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Biotechnology
Overview

Maps & Tables
Dimensions of Globalization
Environmental & Social Issues
Case Studies
Policy Implications
Resources
Dimensions of Globalization

Introduction

Amongst other areas, the Biotechnology industry directly affects the arenas of healthcare and agriculture.  Continued research and development of biotechnology products can seriously alter these two essential aspects of everyday life.  Thus, as biotechnology has gained in size and scope, it has become clear that every developed country needs an element of this industry.  Beyond that, however, it has also been made clear that biotechnology is essential for developing countries as well, as this industry develops more efficient ways of producing food and preventing and treating disease.   Thus, there is truly a need for biotechnology to become a global industry.

The biotechnology industry is also one of the youngest industries around.  Though some companies have been around since the late 70's or early 80's, it has only been in recent years that the full potential of the biotechnology industry has been realized.  This has led to rapid growth within the industry.  Thus, competition has grown tremendously.  North Carolina will have to make extra efforts to stay a leader in the field.

With the current trends of globalization that have included more transnational cooperation and improvements in communication and transportation, global expansion is not only a possibility for biotechnology, but a reality.  This page will explore the various issues and trends that have been brought about by globalization.

Global Industry Growth

The global need for biotechnology can be seen in the expansion of the industry in the United States and in North Carolina in particular.  Biotechnology is in a rapid state of expansion.  According to the Biotechnology Industry Organization, the industry tripled in size in the United States between 1992 and 2001, and jobs increased from 79,000 nationwide to more than 191,000.1  Between 2000 and 2010, the US Department of Labor estimates that industries directly involved with biotechnology (such as drug manufacturing, health services, and agricultural services) will add approximately 3 million new jobs to the United States labor force.2

This same rapid growth can be seen in North Carolina.  Looking at employment statistics (see maps and tables), it can be seen that the industry has been expanding by approximately 10 % annually over the past 6 or 7 years.3  As mentioned in the overview, the North Carolina Biotechnology Center has partnered with the Golden Leaf foundation to set up a massive training initiative for the biotechnology industry.  The availability of skilled workers is what will help to continue to bring new companies to the area.  Through this initiative, along with the North Carolina Community College System's top-rated job training program, the state has also set up two new incubators near Universities in order to give first-hand training experience.  These steps will help create a huge available workforce, which is why it is estimated that the biotechnology industry could employ 125,000 people by the year 2023.

International Partnerships

The state of North Carolina itself, along with multiple biotechnology companies within the state, has endeavored to form international partnerships that will benefit biotechnology on a global scale.  In February, 2002, for example, North Carolina, through the leadership of the NC Center for Biotechnology, signed an 18 month agreement with the Indian state of Andhra Pradesh to collaborate and exchange information on biotech.4 Andhra Pradesh is a state known for its preeminence in stem cell, health, and agricultural biotechnology. 

These partnerships are occurring on a firm level as well.  Just recently, Tranzyme pharma inc., a company with facilities in Research Triangle Park, announced its partnership with Shin Nippon Biomedical Laboratories, Ltd. of Tokyo, Japan.5  The two companies will work together to research non-human models of human diseases to study them and work for cures in primates.

Through technological advancements such as the internet, globalization has made this kind of long-distance information trading efficient, cheap, and truly much more feasible than it would have been fifteen years ago.  These collaborations can help the industry to grow and advance faster because it can help eliminate overlapping projects and spread the word of new advancements much faster.

North Carolina: How it stays on top

Even with the intense global industry growth and the establishment of new international partnerships, North Carolina remains a global leader in the field of biotechnology.  There has been continued expansion into North Carolina and multinational and foreign biotech firms are still coming into the area. According to the 2002 Global Technology Report, North Carolina had the 5th best biotechnology economy in the United States.6  How does the state stay this competitive when there are so many different global options for companies?

North Carolina was the first state in the US to establish its own center for biotechnology.  The North Carolina Center for Biotechnology was really formed as a result of foresight.  Biotechnology has been growing most in the past 10 years, but the center was opened in 1981.  Establishing this infrastructure so early has allowed the state to design strategies to stay ahead of the game.  The policy implications section of this website lists a number of initiatives the state has taken to remain competitive in the global economy.

Offshoring

As opposed to the recent trends in some other white collar industries that have seen jobs moving to foreign markets at the expense of US jobs, offshoring that has occurred within the biotechnology sector has not been at the expense of employees in the United States or more particularly in North Carolina.  Thus, when a company like Civentichem (headquartered in Pittsboro, NC)  opened up a new 5000 square foot research and development facility in India in 2002, no domestic jobs were loss.7  It was rather simply a factor of the overall global industry growth mentioned above.  Hence, there has been no real “offshoring” of American jobs to foreign markets within the biotechnology industry to speak of since the industry is in such a period of rapid growth.

There is concern, however, that as the industry continues to grow, competition will become so fierce that offshoring may become a viable incentive for companies.  It is believed that the biotechnology industry will grow in clusters.  As major manufacturing and research companies settle in one area, smaller and local supply, shipping, and other companies will form around it to develop a larger industry infrastructure.  North Carolina needs to make sure that this infrastructure develops in such a way that it roots the industry to the area so that offshoring does not become a problem in the futuer.

Summary

North Carolina has continued to attract multinational corporations and foreign businesses to the area.  Globalization thus far has had a positive impact upon the biotechnology industry by allowing for partnerships and continued expansion and advancement.  It is imperative that the state do everything within its power to remain attractive to foreign investors so that the industry continues to expand locally.  If foreign markets with cheap labor become available to biotechnology, the industry could see major outsourcing as other US industries have seen.  Thus, by continuing to build a strong infrastructure within the state and taking precautions now, North Carolina can remain a leader in the biotechnology industry.



© 2004. last updated: April 28, 2004
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