Economics and Institutions of the Bioeconomy

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Junior Research Group “Economics and Institutions of the Bioeconomy”
Dr. Lioudmila Chatalova, Celestine Muli and Brian Beadle (Photo: Nadja Sonntag)

It is a general trend that an increasing share of plant-based foods and feedstocks are produced on large-scale farms, processed industrially, and traded internationally using rapid payment and shipping methods. This development is a result of continuous advances in production and management technologies, which are associated with significant efficiency improvements, cost reduction, larger variety of available products and services, and a general improvement of living standards. It is for these manifold perceived benefits that technological development towards more efficiency has become the dominant economic model. The downside of this model, favoring economies of scale, bulkiness of machinery, and specialization on a single or few crop plants, is that it implies the externalization of costs in the form of manifold risks and threats to society and nature. The green revolution in agriculture, for example, has indeed met the expectations of higher yields and cost-efficiency, while with crop-based renewables a promising alternative to fossil fuels entered the energy market. These advances, however, came at the cost of, e.g., biodiversity loss and groundwater pollution, increasing greenhouse gas emissions, land use change, human health harms, decline in nutrient quality, or loss of farm communities.

To acknowledge these implications as socially and economically relevant requires a broader view of economic activities as being socially embedded and responsive to feedback on the part of consumers, ecology, and society in general. This is precisely where the plant-based bioeconomy is supposed to get involved as a strategy towards resource-efficient and sustainable economy. By dovetailing research efforts of natural and engineering sciences with businesses working on food, material, and energetic use of biomass, the bioeconomy aims to establish innovative, coupled production and utilization processes as a basis for a sustainability-guided development. This approach partially takes up the grand challenges of cost externalization and of balancing economic imperatives with societal expectations. Recycling biomass residues and resorting to non-food crops may, on the one hand, reduce the existent land use conflicts and emission problems. On the other hand, the bioeconomy, being heavily dependent on innovations and integration of involved industries, also holds potential for creating further problems and risks of new quality and complexity. Problems previously associated with conflicting use of agricultural resources might, in fact, not necessary be solved by switching to non-food crops, but moved to forestry, fishery, or synthetics sectors.

Furthermore, the bioeconomy is a quite recent economic concept with largely unknown long- and middle-term effects on economy and society. A transition to a bio-based development model may therefore disrupt the established rules of economic and social organization. A variety of new, potentially disruptive technologies – from synthetic biology to intelligent robots – are already under way and expected to become mainstream and financially viable within the next decade. High-precision devices, drones, and sensors may potentially not only reduce the use of expensive, scarce, or harmful inputs, but entail substantial changes in labor, supply chain, and (big) data management. Intelligent micro-robots and large-scale robotics may not only largely replace human labor, but also render the logic of economies of size irrelevant, opening new opportunities for small-scale operations. Against this backdrop, the project seeks to illuminate some of the critical points in the transition to the plant-based bioeconomy by addressing the role of innovation-driven advances and disruptions. Its overarching purpose is to contribute to rebalancing the technocratic and sustainability-oriented visions of the plant-based bioeconomy. The choice of specific analysis tools is guided by the explicit methodological competences of IAMO.