Financing Industrial Biotechnology in the UK
Industrial biotechnology (biological processes used in industries apart from healthcare) has thepotential to transform materials in amazing ways. It creates the opportunity to use alternatives tooil, to reuse waste, and to transform materials with low energy use. Oils secreted by microalgaecan be harvested and used as biofuels, while sugar from beet and cane can be transformed intobiodegradable plastics for food packaging.Although what might be called the industrial biotechnology sector is small in the UK, it has thecapacity to transform industries as varied as chemicals, waste treatment, energy production andplastics – industries with a combined value in the UK of £81 billion, and employing more than800,000 people.
Industrial biotechnology exemplies the problems that companies who develop novel technologyface – those with long and expensive development timelines, and who are dependent on largecompanies to put their products into action (as customers, acquirers, or by growing themselves).These companies need funding to develop and test the technology they have come up with. Theyneed demonstrations to convince investors and large companies that the technology will work. Theyneed to scale-up processes from the laboratory to the plant, usually in several stages.The high degree of uncertainty and technical risk for these companies means they struggle forinvestment in a shrinking early-stage venture capital market. But the effects of this technologycan be transformative – there are big prizes to be won for those who can make it work. And theresults are not just in prots or cost savings, but in lower energy usage, less landll and reducedgreenhouse gases.This report represents only a snapshot of the industry. While we believe the approach isrepresentative of the industry as a whole, we would welcome feedback and further comments. Thepolicy recommendations in this report are the rst step towards a policy report we hope to publishin the coming months. Please comment, discuss and feed back to us what you think is needed tosupport this growing sector.
Lead Policy Advisor
NESTA is the UK’s foremost independent expert on how innovation cansolve some of the country’s major economic and social challenges. Its work isenabled by an endowment, funded by the National Lottery, and it operatesat no cost to the government or taxpayer.NESTA is a world leader in its eld and carries out its work through a blendof experimental programmes, analytical research and investment in early-stage companies. www.nesta.org.uk
1. Annual Business Survey 2009,revised gures for SIC codes01, 10, 19, 20, 22, 35, 36,37, 38