Is biotech the new semiconductor industry? Big Pharma hopes the answer is yes. Meanwhile, Russia’s path to become a Chinese “resource colony,” resurgence in offshore oil and gas, and what’s actually up with China’s domestic Covid vaccine? Plus: Drought in Taiwan threatens semiconductor production and labor tensions at West Coast ports threaten trade flows.
Fifty years ago, US scientists pioneered genetic engineering experiments. The US has since become a global biotechnology powerhouse. And it continues to maintain that leadership: Just look at the speed at which US biopharma companies developed and deployed not one but multiple effective Covid vaccines within months of the pandemic’s outbreak.
Yet, echoing a dynamic that has played out across numerous industries, the US lacks the biomanufacturing capacity that underpins the production and commercialization of its biotech innovations. Consider industrial fermentation: The US is a leader in engineering microbes, which are widely used to produce commodity chemicals, but lacks the fermentation capacity to produce chemicals at commercial scale.
The lack of a robust US biomanufacturing base—just as the energy transition is expected to raise demand for biochemicals as an alternative to carbon-intensive petrochemicals—means increasing reliance on competitor countries’ (read: China’s) manufacturing capabilities, and supply chain risks inherent in those dependencies.
The US Department of Defense understands this risk. As its biomanufacturing strategy published this week notes: “To prevent the continued economic loss of US-developed biotechnology innovations to overseas manufacturing , it is critical that the US government become more involved in the race for the industrialization of biotechnology” and to “help shape a potentially different fate for biomanufacturing than semiconductor manufacturing.”
Of course, none of this is a surprise and the Department of Defense strategy is just a document. But it could be a leading indicator that the US government is about to assign the same priority, investment, and regulation to biotech that it has, over recent years, to semiconductors. And Big Pharma is certainly trying to encourage as much, including in the form of a CHIPS Act for biotech, which would feature a 25% tax credit to help offset the cost of building biomanufacturing plants.