TREND 2 (of 8) - Bioeconomy: nature is going to find its way back in our lives
Continuing with our recent blogpost on Eight Trends that Will Define the 2020s, here is trend #2 – Bioeconomy: nature is going to find its way back in our lives.
What is it?
The Bioeconomy Council defines bioeconomy as the knowledge-based production and use of biological resources to provide products, processes and services in all economic sectors within the frame of a sustainable ecosystem. It involves three major elements:
· Utilization of renewable biomass and efficient bioprocesses to achieve sustainable production;
· Utilization of enabling and converging technologies, including biotechnology;
· Integration across applications such as agriculture, health and industry.
Source: Bioeconomy Overview, Falak Consulting Research Department
Why is it important?
The growing resentment among millennials for plastic, fossil fuels and their extracts, and all things adversely affecting the climate and the environment is at its peak. Millennials are now demanding that we advance enviro-friendly research (in fact, most of them are leading the charge) and change how we have been consuming our planet. This has given significant impetus to the bioeconomy. Bioeconomy ensures a more innovative and efficient way of natural resource utilization for industrial purposes, and it is an essential factor to mitigate the impact of climate change and help achieve an economy’s sustainable development goals.
By 2030, the world will need 50% more food, 45% more energy and 30% more water than now. Finland has implemented a sustainable bioeconomy strategy. According to the Finland Ministry of Employment and Economy, “Bioeconomy is the next wave of the global economy, producing growth and prosperity.”
Source: Falak Consulting Research Department
What does the data tell us?
The EU is leading the rest of the world in creating the infrastructure necessary for the acceleration of the bioeconomy. Bioeconomy has tremendous potential to contribute to the national GDP of a country and create jobs and employment.
In 2019, the European Union maintained its global leadership position in bioeconomy. Bioeconomy delivers approximately US$700 billion of added value, and accounts for 4.2% of the EU’s GDP and 76% of employment (agriculture, food and drink manufacturing). The bioeconomy is estimated to have contributed 4.2 million jobs to the US economy, with value added of US$ 388 billion and accounts for 2% of the GDP.
Adapted from: Bioeconomy - the European way to use natural resources Action Plan 2018; Summary of the 2019 White House Summit on America’s Bioeconomy
The global bio market is estimated to reach US$ 1.6 trillion by 2030, and in the recent years, significant market pull is growing for biomanufacturing to shift society to a more circular economy.
Source: Falak Consulting Research Department
What business opportunity does this present?
We are very excited about the opportunities that the bioeconomy is presenting to businesses and corporations, as well as startup entrepreneurs today.
It is important to note that participating in the bioeconomy can positively impact the climate by achieving carbon neutrality by reducing emissions and fossil resources dependence and thereby restoring ecosystems and enhancing biodiversity. Additionally, bioeconomy has the potential to disrupt multiple businesses and industries. This is because we are systemically changing our consumption patterns and the market for bioeconomy participants is growing at an exponential rate.
The bioeconomy has already begun disrupting major industries across the world as highlighted below:
Automotive Sector
Car-body parts reinforced by natural fibers, car-interior lining and seats based on bioplastics, tyres based on dandelion
Food and Beverage Industry
Enzymes, fragrances, amino acids, natural food additives, probiotics, food from lupin protein
Building Industry
Wooden structures, composite materials reinforced by natural fibers, insulation materials, bio-based screw anchors, bio-based concrete admixtures
Pharmaceuticals Industry
Biopharmaceuticals, medicinal plants and herbs
Chemical Industry
Bioplastics, bio-based platform chemicals
Mechanical Engineering
Bioreactors, bioprocess engineering, agricultural technology and equipment, greenhouse technology, biolubricants
Energy
Pellet stoves, biogas, biodiesel fuel, bioethanol, synthetic fuels, algae, kerosene
Consumer Goods
Bio-based tensides, bio-active constituents in cosmetics, enzyme-based additives for cleaning agents
Agriculture and Forestry
Precision agriculture, plant and animal breeding, short-rotation forestry, aquaculture
Textiles and Clothing
Natural raw materials for synthetic fibers, high-tech fibers made of spider web, plant tannins
Thus, the bioeconomy presents significant opportunities to innovators, entrepreneurs, businesses and investment funds to unlock the potential in multiple markets and industries and be frontrunners in leading the way towards a sustainable bioeconomy.
What will be the impact and the magnitude?
·Economic Impacts: An increase in demand for inputs for the bioeconomy potentially provides significant economic perspectives for producers of these commodities in terms of new sources of income. At the same time, increasing commodity prices could enhance pressure on other consumers of these commodities. Changing demand and prices for bioeconomy-related products and processes could also have a significant influence on regional and national trade balances. New markets and changing trade balances have an effect on the overall gross domestic product (GDP) and gross national income (GNI).
Source: BioStep - Summary reporton social, economic and environmental impacts of the bioeconomy
Social Impacts: Changing production processes and new markets have a positive impact on employment, health and food security, thereby positively impacting the overall quality of life.
Source: BioStep - Summary reporton social, economic and environmental impacts of the bioeconomy
Environmental Impacts: An essential reason for promoting the bioeconomy is moving away from finite resources and lowering carbon emissions. This has a significant positive impact on biodiversity and the ecosystem.
Source: BioStep - Summary reporton social, economic and environmental impacts of the bioeconomy
What are the expected challenges from it?
A sustainable bioeconomy can only be achieved with a complete transformation process of society as a whole, which involves society and takes into consideration all aspects of the structural changes in industries. Policy and institutional changes that are deep or disruptive economic changes are much more difficult to implement and consequently, less likely. Private sector investments in the bioeconomy is not as high as it could be due to the lack of incentives, supporting regulations, skilled researchers and complementary investment by public sector.
How the bioeconomy will look by 2030 depends on two factors:
1. The rate at which biotechnological research produces successful innovations
2. Changes to regulatory and institutional policies
Developing countries have a long way to go when it comes to formulating a suitable bioeconomy strategy based on national needs, promoting innovation, building a workforce of the future (suitable skilled personnel in this field) and adapting appropriate regulatory approaches.