In just 14 years, BGI-Shenzhen has become the world’s largest gene sequencer and has executed a series of prestigious projects in genetics. How did it become so prominent?
Question: What does a 700,000-year-old calcified horse bone found in Canada’s Yukon region have in common with a varied assortment of plants and animals including silkworms, potatoes, corn, rock pigeons, chickpeas and pigs?
On the outskirts of Shenzhen, Maersk containers whiz to and from the port through highways on the lush green rain-soaked hills. The Shenzhen special economic zone, known for its cheap labor and low-cost manufacturing, is in many ways the factory of the world. It is where your iPhone and New Balance sneakers come from. It is also where the somewhat derogatory term of shanzhai took root, thanks to cheap knock-offs that are churned out by the minute in countless sweatshops that have given this place its hard-to-match competitive advantage.
Faceless buildings flank the roads. Inside, armies of workers go about their jobs busily, supplying the world with everything from smartphones and cheap electronics, to garments and shoes.
An army of a different kind is hard at work in one such building. An hour away from downtown, BGI-Shenzhen’s headquarters stick out like a sore thumb from the gentle slope of a hill. The building has not much in the name of character—it used to be a shoe factory until it was handed over to its current occupants. A sign at the entrance says: “Decode life”.
Youngsters clad in shorts, T-shirts and sneakers troop into the reception shaking rainwater off their umbrellas on to the linoleum floor before they begin their workday. These kids, who make up the bulk of BGI’s 5,000-strong workforce, have made it the world’s largest sequencer of human, plant and animal DNA.
China is known for many things such as low-cost manufacturing and the economic miracle. Not genetics. BGI is out to change that.
China’s Genetic Powerhouse
Barely 14 years old, BGI already rubs shoulders with the big boys of genetics research—like the Broad Institute in the US and the Wellcome Trust Sanger Institute in the UK. It has sequenced more than 57,000 human genomes, more than 6,000 microbe genomes, 5,300 metagenomes, and in plants and animals, more than 580 species and 28,200 variation genomes.
While Broad and Sanger are almost exclusively focused on health care, BGI has firmly planted its feet in three areas: health care, agriculture and bio-energy. It is also becoming a force to be reckoned with in the bio-informatics space. It has multiple locations in China and has set up entities in Japan, Hong Kong, Denmark and America.
On the top floor of BGI’s Shenzhen office is a trophy room of sorts. It was built for former Chinese president Hu Jintao’s visit (he ultimately passed up the visit because his security personnel deemed the hill on which BGI stands a possible security threat). The room houses pictures of many BGI collaborators and well-wishers, such as Premier Li Keqiang and Microsoft founder Bill Gates who visited BGI several times—the Bill and Melinda Gates Foundation has tied up with BGI for 16 projects on agriculture and they are in talks for health care projects in Africa. There’s also a wall dedicated to BGI’s publications in top journals such as Nature and Science. For a young institute, BGI has a fairly high publication rate—and now it even has its own open access research journal called GigaScience.
BGI’s work is already getting attention globally. People like James Watson, co-discoverer of the DNA structure, molecular geneticist George Church and Maynard Olson, one of the founders of the prestigious Human Genome Project, sit on its advisory board. In his latest book, The Future: The Six Drivers of Global Change, former US Vice President Al Gore says that beginning in China (referring to BGI’s work), humans will “seize active control over [our own] evolution”.
How Did BGI Get Here?
Unlike other research institutions in the same league, BGI isn’t funded by well-endowed foundations. It gets some funding through occasional grants or government projects, but it is not significant. BGI makes the bulk of its money by selling sequencing services, relatively inexpensively (for the full genome sequencing, BGI charges around $4,000). BGI’s research division, bio-bank and the college are nonprofit while the technology services and the health care division bring in the cash.
Founded in Beijing in 1999 as Beijing Genomics Institute (it has since changed its name to BGI-Shenzhen), in 2003 BGI moved under the aegis of the Chinese Academy of Sciences (CAS), a highly respected research institute in China. While the CAS affiliation had a significant rub-off, it was also stifling. To become one of the best in genomics, BGI had to be nimble to spot opportunities quickly and act on them accordingly.
CAS insisted on a traditional regimented approach which emphasized, among other things, educational credentials and experience. BGI didn’t. Tensions grew and by 2007, BGI’s funding and state support had ebbed, and it had to reduce headcount to 20 people from 400. And so when the Shenzhen government offered BGI the old shoe factory and RMB 90 million over the next four years, the institute jumped at the opportunity. Independence gave BGI a fresh lease on life—and the ability to work on projects as it pleased.
To make it big in gene sequencing—BGI’s bread and butter—one needs two things: high-tech sequencing machines and brainpower. In 2010, BGI bought 128 DNA sequencing machines from Illumina, an American company that develops tools for genetic analysis. This was a very risky move. Sequencers don’t come cheap—BGI reportedly shelled out $500,000 for each—and technology could change, suddenly rendering the investment useless.
BGI calculated that it would have at least a two-year opportunity with these machines. Overnight, BGI got tremendous sequencing capacity. “That sort of cornered the market for sequencers—they are not like dumplings that you can increase their production overnight. There are (only) so many that can be built in given time,” says a BGI watcher. “The strategy was to become the dominant purchaser or user of the machine which would give them capacity and also block others, even though ‘blocking’ was not an intended consequence.”
In March this year, BGI acquired its biggest competitor, the US-based Complete Genomics (CG), for $117.6 million. This acquisition came under the scanner when Illumina’s CEO Jay Flatley insinuated that this was like giving away the formula for Coke to the Chinese government (even though BGI is private). Despite that, the deal went through. Now BGI has access to CG’s customers, sequencing technology as well as its genetic information database. “The Chinese industry does not have high-level sequencers, and that has been a bottleneck for BGI. If you don’t have your own weapon, how can you fight?” says Zhu Yanmei, Associate Director for the Strategic Planning Committee at BGI.
BGI had already cornered 40% of the gene sequencing market globally. By acquiring its number two rival, it will now have 50%. “There is a great fit,” says Radoje Drmanac, CG’s co-founder. “The two companies had the same vision to implement genomics on a massive scale, to sequence millions of human genomes to improve human health and prevent diseases.
CG has advanced sequencing technology BGI has the ability to scale it and use it in all applications, access to big markets and funding.”
BGI’s secret weapon—like a lot of manufacturing companies in Shenzhen— is competitive costs. “The core competence of BGI is the low-cost and high-throughput platform,” says Zhu. And that’s possible because of the scale at which BGI operates and relatively inexpensive manpower. BGI employs nearly 5,000 people, out of which 3,000 are based in Shenzhen. In a sense, BGI has a somewhat unconventional approach to staffing.
It doesn’t care about credentials and degrees and has hired some college dropouts as well (it can train them in its in-house college which can grant degrees via affiliations with prestigious universities). It takes them in young—usually at the age of 22 or 23. Some of them live in ‘on campus’ dorms. Most of them earn RMB 100,000 a year (about $16,500).
Despite the comparatively low pay, people tend to stick on, and appear to be highly motivated. Take Zhao Bowen, who recently made it to MIT Technology Review’s list of ʻ35 Innovators under the Age of 35’. Zhao, a high school drop-out who is now 21, is leading a multi-million dollar project to uncover the ‘intelligence gene’. Similarly Li Yingrui, now CEO of BGI Tech Solutions, dropped out of Peking University. Yet today he has published nearly 30-40 papers in leading journals.
At the heart of this is flexibility, freedom and an almost hierarchy-less organization—everyone, including the president and the CEO, sits in cubicles. “This is a very different organization. People here are all working based on their (own) inner driving force, the curiosity in the data that they are playing with,” says Xu Xun, Deputy Director and the person leading BGI Research. “The senior people at BGI make the young guys stand on their shoulders,” adds Zhu. A case in point are two of the co-founders—Yang Huanming and Wang Jian—who voluntarily stepped away from active management to make way for younger people with new ideas.
A youngster with a thick mop of hair steps into the elevator. His T-shirt says: ‘1000 Genome Project’, and he wears it with a sense of pride. The 1000 Genome Project, an ambitious effort to track human genetic variations, is one of many marquee projects that BGI has actively pursued.
The idea was to sequence the genomes of 1,000 individuals from several different ethnic groups, and BGI joined hands with other participating research teams from countries like the US, the UK, Italy, Japan and Kenya.
The 1,000 Genome Project is just one of many jewels in BGI’s crown. When BGI was set up in September 1999, the founders somehow managed to get BGI in as a participant in the prestigious Human Genome Project (HGP), an ambitious attempt at decoding the human genome.
BGI got to do 1% of the work in the HGP. It may sound insignificant to many, but it was a very big deal. In more ways than one, this helped BGI get a solid foothold in the world of genomics research. It was the only institute from a developing country to have participated in this project, and suddenly it was rubbing shoulders with the US-based National Human Genome Research Institute, UK’s Sanger Institute, Germany’s Max Planck Institute for Molecular Genetics, and various research institutes from universities like MIT and Stanford.
For BGI the HGP was the first big hurrah. Ever since, the institute has been even more agile in spotting lucrative research opportunities. BGI went on to contribute 10% to the International HapMap Project, the Sino-British Chicken Genome Project, the 1,000 Plant and Animal Genomes and the First Asian Genome Map (See ‘The Making of a Behemoth’).
Doing ‘Good’ Science
In a forlorn corner of BGI’s trophy room is a small aquarium. One half of the aquarium houses two fish—the ‘mother’ and the ‘father’ of a rather disinterested looking hybrid grouper that occupies the other half.The hybrid grouper grows three times faster than a normal grouper—and is apparently “tastier”. A two-hour drive away from the Shenzhen headquarters is BGI’s cloning farm, which houses, among other things, a bunch of cloned pigs that glow in the dark.
The grouper and the glowing pigs, in some ways, represent BGI’s approach towards science: one that is guided by insatiable curiosity and an altruistic goal to do ‘good’ science. BGI proclaims that it wants to make the world better by improving health and food security, and protecting the environment.
This means using genetics not just for screening, prevention and treatment of diseases, but also using bioengineering to improve livestock and crops. BGI has mastered a cheap technique it calls ‘handmade cloning’ to clone sheep, mice and pigs, among other things. It is bio-engineering superior strains of crops designed to improve nutrition and help alleviate hunger. It has sequenced the genomes of living beings, plants and organisms as varied as the panda, potatoes, chickpeas, rice, silkworms, soft shell turtles, asparagus, rock pigeons, human gut bacteria, chickens, and the frozen horse in Canada’s Yukon region. “A lot of people refuse to sequence the whole genome because they think that 98% of DNA is junk and only 1-2% is functional DNA,” says Zhu. “But BGI thinks everything is useful… For the bio-economy everything has to be backed by basic research… If you don’t know the DNA well, you’ll never know where cancer comes from.”
In health care, BGI has already made significant advances in the treatment and prevention of SARS, e-coli, autism, Down’s Syndrome and the dreaded HPV (human papillomavirus). Doing ‘good’ science also means that BGI has ventured into territories where others don’t bother to tread. “BGI tends to work on things that are significant, like autism,” says Fred Dubee, former Senior Advisor to the UN Global Compact and currently advisor to BGI. “There are also things that BGI works on that other people are not interested in, primarily what we call ‘orphan diseases’, the diseases that affect people in the poorest parts of the world.” For instance, BGI recently published a paper on dengue fever, a disease that at this point has no cure and is not lucrative to pharmaceutical companies because it is primarily a developing world problem.
Using scale, BGI is already driving down the cost of diagnostics to near-impossible lows. Take HPV screening, in which BGI has introduced a new testing technique which has driven the cost down from RMB 300 to less than RMB 100 with improved accuracy. In 2013 alone they would have finished over 1 million HPV screens in China.
Pushing the Boundaries
BGI’s sudden rise has also ruffled quite a few feathers. They have been accused of being ‘biology’s version of Foxconn’ and a ‘bio-Google’ in the making with access to unlimited amounts of genetic data. Often Sino-phobia comes in the way. Projects like Zhao Bowen’s attempt at decoding the intelligence gene have raised concerns regarding China getting the ability to bioengineer genius babies. Zhu pooh-poohs such concerns. It’s not about creating ‘designer babies’, she says, it’s about making healthier babies. “BGI wants to make bio-information very cheap so that everybody knows their genes and are able to control their health.”
Going forward, BGI is set to make personalized medicine a reality. “We are about to, or in some fields we have already, entered the era of personalized medicine,” says COO Yin Ye. “Personalized ‘omics’- based 4P medicine (prevention, prediction, personalized, participatory) will be a growing trend in this field.”
BGI plans to launch a simple personal genomics platform in a year’s time. “We want to build the platform and the database first, and then the business. We are not in a hurry to make money,” says Zhu. She adds that out of the 7,000-8,000 single gene diseases in the world, BGI already knows enough about 400. Next come multi-gene diseases, cancer, problems from the environment, etc. “(We’ll move) from simple to complex: BGI wants to do it step by step.”
In future, maybe babies will come into this world with a ‘gene book’, something like their personal product manual. Chances are BGI will have something to do with it.
Jointly offered by CKGSB and IMD Business School, this program offers a comprehensive understanding of successful digital ecosystems from both China and the USA through the latest case studies and cutting-edge research.
DateNov 6-10, 2023
Global Unicorn Program Series
Co-developed by CKGSB and SDA Bocconi School of Management, this program unravels luxury management—particularly in the food, fashion and furniture sectors—and emerging technologies, such as Fintech and AI.
DateNov 13-16, 2023
Co-developed by CKGSB, UC Berkeley College of Engineering, and IE Business School, this program equips participants with proven strategies, cutting-edge research, and the best-in-class advice to fuel innovation, seize emerging tech developments, and catalyse transformation within their organization.
DateNov 5-11, 2023
Global Unicorn Program Series
In collaboration with the Stanford Center for Professional Development (SCPD), this CKGSB program equips entrepreneurs, intrapreneurs and key stakeholders with the tools, insights, and skills necessary to lead a new generation of unicorn companies.
LocationStanford, California, USA
DateDec 11-15, 2023