The International Consortium on Agricultural Biotechnology Research (ICABR)


Science vs. Technology?

Alessandra PomŔ, Domenico Siniscalco
UniversitÓ di Torino and Fondazione Eni Enrico Mattei

1) CASES - The paper begins by recalling two cases of biotech developments in biology and agriculture (particularly, genoma sequencing and GMOs), with crucial downstream applications in pharmaceuticals and food industry. In both cases, important innovations have been developed by American private firms (Celera genomics in the genoma and Monsanto in GMOs) in areas where, even in the US, important research investments are also carried out by the public sector (NIH, National Institute of Health). The Celera genomics and Monsanto cases, despite their differences (also in success), raise similar questions: i) why basic innovations, such as those in genoma and GMOs, have been developed first by the private sector, in spite of the massive research effort by the public sector in the same field? ii) do the above cases provide an argument in favour of private research mechanisms, or is the co-existence of private and public research, which correspond to market and non-market mechanisms respectively, an optimal situation? And finally, iii) are there criteria to guide research policy and institutions’ design in biotech?

2) THEORY - Section two introduces a theoretical framework to discuss the optimal incentives and institutions to optimise the creation and diffusion of knowledge, with an application to innovations in the biotech area. The underlying intuition is that only by looking at the institutional features of the research mechanisms one can understand the creation and diffusion of knowledge. The framework - which was originally proposed by Dasgupta and David (1987) and further developed by Barba Navaretti, Dasgupta, Maler and Siniscalco (1996, 1999) - considers knowledge as an economic good, which can be treated as private or public, according to the structure of incentives and property rights, i.e. according to the resource allocation mechanism. In this framework, "science" is an institutional setting where knowledge is treated as pure a public good, paid for by a system of subsidies, where the rule of priority provides an incentive scheme for disclosure by scientists and research organisations. "Technology" is an alternative institutional mechanism where knowledge is treated as a private good and where patents preserve property rights; secrecy is the key feature of such a mechanism.

3) INSTITUTIONAL MECHANISMS By combining the above considerations, section three argues that the biotech sector should be optimally governed by a system of rewards which is simultaneously based on "science" and "technology" (as defined above), in order to achieve efficiency and safety. Accordingly, the traditional question about the optimal borderline between science and technology in biotech is to be replaced by an enquiry into the optimal degree of co-existence and overlapping of the market and non-market mechanisms. Against this background, four variables, i.e. (i) appropriability, (ii) transparency, (iii) risk aversion, (iv) free riding, help identifying the criteria to design an appropriate institutional setting for research policy. The paper also argues that, given the global nature of knowledge, the regulation of the biotech sector needs some degree of international coordination, to avoid free-riding and/or technological gaps among industrial nations.

4) RESEARCH POLICY The conclusion shows that the present setting, where market and non-market institutions are both present in the same sector and in the same research areas, is somehow optimal and should be part of one research policy. In addition to this, section four tries to explore the political incentives that influence science and technology in a highly sensitive sector such as biotech.

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