The economics of biotechnology

摘要

Biotechnology may change the world. Given the chances and risks of this new technology, the key question from an economic point of view is whether incentives and regulation are appropriate. Both allocational and distributional effects turn out to be important. Since James Watson and Francis Crick published their seminal paper on the structure of the DNA in Nature in 1953, research in genetics and its applications (biotechnology) has developed into an industry. Although genetics has triggered a revolution in our understanding in biology, implementation of biotechnology on an industrial scale is still rare. One might compare the current situation in biotechnology to the state of chemistry in the 1870s (Carr 2003). At that stage chemistry had just acquired a coherent theoretical framework, the periodic table. This theoretical framework was necessary to enable technology to change the production of well known products or even create a whole variety of new products (e.g. plastics) that were to become a part of our daily life. Whether biotechnology will also develop into a mass industry which will eventually change our everyday life, is a question that still has to be answered. There is a huge potential. For convenience one uses colours to distinguish the applications of biotechnology: medical (red), agricultural (green) and industrial (white) applications. Medical applications include both the production of Pharmaceuticals and genetic engineering. Some of the better known examples of medical applications are DNA sequences which are incorporated into bacteria or other other cells which are then used to produce proteins. Agricultural applications include transgenic plants whose genome has been modified by additional genes which allow them to be more resistant to weather conditions and insects, result in better yields; and still allow for less insecticides to be used. Some researchers attribute the largest potential to industrial applications with plastics and fuel as the two most promising examples. Given the huge potential of biotechnology, the question arises whether the regulatory framework in place is appropriate to encourage research and applications in biotechnology. First, I describe the current regulatory regime. Second, I analyse its implications from an economic point of view. Green biotechnology is of particular importance for the developing world. I discuss economic aspects of its implementation. This essay concludes with a summary.