Governments Become Biocapitalists.

More public resources are directed toward boosting biotech firms.

An increasing number of federal, state, and local governments around the world are betting that the biotech industry will boost tax revenue, provide jobs, and otherwise create a better future for their constituents. These

For example, the state of North Carolina recently joined a growing number of states, such as Massachusetts, California, and Texas, that provide seed capital to attract biotech ventures. The North Carolina state legislature appropriated $10 million to create the North Carolina Bioscience Investment Fund, and the fund's managers have raised an additional $25 million from private investors.

New Jersey recently enacted a package of bills offering low-interest loans, tax credits, and research facilities to prospective biotech firms looking for a home. Even individual U.S. cities such as Nashville and San Diego have implemented biotech-promotion programs.

Governments in the United States aren't the only ones supporting biotech. In Germany, the state of Bavaria sold one of its publicly owned utilities and invested the money (DM 2 billion, or $1.1 billion) in numerous technology projects, including many biotech projects.

"Biotechnology, and the creation of other high-tech enterprises in Germany, has flourished as access to venture capital, the availability of government subsidies, and a more entrepreneurial attitude have emerged," writes Oliver.

In China, the Shanghai City Council formed a partnership with two Dutch biotech companies in order to produce better tomatoes. "Chinese and other Asian governments have often directly invested in technology enterprises, and biotech is no exception," says Oliver.

In early 1999, the government of Iceland decided to support the "bioprospecting" company deCode Genetics by awarding them a large contract. The company is analyzing Icelanders' DNA for clues about the genetic component of diseases such as diabetes and schizophrenia. Iceland is an ideal genetic population to study because it is small and relatively isolated.

The federal governments of many large, wealthy countries such as the United Kingdom and the United States have been big biocapitalists for years, Oliver says. The U.S. government has substantial investments in biotech through its Human Genome Project and its support of research projects. That well-established trend is likely to continue, but "the U.S. government's participation in the biotech sector grows more complicated daily," Oliver cautions.

The U.S. and other governments are striving to balance their desire to support and profit from the biotech industry with their responsibility to regulate it in order to protect the interests and rights of citizens, Oliver explains.