securing the bioeconomynas-sites.org/dels/files/2019/02/2-carlson_nasem... · 2019. 2. 2. · the...

Securing The BioeconomyRob Carlson, PhD

January, 2019

(1) Managing Director, Bioeconomy Capital (2) Principal, Biodesic

(3) Affiliate Faculty, Paul Allen School of Computer Science and Engineering, University of Washington

bioeconomy.capital @BioeconomyCap

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Jan, 2019 Bioeconomy Capital, LLC

Biosecurity is Economic Security

“Biosecurity has typically been interpreted as the physical security of individuals, institutions and the food supply in the context of threats such as toxins and pathogens. These will, of course, continue to be important concerns. Yet governments can no longer limit their concern to the proverbial white powder produced in a state-sponsored lab, a ‘cave’ in Afghanistan or a garage in Seattle. Safeguarding the large and rapidly growing bioeconomy requires embracing a more substantial challenge; it is essential to have a refined and ongoing understanding of what must be secured and from where threats might arise. Economic demand is driving technological proliferation, [which] must necessarily inform the evolving definition of biosecurity. Alongside the preexisting bioeconomy, we are building a system composed of inherently ‘dual-use’ engineering technologies that will constitute critical infrastructure for the future economy. …Biosecurity is now clearly synonymous with economic security. The focus of biosecurity policy must shift from protecting specific targets from specific threats to securing the bioeconomy as a system that increasingly drives economic growth and employment and, ultimately, enables humans to thrive on a global scale.”

Carlson, “Estimating the biotech sector's contribution to the US economy, Nature Biotechnology, March 2016.

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Summary Up Front:

● Rough estimates suggest that the US economy is already heavily dependent upon both natural and engineered biological technologies.

● The US is doing a woefully inadequate job of measuring economic and technical progress in biotechnology, and across the bioeconomy.

● Consequently, we have a structurally benighted situational (e.g. both strategic and tactic) awareness.

● This lack of information is a strategic threat to US physical and economic security. ● US national security is at risk.

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Bioeconomy As Defined By Global Summit (Berlin, 2018) (https://gbs2018.com/resources/gbs2018-documentation/)

• 70 countries represented by 800 people.

• Multiple Ministers of the new German government were in attendance and spoke, as did ministers from across Europe, Africa, Asia, and South America.

“Bioeconomy Policy (Part III): Update Report of National Strategies around the World”, German Bioeconomy Council

“Global Bioeconomy Summit Communiqué”

“In view of the noted diversity of bioeconomy in countries around the world, we may define bioeconomy from a global perspective in rather general terms. The definition is partly vision and partly reality, by saying ‘bioeconomy is the production, utilization and conservation of biological resources, including related knowledge, science, technology, and innovation, to provide information, products, processes and services across all economic sectors aiming toward a sustainable economy’. Bioeconomy is a dynamic and complex societal transformation process, which demands a long-term policy perspective; countries are welcome to define their bioeconomies, as any definition also has programmatic elements.”

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How Big is the Bioeconomy? (Expansive Definition)

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Biotech + Rest of Ag + Fisheries + Forestry + Ecosystem services

+ Biodiversity (and invasive species) = 15-25% of GDP?

See:

Carlson, R., “Estimating the biotech sector's contribution to the US economy, Nature Biotechnology, March 2016. Carlson, R., “From National Security to Natural Security”, Bulletin of the Atomic Scientists, December 2013.

“Nature constitutes critical infrastructure in the form of ecosystems that keep us alive. That infrastructure has quantifiable economic value. Consequently, nature, and the change we induce in it, is clearly interwoven with our economy. That is, the security and health of human societies depends explicitly upon the security and health of natural systems. Therefore, as economic security is now officially considered as part and parcel of national security strategy, it is time to expand our understanding of national security to include natural security.”


How Big is the Bioeconomy? (Very Narrow Definition) (see Bioeconomy Dashboard: http://bioeconomy.capital/bioeconomy-dashboard/)

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Biologics are drugs composed of proteins, nucleic acids, and lipids.

Crop revenues include the sale of GM plants (such as corn, soy, cotton) and their seeds.

Industrial biotech manufactures chemicals, as well as ingredients for food, drug, and agricultural markets. The largest component in 2016 was biochemicals, at $115B, which far exceeded biofuels at $10B.

For comparison, 2016 worldwide semiconductor revenues were $370B. (IHS iSuppli)

http://bioeconomy.capital/bioeconomy-dashboard/


2016 US Biotechnology Revenues: >$370B; >2% of GDP

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Biologizing Industry

For comparison, 2016 worldwide semiconductor revenues were ~$370B;

U.S. revenues were ~$100B (Semi.org).

Biochemicals revenues were ~.5% of GDP, compared to 3% for petrochemicals.

I.e. 2016 biochemicals were ~17% of U.S. “chemicals” revenues.

Sources: Nature Biotechnology, Bioeconomy Capital


U.S. B2B Industrial Biotech Revenues (see Bioeconomy Dashboard: http://bioeconomy.capital/bioeconomy-dashboard/)

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Consitent Growth in U.S. Biotech Revenues(1980 to 2016) (see Bioeconomy Dashboard: http://bioeconomy.capital/bioeconomy-dashboard/)

Sources: Nature Biotechnology, Bioeconomy Capital

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Share of GDP and GDP Growth (see Bioeconomy Dashboard: http://bioeconomy.capital/bioeconomy-dashboard/)

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Biological Production Is Already Displacing Petroleum Products

From Market: >$100B in U.S. in 2016, or ~1/6 of Petrochemicals.

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15% of volume 85% of value $10-1000/L ~7000 Chemicals

Biology is already being used commercially to produce petrochemical replacements via fermentation.

Fermentation works commercially at all volume scales.

(see success of microbrewing)

Biological manufacturing is highly adaptable to both production volume and market size.


IEA / EIA / Petroleum Industry Will Be Surprised…

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IEA predicts that petrochemicals will be the largest source of oil demand growth in 2015-2040.


Biology Can Improve Security Across The Broader Economy

Company X: Biological Synthesis of Fluoropolymers

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• Totally novel fluorinating enzyme (orthogonal to existing biochemistry). • ~10 enzyme pathway. • CAPEX is 60% lower than existing industrial chemistry process. • OPEX is at least 60% lower.

• Because (and more importantly): - Bio pathway skips steps with intermediates stabilized in storage and transport by phosgene. - Will result in massive increases in safety and security, lower capital and compliance costs.

➡ Enzyme and pathway design will enable distributed biological manufacturing of even complex chemicals.


At Least 32 Countries With Explicit Strategies

or Clear National & Institutional Interest (OECD, c 2015)Africa (1)

South Africa

Americas (5) Brazil

Canada

Chile

Mexico

United States

Asia (8 plus Hong Kong) Australia

China

Hong Kong

India

Japan

Korea

Malaysia

New Zealand

Singapore

Mideast (2) Israel

Turkey

Europe – EU has its own SB strategy/agenda – (21 + 1)

Austria

Belgium

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Netherlands

Norway

Poland

Portugal

Russian Federation

Slovenia

Sweden

Switzerland

UK

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Biology is becoming a strategic technology.


Economic Proliferation and National Security

1. Despite stated National interests, no country is tracking biotech effectively.

2. “When combined with the torrid pace of economically ︎driven proliferation, this lack of information and awareness will eventually lead to surprises. In the context of this report “surprise” means an innovation by a particular actor that could not be easily foreseen by tracking the prior development of that actor and that may pose a risk to U.S. interests; i.e., “a threat.” (Carlson, BNA, 2012)

3. China (see Carlson, BNA 2012):

i) As of 2002, President stated that China would “use all means available to improve the health of the population, including genetic modification of its citizens”;

ii) As of 2006, 2006, Premier announced a plan to “catch up with the most advanced nations in biotechnology” while strengthening “independent” or “indigenous” innovation.

iii) As of 2008, President stated that ““To solve the food problem, we have to rely on big science and technology measures, rely on biotechnology, rely on [genetic modification]”

iv) Explicit PLA technology acquisition strategy: “Obtain jade from the rocks of others’ mountains.” (see “A New Direction for China's Defense Industry”, E. Medeiros, et al, RAND Corporation, 2005, p 55.)

v) High level Party and Academy Official (c.2014): “As Europe won in the 19th century using industry, and the U.S. won in the 20th using IT, so China will win in the 21st using biology.”

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China

In Berlin, Yin Li, Deputy Director-General of Bureau of International Cooperation, CAS, reported that:

— The bioeconomy in China is growing at 15% annually, with the goals of “better health, better food, better sustainability”,

— In 2015 the bioeconomy was $700B, or ~4% of Chinese GDP, and that the government has a target of more than doubling this to $1.6T, and ~5% of GDP by 2020.

This is roughly in line with the numbers from my 2012 Biodefense Net Assessment, though there is always the confounding issue of which definition of “bioeconomy” one is using.

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China

"In the United States and in the West, you have a certain way," [says BGI President Jian Wang], smiling and waving his arms merrily. "You feel you are advanced and you are the best. Blah, blah, blah. You follow all these rules and have all these protocols and laws and regulations. You need somebody to change it. To blow it up. For the last five hundred years, you have been leading the way with innovation. We are no longer interested in following.”

Michael Specter, “The Gene Factory”, The New Yorker, 6 Jan 2014

“We want all the data.” Hank Wang, Chief Business Officer, BGI Genomics Co, Synbiobeta 2017, San Francisco

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Recommendations (for the record): Summary: redo my 2012 BNA as an annual requirement of the NSC or ODNI; act on this data.From Carlson, R., “Causes and Consequences of Bioeconomic Proliferation: Implications for U.S. Physical and Economic Security”, Biodefense Net Assessment, Homeland Security Studies And Analysis Institute, 2012.

The overall conclusions of this report are that (1) the U.S. is likely to see biotech innovation coming from many diverse sources over the next decade (given the economically︎ driven global proliferation of biotechnology); that (2) some of those innovations are likely to constitute threats; and (3) there is too little effort presently directed at assessing information that would help determine the likelihood and nature of those innovations. Following the arguments developed in the main body of the text, this report makes the following recommendations: 1. The governments of the United States, Canada, and Mexico should consider gathering bioeconomic data about domestic labor, companies, and sectors via the North American Industry Classification

System (NAICS). There is at present no NAICS code for biotechnology, thus limiting the accuracy of any U.S. government estimation of biotech economic activity even within U.S. borders.

2. The U.S. government should consider formally assessing customs tracking category data to understand better which chemicals and what equipment is going where.

3. The U.S. government should use the upcoming 2011 Review Conference for the Biological and Toxic Weapons Convention (BWC) as an opportunity to expand international discussion of the bioeconomy. Encouraging the reporting of state estimates of biotech economic activity would further one goal of the National Strategy for Countering Biological Threats, namely to revitalize the BWC by “promoting transparency about legitimate activities”.

4. The U.S. government should vigorously encourage domestic firms to consider overseas sales. When overseas markets can be supplied by U.S. firms then (a) the domestic bioeconomy grows, (b) foreign development of competition and capability is forestalled, and (c) sales data provide a way of monitoring the focus and pace of research.

5. Conversely, the U.S. government should do as little as possible to discourage exports. Onerous export restrictions or excessive bureaucracy will increase economic displacement — primarily in the form of trade that bypasses the United States—with a consequent decrease in transparency.

6. The U.S. government should seek to make or enforce level︎playing field international trade agreements. An immediate item for consideration under the WTO treaty should be China’s indigenous innovation requirement for government contracts.

7. The U.S. government should avoid regulatory actions that restrict domestic access to biological tools and technologies. Realizing long︎term security benefits that derive from widespread domestic innovation in biological technologies requires that individuals and small organizations have continued access to biological technologies. Above all, the U.S. government should avoid actions that create perverse incentives for black markets.

8. The U.S. government should base biosecurity policy upon data. Because the international proliferation of biotech skills and materials is demonstrably driven by economics, the U.S. government should fund an ongoing assessment of the investment in, and the growth of, the international bioeconomy.

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Summary: Broad Range Of National Security Issues

1. The US has a significant economic reliance on natural and engineered biological technologies. 2. We are suffering a voluntary lack of measurement, i.e, voluntary ignorance of size and role of bioeconomy.

a. Ignorance of the importance of bioeconomy represents an explicit national security vulnerability, and b. Continued political failure to remedy this ignorance is an explicit national security threat.

3. As a large, critical component of physical and economic security, biological technologies are vulnerable to theft and exploitation in other ways. Only in the last six months did the US begin to take seriously the this threat as a national security risk.

4. The US is at risk of losing technological and economic leadership through failure to invest and to maintain good fences.

Refs: Carlson, “Estimating the biotech sector's contribution to the US economy, Nature Biotechnology, March 2016. Carlson, “From National Security to Natural Security”, Bulletin of the Atomic Scientists, December 2013. Carlson, “Causes and Consequences of Bioeconomic Proliferation: Implications for U.S. Physical and Economic Security”, Biodefense Net Assessment, Homeland Security Studies And Analysis Institute, 2012. Carlson, Biology Is Technology: The Promise, Peril, and New Business of Engineering Life, Harvard University Press, 2010, Cambridge, MA.

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