Statement of the Problem: Baja California is one of the regions of Mexico which has particular comparative advantages for the development of the biotechnological industry on its territory. Among these advantages are the following: geographical proximity and close economic ties with the most innovative region of the United States - California; abundance of natural resources, in particular, marine culture (algae, plankton, etc.), presence of well-established research centers and universities that have programs in biotechnology. However, the innovation potential of the region is not fulfilled because there is a very low proportion of enterprises that use biotechnological products or services in their production processes and there is a low rate of technological transfer between the universities and industry. Therefore, the problem consists in the lack of fulfillment of the biotechnological potential of the region.
Policy Question: What actions, if any, should be taken by the Mexican National Council on Science and Technology to establish the region of Baja California as a biotechnology center?
The client for this research is Dr. Luis Gabriel Torreblanca Rivera, the Deputy Director of Technical Development and Innovation in the National Council on Science and Technology.
Policy Options:
1. Maintain status quo: keep financing the public universities and research centers that exist in the region (Autonomous University of Baja California, Interdisciplinary Center of Marine Sciences, Center of Scientific Investigation and Higher Education of Ensenada). This option also includes providing financial assistance to individual companies through the National Council on Science and Technology. Financial assistance is offered on competitive basis and aims at improving technological processes of the enterprises to increase their efficiency and market share.
Advantages:
+ This option is politically feasible because it does not require any legislative and budgetary changes. It will not have any opponents because it generally satisfies the needs of companies and universities.
+ This option implies low costs for the State. The public investment in the university research projects and individual companies is currently low and does not divert much resources from other development targets.
Disadvantages:
- This option is not likely to be effective because it does not create incentives for the companies and universities to develop innovative products and processes.
- In the long run, this policy will negatively affect the competitiveness of the countries as more developing countries tap into the potential of biotechnology. Lagging behind other countries implies future costs in terms of access to patents and licences and high prices of innovative products imported from abroad.
2. Create a BioCluster in Baja California: organizational structure that includes a number of actors from different sectors. On behalf of the governmental sector, the main actor is National Council of Science and Technology. On behalf of the academic sector, the actors are Autonomous University of Baja California, Interdisciplinary Center of Marine Sciences and Center of Scientific Investigation and Higher Education of Ensenada. On behalf of the industrial sector, the actors are SMEs and larger enterprises located in Baja California (Bionag, Algas Pacific, Isosi, Abulones Cultivados, Albiomar, etc).
The cluster implies construction of research facilities, laboratories and production facilities for biotechnological companies. The projects will be financed as a public-private partnership and will attract investments from abroad.
Advantages:
+ This strategy has the greatest potential to achieve the policy goal - to fulfill the region´s potential in biotechnological innovations. It is effective because it will directly provide infrastructure for joint research of academic and industrial sectors. Physical proximity of the companies and universities will create enhanced capacity for innovation.
+ This strategy is politically feasible because biotechnology has been announced as a priority area for science and technology policy since the 1990s. There is political commitment to enhance the potential of the country in biotechnology.
Disadvantages:
- This policy option requires huge public and private investments. Although the State has announced the plan to increase public spending on science and technology to 1% of GDP, however, this will divert resources from other public investment targets - education, healthcare, security.
3. Enhancing framework conditions for innovation: improving business climate, lowering regulations, lowering taxes for SMEs, attracting foreign investments. This option requires the following actions: lower the costs of patenting for Mexican researchers and scientists, lower the tax burden for innovative SMEs, decrease the amount of procedures for approval of new biotechnological products and processes, decrese regulations concerning the access of foreign capital to SMEs, lower the costs of legal procedures to open and close small innovative businesses.
Advantages:
+ No direct cost for the State. The State does not have to invest any additional resources in creating infrastructure, in government procurement and so on.
+ This strategy is likely to achieve some effect on the innovation potential as there are numerous reports of innovation being stiffled by unfriendly business climate in Mexico.
Disadvantages:
- This strategy is deficient with respect to the goal of equity. Improving the business climate and lowering regulations for the companies operating in the biotechnology sector is inequitable towards companies in other sectors which might also pursue important social development goals. It also gives significant advantages to foreign companies that will have easier access to natural resources and indigenous knowledge of Mexico without paying adequate price for it.
- This strategy potentially undermines biological security of the country as biotechnology implies a lot of risks for human and animal health as well as for environment. Lowering regulatory procedures might create potential for some risks not to be taken into account.
- This policy is also likely to encounter a lot of opposition from the general public and NGOs who are concerned about potential negative effects of biotechnology for public health and environment (GMOs, etc).
Summary.
Policy Question: What actions, if any, should be taken by the Mexican National Council on Science and Technology to establish the region of Baja California as a biotechnology center?
The client for this research is Dr. Luis Gabriel Torreblanca Rivera, the Deputy Director of Technical Development and Innovation in the National Council on Science and Technology.
Policy Options:
1. Maintain status quo: keep financing the public universities and research centers that exist in the region (Autonomous University of Baja California, Interdisciplinary Center of Marine Sciences, Center of Scientific Investigation and Higher Education of Ensenada). This option also includes providing financial assistance to individual companies through the National Council on Science and Technology. Financial assistance is offered on competitive basis and aims at improving technological processes of the enterprises to increase their efficiency and market share.
Advantages:
+ This option is politically feasible because it does not require any legislative and budgetary changes. It will not have any opponents because it generally satisfies the needs of companies and universities.
+ This option implies low costs for the State. The public investment in the university research projects and individual companies is currently low and does not divert much resources from other development targets.
Disadvantages:
- This option is not likely to be effective because it does not create incentives for the companies and universities to develop innovative products and processes.
- In the long run, this policy will negatively affect the competitiveness of the countries as more developing countries tap into the potential of biotechnology. Lagging behind other countries implies future costs in terms of access to patents and licences and high prices of innovative products imported from abroad.
2. Create a BioCluster in Baja California: organizational structure that includes a number of actors from different sectors. On behalf of the governmental sector, the main actor is National Council of Science and Technology. On behalf of the academic sector, the actors are Autonomous University of Baja California, Interdisciplinary Center of Marine Sciences and Center of Scientific Investigation and Higher Education of Ensenada. On behalf of the industrial sector, the actors are SMEs and larger enterprises located in Baja California (Bionag, Algas Pacific, Isosi, Abulones Cultivados, Albiomar, etc).
The cluster implies construction of research facilities, laboratories and production facilities for biotechnological companies. The projects will be financed as a public-private partnership and will attract investments from abroad.
Advantages:
+ This strategy has the greatest potential to achieve the policy goal - to fulfill the region´s potential in biotechnological innovations. It is effective because it will directly provide infrastructure for joint research of academic and industrial sectors. Physical proximity of the companies and universities will create enhanced capacity for innovation.
+ This strategy is politically feasible because biotechnology has been announced as a priority area for science and technology policy since the 1990s. There is political commitment to enhance the potential of the country in biotechnology.
Disadvantages:
- This policy option requires huge public and private investments. Although the State has announced the plan to increase public spending on science and technology to 1% of GDP, however, this will divert resources from other public investment targets - education, healthcare, security.
3. Enhancing framework conditions for innovation: improving business climate, lowering regulations, lowering taxes for SMEs, attracting foreign investments. This option requires the following actions: lower the costs of patenting for Mexican researchers and scientists, lower the tax burden for innovative SMEs, decrease the amount of procedures for approval of new biotechnological products and processes, decrese regulations concerning the access of foreign capital to SMEs, lower the costs of legal procedures to open and close small innovative businesses.
Advantages:
+ No direct cost for the State. The State does not have to invest any additional resources in creating infrastructure, in government procurement and so on.
+ This strategy is likely to achieve some effect on the innovation potential as there are numerous reports of innovation being stiffled by unfriendly business climate in Mexico.
Disadvantages:
- This strategy is deficient with respect to the goal of equity. Improving the business climate and lowering regulations for the companies operating in the biotechnology sector is inequitable towards companies in other sectors which might also pursue important social development goals. It also gives significant advantages to foreign companies that will have easier access to natural resources and indigenous knowledge of Mexico without paying adequate price for it.
- This strategy potentially undermines biological security of the country as biotechnology implies a lot of risks for human and animal health as well as for environment. Lowering regulatory procedures might create potential for some risks not to be taken into account.
- This policy is also likely to encounter a lot of opposition from the general public and NGOs who are concerned about potential negative effects of biotechnology for public health and environment (GMOs, etc).
Summary.
| Criteria | ||||
| Policy Option | Effectiveness | Efficiency | Equity | Ease of Political Acceptability |
| Status Quo | 0 | "+" | "+" | "++" |
| Biocluster | "++" | ? |
"-" | "++" |
| Enhancing business climate | "+" | "+" | "-" | "-" |
References
1)
Arias Ortiz, C. (2001) Biotecnología moderna para el desarrollo de
México en el siglo XXI : retos y oportunidades / Francisco Bolívar Zapata
(coordinador general), México : Secretaría de Educación Pública ; Consejo
Nacional de Ciencia y Tecnología, Fondo de Cultura Económica.
2)
Bolívar Zapata, F. (2007) Fundamentos y casos exitosos
de la biotecnología moderna. México, D.F.: El Colegio Nacional.
If you have the BioCluster, there will be international firms coming to this sensitive area. In this sense, you might want to consider national security. On the other hand, the research and operation in this area might destruct the bio-environment in Baja California.
ReplyDeleteNice and sweet explanation :) .. You should also explore use of technology for additional benefits by linking various biotechnology centers through various communication channels..
ReplyDeleteWhat kind of business climate will be good for the establishment in detail?
ReplyDeleteIf the framework is enhanced, more and more groups will invest to develop the Biotech, they may have the same direction, will it make the market crowed, and increased the unhealthy competition?
ReplyDeleteI think you have included a wide range of factors in each option analysis. I think option 3 would have indirect costs to government, as it would receive less from patent applications, corporate taxes, but would also decrease administrative programming on their end. Do you think there is foreign interest in investing in B. Cal.'s biotech industry? How might the government promote this?
ReplyDeleteI thought that this was really well written. Good job!
ReplyDeleteI like your BioCluster option, but do you consider the ways to attract international companies to this area?
ReplyDeleteHow it is biocluster rated in terms of efficiency? I think it is a positive effect. Do you have any description on it?
ReplyDelete