Regenerate: Biotechnology and U.S. Industrial Policy

“Innovation is the ability to see change as an opportunity—not a threat.”¹

—Steve Jobs

Executive Summary

A revolution in biotechnology is dawning at the precise moment the world needs it most. Amid an ongoing climate crisis, fast-paced technological maturation, and a global pandemic, humans must find new ways to reduce greenhouse gas emissions, improve food security, develop new vaccines and therapeutics, recycle waste, synthesize new materials, and adapt to a changing world. But incentive structures in the U.S. private sector are generally biased against risk, and therefore constrain development in ways that do not have the same effect on firms in China and other U.S. competitors. This puts the United States at a relative disadvantage and risks ceding American leadership over one of the most powerful and transformative fields of technology in recent memory.

The United States needs some form of industrial policy to promote its bioeconomy—one that is enshrined in democratic values and focused on improving access to four key drivers of bioeconomic growth: equipment, personnel, information, and capital. This report attempts to measure the health and outlook of the U.S. synthetic biology industry and broader bioeconomy by examining U.S. access to each of these four resources. It concludes that the United States still possesses an advantage in each of these fields—but that, absent a proactive strategy to ensure resource access, and without a significant infusion of capital, the U.S. bioeconomy risks languishing behind competitors such as China in the decades ahead.

Summary of Recommendations

This report arrives at nearly two dozen policy recommendations for the United States to undertake in support of a more robust industrial policy. Each is focused on improving access to four resources at the heart of technological progress: equipment, personnel, information, and capital.

Equipment

A U.S. strategy to promote the bioeconomy should focus on improving access to equipment at the core of the bio revolution: computing and data sources used in genomics, and hard infrastructure used in DNA synthesis and fermentation.

Congress should pass the America COMPETES Act of 2022, which authorizes the creation of a National Engineering Biology Initiative. The initiative should pool and subsequently distribute access to data used in biotechnology discovery applications for investigators and biotechnology startups.

The National AI Research Resource Task Force should formalize a National Research Cloud for distributing access to cloud computing power for researchers and enterprises.

The White House should launch a bioeconomy opportunity tax credit. Biotechnology startups should not have to worry about affording crucial resources like cloud-based computing, one-time gene sequencing fees, or expensive licenses for industrial control software.

The National Institute of Standards and Technology should establish and update clear definitions, interoperability parameters, and technical specifications for fermentation units used in the large-scale cultivation of microorganisms, as well as novel, genetically engineered materials and devices for medical use, to ensure that these products remain safe and interoperable with one another.

Personnel

A diverse and well-trained workforce is undoubtedly the United States’ single largest bioeconomic strength relative to any other country. There are several tools at the U.S. government’s disposal to grow and enhance its pool of human talent in conjunction with allies and partners.

The White House Office of Personnel Management and Budget should establish a BioCorps Scholarship for Service program modeled after the CyberCorps Scholarship for Service, which would support stipends, tuition, and allowances for PhD students in the general area of biotechnology.

Congress should pass the America’s College Promise Act, the proposal to fully fund associate degrees for low-income students at community colleges across the United States.² Supporting community college education and laboratory certification programs can create alternative career pathways that support the U.S. bioeconomy.

The Department of Education’s Office of Elementary and Secondary Education should establish a Bio-Competition Grant Program to cover the cost of after-school training, materials, and travel for teams participating in the International Genetically Engineered Machine competition and other regionally and nationally recognized biotechnology competitions.

The Department of State should replicate or otherwise institutionalize the Quad STEM Fellowship run by Schmidt Futures, which grants PhD funding to 100 students from Quad countries each year.

The Department of State’s Lower Mekong Initiative should fund Agricultural Centers of Excellence across Southeast Asia. By working with regional groupings like the Indian Ocean Rim Association and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, the United States can fund a network of research centers that solve regional challenges and contribute to environmental resilience and socioeconomic mobility.

Congress should vote to codify the recent expansion of the STEM Optional Practical Training program (STEM-OPT) led by the Departments of State and Homeland Security. Expanding STEM-OPT and supporting longer-term immigration pathways will support continued U.S. leadership in biotechnology.

Congress should double the H-1B visa cap from 65,000 to 130,000 visas each year. Amid global crises from climate change, the COVID-19 pandemic, and the Russian invasion of Ukraine, the world’s best and brightest talent is increasingly mobile and willing to work in the United States. Bold action is necessary to transform these crises into opportunities.

Information

Expanding access to genetic data, harmonizing intellectual property protections, and upholding a flexible and transparent regulatory environment are crucial to sustain growth in the bioeconomy.

The National Institutes of Health (NIH) should establish a National Gene Bank equipped for 21st-century genomic research. Creating a system that is updated in real time, with authorities and incentives to motivate private- and public-sector participation, is necessary to sustain U.S. progress in biotechnology research.

The Food and Drug Administration (FDA) should establish a process to share its existing research data with scientists at universities and trusted research institutions. The FDA’s expansive collection of data, from both clinical trials for pharmaceuticals and diagnostic research, could spur innovation in basic research if provided to public research centers.

Congress should broadly aim to preserve the U.S. system of intellectual property protection as it relates to biotechnology.

Congress should scale up funding for the U.S. Patent and Trademark Office. The patent office needs to examine and issue patents faster. To do so, it needs to retain and improve training for existing patent examiners who have a history of being hired away by intellectual property firms as soon as they learn their trade.

The U.S. Trade Representative and Department of Commerce should encourage U.S. allies and partners to relax protections of naturally occurring human genes to promote further innovation in the global biotechnology industry.

The FDA, Environmental Protection Agency (EPA), and U.S. Department of Agriculture (USDA) should overhaul their implementation of the Coordinated Framework for the Regulation of Biotechnology. An updated approach should give weight to the expected safety impact of providing a given product or service—irrespective of the technical method used to derive it.

The Small Business Administration (SBA) should enlist the support of the Federal Bureau of Investigation (FBI) and Defense Counterintelligence and Security Agency (DCSA) in offering security guidance to Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTR) funding recipients. The SBA should collect survey information about awardees’ experiences with attempted economic espionage, which should be shared with the DCSA and FBI.

Capital

While private-sector investments have paid the largest dividends, government can play a much more active role in allocating capital and helping early-stage companies bridge the valley of death.

Congress should authorize significant increases in the budgets of several biotechnology industry incubators, including a 50 percent increase in the SBIR and STTR programs run by the USDA, FDA, and EPA; research grants issued by the NIH; funding for Defense Advanced Research Projects Agency’s Biological Technologies Office, and In-Q-Tel’s biotechnology research portfolio.

The Department of Defense should request to expand the remit and budget of BioMADE, and the Office of the Undersecretary of Defense for Research and Engineering should create redundant initiatives for specific biotechnologies, including novel sources of bioenergy and biomaterials.

Congress should establish the Industrial Finance Corporation of the United States, a new investment mechanism for public-private partnerships, which will act as a magnet for capital in strategic industries.

The White House should work with state and local governments to establish a network of Biotechnology Industrial Opportunity Parks. These special economic zones would include favorable federal and local tax structures, modeled after the oil industry’s Foreign Trade Zones along the Texas coast, but for biorefineries across middle America.

The U.S. Trade Representative and Department of Commerce should advocate for relaxed restrictions on U.S. genetically modified agricultural exports at the EU-U.S. Trade and Technology Council and amid negotiations over the Indo-Pacific Economic Framework.