Bioeconomy and the global economy: industrial policies and bio-innovation

Abstract

The last decades have witnessed major growth in the bioeconomy. Emergence of the bioeconomy as a broad, creative and rapidly expanding part of the global economy coincides with the maturation of the established drug discovery system. This paper presents research evidence focused on the relationships between changes in the bioeconomy and changes in the global economy. It argues that new forms of governance and regulation are key to strengthen industrial policies needed for emerging and developing countries to take account of the complex interactions in life science innovation between technology, markets, regulation and civil society, which could significantly impact on global distribution of the industry.Keywords: bioeconomy, global economy, pharmaceuticals, innovation, global health IntroductionThere is strong evidence that the post-1950s evolution of the pharmaceutical industry is maturing rapidly (Mittra and Williams 2007; Orsenigo and Tait 2008). It is becoming harder to find truly new drugs in spite of continuing high R&D expenditure. Pharmaceutical company profit rates are falling, although volumes are massive and keep big pharmaceutical firms in the top global companies worldwide (Mittra et al. 2010). Another indicator of instability is that large companies are constantly attempting to restructure: cutting in-house R&D units, such as Pfizer's decision in 2011 to close a set of R&D units (Mittra et al. 2011); shaving costs through mergers (Mittra 2007); outsourcing R&D to universities and specialist biotechnology firms; and, organisational changes such as encouragement of smaller 'fleetfooted' innovation units within big pharma companies. The pharma-production model has been increasingly tightly rigidified -increasing layers of regulatory enforcement, and industrial responses, resulting in restriction of innovation to a stage by stage, 'linear' innovative process with more and more sub-stages of clinical trials.The relatively simple staged 'linear' drug discovery innovation model for highly regulated health markets, has given way to a complex mix of, often contradictory, drivers of innovation. The changes may herald a major transformation of health bio-innovation raising the question: Is a major restructuring of pharmaceuticals and health delivery on the cards (OECD 2009;Wield et al. 2013)? If the answer to this question is yes, it leads to two further questions:2 Could these changes bring a broader more globally dispersed set of powerful agents, with resultant implications for the global economy? That is, will changes 2 in the global economy drive a broader range of nations to become bioeconomy players or will they be left behind?3 To what extent can firms in emerging and developing economies take advantage of the transformations to catch-up in some segments?Already there are some changes, perhaps most apparent in agro-biotechnology, where Brazil leads in first generation biofuels. In health, some developing countries, such as India and East Asian, have managed to move from imitation of off-patent ...

What Is the Bioeconomy? A Review of the Literature

“…Also regions specialised in high-quality public research related to bio-technology may benefit in developmental terms [41]. It is furthermore suggested that connections between these global bio-technology centres are very important for innovation in the bioeconomy and that certain regions in emerging and developing economies may also take advantage of the bioeconomy [8,42]. As a consequence of the focus on global competition in the bioeconomy, the notion of governance of innovation also constitutes a central feature in some of the research underpinning such a vision [43,44].…”

“…For instance, the conceptualisations of the bioeconomy range from one that is closely connected to the increasing use of bio-technology across sectors, e.g., [8], to one where the focus is on the use of biological material, e.g., [9]. Thus, describing the bioeconomy, it has been argued that "its meaning still seems in a flux" [6] (p. 386) and that the bioeconomy can be characterised as a "master narrative" [10] (p. 95), which is open for very different interpretations.…”

Conceptualising and practising multiple knowledge interactions in the life sciences

“…It is clear, for example, that big pharma requires a wide range of science, clinical trial, and other outsourced producers. Wield, 2013;Rafols et al, 2014;Mittra, 2016). On occasion, openness allows significant power to be devolved to multiple actors, even though the stronger (usually big pharma) partner can capture more value from collaborations (Gambardella and Panico, 2014).…”

“…Malerba (2002) mapped out four areas for future research, each of which we researched for the life sciences. First, progress in understanding of firm heterogeneity, structure and change within sectors, and on the role of sectoral institutions which we have mapped (Chataway et al, 2004;Orsenigo and Tait, 2008;Wield 2013). We have also built understanding of barriers to entry and the impact of regulatory systems on the lengthy clinical trials process which are important for Malerba's second and third areas of future research: the need for taxonomies of sectors; and research on the relationships between elements of a sectoral system (eg Mittra and Williams, 2007;Orsenigo and Tait, 2008).…”

“…Malerba's fourth area, the need for public policy proposals on the transformation of sectoral systems to identify mismatches and blockages, is exemplified by our work on policy proposals concerning the need for improved regulatory systems (smart regulation) and on new approaches to the development of public-private and more open innovation systems (eg . We have, in the process, focused hard on non-firm activity that can enable firm based innovative potential, showing the importance of open and complex knowledge management approaches (Wield 2013.…”