The International Consortium on Agricultural Biotechnology Research (ICABR)


Agricultural Biotechnology R\&D in Developing Countries: Public-Private Research Partnerships


Gordon Rausser, Leo Simon, Holly Ameden, UC Berkeley






In the area of science and technology, the knowledge gap between rich and poor countries is growing. In agricultural biotechnology research, a second huge gap between private life-science companies and public research institutions has emerged in recent years. One strategy to narrow this compound gap is to form private/public alliances to undertake biotechnology research in the developing world. However, obstacles to the formation of such alliances are huge and gathering momentum. Potential private/public partnerships face significant risks, ranging from private concerns (freedom to operate and loss of privacy) to public concerns (the potential negative impacts of research activities on health, the environment and quality of life).

To navigate their way through these obstacles, public research institutions in the developing world need to adopt creative new approaches to the process of negotiating with their potential private partners. These new approaches must focus on leveraging the complementarities and potential synergies between their knowledge assets and those of the private sector, while simultaneously setting in place institutional arrangements geared toward managing the risks and dangers, objective and perceived, that are of greatest concern to their constituencies.

The task facing these institutions can be addressed at several levels. One involves systematically identifying, and where possible quantifying, evaluating and ranking, the panoply of potential complementarities and gains-to-trade that exist between the potential collaborators. This paper explores some natural candidates: complementarities both within input classes (for example between domestic and foreign germplasm banks) and across input classes (for example, between domestic germplasm and foreign transgenic process technologies). More novel candidates include potential gains-to-trade arising from the objectives of the two partners. In order to assemble this array of complementarities, significant intelligence-gathering resources will be required: who are the potential private partners; what do they want most; what do they have to offer; and what can the public institution offer them in return?

Another aspect of the task involves strategic positioning. To better understand the issues, we present a model of the actual negotiation process which allows us to systematically explore the implications of alternative positioning strategies. The range of strategic options available to the institution include: specifying the set of variables that are negotiable and their admissible ranges of values; creatively adding novel dimensions to the bargaining space with a view to exploiting gains-to-trade (e.g., constructing options, first rights of refusal, etc.); specifying flexibility parameters, i.e., deciding on how prepared one is to trade one objective for another. For example, a common concern of public research institutions in developing countries is that in the process of commercializing one of the partnership's research products, their private partners will exercise monopoly power in local markets, thus exacerbating the very problems that the public institutions should be attempting to mitigate. These concerns might be alleviated by incorporating into the bargaining process a negotiation over public control of the allocation of licenses within the region. Similarly, if the public institution's primary concern is the potential adverse environmental consequences of genetically modified products, a dimension could be added to the bargaining space relating to product testing. Using the simulation model developed in this paper, the relative effectiveness of such alternatives can be explored over a wide range of parameter values.



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