Biotechnology has the power to improve human health, address environmental challenges, and change the way the world does business. A new OECD report, The Bioeconomy to 2030: Designing a Policy Agenda, examines the role of biotechnology in the global economy over the next two decades and outlines policies that could maximize its benefits.

Already biotech-based drugs provide greater health advantages than their traditional counterparts. By 2015 virtually all new drugs, about half of global production of the world’s major crops and an increasing number of everyday products (e.g. food additives, plastics, fuels and detergents) will be produced using biotechnology. New crop varieties under development could increase global food production while requiring less water, pesticides, and fertilisers.

From less than 1% today, biotechnology could contribute to up to 2.7% of the GDP in OECD countries by 2030, and considerably more in non-OECD countries. However many barriers stand in the way of the development and commercialisation of biotechnologies. These include technological challenges as well as regulations, adequate investment, human resources, social acceptance, and market structures.

To boost innovation and competitiveness, policies for the bioeconomy need to align private sector incentives with public goals such as good health and reduce the cost of regulation, particularly for applications in agriculture and industry.

Today, only 6% of business biotechnology R&D expenditure in the OECD is related to agriculture and industry, even though 75% of the potential economic contribution of biotechnology is in these two areas.Meantime, 85% of current business expenditures for biotechnology R&D goes to health, with a 25% potential return. The solution is not to reduce R&D expenditures in health, but to encourage substantially greater public and private investment in other applications of biotechnology.

The bioeconomy could fall victim to the global economic crisis as less capital is available to invest in biotechnology R&D and high-risk start-up firms unless governments, through green stimulus packages, use this opportunity to focus on alternative energy and sustainable agriculture in an effort to address long-term growth.

Faced with global challenges such as the effects of climate change on land use, food production, and human health, the report argues that it would be foolhardy to diminish chances of meeting these challenges by underplaying the role of biotechnologies.