This paper is a response to the question of who the "winners and losers in the swiftly evolving biotechnology industry" will be. The implication of this question is that the "biotechnology industry" involves a kind of contest. To answer the question clearly, I first will have to provide working definitions of "biotechnology" and "biotechnology industry," describe the object of the contest (the development of biotechnology), and explain the "rules of the game." This paper will be used to help identify and elaborate strategies and policies for the Institute for Agriculture and Trade Policy, requiring judgments of value be made outside the context of the biotechnology "game." Therefore, throughout in this study, I will consider and attempt to answer two further, closely related questions:
The nature of biotechnology
I understand "biotechnology" as referring to modern biotechnology--the studied development and refinement of techniques founded on discoveries of the last thirty to forty years in the fields of molecular biology and solid-state physics. I cannot recount the history of modern biotechnology here; Fincham and Ravetz (1991) and Juma (1989), among others, provide excellent accounts. Suffice it to say that biotechnology involves three major techniques: recombinant deoxyribonucleic acid (rDNA), commonly known as "gene splicing"; hybridoma, or "cell fusion"; and the cultivation of engineered cells resulting from either of the other two techniques, usually in groups of clones known as "cell lines." Cell lines can, in turn, be used to produce certain amounts of desired biochemicals.
I think it is important to consider these techniques briefly, in order to take note of their qualitative differences from such preceding biotechnologies as traditional plant and animal breeding. First, modern techniques make possible the recombination of genetic material in a mechanically controlled laboratory, rather than according to inheritance and the selective and mutational pressures of the natural environment. Thus human engineers can take genes from one living organism and introduce them into a different one. The species involved may be as different as insects and plants, viruses and mammals--species which, of course, could not naturally propagate. Second, the scientific explanations developing around biotechnology are exceedingly deterministic, meaning that the forces or techniques applied to a certain object are regarded as the sufficient and entire cause of certain observed effects. This stands in contrast to sciences which rely mainly on statistical descriptions of their objects of study, allowing for measures of uncertainty or indeterminacy. Finally, this "science" of biotechnology tends to be dogmatically reductionistic, meaning that its exponents believe there is a single underlying cause for any given effect. In modern biotechnology, this means that genes (composed of DNA) tend to be regarded as the root cause--and often the only cause--of various biological phenomena. This contrasts with scientific theories that are multivalent, or, in some parlance, "holistic." As I will explain below, these qualitative differences serve economic ends. The industries that promulgate biotechnology often obscure the differences between modern biotechnology and its predecessors. They have called their research and techniques "new biology," which removes any reference to technology, and "life sciences," which makes them indistinguishable from biology.
The question of what is meant by "biotechnology industry" remains. The industry can be defined according to its three major sectors: medicine, agriculture, and environmental remediation. Each of these areas has somewhat different economic and technological dynamics, has different implications for human society and the environment, and gives different emphasis to certain techniques. It has often been useful to treat them as three separate industries, rather than as an abstract, monolithic "industry." Ten years ago, when investment patterns were different and each sector was more closely associated with a different base industry, this distinction was arguably real, not just analytical. However, as I will elaborate below, the sectors are tending to consolidate under the control of few powerful companies. Therefore, I will refer to the "biotechnology industry" as a single, integrated economic entity in this study.
The rules of the game
The swift evolution of modern biotechnology is not fortuitous. It can only be understood in the context of the increasingly homogeneous global economy. "Neo-liberalism" is the prevailing ideology of the global economy, and in practice, it has two major aspects:
The neo-liberal economic model has some characteristsics of its recent forebears:
These three propositions, if you will allow me to extend the game metaphor, are the basic rules, without which others would not follow. There are, of course, many corollaries and corroborating arguments to these "axioms" (if you prefer), and variants of the basic theme exist. Nevertheless, we can derive some further information from these three points alone. The first two points taken together could pertain to every national economy in the world; every nation-state has laws and institutions that permit, even encourage, some part of society to organize social labor in order to secure profits and amass financial and material capital. It is in part a measure of success of the growth model of economy that it has become pervasive. Two recent United Nations Human Development Reports (UNDP 1992, 1996) take economic growth for granted in assuring human health, welfare, and livelihood, as if growth, like good soil, were a natural phenomenon without social roots. However, if "neo-liberalism" as a practice is to have specific meaning, then the third point is of the greatest importance.
First, one derivative of the necessity of organizational and technological dynamism is the ideology that "progress" is inevitable and good. Indeed, this has been one of the central dogmas of economics since the Enlightenment. It has become such a widespread article of faith that unemployment, environmental degradation, and want have all been forgiven as intermediate effects of "progress"--steps in the "transition" to a better "tomorrow." In this vein, neo-liberalism offers reassuring visions of a "global village" trading in exotic goods, and communicating electronically.
Second, point three helps explain the burst of technology-driven growth in the past twenty-odd years. Starting in the middle of the 1960s and continuing until at least the middle of the 1970s, the international economy, governed largely by the Unites States, underwent sea changes. These included a slump in U.S. productivity, saturation of international markets with industrially produced goods, accumulation of widely circulating U.S. dollars in other industrialized countries (and subsequent detachment of the dollar from the gold standard), and assertion of coalitions of Third World countries to their natural resources (OPEC, International Bauxite Association, etc.). Development of new technologies is one strategy for overcoming some of the resulting problems of economic viability, especially in the realm of potential production and consumption. Such development draws on untapped resources, creates new commodities, and opens new markets. The resulting "growth" tends to be in the form of primary accumulation of capital, increasing profits, and greater financial power. This contrasts with the traditional model of economic growth in industrial society of the twentieth century (Fordism-Keysianism), which emphasizes reinvestment in jobs, infrastructure, and consumptibles for mass markets. Biotechnology, like microelectronics, is an element of the neo-liberal technological strategy.
Finally, the third "axiom" explains the elaboration of global economic organization along neo-liberal lines in the form of legal documents, political allegiances, and their attendant institutions. Chief among these is the General Agreement on Tariffs and Trade (GATT). Although the GATT has been negotiated in eight rounds since 1947, the conclusion of the most recent round in 1994 was most significant for a variety of reasons: It involved the greatest number of states of any GATT round (123); it covered in detail non-tariff measures of national economic protection, dispute settlement rules, and agricultural trade, inter alia; and it established a well financed and well equipped implementing body--the World Trade Organization (WTO) (WTO 1995). The global economy has not coalesced by accident.
Neo-liberalism has a formidable armature, in addition to the GATT. If I had to identify the one implement most useful to the growth and spread of biotechnology, it would be recent, stringent changes in national and international laws concerning intellectual property rights (IPRs). The GATT 1994 requires that member states provide for the patenting of microorganisms, and either patent protection or some "effective sui generis" system of IPRs for plant varieties. The phrase "effective sui generis" is widely understood to mean the UPOV Convention of 1991, which governs the rights of plant breeders to their plant varieties. The UPOV 1991 allows right holders to prohibit the multiplication, sale, and export of both reproductive and harvested material from their protected varieties. Furthermore, it extends protection to varieties derived through natural propagation or other means of cross-breeding of protected varieties, and it makes the traditional "farmers' privilege" to save seed between harvests optional.
In the U.S., in the 1980s, utility patents were extended to all living organisms, except humans, as a result of legal cases that many consider dubious and possibly controvertible. Since then, the U.S. Patent and Trademark Office (PTO) has streamlined the application process for developers of modern biotechnology (Linck and Chambers 1995).
Extended IPR protection is as much an enticement to commoditize living things or parts of living things as it is a recognition that biotechnology is extremely capital-intensive, requiring huge investment in research and development (R&D) to create useful, marketable products from "inventions" or "discoveries." Patents, in particular, allow holders an exclusive monopoly on a process or product for a period of 17 to 22 years. In many applications for biotechnology patents, observations of natural phenomena, such as chemical reactions, are being declared "processes," and unmodified living matter, such as gene sequences, is being declared a "product."
The Organization of this study
Already we have the economic rudiments of how to judge who the winners and losers in the biotechnology industry will be. Those who have the money, the legal and institutional protection, and can make a profit will win; those who can obtain none of these things will lose. Still, this basically tautological answer does not describe what it really means to be a winner or a loser. To understand this, one must consider issues outside of the narrow framework of neo-liberal economic values: What is the impact on the whole of society, on human health, on the environment, and on our means of survival? In order to answer these questions, I have a chosen to structure this study according to four, admittedly interrelated, categories: