The U.S. Biotechnology Industry

The United States is the largest market and leading consumer of biotechnology products in the world and home to more than 1,300 firms involved in the industry. The U.S. employs more than 60 percent of the worldwide workforce in dedicated biotechnology firms and is home to 70 percent of the world’s research and development, according to a survey by Ernst and Young. In 2008, bioscience research and development in the U.S. was valued at $32 billion (source:  Battelle/BIO State Bioscience Initiatives, published May 2010).

There are more than 5.5 million scientists, engineers and technicians in the United States, 1.3 million people directly involved in biosciences, and another 5.8 million workers in related industry sectors.  Business opportunities in this field for small- and medium-sized enterprises, universities and research institutions in the U.S. are extensive. Research and development in the U.S. biotechnology sector drives the commercialization of products for domestic consumption and international trade.

With the world’s largest scientific research base and longstanding government support for biomedical and other biotechnology research and development, the United States maintains a competitive environment for the development and commercialization of biotechnology.

Industry Subsectors

Medical Biotechnology: This is the largest component of the biotechnology industry. Key product areas include biological drugs, vaccines and in-vitro diagnostics. Principal targets for research and development are treatments for cancers, infectious diseases, auto-immune conditions, HIV/AIDS, and other diseases for which no effective treatments exist. Biotechnology-derived medicines were valued at $67 billion in 2010 (source:  IMS Health) and are a growing component of the pharmaceutical industry, accounting for a quarter of all new drugs in clinical trials or awaiting Food and Drug Administration approval.

Agriculture Biotechnology: Key products include biotech crops such as corn, soybean, cotton and canola.According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA) the United States accounts for more than half of all biotech crops in the world, and the value of harvested biotech crops was $130 billion globally in 2008, and projected to increase up to 10-15 percent annually.  The principal targets for research and development are the creation of new biotech crops, crops with new traits such as drought tolerance, crops with stacked traits, and biotech animal products (e.g., salmon).  The biotech crops market is the fastest growing component of the agriculture biotechnology industry, accounting for more than $2 billion in U.S. exports in 2008 alone.

Industrial Biotechnology: Key products in this subsector include a large number of industrial applications that cut across other industry sectors. Primary product categories are nanotechnology, enzymes and biofuels.  The production of U.S. ethanol, mostly corn-based, is steadily increasing.  According to the Renewable Fuels Association (RFA), 200 U.S. ethanol refineries produced 10.6 billion gallons of ethanol in 2009, a 34 percent increase over 2008. The RFA predicts that capacity will grow to 11.9 billion gallons in 2010, including new facilities that will produce cellulosic ethanol from non-food crops. One of the main drivers of ethanol demand in the United States is the Renewable Fuel Standard.  The Volumetric Ethanol Excise Tax Credit (VEETC) - created in 2004 as part of the American Jobs Creation Act - has also provided oil companies with an economic incentive to blend ethanol with gasoline. The U.S. biodiesel industry is also growing, with an annual production capacity of 2.6 billion gallons – 350 times the production capacity in 2000.  The Biodiesel Board predicts that biodiesel production volume could soon double due to the construction or expansion of 30 plants in 2010.