Driving forces behind applications of biotechnology
In component project 5 we will analyse the governance of the Swedish agri-food system and the national and international regulatory environments. We will also explore the capacity and constraints to produce and distribute innovative products and processes, and the impact on the Swedish economy.
The economic and regulatory environment in which firms operate determines their ability to produce and to adopt new technologies. Firms will produce innovations when they have the ability to commercialize, to sell a product or service at a profit. The profitability of an innovation depends on the degree to which they are able to capture the rents generated by their innovations.
Appropriability regime is the degree to which firms are able to capture the rents generated by their innovations; in a tight appropriability regime, firms can retain the profits they earn from their proprietary resources, while in a loose regime, these profits are subject to involuntary spill-overs to other firms. The strength of the appropriability regime of an industry is related to patent strength, the value of first-mover advantage, and the ability to maintain the secrecy of an innovation. These factors are also related to market structure, and the governance of transactions. Especially with respect to firm integration and alliances the individual firm’s concern about appropriation will vary depending on the industry in which the alliance occurs and the degree to which the appropriability regime in the industry is tight or loose. Different studies point to the relatively low degree of appropriability in the agri-food industry compared to other industries in the EU. The accumulation of knowledge is rather low, leading to an intermediate-to-low innovation intensity.
The choice of organizational form is often what gives firms comparative advantage. The structure of the relevant industries and the governance of transactions between and within firms impose constraints and provide incentives for the development of the new crops and their adoption by farmers and their processing and handling by the downstream industries. We therefore need to study how the choice of governance system, the overall organization of the firm, and the structure of the industry, affect innovation in agri-food industry including the biotech industry, farming, processing, and distribution to the final consumer. We will also examine the existing regulatory framework for biotechnology in Sweden, in Europe, and internationally, and we will estimate the potential impact of the development and adoption of the new crops on the overall Swedish agricultural economy. Taken together, this will offer a solid basis for understanding the economic and institutional constraints and potentials of the agri-food industry.
The goal is to provide a synthesis which will be part of the basis for discussions on policy recommendations. The results will be relevant to actors in the primary agriculture sector, the biotech industry, and other stakeholders in the processing and distribution agri-food industry.
DO YOU HAVE QUESTIONS ABOUT MISTRA BIOTECH?
PLEASE E-MAIL mistrabiotech@slu.se