The English industrial revolution, which began in the 18th century, transformed the world through technological and manufacturing innovations. Similarly, the bio-industry that will lead this final fourth industrial revolution in the 21st century will reverberate in the fields of health, food and environment to help solve the problems of humanity. Of the sustainable future technologies, the bio-industry is the fastest growing industry in recent years. In this industry, the fundamental goal is for humans’ disease-free longevity, and the fundamental question of the bio-industry is how to achieve this.
The bio market is a convergence industry capable of creating high value-added new technologies that
exceed the total size of semiconductors, automobiles and chemical products. In addition, R&D achievements are directly linked to industrialization, which will lead the fourth industrial revolution to spur economic effects.
In 2009, the OECD predicted 2030 as the era of bio-economy, underpinned by bio-technology a new
economic paradigm to allow both human welfare and economic growth. However experts say that battles over bio-economic hegemony have already begun. Which country will lead the bio-economy? And can South Korea be included in the short list of bio leading countries?
The South Korean government recently announced that bio-economy has been adopted as a leading innovation strategy industry, as it is the last large industry that can bring Korea closer to the world. The growth rate of Korea's bio industry sector showed an average annual growth of 13.4 percent between 2000 and 2016. Total production was US$8.8 trillion in 2017 with exports reaching US$4.4 trillion. The share of biomedical care is expected to grow sharply from 1.6 trillion dollars in 2017 to 4.4 trillion dollars in 2030. The Korean government has also increased bio R&D investment by 19.3 percent annually from 1994 to 2017, investing a total of 3.114 trillion won (US$3.4 trillion) in 2017. Among them, R&D is the biggest investment in health care, followed by the environment, agricultural products and fisheries.
Since announcing their third foundational biotechnology plan in 2017, the Ministry of Science and ICT has introduced three strategies: bio R&D innovation, global convergence research, bio economy creation and the establishment of a bio-innovation platform. For these purposes, the government will earmark about 30 trillion won (US$26.7 billion) by 2022, with the ultimate goal of realizing a bio-powerful country that leads the world's bio-economy.
South Korea's biotechnology industry followed Samsung Group's announcement last month of its plans to invest 180 trillion won (160.3 billion); other large companies such as LG and Kolon are also scrambling to enter the bio market. Lee Jae-yong, Vice Chairman of Samsung Group, pointed to the bio industry as being the next generation growth engine of Samsung Group, hence their decision to invest about 25 trillion won(US$22.4 billion) in the future growth businesses of AI(artificial intelligence), 5G, bio, and electric parts through Samsung Bio Logics.
With the development of a blockbuster new drug, which is playing a starring role in the biotechnology field in Korea, JWMedical has recently signed a US$420 million contract to export an atopic dermatitis treatment, which is being developed as an innovative drug. This is the first time in 73 years that this company has succeeded in exporting its technologies. In addition, major biopharmaceutical companies such as Samsung Bioepis, SK Chemical, Dong-A ST, and Green Cross have had smaller but notable roles in the development of new drugs. Still, although both large and small companies have poured enormous amounts of R&D investment into new drug development, only 9.6 percent of them have succeeded from clinical phase 1 to new drug approval.
Bio-convergence Areas to lead the Fourth Industrial Revolution
The bio-convergence business is a field that that promises to lead the Fourth Industrial Revolution and create new value in new technologies and new industries. First, one of the main convergence areas is fusion technology in gene analysis and engineering, a 'gene therapy' technology aimed at producing and synthesizing artificial life forms that imitate existing creatures or that do not exist in nature. Second, medical information and big data convergence technology is another large area in convergence projects. This is the 'precision medical digital healthcare technology', the BT + ICT fusion technology that combines ICT technology such as artificial intelligence and big data analysis technology. Third, bio-technology and energy material fusion technology is 'bio energy' made from all materials derived from animals and plants. Fourth, convergence of brain science and mechanical engineering refers to the Brain-Machine Interface (BMI), which is a fusion of brain science and mechanical engineering to allow control of external devices and environments with only human thought. Finally, the convergence technology of BT (Bio Technology) and NT (Nano Technology) is technology that researches various fields such as nano bio-analysis and material, nano-biosensor / chip through convergence of diverse fields such as BT and IT through nanotechnology.
Trends in Bio-developed countries
The United States accounts for about half of the global bio market. European countries and Japan account for about 20 percent each, while others account for the remaining 10 percent. The U.S. has more than half of the market share of high value-added biological drugs and is expected to continue to dominate the market in this field.
The US biotechnology industry has the world's best basic scientific infrastructure, researchers and a variety of venture capital. Since 2000, the United States has supported white biotechnology through the Biomass R&D Act. It released a blueprint for a national bio economy and strengthened its support for the white biotechnology sector through the amendment of the agricultural law in 2014. The U.S. government also established the Biomass R&D Committee after it enacted the Biomass R&D Act in 2000. It will spend $ 150 million annually on funding for biomass-related R & D and will replace 30 percent of its oil consumption with white bio by 2030.
Europe selected bio as one of the key areas for sustainable development and response to climate change in 'Europe 2020 Strategy.' Through the EU R&D support program Horizon 2020, from 2014 to 2020, they are pushing for R&D support and introduction of a carbon tax; in addition, they formed EuropaBio, a coalition of bio and petrochemical companies. Based on Horizon 2020, Bio-Based Industries Joint Undertaking has invested a total of 3.7 billion euros in securing biomass, biorefinery, market, product and policy development.
In Japan, the ‘Biomass Japan Comprehensive Strategy’ was established in 2002, setting up a strategic road map and up to 200 detailed tasks by 2020. It is currently pushing for policy support such as the introduction of a carbon tax and application of bioplastic certification systems. In 2013, Japan announced a joint plan by seven ministries to create self-sufficient energy towns (Biomass town) and nurture the biomass industry at 500 billion yen by 2020.
China has also offered support for white bio R & D, introduction of bio product certification system and carbon tax, subsidies for carbon emission reduction companies through the 12th five-year plan, bio industry development strategies, the 973 plan, and the 2015 bio-related industry development plan.
Canada currently imports 10 percent of the world's bio industry. The Canadian government’s support can be
broken down to 56 percent in bio-health, 25 percent in R&D, 17 percent in agricultural biotechnology and 14 percent in biotechnology industrialization. The government invested $50 million in July of this year to raise a total of $80 million to continue to support these solution-driven groups of scientists, entrepreneurs and innovators. The Canadian government has said it will set growth targets for the next five years and create highly skilled job innovations.
According to an expert, Korea's biotechnology industry has a clear growth trend, but the market continues to shrink due to regulatory and accounting issues. Recently the new bio sector businesses can be broken down to 44.2 percent pharmaceuticals, 17.2 percent chemicals, 7.7 percent diagnoses, 7.7 percent foods, 7.7 percent support services, 5.9 percent energy, 4.3 percent agricultural, and 2.9 percent environment. Last year, the number of new small and venture start-up biotech companies increased 2.2 times from the previous year.
The shortcut to Korea's bio-power is to eliminate all obstacles such as government regulations and improved accounting and use small and medium sized companies as stepping stones to achieve a balanced growth with large companies.