Report: Unleashing bioeconomy’s huge potential requires regulatory updates

If innovation is nurtured carefully, biotechnology in food, agriculture, and manufacturing could grow to contribute $416 billion to the U.S. economy by 2030, says a new report commissioned by the Biotechnology Innovation Organization (BIO).

Biotech in these areas—collectively called the “bioeconomy” in the report—currently has a direct impact of $210 billion on the U.S. economy and a broader indirect impact of $830 billion, and supports roughly 430,000 U.S. jobs, says BIO’s report, conducted by Kearney and released March 24.

The report breaks down the economic contribution of bioproducts, including animal, biologicals, and plant biotech, identifying factors that help or hinder growth. It explains how much the U.S. economy stands to gain in the next five years if we take full advantage of the bioeconomy. We could earn tens of billions.

“Biotechnology is at the forefront of discovering, developing, and delivering a host of innovations that will propel our economy forward at all levels—boosting agricultural yields, unleashing our energy abundance, and securing our food and health systems,” says Sylvia Wulf, BIO’s Interim Head of Agriculture and Environment.

Over the long term, the report says, the U.S. can unlock additional value from the bioeconomy by realizing opportunities like eradicating diseases and pests, accelerating commercialization of innovation, repatriating production for strategic growth, and bolstering biosecurity and national defense.

“The success of America’s economy increasingly hinges on our ability to innovate and develop cutting-edge solutions that benefit American farmers, manufacturers, energy producers, retailers, and consumers,” according to Wulf.

The potential of bioeconomy segments

Biobased products include biobased materials and polymers, biobased industrial chemicals, biofuels, agricultural biological inputs, and biobased food ingredients. At current growth rates, the revenue from these products is on track to reach $291 billion annually by 2030, but they have the potential to provide as much as $345 billion, the report finds.

According to the report, drivers encouraging growth in this market include:

• U.S. Department of Agriculture’s BioPreferred program, which encourages the purchase of biobased products through labeling and federal procurement preferences.
• Consumer awareness and demand for environmentally friendly products, such as biological alternatives to synthetic fertilizers.
• Innovations that enhance feedstock conversion and increase production capacity, leading to improved economies of scale.

Potential barriers to growth in the bioproducts market, according to the report:

• Biobased supply chains are becoming more integrated with materials and chemicals produced in Asia, in places like Indonesia, which are closer to end-use production in China.
• Uncertainty regarding implementation of the Renewable Fuel Standard.
• Challenges in upscaling production for manufacturers of emerging materials.

The animal segment of the bioeconomy, including animal biopharma, animal nutrition, animal genetics, and advanced breeding tools like CRISPR, is increasing at a 10% compound annual growth rate. The segment’s contribution to the U.S. economy is on track to grow to $30 billion by 2030, though, with support, it has the potential to grow to $39 billion.

Drivers supporting animal biotech, according to the report, include:

• Rapid growth fueled by an increase “in companion animals and pet humanization.”
• Growing demand for preventative treatment and disease management for pets and livestock.
• Advanced breeding tools enabling genetic improvement, such as the use of gene editing for introducing disease resistance traits.

Potential barriers to growth in the animal biotech segment, according to the report:

• Under the current regulatory system, the Food and Drug Administration (FDA) makes an unsubstantiated differentiation between animals developed using biotech compared to animals developed using traditional breeding methods, treating genetically modified animals, including gene-edited animals with traits that could have been produced using other breeding methods, as “drugs.”.
• FDA’s stringent framework could hinder next-wave innovations.

The plant segment of the bioeconomy includes advanced breeding tools like CRISPR, crop inputs (biofertilizers, bioinsecticides), and biotech traits like drought resistance and herbicide resistance. This segment is on track to contribute $26 billion to the U.S. economy but could add as much as $32 billion if properly supported.

Drivers supporting plant biotech, according to the report, include:

• Expansion of biotech beyond traditional row crops and modifications to crops to suit changing agronomic challenges, such as drought, and offer consumer benefits like increased nutrition.
• Demand for specialized applications for crops with modified quality traits.

Potential barriers to growth in the plant biotech segment, according to the report:

• Time-consuming and inconsistent global regulatory approval procedures makes commercial release of biotech plants and plant products difficult and expensive, especially for small and medium-sized developers.
• Political trade barriers.
• Insufficient IP security.