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Think tank: Chips Act is great, but US should look at biotech supply chain too

The White House and DoD move to bolster domestic biomanufacturing

When the White House rolled out its 64-page plan outlining the goals for ramping up the country's biotech and biomanufacturing industry in early March, included were sections by such departments as Agriculture, Commerce, and Health and Human Services.

There was nothing from the Department of Defense (DoD), but that doesn't mean the Pentagon doesn't understand how a stronger national biomanufacturing industry could bolster national security.

Two days after President Biden announced his Executive Order in September 2022 for a "whole of government approach" to homegrown innovation in the space to address everything from healthcare and climate change to supply chain resilience, energy, and economic and national security, the DoD confirmed plans to spend $1.2 billion over five years to establish a domestic biomanufacturing industrial base, develop biosecurity and cybersecurity-related initiatives for the facilities, and improve supply chain resiliency.

"The department recognizes biotechnology as a Critical Technology Area that will change the way the DoD develops new capabilities, conducts missions, and adapts to major global changes," Heidi Shyu, under secretary of defense for research and engineering, said at the time. "This Executive Order will advance and synchronize our efforts – across the DoD and across the federal government – to strategically leverage biotechnology so that our nation maintains its economic, military, and technological advantage."

Biotech market is skyrocketing

Biotechnology is about leveraging biological mechanisms to create products. The market is booming – expected to grow from $372.8 billion in 2021 to more than $1.3 trillion by 2030 – and vast, touching on everything from food and medicine to fuels, chemicals, and construction materials. Advances in many of these will have a positive impact on the national defense apparatus. Better nutrition and medical care will make for better soldiers and sailors, for example.

But biotechnology and the biomanufacturing that support it will spread its tentacles into myriad areas of the military.

"The same applications that can support the rapidly emerging bioeconomy can have significant benefits for national security," Timothy Marler and Daniel Gerstein, researchers with the RAND Corporation, write in an October 2022 report. "Using engineered biomaterials can provide capabilities for rapidly preparing cantonment areas, building structures, and monitoring the environment. Defensive capabilities and the ability to sense attacks could be a priority in addressing these concerns."

DoD and its biomanufacturing strategy

Weeks after the White House released its "Bold Goals for U.S. Biotechnology and Biomanufacturing" plan last month, the DoD rolled out its own strategy [PDF] for a self-sustaining domestic biomanufacturing industry, a wide-ranging 10-page document that comes with three primary goals: finding transition partners for early-stage innovations, expand manufacturing in the US and with allies, and use metrics to track the evolution of the relatively new space.

"If resources are strategically placed, biotechnology can support the U.S. military and militaries of our allies and partners," the document reads. "The strategy … builds on initial investments in biomanufacturing to accelerate its maturation and use."

The argument by the DoD for the need for a stronger domestic biomanufacturing ecosystem dovetails with the White House's stance. To keep the worldwide edge in biotechnology, the US needs to be able to innovate and build within its borders. A significant investment is necessary at a time when competitors like China accelerate their own efforts in the rapidly expanding global biotech field.

"Currently, strategic competitors are investing in flexible 'multi-product and multi-organism' biomanufacturing facilities that enable the production of different products at a single facility in response to product demand," the DoD strategy report reads. "As a result, many U.S. companies go to the European Union for their biomanufacturing needs, and it is only a matter of time before US companies also go to China for their biomanufacturing needs."

Avoiding the semiconductor trap

It points to the semiconductor industry as a cautionary tale, with the US losing high-end manufacturing to countries like Taiwan. When the COVID-19 pandemic hit, the supply chain problems linked to relying on other countries to manufacture such an essential product came into full view. Now the government is spending billions with the CHIPS Act and working with Intel and others to bring more chipmaking facilities to the US.

The government must invest in biomanufacturing at home, the DoD argues, and the Pentagon has a large stake in this, given the defense capabilities that could arise from mitigating supply chain weaknesses, addressing logistics hurdles via point-of-need manufacturing, and bringing materials with unique characteristics to military forces.

"Biologically derived products, such as the chemicals in paints, are already a part of the DoD supply chain and are poised to continue to increase in significance going forward," the Pentagon writes. "As a result, DoD cannot wait until there is a supply chain crisis in any critical biomanufactured component to reveal the Department's already growing dependence on biomanufacturing in adversary nations."

Biotech and the military

The benefits of biotech are far-reaching, according to the Rand report. It points to ways it can enhance performance of military personnel, including the digestive and mental health improvements with balancing the human microbiome, the collection of microbes like fungi, bacteria, and viruses that live in the human body.

It "will also include enhanced abilities to sense the environment. Furthermore, advanced neural interfaces are being developed that will improve cognition and decision-making skills," according to the DoD.

The industrial applications are just as important as personal ones.

"Biomaterials could be used to develop new reagents for next-generation explosives, harvest rare earth materials, enhance armor protection (including protection for the individual soldier), biobased construction for airfields, and develop specialized bio resins and polymers that offer increased performance in various applications," Rand's Marler and Gerstein write. "As the field of biotechnology continues to expand, still more useful applications are likely to surface."

They also warn that "biotechnology is inherently dual-use" – it can improve aspects of modern life, but can also be used by rogue agents or nation states to build biological weapons or create lethal pathogens. It's among a number of reasons why the US government needs to increase its focus on and invest in biotech and biomanufacturing, they say.

Keeping an eye on China

Another is the growing competition with China, which is expected to increase spending on biotech 7 percent a year through 2025. Marler and Gerstein also wrote of efforts by China to weaponize biological data and to build facilities in the US and other allied countries, enabling it to collect information about US technologies with little scrutiny.

They also note that the pandemic showed the US it not prepared to respond to a significant biological incident, a weakness that can roll over into the military. The Rand researchers point to the outbreak of COVID-19 in March 2020 on the Theodore Roosevelt aircraft carrier, which "highlighted the challenges of maintaining force health protection and mission readiness in the face of a large-scale biological incident."

The US government's initial Executive Order and strategy are a good start, but they need to touch on other steps such as balancing centralized coordination with the government's decentralized needs and work closely with the private sector and academic institutions.

"As [the biotech field] continues to mature, proactive policy becomes necessary for the federal government to leverage emerging capabilities effectively and remain competitive," Marler and Gerstein write. "Consistent communication, coordination, and collaboration may help retain this competitiveness and support today's warfighter most effectively." ®

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