April 22, 2024

Biotech Matters: Public-Private Coordination of Biotechnology

Three Revolutions, Three Problems, Three Prescriptions

By: Richard Danzig

An appreciation of biotechnology’s great opportunities is, for many commentators, intimately joined with regret about a disconnect between the U.S. government and the private sector. How, it seems reasonable to ask, can this country better coordinate efforts to use biotechnology more effectively and efficiently to improve health and security?

In recent years, the abilities to sequence (making use of polymerase chain reaction), edit (using CRISPR), and analyze (employing new forms of machine learning) genetic materials have dramatically improved. Joining these advances with comparable developments in understanding proteins, it is possible to create new materials, drugs, medical treatments, sources of nutrition, and sources of energy.

As in so many other fields, the U.S. government promotes these advances through grants for research and development and by purchasing finished products. It exercises indirect but powerful influence through taxation and regulation. These efforts, however, are limited, scattered, and often at cross-purposes. There is little meeting of the minds between the public and private sectors.

The U.S. successes and failings during the COVID-19 pandemic, combined with perceptions that China vigorously coordinates its public and private sectors, generated calls for an American industrial policy that would further orchestrate biotechnology work in the United States. In this context, the natural tendency is to regard improved coordination as straightforwardly achievable through improved processes and enlightened leadership.

The nation would be well advised, however, to recognize that the difficulties are more deeply rooted than simply failures of will, imagination, or efficiency. Three deep-seated problems impede progress.

First, the expansive nature of the biotechnology sector means there is not one problem to solve or one set of entities to coordinate, but many. The term “biotechnology” encompasses many efforts by many private actors for many different ends. Contrast, for example, a large pharmaceutical company and a new start-up that aims to use biotechniques to convert waste to energy. These two enterprises have very different goals, problems, infrastructures, human capital, financial wherewithal, and incentives. Their interactions with government are also quite different. For the pharmaceutical company, the path to a product is heavily regulated. For the start-up, government may be most significant as a customer. These companies will deal with different agencies and have very different concerns about foreign competition, affiliations, and marketing opportunities. A strategy to nourish the former has as much relevance to the latter as a program for protecting whales does to a program for cultivating bees.

Second, it is immensely difficult to create and sustain an overarching strategy on any subject, in any context. Human beings are not good long-term predictors, much less shapers of the long-term development of new and complex technologies. For this reason, while clarion calls for a biotech strategy are commonplace, they rarely produce actual strategies. It is far easier to preach strategic thought than to practice it.

Governments, which produce strategies by committees subject to interest groups and inertia, are especially handicapped. Even when strategic planning is prioritized for subjects more developed, less diverse, and better understood than biotechnology, the record has not been impressive. For example, strategies for America’s energy independence hardly anticipated fracking as a powerfully transformative factor. And, while the national security establishment prides itself on planning, its failures are as frequent as its successes, including, recently, how ill-prepared it was for terrorism and how a succession of plans failed to counter insurgency in Afghanistan.

The U.S. successes and failings during the COVID-19 pandemic, combined with perceptions that China vigorously coordinates its public and private sectors, generated calls for an American industrial policy that would further orchestrate biotechnology work in the United States.

Governments also have trouble sustaining long-term interest. The United States’ best program, Operation Warp Speed, ended abruptly, as did funding for manufacturing Ebola vaccines before it. Both should have benefited more from the infrastructure and experience gained from developing and stockpiling a new smallpox vaccine after 9/11 and the 2001 anthrax attacks, but those efforts were largely dismantled when the emergencies ebbed. Government priorities are commonly seasonal, rarely perennial.

Third, seeking to better align the U.S. private and public sectors is attempting to conjoin, or at least coordinate, organisms of two very different species. Companies and governments have different metabolisms fueled by different priorities. Companies have narrow near-term interests and respond rapidly to price signals. Two-thirds of new companies fail, and those that survive must constantly innovate to sustain their positions. By contrast, governments respond slowly to a complex web of interconnected, ambiguous political signals as well as to real-world imperatives. They are inherently conservative because their incentives punish failure more than they reward success.

This mismatch between the public and private sectors is amplified by great distance, suspicion, and misunderstanding. Government’s commercial expertise is limited. When biologists are recruited from outside of government for senior positions in the executive branch, it is usually from academia. Private sector experts are discouraged from government service by barriers intended to prevent conflicts of interest and “revolving doors.” Data, intellectual property, and business plans are kept from government for fear of regulation, discovery by competitors, or political misuse (for example, by politically popular attacks on companies for “profit gouging”). Even when the two sectors agree on a common program, they are challenged by conflicting decision cycles, accounting systems, cultures, and even vocabularies.

These difficulties suggest that wise policymakers should aim to moderate the problems rather than comprehensively resolve them. The focus should be not so much on ambitions as on capabilities, not on what is wanted but instead on the more realistic appraisal of what government can do. This focus counsels avoiding complex programs dependent on necessarily uncertain predictions about the directions of new technology and argues for investment in public goods that markets typically fail to value.

Applying these principles, I urge three priorities for public effort to complement private sector work on biotechnology: priming the pump of creativity, developing domestic regulations and international norms, and better sharing expertise between the public and private sectors.

The pump of creativity is primed by investing in human capital and infrastructure. Because biotechnology is on a trajectory of rapid expansion, the sector will require far more talent. The requirement will be not only for biologists as this branch of science has been traditionally understood, but also for mathematicians, those skilled in applying artificial intelligence to biological problems, biomanufacturers, and others. The U.S. government has the power and the mandate to develop this talent pool and encourage its application to cross-disciplinary work in biology. To accomplish this, it should make investments in education and widen opportunities for skilled immigrants. Concomitantly, it should use tax incentives and a limited number of direct investments to encourage developments that the market is unlikely to provide, for example, in tangible infrastructure such as shared fabrication facilities and in intangible infrastructure such as data banks.

Second, government must more effectively regulate this fast-growing sector. As with other new technologies, biotechnology will be dangerous. Recent debates about gain-of-function research, modification of heritable human genomes, the use of artificial intelligence to develop biological weapons, the actual safety of biosafety level laboratories, and other subjects, are early markers of challenges to come. Companies need to recognize—as software companies, cryptocurrencies, the creators of artificial intelligence, and others came to recognize—that if they endanger the broader society, they endanger themselves. Accordingly, they need government to establish norms and regulations both domestically and through multilateral agreements abroad.

Third, good government decisions—from individual product approvals to sector-wide regulations—require better human capital in the public sector. To this end, the government should relax restraints on movement of expertise between the government and the private sector, establish mechanisms for sharing data and plans in fora that preserve confidentiality, expand the budgets of relevant agencies, and better reward, celebrate, and protect civil servants.

Many of the predictions for biotechnology will be unreliable. However, several assumptions seem indisputable: the private sector will have much success using the new techniques of biotechnology; there will be times of emergency and failure in which this sector will be a part of both the solution and the problem; and resolving these problems will require government and the private sector to work together. To prepare for this future, capabilities in both sectors and the ability to communicate between them must expand.

While there are great challenges ahead for public-private alignment around biotechnology, they can be overcome by accurately appraising the obstacles to public-private collaboration, and in doing so, unlocking the vast promise of biotechnology for America.

About the Author

Dr. Richard J. Danzig has served as a consultant to U.S. intelligence agencies and the Department of Defense on national security issues. He is chair of the U.S. Navy Advisory Board on Science and Technology, a senior fellow at the Johns Hopkins Applied Physics Laboratory, and a trustee of the RAND Corporation.

Previously Dr. Danzig served as director of National Semiconductor Corporation (N.Y. Stock Exchange) and Human Genome Sciences Corporation (NASDAQ). He has served as chairman of the board at CNAS and at the Center for Strategic and Budgetary Assessments, and as chair of the advisory panel for Idaho National Laboratories’ Innovation Center. Additionally, Dr. Danzig has been a member of the President’s Intelligence Advisory Board; the secretary of defense’s Defense Policy Board; the homeland security secretary’s Advisory Council; the Aspen Strategy Group; the Toyota Research Institute Advisory Board; the Cyber Resilience Forum of the National Academies of Sciences, Engineering, and Medicine; and the Reed College Board of Trustees.

He served as the 71st secretary of the Navy from November 1998 to January 2001, and from 1993 to 1997 as under secretary of the Navy. From spring 2007 through the presidential election of 2008, Dr. Danzig was a senior advisor to Senator Barack Obama on national security issues.

Acknowledgments

The author is grateful to Michael Callahan, MD (diploma in tropical medicine and hygiene, master of science in public health); Dr. Monique K. Mansoura; Vivek Chilukuri; Hannah Kelley; and Maura McCarthy for their valuable feedback and suggestions on earlier drafts of this commentary, as well as to Melody Cook and Rin Rothback for their design support.

This commentary series was made possible with general support to CNAS.

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Author

  • Richard Danzig

    Adjunct Senior Fellow, Senior Advisor, Johns Hopkins Applied Physics Laboratory

    Richard Danzig’s primary activities in recent years have been as a consultant to U.S. Intelligence Agencies and the Department of Defense on national security issues. He is a ...

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