The bioeconomy continues to emerge as a significant component of the U.S. economy. Domestic revenues from genetically modified systems are growing at approximately 15% annually, much faster than the economy as a whole. Around the world an ever larger number of countries have articulated strategies that explicitly identify biotechnology as critical to economic growth. The U.K., for example, has gone so far as to explicitly name synthetic biology as one of the "eight great technologies" that will propel economic growth and has announced more than ₤160 M (or about ₤2 per capita) for research, development, and commercialization of synthetic biology.
As I announced during a Congressional Briefing in November, the total 2012 U.S. revenues from genetically modified systems, hereafter the Genetically Modified Domestic Product (GMDP), reached at least $350 billion, the equivalent of approximately 2.5% of GDP, up from $300 billion in 2010. For comparison, according to IHS iSuppli, the 2012 global revenues for the semiconductor industry amounted to $322 billion. Remarkably, assuming a 2011-12 GDP annual growth rate of 2.5%, the two year, $50 billion increase in GMDP accounted for almost 7% of total U.S. GDP growth.
Due to differences in regulatory structure, financing, and, consequently, pace of development and commercialization across the industry, the GMDP naturally breaks down into the sub-sectors of biotech drugs (biologics), GM crops, and industrial biotechnology.
In 2012, global revenues from biologics reached $125 billion. In the U.S., domestic revenues from biologics reached more nearly $100 billion, although this figure includes $28 billion in revenues accruing to companies such as Genentech, Zymogenetics, and Genzyme that are now wholly owned by overseas entities. Domestic U.S. clinical demand for biologics rose about 5%, reaching almost $54 billion in sales in 2011, indicating that the U.S. continues to enjoy a substantial positive balance of payments by biologics sold in international markets.
In 2012, global planting of GM crops increased by 6%, reaching a total of 170 million hectares. Of the 17 million farmers chose to plant GM crops, more that 15 million were "resource poor farmers in developing countries". In the U.S., where farmers planted 40% of the total GM area, GM corn, cotton, and soy held steady at approximately 90% penetration, with GM sugar beets planted at about the 95% level. Based on average crop revenue figures compiled by the USDA, I estimate that in 2012 the combination of biotech seeds and farm-level revenues reached $125 billion in the U.S.
U.S. revenues from industrial biotech (fuels, enzymes, and materials) reached at least $125 billion in 2012. The accuracy of this estimate continues to suffer in comparison to revenues from biologics and GM crops due to the quality of available data. For the purposes of this post, I am temporarily relying on an estimate provided by Agilent Technologies, as recently described by Darlene Solomon. The internal breakdown of the $125 billion in business-to-business sales is quite interesting: $66 billion in chemicals, $30 billion in biofuels, $16 billion in biologics feedstocks, $12 billion in the food and ag, and $1 billion in emerging markets. (Agilent did not provide any greater specificity on how these areas were defined or how the numbers were derived.) As I have been predicting for several years, it appears that chemicals have eclipsed fuels as the largest component of industrial biotech revenues. Finally, note that, at the level of consumers, the ultimate economic impact of these revenues is probably larger than $125 billion.
More Work To Do
It is important to recognize that the preceding estimates are relatively inaccurate compared to those describing other parts of the U.S. economy. While I have previously estimated revenues from biopharmaceuticals ("biologics") and GM crops using corporate financial reporting and data collected by the USDA, respectively, revenues from industrial biotechnology are poorly constrained because no relevant data is gathered by the U.S. government or provided by industry (see previous reports on this topic for an in depth discussion). The Agilent numbers are a welcome additional bit of information, but we really need to have better data for, and analysis of, the GMDP in order to understand the larger impacts on our economy and society. Among other details, we need to understand the skill base, employment, and also generate historical estimates in order to sort out what the longer term trends look like. As I mentioned during my presentation at SynBioBeta in November, I am launching a new non-profit to take up this task. More on this soon.
#GMDP = Genetically Modified Domestic Product