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News | March 11, 2021

Want to Grow the Economy? Try Fermenting It Instead

By Peter Emanuel Ph.D., Brian Feeney Ph.D. and Diane DiEuliis Ph.D. Strategic Insights

Biomedical specialist Mamadou Dialio at work in the Cedars-Sinai Biomanufacturing Center.
Biomedical specialist Mamadou Dialio at work in the Cedars-Sinai Biomanufacturing Center.
Biomedical specialist Mamadou Dialio at work in the Cedars-Sinai Biomanufacturing Center.
Biomedical specialist Mamadou Dialio at work in the Cedars-Sinai Biomanufacturing Center.
Biomedical specialist Mamadou Dialio at work in the Cedars-Sinai Biomanufacturing Center.
Photo By: Cedars-Sinai
VIRIN: 210304-D-BD104-001

The economic impacts of COVID19 will last long after vaccines arrive to bring a new normal and begin the long road to recovery for the U.S. economy. One unexpected effect of the pandemic is that it exposed a weakness in U.S. manufacturing that has been building for years; some would go so far as to advocate that “deindustrialization” has been the equivalent of disarmament.[1] U.S. industry’s distribution system and supply chains were vulnerable before COVID, but pandemic-related disruptions to supply chains fully exposed this already alarming problem. U.S. manufacturers have relied too heavily on foreign materials for production, and the steady off-shoring of critical industries over a course of decades has reduced direct control of vital defense-related manufacturing should it be needed. [2],[3] This has caught the attention of national security leaders.[4]

At the same time, U.S. industry has been transformed by the convergence of robotics, artificial intelligence and synthetic biology. This represents a new and ongoing industrial revolution characterized by the blurring of the divisions between the physical, digital, and biological domains in what has been referred as the fourth industrial revolution.[5] It will rapidly transform global relationships and disrupt all prior industrial technology. As this gathers momentum, China will serve as our chief competitor – generating interrelated economic and national security implications. China’s prowess in biotechnology continues to grow, and while their current R&D investments in biotech are at 80% of that of the U.S., as their GDP grows, they will massively outstrip US investment.[6], [7]

The Coming Race for Bio-Manufacturing

Staying ahead in this manufacturing technology race is a national security imperative; how China may deploy or exploit biotechnology will challenge core values and interests of the U.S., undermining U.S. democratic leadership in emerging biotechnology globally.[8] Further, China is positioning itself to become the world’s resource for biopharmaceutical and biotechnological products, placing the U.S. at an economic disadvantage across multiple sectors of the global economy to include public health, agriculture, manufacturing, and energy. As the U.S. begins to rebuild its economy, in the midst of this revolution, there is a one-time, urgent opportunity to focus on biotechnology and biomanufacturing as a priority. The U.S. must invest in an economic and technological acceleration program that focuses on growing America’s ability to supply its industrial sector with domestically produced biomanufactured products. The program will need to include re-training the domestic workforce so that American workers possess fourth industrial revolution skills.

Prior to the pandemic, in late 2019, the White House hosted a summit exploring ways to promote and protect the U.S. bioeconomy. The convened experts agreed that a national strategy will be crucial to ensure U.S. dominance in a global economy in 2050[9], a recommendation echoed by other comprehensive consensus studies on protecting and advancing the U.S. bioeconomy.[10],[11] In the post-COVID era, such thoughts have been eclipsed by the need for the government to take actions to revive a damaged economy. The two are, in fact, highly compatible. Instead of rebuilding what was lost, the nation should use this as an opportunity to leap ahead and create the manufacturing base of the future. A domestic bioeconomy and its innovations can return industries from overseas, re-tool aging production lines with new biotechnologies, and retrain a displaced workforce to possess the skills needed for the green bio-synthesis of everything from toothpaste to tanks.

Need for Better Planning

To understand where we need to go, we will briefly examine how we got here. Eighty years ago, America was the arsenal of democracy whose production and supply helped beat back fascism in Europe.[12] The warring powers each possessed their own manufacturing base which was ultimately as important to victory as forces in the field.

Today, commerce has evolved into an international patchwork of supply and demand that connects the United States to every corner of the Earth. Over the last 30 years, corporations have embraced the tenets of Lean Six Sigma improvement methods and the benefits of ‘just-in-time’ manufacturing. In normal times, just-in-time manufacturing allows a cost-effective logistical network to deliver products to the right place at the right time, minimizing inventory stockpiles in warehouses around the globe. What came with this change is nations’ loss of control over its manufacturing base and, therefore, their national security.

This became painfully clear in 2020 when the COVID-19 pandemic froze the supply lines necessary to feed global corporations. The worldwide embrace of social distancing policies laid bare the fragility of our supply chains and how vulnerable the U.S. economy is to their disruption. Within weeks of the World Health Organization’s declaration of a pandemic, standing domestic inventories of textiles and chemicals were approaching depletion, forcing leaders to make hard choices based on limited supplies.

Policy and defense planners long recognized that a, a pandemic-causing virus – something very much of the biological world – would move right through the geographical boundaries of sovereign nations which are, after all, a socially constructed notion. The novel coronavirus did exactly what was predicted, infected nation states across the planet and caused havoc. It jumped from animals to people, and driven by global commerce and fanned by international flights, spread quickly.

In response, world leaders implemented existing national response plans. They established social distancing and quarantine protocols. Having been part of the early planning meetings on these policies during our tenures at the Office of Science and Technology Policy in the Executive Office of the President, we recall when these ideas were first advocated. Following on decades of traditional disease response preparation, we failed to anticipate the ramifications of a country pivoting to online commerce and the impact of the global supply chain disruption on the ability to mobilize a pandemic response. In the U.S., leaders were surprised to learn that the supply vulnerability was not only in medicines but also in chemicals and textiles.

From Smokestacks to Vats

Historically, petrochemical production has supplied the raw materials to fuel American industry and increasingly these precursors are being synthesized overseas by countries such as China and India.[13],[14] The maturation of biotechnology has led industry to embrace biomanufacturing as an alternative to the refining of oil to make “high value” chemicals. Microbes grown in fermentation vats can be programmed to produce specialty chemicals in much the same way that craft beer is brewed. Increasingly bio-based products are replacing traditionally refined chemical precursors and being used to manufacture things like carpet, paint, fabrics, concrete, tires, and medicines.[15]

Biomanufacturing is attractive to industry for a range of reasons. It requires little capital to build a facility which is smaller in scale, and can operate in a closed system. Once built, the facility has the flexibility to pivot between making different kinds of commodities. It runs at ambient temperature and pressure, while consuming far less energy than current industrial facilities. As well, the facility can produce previously unattainable chemicals. All this comes with the added benefit of a vastly smaller waste stream. By contrast, petrochemical plants operate at high temperatures and pressures, consume vast amounts of energy, and generate large toxic waste streams, which severely limits the number of communities willing to host new production plants.

Biomanufacturing, therefore, is in keeping with the spirit of the Kyoto and Paris[16] protocols and accelerates U.S. manufacturing’s embrace of clean, green and sustainable methods to produce chemicals. Economically, biomanufacturing makes possible the return of overseas production, and provides investment opportunities here on U.S. soil.

In order to realize this great promise, we propose national policies that will launch biomanufacturing in the United States. What we propose is in tune with a major state effort proposed by California, known as the “Built with Biology” plan.[17]

A Plan to Win the Bio-Revolution

The White House needs to lead the development of a national strategy for increasing U.S. biomanufacturing capacity and reducing reliance on foreign materials produced through petrochemical production. We contend that a national strategy must include several key components:

Prioritize Reshoring: Reshoring is the practice of bringing manufacturing and services back from overseas.[18] Successful reshoring is a fast and efficient way to strengthen the U.S. economy because it helps balance trade and budget deficits, reduces unemployment by creating well-paying manufacturing jobs, and fosters a skilled workforce.[19] Reshoring production lines can reduce costs but also reduce risk from international delivery disruptions, avoid introduction of counterfeit materials, and make the U.S. invulnerable to unforeseen quality chain deviations.

Ferment New Business: Create biomanufacturing opportunity zones[20] with regional specialization that repurposes local resources. Public and private investment in matching programs should also be made available for businesses. Biomanufacturing startups will also need permitted pad-ready land parcels, supported by transportation and utility investments by state and local jurisdictions. All this will stimulate business creation and attract talent.[21]

Get America Working Again:  A government-led biomanufacturing program should include talent management strategies that solve biotechnology workforce shortfalls, and feed the burgeoning bioeconomy by retraining displaced workers from other industries. Worker retraining should include an emphasis on paid apprenticeships and work-based learning programs that provide financial incentives in return for post-training commitments. The effort should also include an increase STEM education in grades 7-12 and paid hands-on college internships. Lastly, the strategy would benefit from national science and engineering competitions, similar to the international genetically engineered machine (iGEM) competition (which recently relocated from the U.S. to France, sending a dangerous signal that the U.S. was losing ground as the world leader in synthetic biology).[22]

Expand use of Bio-based Products: Expand the use of BioPreferred Programs in order to spur economic development, provide new markets for U.S. farm commodities, and create new markets for bio-based products.[23]  The expanded use of bio-based products creates jobs in other industries. A bio-based economy generates spillover employment opportunities in farming, construction, engineering, and transportation. Every direct job in the bio-based product industry creates 1.76 jobs in other industries.[24] A separate study, specifically of the biotech industry, calculated that every direct bioscience industry job creates 5.5 additional jobs elsewhere in the economy. For workers in the agricultural feedstock and chemicals sector of the biotech industry, which includes biofuel producers, the multiplier is as high as 18.4 additional jobs for every direct job.[25]

Biomanufacturing investments must be a central component to broader discussions on reviving the economy but it is not a solution for every problem. Some bio-synthesis processes are not cost effective and abrupt transitions to new technologies introduce unnecessary risk. Thus, an industry-by-industry analysis of the benefits and cost of a transition to biomanufacturing will be required.

Finally, a national strategy will permit the federal government, and in particular, the Department of Defense to gradually enact “Buy American” mandates on federal procurement that possess national security implications.

A U.S. Strategy could implement the coordinated growth of this new field to complement traditional industries, re-train displaced workers, re-draw supply lines, and reposition the country to dominate the bioeconomy.


Dr. Diane DiEuliis is a Senior Research Fellow at the Center for the Study of Weapons of Mass Destruction, Institute for National Strategic Studies, at the National Defense University. Dr. Peter Emanuel is a Senior Research Scientist (ST) for Bioengineering at the U.S. Army Combat Capabilities Development Command (CCDC) Chemical Biological Center. Dr. Brian B. Feeney is a public affairs specialist at the U.S. Army Combat Capabilities Development Command Chemical Biological Center. He also teaches communication theory and persuasion at Towson University. 

The views expressed in this op-ed are the authors’ own and do not reflect the official policy or position of NDU, the Department of Defense, or the U.S. government.


Notes


[1] Helburg, J. In the New Cold War, Deindustrialization means Disarmament. Foreign Policy, August 12, 2020. https://foreignpolicy.com/2020/08/12/china-industry-manufacturing-cold-war/

[2] Gould, J. American exodus? 17000 US defense suppliers may have left the defense sector.  Defense News, December 14, 2017. https://www.defensenews.com/breaking-news/2017/12/14/american-exodus-17000-us-defense-suppliers-may-have-left-the-defense-sector/

[3] Industrial capabilities, Office of the Under Secretary of Defense for Acquisition and Sustainment, Office of the Deputy Assistant Secretary of Defense for Industrial Policy, May 13, 2019. https://www.businessdefense.gov/Portals/51/Documents/Resources/2018%20AIC%20RTC%2005-23-2019%20-%20Public%20Release.pdf?ver=2019-06-07-111121-457

[4] https://www.whitehouse.gov/presidential-actions/presidential-executive-order-assessing-strengthening-manufacturing-defense-industrial-base-supply-chain-resiliency-united-states/

[5] The Fourth Industrial Revolution by Klaus Schwab.

[6] Organisation for Economic Co-operation and Development (OECD) Main Science and Technology indicators, selected indicators for China.  https://data.oecd.org/china-people-s-republic-of.htm

[7] Normile, D. China again boost R&D spending by more than 10%.  Science. August 28, 2020. Posted in: Asia/PacificFunding. doi:10.1126/science.abe5456. https://www.sciencemag.org/news/2020/08/china-again-boosts-rd-spending-more-10

[8] Chhabra, T. et al. Global China: Technology.  Brookings Institute, April 2020. https://www.brookings.edu/wp-content/uploads/2020/04/FP_20200428_technology_chapeau_v2.pdf

[9] Summary of the 2019 White House Summit on America’s Bioeconomy.  Office of Science and Technology Policy, the White House, October 7, 2019.   https://trumpwhitehouse.archives.gov/wp-content/uploads/2019/10/Summary-of-White-House-Summit-on-Americas-Bioeconomy-October-2019.pdf

[10] National Academies of Sciences, Engineering, and Medicine. 2020. Safeguarding the Bioeconomy. Washington, DC: The National Academies Press. https://doi.org/10.17226/25525.

[11] https://www.centerforhealthsecurity.org/news/center-news/2019/2019-08-12-USbioeconomy.html

[12]  Harold G. Vatter, The U. S. Economy in the 1950s: An Economic History (1984)

[14] The GCC Petrochemical and chemical Industry, Facts and Figures, 2017. https://gpca.org.ae/wp-content/uploads/2019/01/Facts-and-Figures-2017.pdf

[16] https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

[17] https://www.forbes.com/sites/johncumbers/2020/05/05/its-time-to-buildwith-biology/#5568fa6a5f00

[18] https://www.reshorenow.org/

[20] https://www.forbes.com/sites/johncumbers/2020/05/05/its-time-to-buildwith-biology/#12bdf7ec5f00

[22] Qarmbrod, K., Trotochaud, M. and Gronvall, G. iGEM and the biotechnology workforce of the future. Health Secur Jul/Aug 2020;18(4):303-309. doi: 10.1089/hs.2020.0017. https://pubmed.ncbi.nlm.nih.gov/32816589/

[24] Golden, J.S., Handfield, R.B., Daystar, J., and McConnell, T.E. An Economic Impact Analysis of the U.S. Biobased Products Industry. Washington, DC: USDA BioPreferred Program, 2016.

[25] TEConomy/BIO. The Value of Bioscience Innovation in Growing Jobs and Improving Quality of Life. Washington, DC: Biotechnology Innovation Organization, 2016.