Biotechnology industry at the crossroads

24 February 2003 16:14  [Source: ICIS news]

Attitudes to biotechnology are changing fast so is it time for the companies that dominate the industry to mount a charm offensive?

A great deal of new technology waits in the wings with the potential to bring with it new disease-resistant crops, better foodstuffs and even cleaner chemicals; yet consumer resistance to biotechnology is growing. Initially North America seemed to embrace biotech exploitation but Europe’s more cautious approach is spreading fast. The sector faces a challenging short-term future.

The new Cambridge, Massachusetts, US-based research and advisory firm, Bio-era (Bio Economic Research Associates see www.bio-era.net ), is right to sound a note of caution about biotechnology’s uptake and urge companies in the industry to work to break the current impasse. It would be criminal to squander biotechnology’s potential but there has to be a much greater understanding that the final arbiter is the consumer. In that respect, the European regulatory approach, which has been to seek to pass much of the responsibility for accepting and adopting the new technologies directly on to the consumer, has gained the upper hand. Even the US this past week appeared to step away from potentially damaging biotechnology-driven trade battles with Europe.

The biotechnology business has suddenly become very big and it has the potential to become even bigger but strong forces, like Canada’s wheat farmers and distributors and big US food groups are becoming increasingly concerned. Just this month, Canada’s wheat growers said that forsaking the wheat industry for pro-biotechnology goals or for free trade ideals is unacceptable. The working group on the introduction of genetically modified wheat in Canada was worried particularly about the impact of new wheat varieties on Canada’s wheat trade.

Bio-era also points to the fact that 10 industry food groups, including the Grocery Manufacturers of America, the Food Marketing Institute and the National Restaurant Association, has urged the US government to halt the growing of ‘bio-pharm’ crops until tougher regulations controlling accidental release and contamination of other crops is in place.

The growing organic foods markets certainly is under threat. In Europe it is not difficult to see why the release of genetically modified organisms (GMOs) is the subject of widespread debate nationally as well as at the EU (European Union) level

How companies heavily involved with biotechnology, and there are only a few of them, handle this growing disquiet will colour the short-term future. Bio-era’s report highlights the shift in research and development (R&D) in recent years towards big agricultural biotechnology companies. While more than 180 organisations are involved with agricultural biotechnology, the top eight firms, including Monsanto, DuPont, Bayer, Dow, Syngenta, and BASF, accounted for 69% of R&D activity in 2002. The top four accounted for 57%.

Bio-era says that the biotechnology industry will need to directly engage opposing stakeholders (we are not seeing a great deal of that at present). There is a lot of trust-building to be done and not a little education, it says. Companies have to become more effective advocates of their products, the research firm adds. "We believe this kind of advocacy, or social marketing, will become a critical core competency of successful companies, complementing their intellectual property assets, research and development capabilities and conventional marketing strength."

At the launch of the report in Monterrey, California, last week Bio-era founder and chief executive Stephen Aldrich put it in a nutshell. "By now, all biotechnology companies should realise that no amount of "benefits jawboning" will, by itself, overcome the objections of a public that resounds emotionally to GMO products," he said.

The biotechnology industry is at a crossroads, Bio-era maintains, and needs to become much more involved with the debate about its products and their potential impact.

"Companies need to develop strategies that fully respect the power of other legitimate stakeholders to influence the political, regulatory, trade and consumer choices that ultimately determine their success or failure,"  Aldrich says. He is right.

By: Nigel Davis
+44 20 8652 3214

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