Biotech and Public Sector Investment

Rosas, Maricon A. MST 5 - O

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Public Sector
The part of the economy concerned with providing basic government services.
The part of the economy where goods and services are provided by the government or local authorities.

The aim of public sector activity is to provide services that benefit the public as a whole.

Investment
The commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of:

(1) interest, (2) income, or (3) appreciation of the value of the instrument.

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Background
Biotechnology, as it is now, can only prove to move forward.
The most recent estimates suggest that current research and development investments by both public and private sector in biotechnology, Including medical, agricultural and industrial, are of the order of US$ 12 billion annually where:

Background
Distribution of investments in biotech research and development
10%

USA 30% 60% Europe

Japan

Background
Distribution of investments by public and private sector
20%

Public Sector Private Sector

80%

Background
Worldwide, companies invest perhaps as much as US$ 2.5 billion annually in plant biotech research and development.

Background
However, biotechnology investments in developing countries are estimated to be less than 5% of these total investments.

Why invest in biotech?

Why invest in biotech?

Biotechnology is knowledge based and hence is a non consumable good. The capturable value of the idea may be diminished is the reason for the use of patents and intellectual property rights.

Why invest in biotech?

However, the quantity of the idea is not reduced.
Because of these two reasons, biotechnology is ideally suited to be traded. Moreover, in a general sense, the importance of biotechnology trade will increase, both in terms of knowledge and of material property.

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

History
Most of the investments in biotechnology has been by the private sector. Why? Because the private sector which comprises of privately owned companies has the money to invest in biotech, which is somehow a very shaky ground to invest on.

Public sector should invest in biotech.

Why?
If the public sector should invest more in biotech, many poor farmers could benefit from its products, in terms of agriculture.

Public sector should invest in biotech.

Moreover, more researches could be done since the university and independent researches will be funded by the government.
In general, research and development in biotech would advance relatively faster if the public sector should step in since its priority is the people and not profit.

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Applications
Victoria, Australia
Victoria has made evident progress in developing a successful biotech industry and research hub with investment largely consistent with international benchmarks and criteria.

Applications

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Controversies
The development of GM crops and other biotechnology applications is capital-intensive, requiring substantial long-term investment.

Controversies
Research costs are high, especially as the vast majority of new discoveries and cutting-edge products involve technological components that are owned by, and must be licensed from, private companies and a few major public research organisations.

Controversies
The public sector in a given country does not necessarily need to invest significant public funds into the development of products.
This may make it a competitor to potential private investors with the result of reducing the overall speed of adoption of transgenic crops.

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

Impact on the Society

Having the public sector invest on biotech can have both positive and negative impacts on the society.

Impact on the Society

Positive The biotech industry could greatly improve the state of a countrys economy since its advances affects not only agriculture, but other industries as well.

Impact on the Society

Negative
However, if the biotech industry should fail, a lot of taxpayers money would be wasted. This is sometimes true for developing countries (like us) since our government doesnt have enough budget to gamble on the biotech industry.

Outline
Definition of terms Background

Controversies

Applications

History The way I see it

Impact on the Society

The Way I See It

The Way I See It

Sources
Krattiger, Anatole. IP Strategy Today. Victorian Auditor-Generals Report. 2011. http://www.investorwords.com/3947/public_se ctor.html http://www.bized.co.uk/educators/level2/busac tivity/activity/intro15.htm