151. Report on Reports: Cash Flow, Carbon, and the Bioeconomy

Meta-Reports Biology's Economic Reality

Erum Today we're doing something different, a report on reports. There has been a wave of studies about the Bioeconomy this past year where the money's flowing, what's working, what's failing, and what we need to do next.

Karl The fact of the matter is we've read so many of these and we read 'em all the time with a goal, and we're doing this today so that you don't have to listen to them. We're gonna do is we're gonna unpack what these reports say, what they miss, and what they mean for the future of biology as an industry, and how that industry is an engine for the planet's economy.

Erum this idea of reports on reports came after someone pointed out that the US government once won the IGN Noble Prize. If you guys know the IGN Noble Prize is, it's when there's something funny that's discovered but meaningful and so they give a prize for, um, any type of scientific achievement or.

Erum Science that [00:01:00] has come out that's interesting, but so the US government back in 2012 won the IGN Noble Prize for producing a report about reports. About reports. So yes, we're in prestigious company and if a government can get an IGN Noble prize for meta reporting, we figured why not lean in and do one ourselves?

Erum Do one ourselves with better jokes and fewer footnotes.

Karl Um, so why don't I like talk, I mean, we're gonna do like a meta-analysis on these reports, but why don't we first talk about the reports that we're gonna go through? Um, and I don't, yeah, we're just gonna alternate these, right? Yeah. Okay. So why don't we talk about the reports we're gonna go through. We're gonna kick it off by talking about Symbio Beta's 2025 Investment Trends Report.

Karl This report covers investment in synthetic biology. It showed at the beginning of this year that investment, uh, in 2024 re uh, rebounded with fewer deals [00:02:00] but bigger checks. The focus of that report showed that, uh, sorry, lemme just say that again. Um, the first report we're gonna look at is SynBioBeta 2025 Investment Trends Report.

Karl That report showed that in 2024, investment in synthetic biology rebounded with fewer deals, but with bigger checks. The focus shifted from company. The focus shifted to company's proven products and clear paths to revenue.

Erum And then we're also gonna review the World Economic Forum's report with Capgemini about the next generation bio innovation, about next generation bio innovation. So this argues that biology won't scale through tech alone products must deliver cloud. Clear value, so better performance, lower cost, or supply chain resilience to win mainstream adoption, which we love to talk about.

Karl Then we'll talk about a report that probably not a lot of people saw the AB four s report, which is. The advanced, I should get it right because I don't wanna like,

Erum for it.

Karl um,[00:03:00]

Karl uh, so the next report we're gonna look at is one from the Advanced Bio, the Advanced Biotech for Sustainability Coalition, um, which, uh, did a report with several in several large companies, including McKinsey, L'Oreal, and other companies. And the report found that projects that advanced biotech could cut up to four gigatons of carbon dioxide and unlock a $1 trillion global market by 2040 if scaled properly.

Erum Yeah, that's a good one. I can't wait to dig into that. And then we have bio and. Bio and Kearney's Bioeconomy Impact Modeling, which was released in March, 2025. And the report, um, the, uh, the report finds that the US Bioeconomy, the US Bioeconomy already generates 210 billion directly and 830 billion Inc.

Erum And 830 billion, including ripple [00:04:00] effects and supports roughly 430,000 jobs for now.

Karl I can't wait to get into that one. Then. Um, we looked at the National Security Commission on emerging Bio technologies report. Which warns that the US is falling behind China in biomanufacturing and biological data infrastructure, and it called for a $15 billion, five year national initiative. We've had two guests on the podcast talk about the report, Alexander Titus and uh, Angela Belcher.

Erum Yes. Yes. And then, uh, last but not least. Um, the report that wins the title of Best. The, the report that wins the title of best title is First Bite Ventures to Buy a Manufacturing Graveyard. And that analyzes more than 60 failed companies, and concludes that most died from economic and operational mistakes, not science.

Erum And I'm so glad that someone wrote a report on failure, so I'm excited to, uh, dig into that. [00:05:00] So let's get started. Carl, do you wanna talk about the first one and we can, uh, chit chat about it?

Karl Yeah. Okay, so let's talk about Symbio Beta's report. Symbio Beta puts out an investment report every year, and they look at what happened in the previous year. So the report they put out at the beginning of this year showed that funding for synthetic biology projects was up 14% year over year to 12.2 billion.

Karl The average deal size is nearly 60% larger. The big conclusion there was that investors favored industrial biotech. Something we talked a lot about on this podcast. So chemicals, materials, and agriculture over speculative platforms. Again, something that we talk a lot about on this podcast, whether platforms or products or processes are gonna win.

Karl And the examples that were named in the report included. So who combines bio catalysis and electric chemistry? [00:06:00] As a model for high value, low volume manufacturing, pivot Bio, a company that has scaled microbial nitrogen to thousands of farms. What Pivot has done is they basically spray, um, microbes onto seeds so that you need less fertilizer to grow those seeds.

Karl And ArcHa Bio, a company that is engineering cattle to cut methane emissions.

Erum Yeah. And not to be confused with ArcHa, the company that makes personal care and beauty ingredients. Um, that was a spin out of Ginkgo, led by Jaina, um, Jasmina. What's last name? Jaina, uh, um, led by Jasmina Ag Ag. A kovich that by Jesse Kovich. So, um, but, but yeah, that's, um, you know, I, I, it makes sense, right, Carl?

Erum I mean, biology promise, not promises, but being able to do biochemistry, you can create amazing chemicals. Um, not, not only just through Biomanufacturing, but of [00:07:00] course, um, using cell-free biomanufacturing, um, and being able to, uh, do that at a very cost competitive way towards, um, um, compared to everyday chemical manufacturing.

Erum Um, so. I, it kind of, it, it makes sense, right? For, um, investors to put money towards these foundational molecules that are needed to be the, you know, ingredients of everyday products.

Karl Yeah, the soundbite that stood out, uh, for me in this report was Easy Money.

Erum a soundbite from the report. It's what we say, by the way. Okay.

Karl Okay. So you know, basically what this report is saying that Easy Money's gone, but Patient Capital has finally showed up, and I think that this has played out during the course of the year, during the course of this year, where so much money has been moving into AI and AI infrastructure.

Erum Yeah. Yep. And Solu Jen's [00:08:00] latest partnerships with Dow and a DM show Biology, moving from pilot plants to global supply chains. And then you mentioned Pivot Bio, and that's proof that climate solutions can also be. Profitable, right? So sustainability is table stakes. Now let's talk about high performance and profitability. So, so Carl, are we seeing biology mature or is it just another hype cycle wearing a lab coat?

Karl Uh, I don't know. I mean, here we are. It's October, this report came out early in the year. Um, in a way it feels like, you know, 2018 software. Um, but the bigger economy feels more like, you know, the.com bubble with all this money being poured into ai. So the tourists are gone, the builders are staying. I mean, this is something we've seen over and over again.

Karl Saw it in software. We've seen it in biotech. So that's kind of where I'm my head is at today. What do you think Iam?

Erum I think [00:09:00] that's great. Um, okay. Uh, so let's move on. Wonderful. Amazing. Okay, so the next report that we wanna dig into, and we had someone from Capgemini on Richard Tare, is that, say, say his name. Richard Richard Turn came on a podcast. You spoke to him. I spoke him a little bit until I had technical difficulties, but Capcha and I worked with the World Economic Forum and they wrote this paper about, um, I. The next generation bio innovation. So this report warns that biotech often leads with technology not value, which is something again, that we keep saying is that, let's talk about the end state, right? Technology's great, but people aren't buying technology. They're buying value, the buying a product. So, and they also, it also stated that successful products start with user needs.

Erum So what are the user needs? Taste, texture, cost, reliability. And then once you [00:10:00] understand that you can work backward and then align your technology with what, uh, functionality that or need the consumer's searching for or looking for, or maybe they don't even know and you're sharing some, a completely new experience with them, that completely changes their lives, right?

Erum This is the whole if people back in the day that when we were just riding in horse and buggies. If they were told what type of, um, advancement they needed for mobility, they would say faster horses, but they wouldn't have known to have actually have a car. Right? Same, same story. And so the examples that were discussed in this report were both threads and modern meadow.

Erum The, uh, the examples that were discussed in this report were bold threads and modern meadow struggling to compete with cheaper alternatives despite strong science. And those, both of those companies were heavily invested in, um, and tried [00:11:00] different types of products, targeted to different industries and, um, and, and they struggled, right?

Erum Um, they're both still around. They're finding their footing, hopefully. Um, and then. It also mentioned that, you know, consumer adoption is growing in beauty and food sectors that we know intimately. Um, and that's because performance and the story align and bio and things like bio derived collagen peptides, plant-based colorants are really capturing the minds and what consumers actually need.

Erum So what do you think about some of these? Points that were made in this report, and I know you had this conversation, um, more than I did with Richard Thoughts.

Karl Yeah, I mean, first I think it's worth even stepping back, uh, a little bit because this is the World Economic Forum and Capgemini report and Capgemini had put out this really [00:12:00] comprehensive, um, engineering biology report, which we cite regularly, and I think it's a very well done, very well research report that shows that so many people are looking for these BioSolutions.

Karl But as we say on the podcast, um, people aren't really looking for sustainability. If it doesn't smell good, tastes good, save you money, or have high performance, I think sustainability is becoming a very challenging sell. So, um, I think this report is really important for just kind of highlighting the fact that these companies that had so much invested into them, companies that focused on materials, but then have pivoted into personal care and beauty, they're still having a hard time.

Karl And, um, again, it goes back to that message of you can't sell sustainability.

Erum Yeah, and we know the big CPGs are now piloting bioidentical ingredients where consumers can't tell the difference. Right? It's just, you know, there's biotech vanilla and there's elastin peptides. They're not. People don't [00:13:00] know the technology behind it. They just know, Hey, taste like vanilla. Okay, these peptides are working and that's it.

Erum Right? They don't need to know the technology, they just need to know it works.

Karl Yeah. So which one bio-based product that actually outperforms. It that maybe came from, or fossil fuels.

Erum Now. This is a good one. Um. I'd say engineered peptides for hair care that deliver better results and consistency, that's what wins. I don't know if one exists. I mean, maybe we should create a company that has unique hair peptides. We'd call it K 19 hair. Um, okay. Let's go into the next report. Carl, I.

Karl All right, so this is First Bite. Um, by manufacturing report. You pointed out that this report had a really great, uh, title and, um, we had, uh, God, what is her name? And I wanna say an yeah. We had Veronica [00:14:00] Breckenridge from First Bite on the podcast a couple months ago, and, um, this report showed that 80% of failures.

Karl In biotech came from biofuels and platform chemicals. So low margin sectors that that cost a lot of money to to boot up. They have enormous capital costs and problems included, unrealistic cost models, scale up errors, and poor offtake planning. And I think what I would add here, well, I'll add it at the end.

Karl Um, and the examples that, um, are cited are Amris, Solazyme, me, metabolics. So these are kind of like first generation synthetic biology companies. They were all very strong in research and development, but they were stu sunk by scale economics. And I think the lessons need to be told over and over again because we see the same mistakes being made.

Karl And then survivors like Genomatica, they pivoted to licensing and partnerships instead of building plants alone. [00:15:00] Um, this really mirrors today's reality. Investors are really looking for stage capacity, shared infrastructure, and toll manufacturing. The one thing that I would say that is missing from this report, and I'm not faulting, uh uh, Veronica and her team is like, they don't really talk about this orchestration idea of how do you build out this ecosystem that needs to be built for these products and these companies to succeed.

Erum Do, do they not? I mean, I didn't read the whole report. Just making sure they don't Okay. Making sure

Karl Sure.

Erum Okay. Just, you should definitely double check 'cause you don't want them to hear that. And they said, yeah, we talked about on page 18, just make sure, but we'll double check. Okay, cool. Yeah, I mean, biotech didn't run outta science and ran outta cash flow.

Erum I mean, this is, there's a lot of infrastructure that can be reused. Um, there, you know, either, either creating a manufacturing company or you're creating a product company to be, to do both is extremely, extremely challenging and we don't need to. Right. What do you. [00:16:00] Where do you want the money to come from?

Erum Right? And, and being able to make that decision in a, you know, data forward way. You know, put your data hat on. Is it better to do this through B2B or to better to go direct to consumer? So if it's B2B, maybe it is manufacturing, if it's product, work with the manufacturing companies, which Gena did, and create the products that go directly to your customer.

Erum And, um, it's. An exciting model that, you know, I'm super curious about, you know, we've talked, talked about this internally, you can, I wouldn't say, okay, easy is, uh, not the word to use, but, you know,

Karl Relatively easy.

Erum easy compared to back in the day when you did just think, oh, I need to raise $500 million to create, create a pilot plant.

Erum To be able, you know, and it's like, okay, the math ain't math in, but somehow the vision [00:17:00] was what drove investors to put the money in. And then, you know, you start seeing those failures. But I do really appreciate the first bite team coming together, taking a hard look at the failures, taking the lessons learned, because I do believe.

Erum Failures are the key to success, right? Like, um, we had, uh, Glenys Mayor on, um, formerly of Bio Labs now at Memorial. So Kettering talk about wouldn't it be great to have a database of failure? So we just don't do it. We don't repeat failure. And so I really, really applaud the first Bite team for writing this report.

Erum Thank you so much for it. Um, and Carl, I'm gonna ask you, what's the smarter path to scale today?

Karl I say, you know, smart, start small. Build your ecosystem or infrastructure, and then sell big. Prove the economics before you start pouring concrete because you might not have to. You might not have to pour concrete. You know, there's a lot of infrastructure you can leverage and there's [00:18:00] a lot of new infrastructure that's being created today that you can take advantage of, which can keep your cos down.

Erum Amazing. Amazing. Okay, shall we dig into the next report? Alright.

Karl So, uh, what? You should do this one because I thought, yeah.

Erum the first one, right? Okay. All right, so the next report is the, let me just get this right. The Advanced Biotech for Sustainability report, so AB four s for short. And this report estimates that by 2040 advanced biotech could abate three to four gigatons of carbon dioxide.

Erum Repurpose two to 4 million kilometers of land and save 250 to 500 billion meters squared of water and build a trillion dollar market across fuels, food and materials. So that's really looking at some very high value [00:19:00] markets and going after some of those hard hitting, um, you know, uh. Climate concerns, or let's just say like the, you know, going after those fossil fuels, going after those things that have been causing, um, some of the, you know, causing the pollution and, uh, causing pollution.

Erum Let's just leave it at that. So biology could do, so biology could do for climate, what the internet did for communications, but we have to plug it in. Right. And in this report. Some examples I wanna mention are bio-based aviation fuels and compo and compostable plastics. Called out are called out as the top five opportunity areas, which I was like, what?

Erum Okay. Buy base fuels making a comeback. Don't call it a comeback, but it is a comeback. Let's see. I mean, I, you know, we looked at this report, we have questions because, you know, the thing is, um, these are reports [00:20:00] are written by people or if it's written by a AI too. We just wanna know where exactly these numbers are coming from.

Erum Who do they talk to very specifically? We need to dig in deeper. We just read these reports, but, okay, great. I love the fact that they are putting aviation fuels, right. Um. At the top there. And then they also mentioned food fermentation and enzyme based manufacturing among the fastest growing segments, which aligns with, um, the other ro aligns with the the AYA beta report.

Erum Which talked about how a lot of investment went to companies that were making chemicals and materials in agriculture, being one of them that uses bio catalysis and electrochemistry. So, um, we also looked to where there are, um, similarities amongst these reports. What trends we're seeing across them. And we love the fact that they're all pointing towards these advanced chemicals or using, you know, [00:21:00] cell-free as a way to make new types of chemicals.

Erum It's great. And so, um, you wanna add some color to this report? Carl, what do you think?

Karl I mean, have you noticed, um, when you purchase an airline ticket that it does give you a CO2 friendly option? Because I've just recently noticed. That. I don't know if that's something new, but, um, and I know that when we first looked at this report, you pointed out, oh, biobased Aviation fuels. Wow. Where'd that come from?

Karl I mean, you just mentioned that too, because we know about the kind of biofuels, uh, you know, disaster that really set up the, the synthetic biology industry. But, um, I think what's interesting about this report is it makes the case that climate, uh, corporate climate, climate rules. Despite this kind of push for deregulation and less regulation are still pushing buyers to seek out environmentally friendly materials and bio-based materials or [00:22:00] bio-based options are finally getting the attention they deserve because they actually do reduce carbon. Um, but the question is who gets paid to save the.

Erum Yeah. Yeah. And how much carbon emissions need to be removed. Right. Um, you know, one of the things that, you know, we do a lot of rah rah, rah by manufacturing. Um, but one thing we do wanna make clear, we're not saying petrochemicals are horrible, you know what I mean? Like, you do need some of 'em. It's just that the extreme dependency is a bit much, um, every, we need.

Erum Kind of all of it to work together. So, you know, we're fans of the petro chemistry, but just, and it got us to where we are today. Let's not forget that a lot of our, um, economic freedoms that we enjoy, uh, for more of the population came because we were able to have, you know, cheaper fuels, more products that are more affordable for people to have.

Erum Um, you know, respectable lifestyles, right? I mean, you know, so [00:23:00] it, it had its place, but we did a little too much. Now we gotta reel it back. We gotta readjust. We have to adjust. So, um, that's where we are. And, um, you know, who gets paid for saving the planet? The ones who link impact to profit. If it cuts emissions and cost, it wins.

Erum So, gotta do both, you know, we, we can have our cake and eat it too.

Karl Yeah. One, I just wanna mention a couple things about this report that I really appreciated. So we talked about, uh, one is that are predicting. Uh, you know, an abatement of three to four gigatons of C2 by 2040. We didn't really get into too much detail on that because it starts to get kind of murky, but it is important to note that that is one of the things that bio-based biotech solutions offer, this reduction in carbon emissions, even potentially pulling carbon out of the air.

Karl The reason we didn't go too deep in it, into it [00:24:00] and rim, you know, this way better than I do, is because the numbers start to get very murky, very fast. People are talking about scales that are, you know, 20, 30, 20, 40 different numbers. Giga, how many gigatons do we emit today? How many gigatons do we need to abate by 2040 by 2050?

Karl So we decided to not get into those details. The other thing that I appreciate about this report is it did talk about water, which I don't think it talk, it's talked about enough. Water is, you know, one of the new golds. Um, you know, when they talk about these big data centers that are being built for ai, one of the issues they talk about is how much water they require.

Karl And then finally, um, you know, then they talk about building a trillion dollar market. I felt like that number was very con conservative compared to other reports that we've read in the past. Um, and the numbers of the bioeconomy vary, but I will just say that one of the things that I've heard repeatedly is that in the United States, until the bioeconomy reaches a trillion dollars and we're not there yet, [00:25:00] no one's really gonna pay attention to it.

Karl We're very close to that. So those are all things that I really appreciate about this AB four s report and, um, let's talk about the next one.

Erum Yeah, let's talk about the next one. So you took a look at this one. We mentioned a little bit about, we had experts on this podcast. Talk about it. Go for it, Carl.

Karl Okay, so this is the, um, hold on. I wanna just get, I want to get it right because this is the National Security Commission on Emerging Biotechnology. And, um, this is, uh, kind of a bipartisan effort in the United States to look at. Different industries, but in this case it's about biotechnology. And this report warned that the US depends heavily on foreign suppliers For DNA synthesis, reagents, and biomanufacturing equipment, it recommended a $15 billion, five-year national plan for infrastructure, workforce, and secured data networks.

Karl This might be one of the few areas where both sides of the aisle in the United States [00:26:00] are agreeing. Um, and we've seen both, uh, you know, politicians from both, uh, the Democratic and and Republican party talk about the importance of, um, sustaining and maintaining global leadership in biotechnology. So if the last century was about oil and physics, this one's about DNA, and we can't afford to import it.

Karl It has to be a homegrown, um, a homegrown industry that we, we are leaders in. The examples that a report gives are about China's rapid investment in biomanufacturing zones. This is something we've talked about on the podcast, how the United Kingdom and the EU have launched, uh, extensive public private bio foundry programs and that the US really needs a clear.

Karl Definition of critical bio infrastructure. We talk a lot about biomanufacturing, but what in addition to that biomanufacturing is critical bio infrastructure. [00:27:00] So, um, you know, there was momentum around a US biochips act that momentum is growing with the idea of tying biological manufacturing to na, national resilience.

Erum Okay. Yeah, we'll you, the whole thing, I don't even know where. Okay. Um, it's okay. Yeah. You went through the whole thing. Um, you should also mention that the name of the report, I didn't have it in here, so I'm sorry, but just say it and we can put it up top.

Karl Uh, isn't it just the, yeah. Um, why don't we just do that one again so that we can like, go back and forth on it because I, I'm sorry.

Erum Okay.

Karl Um, okay, so the next report is.

Karl Hold on a second. It's the National Security Commission on Emerging Biotechnology report that is titled Charting the Future of Biotechnology. And this report warns that the United States is heavily dependent on foreign suppliers For DNA synthesis, [00:28:00] reagents, and biomanufacturing equipment, it recommends a $15 billion, five year national plan for infrastructure, workforce and security data networks.

Erum It sounded like you just read it, so I think just try again and just try to be natural about it. Yeah.

Karl Okay, so the next report, the National Security Commission on Emerging Biotechs report was charting the Future of Biotechnology. And this one, we've had a couple of people come on the podcast to talk about, talks about how the US is heavily dependent on DNA on foreign suppliers for DNA synthesis, reagents, and a lot of biomanufacturing equipment, which is surprising.

Karl It recommends a $15 billion, five year national plan for infrastructure, workforce, and secure data networks. Um, and it plays into this idea that if the last century was about computation and oil, this one's about AI and DNA, and we [00:29:00] can't afford to lose our leadership in this, in this industry.

Erum Well, we are already losing the leadership. If you ever, um, take a look at what's going on in China, there was all these, um, articles that came out recently about. China's not China's force in not only drug development, which is insane in terms of how they're leveraging ai. China's always been. Super fast at manufacturing and not only, again, not only for the biopharma side, but also for the bioindustrial side, making all the different ingredients and materials that we talk about.

Erum And, um, there was, um, someone who wrote on LinkedIn who is, um, uh, I think Chinese American who goes to China and participates in the conferences there and is just blown away and reports about what he's seeing at these. By manufacturing conferences and they're packed full of people in different companies there.

Erum And so we do need to gain this leadership, hence why this report is written. And I recommend [00:30:00] people going back and listening to the episode with Angela Belcher. Um, we talked about workforce, you know, gotta start younger. You gotta start younger with people. Understanding biology, bio literacy is a thing.

Erum We need everyone to learn about the opportunities. Um, and what. What can be made with biology and then they can, you know, use AI and other, everything else to help them get to the product, right? We talked about up top, what do consumers need? What do they want? What is gonna make a difference for them?

Erum Anyone can understand that, but then what tools are they going to use? Are they going to use traditional chemistry and or are they gonna use biochemistry? It all works depending on what you're trying to make, right? And, um, and so again, like this report does highlight China's rapid investment in bio manufacturing zones.

Erum They are pouring money into it. Carl, um, you know, you and I talked about their five year plan and they triple underscore biology and AI [00:31:00] as their, you know, beacons for development. Um, and then there were a couple other examples. Um, you wanna point, did you wanna point out.

Karl We've seen that the, both the United Kingdom and the EU have launched these public private Bio Foundry programs, and the US really needs to define what critical bio infrastructure is. Is it just biomanufacturing infrastructure? What else is it? Um, the.

Erum and like, and so, um, they've defined some of that in this report and, you know, like what is that infrastructure? Um. Not only by manufacturing, but the by by processing. Right? How do you process different natural resources, whether they are feedstocks to um, then feed the microbes that are making the molecules and fermentation?

Erum Um, or just other types of resources. Um, you know, specific plants. You know, there's, um, plant, um, [00:32:00] um, was it molecular manufacturing in plants? You know, being able to have plants make certain. Molecules. And so, you know, um, we can help them define it too. If they, you know, like let's you know next time they write a report, bring us in Roman Carl, grow everything.

Erum Podcast. We'll help 'em out.

Karl Um, why don't I ask the question, you know, so I, I don't, I'm not sure I like this question, but, you know, Iran, what do you think? One policy move that can help the Bioeconomy scale?

Erum Um, I would say you we're talking about the US government procurement by the bio-based materials. Don't just celebrate them. Don't just say, Hey, good job companies, you know, you guys are doing things over there, you go do it. No purchase it. Government buys so much products. I mean, I don't wanna sound, you know, dire, but for the military, for, you know, jails and prisons, which, that's a [00:33:00] completely different conversation and I'm, you know, all for reform when it comes to that.

Erum But government is a big buyer of products. Buy the materials from these companies. So let's, let's just do that policy. Stop. You know, whether, you know, love him or hate him, Trump's buying those maga hats from China. Why buy them from the, you know, there's all these manufacturers here. Like just, you know, let's, let's, let's just, you know what, what I wanna say, we wanna, we gotta take our own advice.

Erum Let's take our own advice and, and just do it. Right? Just buy, we have so many biomaterial companies here in Brooklyn alone. So, um, so yeah, that, that, that's what I would say.

Karl All right. Let's go into the next report. Iam, why don't you kick this one off?

Erum and so. This is the final report, um, one that kind of slipped through the cracks for me. But then, you know, when we were doing this, I was like, oh wait, there's another report. And this report is from Bio and Kearney. So a, it used to be called AT Kearney. [00:34:00] I had worked with them in the past. It's a consulting company and, um.

Erum They did this report and they looked at data from 2023 that the US buy economy generated 210 billion in direct GPT, uh, GPT in direct GDP and 830 billion, including indirect efforts and, and supported around 430,000 jobs. So that was a great year for, um. The buy economy, just in terms of growth and, uh, numbers.

Erum Um, and most of this has been, again, in industrial buy, manufacturing, agriculture and materials. So, you know, the buy economy isn't the future. It's the payroll. It's payroll today. It's actually, well, it is actual economy, right? And we always say that, you know, we, we talk about the bioeconomy, but when it's just the economy, it's not the bioeconomy, it's just the economy.

Erum Right? Um, what did you find in this report? What are some examples that you saw that were like, you wanted to highlight for our listeners?

Karl you [00:35:00] know this. Yeah. Sorry. So go ahead and say that again. I, I cut you off.

Erum and what did you wanna highlight for our listeners from this report?

Karl So this report was very practical, which is no surprise because Bio is the bio, uh, biotech industry organization, the big lobbying arm of the biotech industry. And so, you know, an example is something we talk a lot about on this podcast, this idea of using enzymes to replace harsh chemicals in detergents and food processing that, um, you know, I don't know the exact numbers, but it's huge win.

Karl For example, p and G's Tide used an en, started using an enzyme that allowed you to, uh, use cold water as opposed to hot. That was a huge plus for the environment, um, because most of the energy used when you do your laundry is hot water. Um, it also talked about bio-based packaging and textiles that are driving regional growth in the Midwest and in the South.

Karl So that I thought was also, you know, super positive. This report argues [00:36:00] for better measurement, uh, because contribution still hidden inside.

Erum So, yeah. Yeah, I, that's right. The, the hidden contribution of biology is something that. We, uh, learned intimately. Um, you know, we had, you know, been, we worked with p and g for a little bit. I dunno if you wanna say this, but we worked with a large, yeah. So we, we, we worked with CPG companies and they have been using biotech for many, many years, even from the beginning, whether they used waste products to make different, um, like soaps for example, or, um.

Erum Candles and you know, they, they used waste as a resource from the early days and then they have been silently using body manufacturing for unique ingredients for, you know, haircare products or, you know, skincare products or food and. It's just not being calculated in or recognized as much. So, um, I love the fact that, you know, [00:37:00] bio and Kearney pointed this out because, you know, you always hear, um, oh, you know, bio manufacturing can't scale 'cause it's gonna cost too much money.

Erum Well, it has and it will continue. And if the math doesn't work out, you need to go back to the drawing board and figure it out because there's something, there's one point in your math, there's, there is a variable. That you're not optimizing to be able to get the cost down correctly, and you need to figure that shit out.

Karl Whoa. I mean, what, what this also, yeah. What this report also reminds me is that there are different ways to measure the bioeconomy, and I'm pretty sure that anything you in the United States, we don't count agriculture. We don't count our natural resources. So like all of the, you know, Timberland. We don't count our fisheries And other companies that have done bio economy blueprints, they include those.

Karl They value their timber, they value their fisheries, they value their agriculture. So again, this call for better measurement I think [00:38:00] is a really good one. Um, and I think it just makes things more confusing for people. How big is the bioeconomy? Well, you said it before the bioeconomy is, um, you know, is the economy.

Karl And if it's already this big, why don't people realize it?

Erum Well, hopefully they're realizing it more 'cause they're listening to this podcast, but because biology hides in plain sight. your laundry. Oh wait. Um, oh. When people don't realize that because it's because biology hides in plain sight from your laundry to your snack bag, it's there. Just open your eyes and then see it as an example of progress.

Karl Okay, so as we wrap up this podcast episode on reports. Let's just talk about the bio economy split personality, the contradictions that we saw in, uh, in these reports, like the bigger theme, like this is our meta-analysis of these reports. Iam, what do you, what do you, what did you think?

Erum Yeah, I mean, of course, you know, for [00:39:00] us and for a lot of people in this. Industry or the sector. Um, there's a big, there's big vision. Then compare that with the small margins. You're talking about chemicals that are um, you know, cost, you know, less. How do you get it in? So everyone predicts this trillion dollar market, but most companies still fight for unit economics.

Erum So how do we, you know, square that circle? And I think that's something that, um, we need to bring someone on to talk about a bit more and how, you know, some of these companies accomplishment, like we need to get solid gen on. It'd be great to talk to them to see how. They continue to, you know, succeed. Um, and another one is, you know, this push and pull from global trade, which is how our economy has been working for many decades versus national security.

Erum And that is the talking point. That is what we're all looking at right now. So we wanna open innovation, we want. We want to open innovation, [00:40:00] yet we worry about buy supply chain dependence. So what does that, you know, look like? Um, how do, how do the people that are writing these reports, 'cause this is really about, you know, right now, you know, this is about how we're coming together to have a discourse, great intelligence across an industry and share it so.

Erum What makes sense, right. And of course we have thoughts about this that, you know, we would recommend, but um, we need to talk about it, right? I mean, global trade. Okay. Yeah. You know, there's, there are certain items that it, where it makes sense and there's other items where, you know, you could just keep it local and regional.

Erum Right. Um, so I think again, it's, um, it's a very nuanced thing. Um, what, what is the theme that, you know, you saw that that was, um, important.

Karl I'm gonna. Expand on the global trade versus national security theme a little bit because we talk a lot about distributed [00:41:00] biomanufacturing as a solution, and especially with the way the political climate is today. There is this kind of. Uh, turn towards isolating the US and there's these tariffs that had been, um, you know, implemented and so that, that feels like that should have more, that should create more opportunities for localized bio manufacturing and for producing more, uh, items here in North America.

Karl Particularly in the United States. And that speaks directly to national security as well. I feel like that we could do entire episodes on that. And like we said earlier, we did have both Titus and Angela Belcher to talk about the national, the National Commission on Emerging Biotech. Talk about that. The other thing, I

Erum I don't think they talked about localizing supply chains

Karl no, they didn't talk about localizing supply

Erum and also then it's like,

Karl national,

Erum what does that mean for global trade? Right? So you're just saying like, okay, so we produce and purchase locally, or do you produce things locally [00:42:00] and sell them internationally? So how does, what's the push and pull from global trade and national security when it comes to distributed manufacturing?

Karl Yeah, I mean, I think it's a really good question. I mean like the, it seems like this administration wants us to produce everything locally and export. But the reality is that we're, you know, we're, I'll say decades behind and it's not really fair. We're, let's just say we're a decade behind where China is, when we've

Erum are, we are decades behind. We are like five decades behind China. Are we talking about when did we out manufacture China? Probably in the six fifties or forties. Right. Like when, you know, like we've been buying from China since when I.

Karl Uh, so that's a, I think that's a, it's really been, um, not since the fifties like that, you know, it's really like in the, probably in the nineties that China really started building their, you know, manufacturing infrastructure and it really didn't take off until the early [00:43:00] two thousands. And for, unfortunately, it made it very easy for us to get very dependent on cheap manufacturing, and many American companies enabled that because they were looking for cheaper places to manufacture.

Karl And that is one of the challenges with bringing manufacturing back to the us. The US is a very expensive market, costs a lot of PE money to employ people. I think China's getting more expensive. It's really helped Southeast Asia grow because there are still places that it's cheap to manufacture and who knows what automation and robotization is gonna do to manufacturing.

Karl But this idea of localizing, especially essential things, I think speaks to national

Erum Yeah. And then the, then the question is what is essential? Right? Is it drugs? You know, I mean we had our, um, I can't remember her name. What's her name from um, uh, she makes active pharmaceutical ingredients with

Karl Um, Christina

Erum Yeah. We had Constru Mulky and her company. What's her

Karl is, uh.

Erum So, yeah, so [00:44:00] Chris, Christina.

Erum We had Christina Smoky of Anthea on who makes. Active pharmaceutical ingredients using biomanufacturing, which could happen anywhere. So, um, and those are essential, uh, to some people. Um, so yeah, the concept of essential, like what can we make this, I mean, food of course. Um, and then what kinds of food, right?

Erum Um. And that also plays like this final cross report theme is this, um, sustainability versus convenience. And this also goes, I mean, the reason why we buy so much from China is that it's cheap, it's easy. The, the supply chains are set up and it's easy to buy something for like a dollar versus $5 if it's, you know, similar, you know, just the only difference is the brand, you know?

Erum Um, so, you know, consumers do want eco-friendly. But they won't pay extra for it. This is something that we talked about. Edward Vic of Synonym, talked about that on, um, his episode, which is our number one episode right now. Um, that's the push and pull I.

Karl Yeah. And I mean the tension between, uh, you know, greener planet, more [00:45:00] sustainable ingredients and, and you know, technology and, you know, that shows up in every single report. It's like scaling biology means solving economics. It's not just ethics. It's not just sustainability. You've got solve the economics.

Erum Yep. So what's the most important story we're not telling about biology's role in the economy?

Karl It's not science fiction anymore. It's infrastructure and it's economics.

Erum Yes. Well, yeah. Yep, yep, yep. Excellent. Excellent. All right. So let's have some fun, Carl. You

Karl This was a very serious episode, by the way.

Erum Yeah. I mean we just, it's a report and reports. What do you expect? I mean, we try to throw some, you know, let, let's just, we'll loosen up right now, right? We're gonna do something we do with a lot of our guests, um, recently, and we have these quick fire questions.

Erum So, um, I'll ask, but we can both, I'll ask the first one. You asked the second one, but we can both.

Karl Wait. No. Let me ask the first one because you let me ask the

Erum so you'll ask, you know, okay. So you can ask the first one, but we'll both answer. Um, and we'll go, we'll go from [00:46:00] there. Five questions. Here we go.

Karl Okay. Iran, what's one buzzword from these reports that you wish you would ban would be banned forever?

Erum Yeah. From these reports and many other reports and blogs and, you know, Silicon Valley, the word is disruptive. Biology doesn't disrupt it, decomposes.

Karl Yeah, I a hundred percent agree, but I'd also, uh, ban platform because everything's a platform until it runs outta

Erum Okay. Can you say that again? It just went very quiet.

Karl yeah. Um, I would ban platform because everything's a platform until it runs outta cash.

Erum Mm-hmm. Mm-hmm. Okay. So if biology were a movie genre, what would it be? Sci-fi documentary or romcom.

Karl I would normally say sci-fi, but it is a romcom. The lab falls in love with the market, but they're from different worlds.

Erum Totally. She's a scientist. He's a supply chain manager. It'll never work until it scales.[00:47:00]

Karl I don't get how they met because that just is such a weird combo. Okay. Which come first, which comes first? A trillion dollar bioeconomy, or a billion bio-based products in homes.

Erum Billion bioproducts. People will have bio base everything before they realize it.

Karl Yeah. It's already, you know, bioeconomy is already in your laundry, it's in your Doritos. It just hasn't gotten the credit yet.

Erum Yep. Yep. So if micros, okay, next one is, if Micros could talk, what headline would they write about us? Let me write, let me say that one more time. If Micros could talk, what headline would they write about us?

Karl Uh, humans finally discovered they've been doing our work this whole time with the our being the microbes.

Erum that again?

Karl Uh, humans finally discover they've been doing microbes work this whole time.

Erum Or Earth's smallest employees? [00:48:00] Demand better pr. We got your microbes. We got you. We'll give you the best PR called Messaging Lab. Um,

Karl Okay. So when people look back, sorry.

Erum go ahead.

Karl So when people look back in 2050, what do you think they'll say? This era of biology got right.

Erum We stopped treating biology as magic and we started treating it like infrastructure.

Karl And that we finally learned to collaborate with microbes instead of trying to make them smart and instead of, instead of trying to outsmart them, lemme just say that again. And we finally learned to collaborate with microbes instead of trying to outsmart them.

Erum Yes. All right. Exactly. All right. That's a little fun that we had. Um, so. These reports prove that the Bioeconomy is already here. The next challenge is proving biology works. It's proving it pays. Oh, sorry. Can

Karl who

Erum I, can we can, let me just do that again. Sorry.

Karl Yeah, go ahead.

Erum These reports prove that the, these reports prove that Bioeconomy is already here.

Erum The next challenge [00:49:00] isn't proving biology works. It's proving it pays.

Karl Who are gonna be the ones who grow everything from our

Erum Awesome. Alright, that's a wrap.

Karl report.

Erum Mm-hmm. And then we'll do intro and outro next week later.

Karl Oh, that's awesome. Do we have a recording next week? Uh, we do. We have.