Challenges for the Future Bio-Economy

Challenges for the Future Bio-EconomyResults of an international web-survey15.09.2011 Sitra, Landmarks Programme

Motivation for the survey
Bio-economy is here to stay
But what is bio-economy today and in the future?
In the lack of a joint strategies and in the midst of varying opinions on bioeconomy,
the survey aimed at answering he following questions:
Is bio-economy more than biomass-based production or biotechnologies? Can it also be seen as a wider societal issue, which affects all of us ?
What are the most important challenges to establish the future bio-based economy in businesses and in society in general? And what are the solutions?
How do individuals from different sectors see bio-based economy and its challenges (ie. farmers-forest-bioenergy-biobusiness. biotech)
The international web survey was conducted to support of the preparations and designing of resolutions for the international Koli Forum on “Resources for smart, sustainable and inclusive growth” held in Finland 14-1.9.2011.
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1. How?Data collection and respondents
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Introduction
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Data collectionmethod
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June-August 2011:
Invitationsby e-mail to variousstakeholders, such as industryassociations, Sitra mailinglists, EU institutions, Koli Forum mailinglists, etc.
Resultssummary
Question: ”Whatare the challenges for the future
bio-economy?”
Evaluation of importance of others’ responses
Elaboration: Whyarethese the mostimportant for you?

Participation and respondentbackgrounds(n=173)
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2. Results for the whole dataThemesarrangedbyimportance and degree of agreement on the importance
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Topicsexamined
Biomass
Water
Nutrients
Supply
Business
Products
R&T&I
Economictools
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Energy& Climate
Environment
Materialflow
Global
Local
Norms
Communication
Societalsystem

How the resultsarepresented
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INTERPRETATION RULES
Size
= Number of suggestions
Location
= Importance
= Level of agreement
Note:
Locationrefers to relative, notabsoluteimportance and agreement
- Importance +
- Disagreement +

Framework for Interpretation of Impulses
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10
AGREEMENT
DISAGREEMENT
CHALLENGE
CLEAR
=> FindingSolution
CONFLICT OVER THE CHALLENGE
=> FindingAgreement
IMPORTANT
NOT ON AGENDA
=> Consciouslyornot
POTENTIAL
WEAK SIGNALS
=> Openeyedevaluation
NOT
IMPORTANT

Bio-economy as a business sector
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11
Business view - mostcommonview to bio-economy
Importantbutnot the mostimportantaspect
Strongfocus on biomassbasedproduction; yetdisagreement on supply of rawmaterials
Materialproducts and energyequallyimportant; yettensionrelated to energyuse
Highagreement on the need of inputs in R&T&I and economictools
Disagreement onnormcontrol
Common ground on importantissues
Importantbutconflictuousissues
- Importance +
R&T&I
Economic
tools
Business
Supply
Pro-duct
Norms
Bio-mass
s
Climate
& energy
Not on agenda
Lowinterestbutdeviatingviews
- Disagreement +

Bio-economy as a societalstrategy
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12
Mostoften, bio-economy is viewed as a strategyrelated to energy & climatechange
Maintaining a sustainablenutrient and watercycleis evaluated as the farmostimportantchallenge for futurebio-economy
Biomass is rural, butruralaspects and localmaterialflowsarenot on agenda
Communicationchallenges
Nutrient
Water
- Importance +
Communication
Materialflow
Climate
& energy
Local
Environment
Not on agenda
- Disagreement +

Bio-economy as an economic and social system
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13
The importance of bio-economy as a societalstrategy is recognisedbyfew
Highimportance & conflictuousviews
Major issuerelated to spatialscale of bio-economy(global+local)
Howarematerialcyclesorganizedbetween
Global and local
Nutrients & water
Global
- Importance +
Societalsystem
s
Materialflow
Local
Not on agenda
- Disagreement +

Nutrient(Examples of respondents’ answers)
Biomassproduction and usage is both an opportunity and a threat to the nutrientcycle; reaching a balance is necessary.
Renewability of the resources and nutrients is onlyone side of the story; production of nutrients and the necessaryenergyhave a largeimpact of theirown. Renewablesdemand a lot of finites (water, fertilizer, land) in theirproduction.
The wholeproductionchainhas to understand and show commitment to the bioeconomicalapproach, and beaware of unintendedconsequences. Profitabilitymustnotbeneglected.
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Water(Examples of respondents’ answers)
Waterleads the choices of sustainableproduction in everyarea; for examplegrowingwater-demanding food in water-richareas.
Waterscarcity and itsunevenglobaldistribution is one of the main challenges.
Closedcircuitor the minimization of the use of nutrients, waterorenergy? There is somedisagreementbetweenparticipantsconcerning the priorities.
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Business (Examples of respondents’ answers)
Business shifts the globalbalance of bio-economy as the speed of implementation and technologytransferdiffers.
Favorable business environment is one of the keyissuesaffectingchange in the industrialstructure.
Long-terminvestment for development and production is alsoseen as a challenge for the bio-economy.
SME enterprisesalsofacechallenges in economies of scalewhenlaunching new sustainableproductionmethods.
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Product(Examples of respondents’ answers)
Food production is the mostsignificantarea of innovation for the futurebio-economy.
Various new researchprogrammes and grantsareneeded for moretargetedresearch and innovation.
In today’satmosphere products stillneed to carry the associatedenvironmentalcosts in order for greensolutions to beable to compete.
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Climate & Energy (Examples of respondents’ answers)
The competition for resourcesbetween food and energyproductionwillbestrong in the future. The landareaneeded for bioenergyproduction is a keyquestion.
Manyseethat the currentprices of fossilfuelsdonotreflect the externalcosts of theirproduction and use. Pricematters a lot in the competition. Use of landorsea for biofuels?
Overallenergyconsumption is expected to rise, whichwillalsoeventuallyhave an effect on the feasibilitythreshold of differentenergy products.
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Biomass(Examples of respondents’ answers)
The oftenlowrefininggrade of biomass is problematic;If we produce biomass while resources are already scarce, we have to have the most effective processes possible in use. We especially need processes that also work in areas where biomass growth is rather low to actually skip inefficient use of resources.
Biomass is readily available in tropical areas. The technology for converting biomass into energy is lacking in most tropical countries. The balance of technological, economic and social development is also dependent on investments in new technology.
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R & T & I (Examples of respondents’ answers)
Research and innovationarevital for technologicaldevelopment to secure the effectivebio-economy.
Sufficientresearchprogramsdemand international coordination and networks.
By nature, bio-economy’sresearch and implementationchallengesarecomplex and requiremultidisciplinaryapproaches.
In most parts of the world, scientific research is not well applied. It is a matter of education, which makes it hard in most regions of the world.
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Societalsystem(Examples of respondents’ answers)
Solutions in the bio-economy should aim in sustainability in which economical, ecological and social factors are all working together and making the sustainable solution possible. How can the companies and societies in the bio-economy sectors work together so that the result is beneficial for both of them and better than what they would have reached alone?
Bio-economy requires new technical and social processes, which require both money and time to be established. It is so much easier and often cheaper to rely on the old non-renewable and fossil methods.
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Environment (Examples of respondents’ answers)
Environmental cost accounting and costing principles are one of the main topics throughout the discussion.
To thoroughly understand the environmental impacts of choices is a controversial tropic. Several policies and practices, although originally well-intended, may end up wasting more resources than foreseen in the beginning.
Governments should address the interdependency between economic and environmental systems.
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Norms(Examples of respondents’ answers)
The role of governments is seen to be facilitating the change towards the bio-economy by implementing regulations and norms that support the bio-economy activities.
Regulations have a big impact on the financial outcomes, access to markets of different operators and competition.
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Supply(Examples of respondents’ answers)
Availability of biomass for the bio-economy in sufficientquantities and at a tolerableprice for scaled-upproduction is doubted.
Promising new supplies in by-products and wastematerials.
There is a high agreement on the view that sustainable food production should be secured in every area. Securing the food production serves people in the area - without food production it may be impossible to live in such areas in the future, especially during possible times of crisis.
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Communication(Examples of respondents’ answers)
Public attitude is a majorchallenge for futurebio-economy. Education and communicationmayshiftattitudes, butittakestime. It is unclearwhether the publictakesitsleadfrompolicymakers, or the otherwayaround.
People'smindsetneeds to changedramatically in order to giveroom to the success of bio-economy. Trueactions and truethinkingareneeded. In surveys, peoplearegreenbecausetheyaspire to begreen. However, theirconsumptiondecisionsareoftenanythingbutthat.
Ultimately, the publicshouldbeconvincedthat the shift is worth it.
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Economictools(Examples of respondents’ answers)
Long-terminvestment is one of the majorchallenges. The problem is thatinvestorswantrapidreturns. Therefore, investment for development and production of primary products needmuchsupportfrom national and international levels.
Alltoooften is bio-economyseen as an action with no soundeconomicbasis.
The role of governments is to facilitate the changetowards the bio-economybyimplementingregulations and normsthatsupportbio-economyactivities.
Privateinvestors and innovatorsareneeded, buttheyrequirestablepolicies and regulatoryframeworks.
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Materialflow(Examples of respondents’ answers)
A life-cycleapproach in usingmaterials is important for the bio-economy.
One process’swasteshouldbeanother’s input.
Shouldbio-economybe a ”growth” or a ”de-growth” economy?
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Global(Examples of respondents’ answers)
Is itevenpossible to balance the manydifferinginterests of developed, emerging and developingeconomies?
Mechanisms of globalcoordination and cooperationarecalled for, butnotspecified.
What is the way to findglobally and locallysatisfactorysolutions? Globalsolutionstend to favorlargecorporationswhohaveoverwhelmingresources and economies of scale.
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Local(Examples of respondents’ answers)
Localchallengesareinexorablyintertwined with the globalones.
Resources, capital and knowledgeareunevenlydistributed, evenwhen the supply is adequate on the globallevel.
Production of food withoutincreasingpollution and with the controlling of carbondioxideemissions, in a wayalsoeconomicallysensible for the producer, needs a lot of development.
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3. Examples of individualsuggestions
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HIGH RELEVANCE, LOW DEVIATION
Bio-economyrequires new technical and social processes
It is a majorchallenge to change the attitudes and short-termthinking in the politicalarenas – peoples’ mindsetsneed to changedramatically
Social rejection and ignorance – ifpeopledonotunderstandit, theywillnotacceptit
It is a challenge to change the existingeconomicpoint of view of people (i.e. changing the motivationfactors of buying, fromlowprices to howitwasproduced)
The societymustunderstand the importance of cascadeuse
Resourcelimits – methods for defining the optimaluse of bio-resourcesareneeded
The expectedgrowth of general energy and resourcedemandwillbringtremendouspressure to, alreadyscarce, land, water and fertilizers
Securing the supply of naturalresources is a challenge to meet out currentlifestyles and the increasinguse of them
The governmentshouldsave the renewableresourcesfromprivatizationsothattheyare in the reach of everyone
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HIGH RELEVANCE, LOW DEVIATION (contin.)
Cooperation is neededthroughout the chain to makebio-economyprofitable
The public and privatesectorhave to puttheirgreedaside and worktogether
Private: venture capital; public: incentiveframework
Politiciansarenotable to make the unpopularcostlydecisions
Trainingpeople for the ruralbio-economy in the urbansociety
The basicneeds of developingcountries’ peoplehave to befulfilledbeforetalkingaboutbio-economy to them and usingtheirresources
Food productionhas to besecuredeverywhere, meeting the existinglocalneeds
The scientists and industryshoulddevelopsolutionseffectiveboth in the bio-economy and the privateeconomy
Climatechange is the biggestchallenge in the circumstances of growingneeds of food and energy
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HIGH RELEVANCE, HIGH DEVIATION
Pricing. Oil is stillcheapcompared to bioenergy.
New pricingmechanismsareneeded – what is the cost of renewableresourcesagainstconventionalnon-renewables
It is a requirement for the bio-basedproducts to becost-effective, theyshouldnotexceed the price of non-bio-basedproducts
How to matureeverything ”bio” with the cheapfossilscompeting
New processtechnologiesareneeded for finding new business models
It is important to balance the sustainableuse of resourceswith the increasingneeds of people
With the existinglaws, the demand for bio-energywillincrease
Landavailability is a globalchallenge for the future – sustainability of biomass for bioproductswillfacemajorchallenges outside Europe
Climatechangewillbringradicalchanges in weather and crops
The attitude of the oldcore of economics – earlierGreenwashharms a lot of rethinking. The EU and itsenterprisesneed to adapt the pioneer’srole in developing and building new bio-economy
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LOW RELEVANCE, HIGH DEVIATION
A multidiciplineryapproach is needed in bio-economysolutions – cooperationbetweeneveryone in differentsectors, companies and researchfields
The challenges and opportunitiesareendless. Withorwithoutbio-economy, wearedrivenevenfurther to innovate in order to maintain the properfunctioning of a globaleconomy of sevenbillionpeople and growing.
International relations of producing and consumingcountrieswillrise on the agenda
Wehave to focusdegreeprograms on bio-economy
Sectorsarealreadycompeting for the utilization of bio-resources – Howshould the sustainabilitybeensuredwhenthedemand is growingfast
Weneed to investmore in creativeideas (i.e. products) in creating a new bio-economybeyondenergy
In Finland, wedon’tneededucation in bioenergy, lots of youngbio-engineersarewithoutjobs.
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LOW RELEVANCE, HIGH DEVIATION (contin.)
Combiningsustainablitywithgrowth – bio-ecomomyshallprovide a model of continuousdevelopmenttowards the limits of the self-restoringcapacity of nature
Difficulties and fears of thinkingdifferently, it is easy to do ”business as usual”
Producingcountrieswillbedifferentcomparedwith the fossilera
Bioenergy is temporary. Itwillbereplacedbygeoenergy and wirelesstransfer
The safety of biomass for certainapplicationshas to beensured (i.e food)
LOW RELEVANCE, LOW DEVIATION
Small scale is notappreciated – only big enterpriseshavepower in economicpolicy
Differingculturalphilosophies of variousgroups (i.e. nimbyvspimby)
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Examples of individualsuggestions: HIGH RELEVANCE, LOW DEVIATIONHighlevel of agreement => Search for solutions
”Societymustunderstand”
People’smindsetneeds to changedramatically; ourways of working, thinking and consumingneed to becompletelyrenewed
Politicianswhothinkthatnextyearsarenotimportant and arenotable to make the unpopularcostlydecisions
”Totally new structuresareneeded”
Bio-economyrequiresnotonly new technology, butnew social processes and infrastructure
”Wearenotalone”
Cooperation and common language and is neededbetweendifferentbioeconomysectors, and betweenpublic and privateactors.
The option of bio-economyhas to beofferedalso for developingnations
”Bio-economy is aboutland, sun, water and nutrients”
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Examples of individualsuggestions: IMPORTANT BUT CONFLICTING VIEWSHighlytensiousissues => Find common ground
”Bio-businessesstrugglewithcompetitiveness”
Althoughincreasingdemand, bio-businessesarestrugglingwithcheapoil, costeffectiveness, landavailability, and problemsrelated to new technologies and innovation
”Bio-businessesare the key”
Bio-economy is needed to combatclimatechange
The attitude of the oldcore of economics
”Sustainable management and optimization of resources is the key?”
Willtherebeenoughresources for the bio-economy?
Landstruggles and climatechangewillaffectourresourcebase
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Examples of individualsuggestions: LOW RELEVANCE, HIGH DEVIATIONPotentialweaksignals => considerwithopeneyes
Bio-energy is temporary. Itwillbereplacedbygeo-energy and wirelesstransfer
International relations of producing and consumingcountrieswillrise on agenda
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Examples of individualsuggestions: LOW RELEVANCE, LOW DEVIATION
Not on agenda =>Shouditbe?
Small-scale is notappreciated – only big enterpriseshavepower in economicpolicy

4. Themesbyparticipantbackground
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Number of responsesbybackground

Themefrequencybyrespondentbackground: Country

Themefrequencybyrespondentbackground: Sector 1/2

Themefrequencybyrespondentbackground: Sector 2/2

Themefrequencybyrespondentbackground: Affiliation

Whatthemesdifferentsectorsmentionmore/lessoftenthanothers?
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Environment
+ Water
+ Environment
+ Climate & Energy
- Societalsystem
- Economictools
Agriculture
+ Materialflow
+ Normcontrol
+Economictools
+ Societalsystem
Business
Biomass
Environment
Climate&Energy
Communication
Bioenergy
+ Climate&Energy
+ R&T&I
Environment
Forest
+ Environment
+Societalsystem
+ Communication
Materialflow
Local
- Nutrients
Water
Climate&Energy
Normcontrol
Product
- R&T&I

Strongsectoraldifferences in thinkingaboutmajorchallenges of futurebio-economy
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5. Summary of the results
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Interpretation of the web-surveyresults
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AGREEMENT
DISAGREEMENT
Conflicts to beresolved:
Bioeconomy in society:
Bioeconomy & Sustainability (Ecosystems and climatechange)
Bioeconomy as business:
Biobusinessstrugglewithcompetitiveness
Biobusinessesare the key
Willtherebeenoughresources?
Energy vsmaterialproduction
Solutions to besought:
Bioeconomy in society:
Bioeconomy is aboutland, sun, water and nutrients – food and energyare the keys
Societymustunderstand; totally new structuresareneeded
Wearenotalone, solutions for developingcoutriesareneeded, too
Bioeconomy as business:
Need for economictools and R&T&I
IMPORTANT
Potentialweaksignals:
Bioenergy is temporary
International relationswillrise in agenda
Safety of bioproducts, e.g. food
Modelsrelated to the self-restoringcapacity of nature
Ignoredaspects:
Localproduction and small-scalebiobusinesses
Biowaste and materialflows
Culturaldifferencesbetweensectors
NOT
IMPORTANT

Main findings of the websurvey
WHEN ASKED (first thought):
Competitiveness of bio-businesses as a whole (access to biomass + use of biotech)
Enabling environment needed (policy frame, regulation, financing, incentives)
Internal competition between different bio-businesses over infinite resources (e.g. material vs energy)
WHEN EVALUATING OTHER’s SUGGESTIONS (giving it some thought):
Bioeconomy is essentially about nutrients, water, land, … NOT biomass !
Strong call for paradigm shift in thinking related to natural resources and well-being
New societal structures are needed to secure food and energy for the growing population in conditions of resource limits
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WHEN LOOKING OUT OF THE BOX:
Bioenergy is onlytemporary
International relationswillrise on the agenda
Safety of bioproducts, e.g. food
HARDLY EVER REMEMBERED:
Business potentials / societalimportance of materialflows and ecosystemservices
Potentials of localproduction and materialcycles

http://www.slideshare.net/Maamerkit/bioeconomy-challengesMore information :Eeva Hellström, Sitra, eeva.hellstrom@sitra.fiEero Kokkonen, Sitra, eero.kokkonen@sitra.fi
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Challenges for the Future Bio-Economy

by Sitra Maamerkit on Sep 12, 2011

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Challenges for the Future Bio-Economy — Presentation Transcript