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The Bioeconomy to 2030 - Main Findings and Policy Conclusions ~
Executive Summary ~
Table of Contents ~
Foreword ~
Chapter abstracts ~ How
to obtain a paper copy of this Publication
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
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Chapter abstracts
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. Top
How to obtain this publication:
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designing a policy agenda by choosing from the following options:
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