureaucracy. 

“On the one hand, people have suddenly realized just how important [the life sciences] industry is to their survival, and why this industry has to operate effectively and quickly,” Enriquez says. “On the other hand, it has been made very clear the inefficiencies of the industry — how long it takes, how difficult it is to get a drug to market, how many bureaucratic obstacles there are to do that.”

Enriquez is the Managing Director of the venture capital fund Excel Venture Management, which is focused on investing in entrepreneurial life sciences companies and big data platforms. He is also the co-author of the book “Evolving Ourselves: Redesigning Humanity, One Gene at a Time.”

In our recent conversation, Enriquez shared his insights on how COVID-19 has affected life sciences and other industries. “There are just crazy amounts of productive innovation taking place,” he says. This interview with Enriquez is part of Innovation Leader’s most recent research report, “What the Future Looks Like.” For more data and interviews on how the coronavirus pandemic is reshaping work and home life, visit the main report page

What will the life sciences industry look like in the near future? 

You can see two different pathways to exit from this [crisis]. 

There will be a series of entrenched players that say, “We have to go back to business-as-usual.” Those entrenched players can range from the FDA, through big pharma, through various large lobbying groups, because there were a lot of people making a lot of money by the way things were working.

On the other hand…you can absolutely do things faster, better, cheaper…  

I think a good outcome…would be to have rolling admissions on things that have been shown to be non-toxic. Especially for things like diagnostics, I would love to see [more] sharing of information. I would love to see more open laws, where people opt in to sharing their data, and sharing the outcomes, because that would lead to much faster approvals. 

What other big changes will occur on a national scale? 

What’s at stake is the future of the US, and US competitiveness, because healthcare is such a big chunk of the US gross domestic product… If you’re spending 17 or 18 percent of GDP on healthcare, and you get twice as good a result as your neighbor, then dollar per dollar, that expenditure makes sense. But if you’re spending twice as much, and you’re getting worse results than Norway, or Sweden, or France, or Canada, or England, or Switzerland, then for every dollar spent, it’s worth half as much in terms of overall productivity to the economy. That is incredibly dangerous. 

It would be really harmful to the United States’ national long-term competitiveness if we come out of this and say, “We’ll go back to the way it was.”

The second thing that you’re seeing is a restriction on some of the smartest minds in the world coming into the United States. 

Before COVID, there was a 42 percent drop in visa applications from foreign students to the United States. With COVID, [these visa applications will continue to decrease,] because it’s going to take the US longer to get out than any other developed country, because it’s been so inefficient. So, when you look at the brain drain [and its impact on] research labs, university labs, [and corporate] labs, those brains are not going to shut down and say, “Oh, I’m not going to do this.” They’re going to do it in other countries, and that’s going to make those countries competitive. 

That can happen very quickly, and that could gut the US industry very quickly…

Is there any part of the industry that you think will snap back to how it was before? 

It would be really harmful to the United States’ national long-term competitiveness if we come out of this and say, “We’ll go back to the way it was.” That would be incredibly damaging, but there’s going to be enormous pressure. People had a comfortable system, they made great margins… 

I think life sciences has the opportunity to [bounce back]… It depends on national leadership, and depends on what happens in November… What happens November 4 [in the US Presidential election] is going to determine whether it is a science-friendly, evidence-based government or not. If we have another four years of anti-science…I think there is a very good chance that a lot of people who are innovators will choose to take their innovations elsewhere. 

What do you envision a new normal would look like, after the stay-at-home orders are lifted? 

Whatever happens depends on two words: transparency and credibility. Because you can lift any order you want. People will choose to come out or not choose to come out, depending on whether there’s transparency on the cases and credibility in the measures to avoid future cases…

It’s not just an issue of lifting the orders. It’s an issue of having people believe that they’re lifting the orders for the right reasons… The consequences of lifting the orders too early are that we’re going to destroy the economy, and we’re going to destroy the credibility of the government. 

There are just crazy amounts of productive innovation taking place…That part gives me hope.  

What advice do you have for corporate innovators as they prepare for the future?  

There’s a whole sector of people who have never worked as hard in their lives. Every day, they are producing, doing, executing, making, innovating because they have to… 

There’s also a [piece] of the economy that became hyper-productive and hyper-focused, because everybody showed up to the meetings, everybody showed up on time. You didn’t have meetings you didn’t need to do… You didn’t spend a lot of time on travel… It was just focus, and it’s exhausting… Any person who says they were bored during this pandemic is not part of the innovation economy. 

And I don’t want to say this in a way that minimizes the pain that’s going on out there…but there’s a parallel story, which is…there are just crazy amounts of productive innovation taking place… That part gives me hope. That part gives me the idea that there are areas of the economy that can emerge from this turbocharged.