The biological sciences are adding value to a host of products and services,
producing what some have labelled the “bioeconomy”. From a broad economic
perspective, the bioeconomy refers to the set of economic activities relating to
the invention, development, production and use of biological products and
processes. If it continues on course, the bioeconomy could make major
socioeconomic contributions in OECD and non-OECD countries. These benefits are
expected to improve health outcomes, boost the productivity of agriculture and
industrial processes, and enhance environmental sustainability. The bioeconomy’s
success is not, however, guaranteed: harnessing its potential will require
coordinated policy action by governments to reap the benefits of the
biotechnology revolution.
The Bioeconomy to 2030: Designing a Policy Agenda begins with an
evidence-based technology approach, focusing on biotechnology applications in
primary production, health, and industry. It describes the current status of
biotechnologies and, using quantitative analyses of data on development
pipelines and R&D expenditures from private and public databases, it
estimates biotechnological developments to 2015. Moving to a broader
institutional view, it also looks at the roles of R&D funding, human
resources, intellectual property, and regulation in the bioeconomy, as well as
at possible developments that could influence emerging business models.
Fictional scenarios to 2030 are included to encourage readers to reflect on the
interplay between policy choices and technological advances in shaping the
bioeconomy. Finally, the book explores policy options to support the social,
environmental and economic benefits of a bioeconomy.
The International Futures Programme (IFP) of the OECD undertook The
Bioeconomy to 2030 project with the support of other interested OECD
directorates, OECD Government Ministries, and outside partners. A number of
documents prepared within the context of “The Bioeconomy to 2030” project,
including scenarios and analytical reports covering business models, ethics,
intellectual property, and regulation are available here
.
Chapter 1 - Defining the Bioeconomy
Both OECD and developing countries face a range of environmental, social, and
economic challenges over the next two decades. Rising incomes, particularly in
developing countries, will increase demand for healthcare and for agricultural,
forestry, and fishing products. At the same time, many of the world’s ecosystems
that support human societies are overexploited and unsustainable. Climate change
could exacerbate these environmental problems by adversely affecting water
supplies and increasing the frequency of drought.
Biotechnology offers
technological solutions for many of the health and resource-based problems
facing the world. The application of biotechnology to primary production, health
and industry could result in an emerging “bioeconomy” where biotechnology
contributes to a significant share of economic output. The bioeconomy in 2030 is
likely to involve three elements: advanced knowledge of genes and complex cell
processes, renewable biomass, and the integration of biotechnology applications
across sectors. This book evaluates existing evidence and the characteristics of
biotechnology innovation in order to estimate what the bioeconomy of 2030 might
look like. It also develops a policy agenda to help guide the use of
biotechnology to address current and future challenges. Top
Chapter 2 - What External Factors Will
Drive the Bioeconomy to 2030?
Several factors will drive the emerging bioeconomy by creating opportunities
for investment. A major factor is increasing population and per capita income,
particularly in developing countries. The global population is expected to reach
8.3 billion in 2030, with 97% of the growth occurring in developing countries.
GDP is expected to grow by 4.6% per year in developing countries and by 2.3% in
OECD countries. These trends in population and income, combined with rapid
increases in educational achievement in China and India, indicate not only that
the bioeconomy will be global, but that the main markets for biotechnology in
primary production (agriculture, forestry and fishing) and industry could be in
developing countries. Increases in energy demand, especially if combined with
measures to reduce greenhouse gases, could create large markets for
biofuels.
An expected increase in elderly populations, both in China and in
OECD countries, will increase the need for therapies to treat chronic and
neurodegenerative diseases, some of which will be based on biotechnology. Many
countries and healthcare providers will try to reverse rapidly increasing
healthcare costs. Biotechnology provides possible solutions to reduce the cost
of pharmaceutical R&D and manufacturing. Alternatively, biotechnology could
improve the cost-effectiveness of health therapy, so that expensive treatments
provide commensurate and significant improvements to health and the quality of
life. Top
Chapter 3 - The State of the
Bioeconomy Today
Biotechnology today is used in primary production, health and industry.
Platform technologies such as genetic modification, DNA sequencing,
bioinformatics and metabolic pathway engineering have commercial uses in several
application fields. The main current uses of biotechnology in primary production
are for plant and animal breeding and diagnostics, with a few applications in
veterinary medicine. Human health applications include therapeutics,
diagnostics, pharmacogenetics to improve prescribing practices, functional foods
and nutraceuticals, and some medical devices. Industrial applications include
the use of biotechnological processes to produce chemicals, plastics, and
enzymes, environmental applications such as bioremediation and biosensors,
methods to reduce the environmental effects or costs of resource extraction, and
the production of biofuels. Several applications, such as biopharmaceuticals, in
vitro diagnostics, some types of genetically modified crops, and enzymes are
comparatively “mature” technologies. Many other applications have limited
commercial viability without government support (e.g. biofuels and biomining) or
are still in the experimental stage, such as regenerative medicine and health
therapies based on RNA interference. Top
Chapter 4 - The Bioeconomy to
2015
What types of biotechnology applications are likely to reach the market by
2015? Regulatory requirements in agriculture and health provide data that can be
used to estimate the types of genetically modified (GM) plant varieties and
health therapies that will be available by then. There are far less data for
other biotechnology applications, with estimates based on past trends in
scientific discoveries, production, or employment.
Based on past trends, GM
field trial data, and company reports, it is estimated that by 2015
approximately half of global production of the major food, feed and industrial
feedstock crops is likely to come from plant varieties developed using one or
more types of biotechnology. These biotechnologies include not only GM but also
intragenics, gene shuffling and marker assisted selection. Several novel
agronomic and product quality traits will reach the market for a growing number
of crops. Biotechnologies, other than GM, will be used to improve livestock for
dairy and meat. GM will be increasingly used to develop animal varieties that
can produce valuable pharmaceuticals or other compounds in milk. In health,
biotechnological knowledge will play a role in the development of all types of
therapies. It will no longer be meaningful to separate the pharmaceutical sector
from the health biotechnology sector. Pharmacogenetics will develop rapidly,
influencing the design of clinical trials and prescribing practices. The value
of biochemicals (other than pharmaceuticals) could increase from 1.8% of all
chemical production in 2005 to between 12% and 20% by 2015. Biofuel production
could partly shift from starch-based bioethanol to higher energy density fuels
manufactured from sugar cane or to bioethanol from lignocellulosic feedstock
such as grasses and wood. Top
Chapter 5 - Institutional and Social
Drivers of the Bioeconomy
The emerging bioeconomy will be influenced by public research support,
regulations, intellectual property rights, and social attitudes. In 2005, public
R&D expenditures within the OECD area for all types of biotechnology were
USD 28.7 billion, compared to 2003 R&D expenditures by the private sector of
USD 21.5 billion. The public sector is a major player in health biotechnology
and accounts for a notable share of research for primary production, with 20% of
field trials for genetically modified (GM) crops between 1989 and 2007 conducted
by universities or government research institutes. Data on public research
support for industrial biotechnology are not available, with the exception of
biofuels. Here, most support appears to go to pilot plants instead of to
R&D.
Regulations to ensure the safety and efficacy of biotechnology
products influence the types of research that are commercially viable and
research costs. Pure regulatory costs are highest for GM crops (ranging from USD
0.4 million to USD 13.5 million per variety) and for the open release of GM
micro-organisms (approximately USD 3 million per release). The European Union’s
de facto moratorium on the commercial production of GM crops appears to have
hampered GM research in Europe. In health, the future of regulation is not
clear, with economic pressures and technical opportunities pushing the system in
different directions. Intellectual property rights could be increasingly used to
encourage knowledge sharing through collaborative mechanisms such as patent
pools or research consortia. Social attitudes to biotechnology will continue to
influence market opportunities, but public opinion can change, for instance when
biotechnology products provide significant benefits for consumers or the
environment. Top
Chapter 6 - The Business of the Emerging
Bioeconomy
Social, economic and technological factors will create new business
opportunities for biotechnology, requiring new types of business models. The
main business models to date have been the small, dedicated biotechnology firm
(DBF) that specialises in research and sells knowledge to large firms, and the
large integrated firm that performs R&D and manufactures and distributes
products. This structure characterises the health sector. In primary production,
gene modification technology has created economies of scope and scale that have
driven rapid corporate concentration. Only a few DBFs have been active in
industrial biotechnology, as profitability depends on the ability to scale up
production. This requires specialised engineering knowledge and large capital
investment.
This chapter identifies two business models that could emerge in
the future: collaborative models for sharing knowledge and reducing research
costs, and integrator models to create and maintain markets. Collaborative
models are relevant to all application areas. Their adoption, combined with new
business opportunities for non-food biomass crops, could revitalise DBFs in
primary production and in industry. Integrator models could develop in health
biotechnology to manage the complexity of predictive and preventive medicine,
based on biomarkers, pharmacogenetics, shrinking markets for individual drugs,
and the analysis of complex health databases. Top
Chapter 7 - The Bioeconomy of
2030
What is the bioeconomy of 2030 likely to look like? This chapter describes a
“probable” bioeconomy in 2030 and develops two fictional scenarios that explore
the interaction of different factors on possible futures. The “probable”
bioeconomy builds on the types of products that are likely to reach the market
by 2015. Within the OECD region, biotechnology could contribute to 2.7% of GDP
in 2030, with the largest economic contribution of biotechnology in industry and
in primary production. The economic contribution of biotechnology could be even
greater in developing countries, due to the importance of these two sectors to
their economies.
The scenarios assume an increasingly multi-polar world, with
no single country or region dominating world affairs. They include plausible
events that could influence the emerging bioeconomy. The results highlight the
importance of good governance, including international cooperation, and
technological competitiveness in influencing the future. Complex scientific
challenges and poorly designed regulations could reduce the ability of
industrial biotechnologies to compete with other alternatives. For instance,
rapid reductions in the cost of renewable electricity combined with technical
breakthroughs in battery technology could result in electrical vehicles
out-competing biofuel transport systems. Public attitudes could result in some
biotechnologies not reaching their potential. An example is predictive and
preventive medicine, where the advance of this technology could be limited by
public resistance to poorly planned and intrusive healthcare systems. Top
Chapter 8 - Policy Options for the
Bioeconomy: The Way Ahead
The social and economic benefits of the bioeconomy will depend on good policy
decisions. The required mix of policies is linked to the potential economic
impacts of biotechnological innovations on the wider economy. Each type of
innovation can have incremental, disruptive or radical effects. In many (but not
all) cases incremental innovations fit well within existing economic and
regulatory structures. Disruptive and radical innovations can lead to the demise
of firms and industrial structures, creating greater policy challenges, but they
can also result in large improvements in productivity. This chapter identifies
policy options to address challenges in primary production, health and
industrial biotechnology. It also looks at cross-cutting issues for intellectual
property and for knowledge spillovers and integration, global challenges, and
the need to develop policies over both the short and long term.
Primary
production provides a diverse range of policy challenges. Examples include the
need to simplify regulation, encourage the use of biotechnology to improve the
nutritional content of staple crops in developing countries, ensure unhindered
trade in agricultural commodities, and manage a decline in the economic
viability of cool-climate forestry resources for low value commodities such as
pulp and paper. The main challenges for health applications are to better align
private incentives for developing health therapies with public health goals and
to manage a transition to regenerative medicine and predictive and preventive
medicine, both of which could disrupt current healthcare systems. Industrial
biotechnology faces multiple futures due to competitive alternatives from both
outside and within biotechnology. Policy needs to flexibly adapt to different
outcomes and prevent “lock-in” to inferior technological solutions. Top
Chapter 9 - Conclusions: On the Road
to the Bioeconomy
Obtaining the full benefits of the bioeconomy will require purposive
goal-oriented policy. This will require leadership, primarily by governments but
also by leading firms, to establish goals for the application of biotechnology
to primary production, industry and health; to put in place the structural
conditions required to achieve success such as obtaining regional and
international agreements; and to develop mechanisms to ensure that policy can
flexibly adapt to new opportunities. There are nine main challenges, summarised
in this chapter
