TWC Lesson 6

In today’s lesson, we covered mainly the area of technology and how it has impacted the biobusiness industry. The Biobusiness industry comprises mainly of pharmaceuticals, life science research, agricultural and environmental aspects just to name a few. Biobusiness is given its name because it is essentially a commercial activity that is based on the understanding of life sciences and its processes. Although the industry already constitutes 25% of world GDP and has employed 40% of the world’s workforce, this industry is still relatively new and expanding. With the many potential areas such as nanotechnology and biotechnology that have yet to be fully explored, this is definitely an industry where there is ample opportunity (to make $ and a name for thyself!) for new players to break in as long as they may overcome the barriers to entry i.e. high start up costs, and non- immediate returns.

Firms that invest in Biobusiness have the initial idea of discovering new concepts and ideas from research in a specific industry such as agriculture, and from there, implementing these concepts in other industries such as medicine and healthcare. Thus, there will be a transition from a low value-added industry to a high value-added industry with time where potential products could fetch a higher value. This increases the attractiveness of such an industry because the returns are definitely worthwhile in future. In terms of healthcare and pharmaceutical industry, according to Reading 1, “With the shift in paradigm from disease management to wellness management and disease prevention has come greater interest in alternative and complementary medicines/therapies by consumers not only in the Asia-Pacific region but globally”. Disease management would refer the management of chronic conditions i.e. managing and curing cancer through chemotherapy. Wellness management simply put, would refer to the management of people who are able and well. This includes prevention of sicknesses, diseases and even exercise regimes to keep these people healthy. These new interest in different aspects of healthcare have resulted in a renewed interest in the life science and pharmaceutical field, where there is even more extensive research in to diagnostics, medical devices etc.

Yet, what are the challenges that these firms face in producing the product? According to reading 1, it takes about 14 years in order for a firm to successfully produce and sell the drug to the mass market. It is generally estimated that only 1 in 10 000 drug candidates make it through the development process to enter the market. These constitute the high barriers to entry that firms have to face in order to even enter the industry, aside from the high costs of R&D equipment that firms have to pay for. As for firms that are already in the industry, they will have to make sure their barriers to entry remain high, and patent their products to recoup costs and make substantial revenue.

Issues for discussion:

Given that there is much discussion about the benefits and potential that this industry could bring to countries, but the amount of time needed to harvest a certain technology from scratch takes a significant amount of years, is it possible for this industry to be sufficient in coping with demand from users?

Rating:
6.5/10