As we begin the long process of decarbonization it is quickly becoming apparent just how much of our technological society is built on a foundation of petroleum. It, directly or indirectly, powers our cars, heats our homes, fertilizes our fields, and clothes our bodies. For some sectors, such as transportation or energy, decarbonization has a straightforward technological roadmap. We know how to build comprehensive, electrified rail and bus systems, the primary barriers are political and financial.
For other sectors, however, it is less clear how we can fulfill societal needs without fossil fuels. Large swaths of the materials, chemical, and industrial sectors are highly bound up in processes built upon fossil fuels, such as chemical feedstocks or plastics. Identifying and scaling alternatives to these processes and product classes is a crucial step in pursuing a fossil-free future.
In the past, I’ve written about how the life sciences are critical to fulfilling these societal needs. Achieving a circular society powered by solar energy is dependent on the adoption of technologies that lend themselves to circularity. Biological systems are optimized for circular production systems because they follow the template of ecosystems, where spare nutrients are scavenged and waste is utilized by decomposers. Building technology from these systems allows us to model industries based on ecosystems, in lieu of the linear models pursued today, allowing us to unlock true sustainability.
An example of this process is the production of resins, which are currently manufactured via petroleum-derived polymers. However, one review assessed an array of potential alternative processes that utilize vegetable oils or lignin (the structural component of many plant tissues) to produce various alternative resins. As peak oil approaches, there is a massive opportunity to rapidly scale up this and other novel technologies and build out new and improved industries based on the life sciences. A bioeconomy for the future.
Unfortunately, there has been little movement in bringing these discoveries to market. These innovations tend to sit between journal pages or in proof of concepts. No one is taking the time to properly scale them up and overthrow oil incumbents in these markets. There is, of course, a multifaceted explanation for this, but part of the issue is that there is a fractured innovation ecosystem for bio-based technologies. The researchers and entrepreneurs focused on this work are isolated and lack any infrastructure to scale and commercialize these technologies. What we need is to develop systems that can bring innovators together with the structures needed to bring their inventions to market.
The Bay Area in the 1960s was not particularly well known for technology. It was a finance and insurance center with a backbone of manufacturing and distribution. Computer and computer chip companies such as HP and Fairchild Semiconductor Corporation began to set up shop, and eventually, the employees and contacts of those firms began to found their own companies like Apple or Intel. Soon if you wanted a piece of the tech pie, as either engineer, founder, or investor, you had to move to San Francisco.
Economists call this an agglomeration effect, where the concentration of talent in specific regions spurs innovation. This is due to existing infrastructure already in place to drive innovation further such as universities, labs, funders, and industry-specific services. Additionally, social effects from the continual interaction of driven, intelligent people all in the same city, attending the same parties and meetings, networking, sharing ideas, and introducing people to each other spur collaboration. An ecosystem like this is what the biomaterials and biochemical industries need.
To achieve this first requires identifying a series of cities that already have the beginnings of an agglomeration. A life science Silicon Valley circa 1960, with a smattering of researchers, startups, or other innovators already working on these issues. Once these regions are identified, making investments in building the physical and social infrastructure necessary to drive innovation forward and build a critical mass of talent can be attempted.
This is a great opportunity for states, municipalities, and firms to get a bite of the pie before decarbonization seriously gets underway. Governments can focus on incentives to attract companies and build the early stages of a cluster, such as constructing research parks to provide laboratory space and equipment for startups. Identifying niches specific to one region to double down on and build out agglomeration effects is an important component of this strategy.
Say your city has an existing company developing and marketing mushroom-based proteins. Putting city funds into the local university to spur research in additional fungal food and industrial applications would be a great way of leveraging an existing advantage to build out a proper industry for the region. The company already has talent in the region, many of whom likely have their own ideas that could spin off into startups. Additionally, entrepreneurs may be attracted to the region, seeking a labor pool with experience with fungi. The role of these planners should be to identify these types of opportunities.
The Colorado hemp industry is a place where this model could be applied. Currently, much of the hemp produced in the state is grown for CBD, but there is a huge opportunity to use the existing supply chain to spin up additional sectors. Hemp has a huge potential for use in insulation and concrete products. With the existing supply chain and industry expertise, sprinkling some incentives to spur innovation in these alternatives would be a great way to generate new industries and provide alternatives to petroleum products.
For entrepreneurs, identifying regions where there is a critical mass of research and commercialization activity should be a core component of developing and scaling a startup. This will provide access to talent and the potential for access to facilities.
For regional planners seeking to form a cluster, systematically mapping the innovation space of the local area and identifying strengths should be the first step. Once a target sector has been chosen, working with stakeholders to draw in talent, capital, and innovators will be a must. Partnership with universities to forge partnerships and provide facilities is a core component of this strategy.
For investors, seek to bring together founders and portfolio companies into the same region. This will drive further innovation and create more opportunities for product lines and investible companies.
Bioeconomy clusters will require a lot of coordination between private and public players. Utilizing industrial policy strategies to create the technological foundation for decarbonization will not only bring these technologies to market more quickly, but it will also bring great wealth to the cities that can attract the right combination of skill and vision and provide them the resources to thrive.
