Until the recent financial crisis, biology-based industries were some of the most rapidly growing sectors of the world economy – the biofuels business was booming, agriculture commodity prices were high, agricultural biotechnology firms were making record profits and the pharmaceutical industry was increasingly based on biologics. A recent (2007) EU report estimated that the contribution of modern biotechnology to the European Union’s Gross Value Added was just under 2%, about the same size as the contribution of all agriculture or the chemical industry. The financial crisis has, and will continue to, have impacts on the bio-economy.
The bio-economy has been “emerging” for some time now and questions about what exactly fits into the bioeconomy, how important it is and how large it will be in the future are important topics for debate. Within the bioeconomy, some components are emerging but several major constraints to further growth still exist.
The first of the emerging bio-economy issues is that agricultural biotechnology in some major crops has taken off at the same time as there is a world food crisis. A combination of weather problems in key exporting countries, high oil prices that has pushed up the prices of agricultural inputs and transportation, policies to encourage the growth of biofuels and other policies of key exporters have reduced food exports leading to the recent spike in world food prices. These prices have increased the income of some farmers but reduced the incomes and raise the price of staple food products for millions of poor people. At the same time, agricultural biotechnology is spreading rapidly in some countries and crops and is proving to be very profitable. However, its impact has been quite limited on major food crops such as rice, wheat, cassava, beans and bananas, which are staples for many poor people.
The second emerging bio-economy issue is the sustainability of the biofuels industry. As a means of encouraging investment into this area of the bio-economy, many governments around the world have provided subsidies to biofuel production and research. Biofuel continues to face technical problems and logistical issues from railcar shortages to outdated docking facilities. Now it has come under attack from environmentalists and oil prices have plunged from US$140/barrel to US$70/barrel.
A third important emerging aspect of the bio-economy is the issue of food safety and nutrition. Strengthening food safety is on the agenda of policy makers in almost all countries today. There is the tragedy of lost lives and illness, but also there is a loss of consumer confidence, the cost of product recall and the time required to identify the source of the problem. There is a strong role for biotechnology in the prevention food borne illnesses, in the identification of the sources of the food borne pathogens and zoonotic diseases. In addition, both GM and non-GM plants can now be used to improve the nutrition of basic foods and reduce naturally occurring toxins such as fumonisins.
A final aspect of the emerging bio-economy that needs consideration is the impact of the world financial crisis and other constraints and incentives for biotechnology innovation and globalization. The financial crisis is slowing the flow of venture capital money into biotechnology. Continuing concerns by consumers in both developed and developing countries have led to increased regulations in some countries but limits on technical capacity means no working regulatory system in others. Consumer concerns continue to be important issues which slow the spread of biotechnology adoption in many countries and new concerns about the safety and ethical aspect of cloning animals are emerging. On the positive side some countries such as Indian and China have gradually strengthened their intellectual property rights systems.