Bioeconomy

The increasing importance of biological sciences for creating value added in many economic sectors contributed to the rise of the now popular term “bioeconomy,” referring to “the set of economic activities relating to the invention, development, production and use of biological products and processes” (OECD, 2009), which are characterized by the accent on the reduction of environmental pollution and the adoption of sustainable practices. Since new scientific advancements in Biology and Biotechnology can be applied to an increasing number of fields, the “bioeconomy” revolution is expected to provide solutions and benefits for a wide variety of human necessities, such as health care (e.g., biopharmaceuticals), agriculture (e.g., bio-pesticides), industrial processes (e.g., bio-refineries and biopolymers) and environmental sustainability (e.g., bioremediation and biofuels), in both developing and developed countries. However, what is the greatest strength of this new paradigm is also its weakness. Bioeconomy-related innovations (like many other types of “environmental innovations”) may suffer, without an appropriate public intervention, from a chronic under-provision by private businesses, since they are characterized by two kinds of positive externalities (the so-called “double externality” problem): the first one relates to the problem of knowledge spillovers and risk of imitation that affect every innovation phase; the second one is mostly related to the positive effects occurring during the (final) diffusion phase, when society (as a whole) obtains from the adoption of these innovations additional benefits (in terms of reduction of waste and energy consumption) that cannot be internalized and appropriated by the entrepreneurs who have borne the cost of their invention and development. This problem is especially salient for bioeconomy-related innovations, because of the pervasiveness of their fields of application (that may span across different industries) and because of the type of knowledge (mainly scientific and codified) they rely on. This implies that the future of bioeconomy will be heavily shaped not only by the new discoveries in the related scientific disciplines and in their applications, but also by the design and implementation of public policies (concerning, e.g., the incentives, regulations, standards, intellectual property rights, etc.) and by the emergence of new markets and business models requiring actors with novel, advanced and heterogeneous competences.