SEOUL, KOREA - Paradigms change across the world, the biggest one being the global aging phenomenon. This has raised the growth rate of aging-associated diseases, including osteoporosis, arthritis, degenerative diseases, diabetes and hypertension.
This, in turn, hiked up medical bills, giving rise to derivative issues such as a shortage of medical insurance finance. Therefore, we should strive to prevent diseases caused by aging instead of focusing on the treatment of diseases. To overcome such changes, the role of biotech industries is growing.
Biotechnology industries, or bio-industries, collectively refer to industries that can produce diverse types of value add, including useful substances or services required for the prevention, diagnosis or treatment of diseases while enhancing human health by directly utilizing biotech or bio-engineering technologies, such as genetic recombination, animal cells and stemcells. Biotech industries have rapidly emerged as core strategic industries that can lead the future world economy while expanding their domains in convergence with IT and NT. Currently, biotech industries are divided into four categories: medical, green, industrial and fusion biotechnology industries.
Medical biotechnology was developed from protein engineering for curing diseases, including protein drugs, antibody drugs and gene and cell therapy products. With the human genome project completed in 2003, customized medicines are being actively developed, as we are now able to determine the causes of individual diseases and their effective medicines.
Green biotechnology commercializes agricultural organisms as bio products with high value-added, including the improvement of species, feed additives, microbial insecticides and pest control using natural enemies.
Industrial biotechnology research is being conducted on key future resources that can produce biotech-based chemical products or materials using biomass as material and bio-catalyst technology.
It is now possible to develop diagnostic systems that can discover diseases in the early stages by clustering bio molecular DNA, PNA and proteins on mini-boards of glass, silicon, nylon, etc. through the convergence or combination of biotechnologies with advanced technologies such as IT and NT. With this connection, nano-scale or molecular biotech industries are vitalized, including bio sensors.
At this point, let us review the scale of bioindustries. The world market for bio medicines has grown to KRW 180 trillion (USD 168.1 billion) as of 2012, accounting for approximately 20 percent of the total medicine market. It is forecast to reach KRW 230 trillion by 2016, growing 9.9 percent on average annually. With EPO (erythropoietin), which is biotech medicine
for anemia, becoming one of the top 10 selling products for the first time in 2000, five biotech medicines have made it to the list of the top 10 selling products as of 2013; this means that their weight tends to grow. In particular, the ratio of antibody medicines has grown rapidly.
According to the 2011 local bio-industry statistics published by the Korea Biotech Industry Organization, the local market size of medicines was approximately KRW 19 trillion as of 2012, constituting 2 percent of the world medicine market. The local market size of bio medicines was pegged at KRW 2.830 trillion, accounting for 14 percent of the total domestic medicine industries. According to the “2013 Market Trends and Strategy for Developing Promising Technologies” published recently by the Korea Industrial Marketing Research Institute, biotech industries are projected to grow 25.92 percent to KRW 10.198 trillion in 2013 compared to 2011.
Functional bio food, which seeks to create higher value-added, is expected to grow dramatically, to KRW 1.215 trillion, compared to 2011. Bio medicines are also forecast to grow by KRW 898.2 billion, bio processes and appliances
by KRW 50.4 billion, bio inspection, information development service and research and development (R&D) by KRW 34.9 billion and bio energy and resources by KRW 22.1 billion.
The Korean government has been increasing its support for bio industries by designating them as a new growth engine that will drive the country’s creative economy. Specifically, the government has induced private-sector investment in biotechnologies through its Smart Project while operating a pan-government, whole-cycle, new drug development group to
develop new drugs for marketing in the global market. The government has also implemented projects for exploring and supporting the development of core technologies for bio products and medical appliances and equipment.
In addition, the government prepares research that can help field researchers contribute to the realization of a creative economy in parallel with future government investment directions by presenting its key investment areas for five specific biotechnology sectors (new drug development, stem cell, brain research, genome and next-generation medical infrastructure). Key investment directions include increased investment in R&D, responding to key issues including diseases and aging, enhanced support for the commercialization of biotechnologies and systems for promoting the
enhanced efficiency of investment in biotechnology R&D.
As part of its efforts to promote the global advancement of Korean biotech businesses, the government provides opportunities to explore and support projects for overseas advancement by raising funds while providing policy support
to clinical areas requiring massive investment during the promotion of new drugs in foreign markets.
Venture startup support funds -- 60 percent or more of which should mandatorily be invested in startups less than three years old — have increased to KRW 180 billion, thus increasing opportunities for venture startups as part of an
effort to promote a creative economy. Five venture capital funds have been newly raised, including the Kakao Youth Startup Fund and Smile Gate Youth Startup Fund.
Korea has successfully secured infrastructure as a world-class IT power by proactively deploying extensive IT infrastructure. Biotechnologies have rapidly emerged as a core strategic industry that can vitalize the global economy after the IT revolution. Rapid industrial growth is expected, with biotechnologies having transformed from the bioengineering
into industrial domains. In particular, they have attracted interest as alternative solutions to health, food and environment-related issues. Businesses have started a full-scale competition to occupy the market that hinges on which can create high value-added.
Furthermore, the domain of bio-industries is growing as biotechnologies are being combined with Korea’s efficient medical service structure and well-deployed IT infrastructure. If an open innovation concept is applied to such combinations,
bio areas will be developed into powerful biotechnologies. And technological development and market growth will be further accelerated. Korean bio businesses should secure new items through steady R&D, grow markets through mergers and acquisitions at home and abroad, secure intellectual property rights for protecting or attracting developed technologies
and play the role of steadily growing markets through aggressive marketing activities.
Smart, flexible guidance for government policies is required to provide incentives so that the private sector may invest in bio industries while supporting research and businesses. The government needs to strengthen its strategies for responding to changes in the global environment while providing a business-friendly environment, including expanded biotech infrastructure, the deployment of systems to connect with other industries and increased venture startup and growth funds.
In addition, an essential task is to help increase intensive R&D investment in world-leading, promising technologies that can enhance future international competitiveness, increase support for creative fusion or combined research through
the division of roles or cooperation among businesses, universities and research institutes, promote new job and market creation and develop a virtuous cycle for the business ecosystem. Active efforts are expected to be made in keeping with
the creative economy.
When all these efforts are made successfully, the local bio industries will form an industrial hub that can lead the world market. The bio economy, or society wherein biotechnologies deeply permeate products, services and daily life, is believed to arrive soon. Local bio industries will definitely lead such a bio economy and society.
By Lee Min-suk
Head of Dept, Strategic Planning Department
Korea Biotechnology Industry Organization
young.chang@kotra.or.kr