Iain Gillespie
Head of Science & Technology Policy
27 September 2010
1
The Bioeconomy:Why it matters and
lessons for BRCs in
delivering it
WE LIVE IN CHALLENGING
TIMES…..
Infectious diseases globally
Projected World Population
Growth
IBIOTECHNOLOGY
DIVISION
Drivers for Agriculture–
World population in 2030
Source: Salim Sawaya, based on medium variant of the UN Population Division’s “World Population Prospects: The 2006 Revision Population Database”
Projected Global Temperature
Change
Outlook for World Total
Primary Energy Supply
Strong economic downturn…..
-30
-20
-10
0
10
20
30
1970 1975 1980 1985 1990 1995 2000 2005
Annualised quarter on quarter growth in world trade (%)
Source: OECD. 8
.. accompanied by a strong decline
in capital availability(Venture capital investment in the United States, index: 2005 Q1 = 1)
Source: OECD, based on PricewaterhouseCoopers and NVCA.9
Decomposition of cross-country differences in GDP per capita into their determinants, 2005
(United States = 100)
GDP PPP per capita TFP Human capital Physical capital Employment
United States 100.0 100.0 100.0 100.0 100.0
Canada 83.5 72.0 103.3 105.8 106.0
Japan 72.6 52.6 100.4 130.7 105.1
China 9.8 13.6 57.3 105.2 119.5
India 5.2 12.7 47.7 98.3 87.1
Brazil 20.5 29.3 70.1 103.1 96.8
Russian Federation 28.6 31.5 84.9 97.4 99.3
EU27 + EFTA 64.7 67.8 91.2 114.1 91.3
Total World 22.8 27.9 64.2 104.2 95.8
Source: OECD.
• The Potential for growth - Key determinants
of differences in GDP
THE CHANGING NATURE OF
INNOVATION
Innovation is key to growth...
Contributions to labour productivity growth, 1995-2006, in %
* Investment in intangibles and multi-factor productivity growth
account for between two-thirds and three-quarters of labour
productivity growth.
-1
0
1
2
3
4
5
6
Intangible capital MFP Non-ICT capital
ICT capital Tangible capital Labour quality
Biotech reliance on Science…
Reliance of patents on science citations
(biochemistry papers cited by pharmaceutical patents)
57.7
64.8
48.6
58.8
30.7
58.9
81.9
9.0
6.3
11.7
21.7
18.4
28.0
6.6
17.6
22.7
15.4
10.4
9.8
6.0
4.3
3.9
5.4
14.3
8.4
14.1
13.3
7.6
0% 20% 40% 60% 80% 100%
United States
Japan
United Kingdom
Germany
France
China
Korea
Higher education Government Industry Non profit
Hospital Other NA
New global players have
emerged …Contributions to growth in global R&D, 1996-2001 and 2001-2006
(in billion constant US PPP and %)
37%
16%
23%
15%
7%
13%
10%
13%
11%
30%
12%
13%
0
20
40
60
80
100
120
140
160
180
1996-2001 2001-2006
Other non-OECD (2)
China
Other OECD (1)
Japan
EU-27
United States
Note: (1) Australia, Canada, Iceland, Korea, Mexico, New Zealand, Norway and Turkey
(2) Argentina, Brazil, India, Israel, Russian Federation, Singapore, South Africa, Chinese Taipei
Source: OECD.
How the BRICS stack up…
15
0
1
2
3
4
5
6
7
8
China Russian Federation
India Brazil South Africa
1996
2005
Global R&D, percentage share
Science is increasingly
international….
16
Canada
Korea
Italy
Netherlands
Switzerland
India
BelgiumSweden
Russian Federation
Poland
Australia
Brazil
Spain
United States
Germany
France
China
Japan
United Kingdom
1998 2008
Canada
Korea
Italy
Netherlands
Switzerland
India
BelgiumSweden
Russian Federation.
Poland
China
Japan
Australia
Brazil
Spain
United States
Germany
France
United Kingdom
Source: OECD (2010) Measuring Innovation: A New Perspective
Co-ownership of Innovation is growing
Between Businesses and PROs…numbers of co-owned patents
0
200
400
600
800
1 000
National International
Innovation increasingly happens across
borders
18
0,0
5,0
10,0
15,0
20,0
25,0
30,0
Share of patents with foreign co-inventors (%)
1993-1995 2003-2005
Source: OECD Patent Database.
19
Receipts from international licensing(billions of USD)
Source: OECD
Number of biotechnology alliances
, 1990 to 2006
0
100
200
300
400
500
600
19901991199219931994199519961997199819992000200120022003200420052006
Total United States Europe Japan Other
Source: OECD (2009), OECD Biotechnology Statistics 2009, OECD, Paris, available at: http://www.oecd.org/dataoecd/4/23/42833898.pdf
Note: Other: non-triad (alliance partners outside of the United States, Europe or Japan).
To Recap so far…..
1. Science …Innovation…Growth2. Science is globalising3. Innovation is increasingly networked4. Intellectual property provides the network
glue5. Businesses also are increasingly linked6. Knowledge is increasingly tradable
THE BIOECONOMY?
The Bioeconomy – harnessing the
latent value in biological systems
• OECD review of Bioeconomy to 2030 (2009)
23
Global Context:
Challenges & the Life Sciences
The Biotechnology Advantage
Biopharmaceuticals All other drugs
Highest rating All indications All indications
Evaluation Class N % N % N %
Major therapeutic progress 5 9.4% 9 8.7% 35 2.4%
Important improvement 13 24.5% 22 21.4% 52 3.5%
Moderate improvement 12 22.6% 18 17.5% 96 6.5%
Minor improvement 8 15.1% 9 8.7% 105 7.1%
No improvement (“me too”) 11 20.8% 40 38.8% 1139 77.2%
Judgement reserved 4 7.5% 5 4.9% 49 3.3%
Total 53 100% 103 100% 1,476 100%
Source: OECD, based on HAS data.
Note(s): (1) Includes therapeutics but excludes diagnostics and vaccines.
(2) Analysis excludes generic drugs.
Haut Authorité de Santé evaluations of the therapeutic value of biopharmaceuticals and all
other drugs (Jan 2001– December 2007)
Bio-NME products expected to reach
registration, by year
Source:OECD, based on data from PHARMAPREDICT.Notes: (1) All results exclude formulations.
Sequencing Output
Source: MR Stratton et al. Nature 458, 719-724 (2009) 27
Number of publications identifying a
drug-gene relationship (3yr running avg)
Source: OECD, based on PharmGKB database as of December 10, 2007.
Regulation has had a major
impact on public researchGM field trials by public research organisations in Europe and North America
0
50
100
150
200
250
300
350
400
Europe North AmericaSource: OECD, based on the UNU-MERIT field trial database.
0
50
100
150
200
250
300
350
400
Europe North America
30
GM crop plantings 2008
Source: Salim Sawaya, based on data from James (2008). Notes: (1) Countries planting less than 1,000,000 hectares in 2007 include: Australia (200,000 ha), Bolivia (600,000 ha), Burkina Faso (<50,000), Chile (<50,000),
Colombia (<50,000), Czech Republic (<50,000), Egypt (<50,000), Germany (<50,000), Honduras (<50,000), Mexico (100,000 ha), Philippines (400,000 ha), Poland (<50,000), Portugal (<50,000), Slovakia (<50,000), Spain (100,000 ha), Romania (<50,000), and Uruguay (700,000 ha).
31
32
Concentration and small market crops
Share of GM field trials by Firm type: 2005 - 2008
Large market crops
Small market crops
Large firms 82.1% 23.6%
SMEs 17.9% 76.4%
100.0% 100.0%
Number of GM trials
3 870 229
By 2030, emerging econmies will
become the world’s bread basket• Strong evidence that European agbio R&D has slowed
down significantly
• Developing country activity has increased
– Of the 8 countries planting more than a million ha of GM crops, 6 are non-OECD countries
– Over 550 biotech field trials have occurred in 47 non-OECD countries
– Major agricultural biotechnology programmes
Country Agricultural biotechnology R&D spending (in USD PPP)
Brazil 350 million per year over next 10 years
China 120 million per year (24 million going to GM rice)
India 100 million per year
Green Innovation
Pollution
(e.g., CO2 , toxic
chemicals)
Economic Growth (e.g., employment, GDP)
Conventional
technology
Sustainability via
green innovation
Den Haag, November 2009 35
Biofuels: Number of GM field trials in OECD of potential
2nd generation biofuel crops: trees and grasses
0
20
40
60
80
100
120
140
160
180
200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Private company
Public institution
Note: Three year running average. Public includes private non-profit
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Bioethanol from wood,
grasses etc.• Using 25% of NZ landbase
would be needed to produce 100% of NZ’s liquid fuel needs (softwood plantations).
• 1% of NZ liquid fuel needs could be met from current wood wastes
– Trevor Stuthridge, SCION NZ
Algal biofuelsAlgal biodiesel could
provide 100% of global
demand using 0.9% of
the Earth’s surface at
33% of predicted
maximum efficiency.
Best conditions are
desert locations near
the ocean – W Australia,
Mexico, Chile, NW
Africa, etc.
Problem: scaling up,
contamination, strain
selection
38
Where is the money?Potential OECD
market (billion
USD GVA) in
2005
Share of total
business biotech
R&D in 2003
Health (pharma
manufacturing &
medical devices)
350 87%
Primary production
(ag, forestry, etc)
680 4%
Industry ~ 1,100 2%
Source: OECD & EUKLEMS. GVA = Gross Value Added
38
Where does this get us…
1. Revealed biotech advantage in health – but networking and access to materials and information essential
2. Food security needs biotech – but Europe is on the margins for the foreseeable future. Understanding diversity will drive progress.
3. Biotech can drive decoupling and green growth but rapid ramp up of investment is critical.
SO, WHO ARE THE PLAYERS?
Technological and non-technological innovation
unevenly distributed Patents and trademarks per capita, 2005-07
Average number per million population, OECD and G20 countries
AustraliaAustria
BelgiumCanada
Czech Republic
Denmark
FinlandFrance
Germany
GreeceHungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
NetherlandsNew Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
UnitedStates
EU27 OECD
World total
BRIICS
Argentina
Brazil
China
India
Russian Federation
Saudi Arabia
South Africa
0
1
10
100
0 1 10 100
Cross-border trademarks per capita (log)
Triadic patent families per capita (log)
Share of countries in biotechnology PCT patent applications, 2006
15,14,0
11,9
27,441,5
0 10 20 30 40 50
Other countriesBRIICSJapanEU27
United States
%
0,10,10,10,10,20,30,30,3
0,50,60,80,90,9
1,1
1,31,31,4
1,41,51,7
1,92,1
2,83,03,2
3,6
4,57,0
0 2 4 6 8
South AfricaHungary
PolandPortugal
IrelandNew Zealand
NorwayBrazil
FinlandSingapore
Russian FederationIndia
AustriaSwitzerland
BelgiumSpain
SwedenItaly
IsraelDenmark
ChinaAustralia
NetherlandsKorea
CanadaFrance
United KingdomGermany
%
Source: OECD (2009), OECD Biotechnology Statistics 2009, OECD, Paris, available at: http://www.oecd.org/dataoecd/4/23/42833898.pdf
Notes: Patent counts are based on the priority date, the inventor’s country of residence and use fractional counts on PCT filings at international phase (EPO designations).
BRIICS refers to Brazil, China, India, Indonesia, Russian Federation and South Africa. Regional allocation of PCT filings is based on the inventor’s address, according to OECD’s
territorial grids (see Maraut et al., 2008).
Revealed technological advantage in biotechnology, 2004-06
0,0 0,5 1,0 1,5 2,0
TurkeySouth Africa
FinlandCzech Republic
ChinaKorea
MexicoGermany
NorwaySwedenHungary
ItalySlovenia
IrelandJapan
FranceAustria
EU27Switzerland
BrazilNetherlands
Russian FederationUnited Kingdom
IndiaIsrael
United StatesSpain
PolandAustralia
New ZealandCanada
SingaporeBelgium
Denmark
Total = 1
2.4
Source: OECD (2009), OECD Biotechnology Statistics 2009, OECD, Paris, available at: http://www.oecd.org/dataoecd/4/23/42833898.pdf
Note: Patent counts are based on the
priority date, the inventor’s country of
residence and use fractional counts on PCT
filings at international phase (EPO
designations). BRIICS refers to
Brazil, China, India, Indonesia, Russian
Federation and South Africa.
1. Share of PCT biotechnology patent
applications out of the total PCT patent
applications for each country relative to the
share of all PCT biotechnology patent
applications out of the total number of all
PCT applications. Only countries with more
than 250 PCT patent applications between
2004 and 2006 are presented in the chart.
Developing collaborative knowledge
networks & markets (KNMs)…
• KNMs encompass a number of differentmechanisms, or marketplaces, where buyers andsellers exchange a variety of knowledge intensivegoods and services.
• E.g.: IP exchanges, patentpools, networking, matching or
• Brokering
• services
- models to ensure optimal outreach of STI networking - decisions on agendas and priority setting - involvement of stakeholders (governments, academia, private sector, civil society)
Outreach, Agenda and Priority Setting
I
- institutional arrangements - treatment, access and utilisation of knowledge generated through multilateral STI co-operation
Institutional and Access Arrangements
II
- promising models to strengthen capacities in emerging economies and developing countries
- role of FDI- transfer of equipment and infrastructure
Capacity Building and Technology Transfer
IV
- contribution of stakeholders to the budget, amounts, trends-traditional vs. non-traditional funding schemes, public andprivate sources
- dynamism and responsiveness of funding
Funding and Spending Arrangements
III
- mechanisms to deliver outcome of multilateral STI co-operation into practical use
- balance of supply and demand, products not only accessible but also affordable and actually used?
Putting Research into Practice
V
Governance Dimensions
LESSONS FOR BRCS
(AND POLICY MAKERS!)
New York Times Op-Ed
October 17, 2005
Ray Kurzweil and Bill Joy
“The 1918 flu genome: Recipe for
Destruction”
“This is extremely foolish. The genome
is essentially
the design of a weapon of mass
destruction.”
Key Lessons
1. The bioeconomy is a reality – biological resources are its foundation
2. Science and knowledge is globalised like never before
3. New networks and markets for knowledge are emerging – these complex systems are well beyond one-to-one deals
4. Knowledge brokering services are essential to facilitate this transition
5. And a new model of governance for cooperation, access and exchange is critical.
A GBRCN?
1. Quality matters – but inclusiveness and networking matter perhaps even more.
2. You cant get value of what you don’t own– secure the IP.
3. But to get value you need to trade – fast, often and pragmatically.
4. A GBRCN need to bring concentration to disperse resources and help broker value.
5. And it needs to happen now.
Contacts: www.oecd.org/sti/innovation
www.oecd.org/biotechnology
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