Biotechnology: Fueling Chile’s Competitiveness

Felipe Camposano, ASEMBIO; Massachusetts Governor Deval Patrick; Ambassador Felipe Bulnes; Arturo Yudelevich, GrupoBios; and Rodrigo Ballivián, AmCham


On June 12, AmCham joined the Chilean biotechnology association (ASEMBIO) and the Universidad Mayor in organizing a workshop for AmCham members titled ‘The Impact of Biotechnology on Business: Opportunities and Challenges’.

The idea was to demonstrate different experiences in which companies have used biotechnology as a business strategy to improve production efficiency and sustainability. The panel was composed of Francisco Lozano, marketing and innovation manager at Chilean wood products manufacturer Arauco, Enrique Guzmán, environmental manager of LAN Airlines, and Patricio Manqué, director of the Center for Genomics and Bioinformatics at Universidad Mayor.

Lozano said that Arauco has recognized that innovation is the key to integrating excellence in forestry products with the production of value-added goods. As a result, it has created a research and development program called InnovArauco. This program is designed to help the company maintain its competitiveness in the worldwide forestry industry despite rising freight costs.

He said the company realized the importance of innovation when it implemented a program last year that encouraged employees to come up with innovative projects in the business or social areas. These were presented to a panel of experts that chose the most innovative projects. Lozano said this experience was successful and that Arauco did not expect the number and quality of the projects presented. Now, the next goal for Arauco is to find a permanent way to systematize innovation within the company’s operations.

Similarly, LAN is also investing in biotechnology in order to achieve sustainability. In line with its goal to reach a balance between economic, social, and environmental excellence, LAN has focused on efficiency and sustainability.

“We use more efficient engines which have less of an environmental impact because they produce less noise and lower emissions. Our aircraft are more aerodynamic and lighter so our flights are more [fuel] efficient,” said Guzmán.

LAN aims to be the first airline in Latin America to use the Boeing 787 Dreamliner on commercial routes, which is significantly lighter than older models due to it being made out of carbon fiber instead of titanium. “This causes the plane to consume 25% less fuel,” said Guzmán. However, this is not enough for LAN, which aims to halve its carbon emissions by 2050. It is also looking into biofuels. Some of LAN’s commercial flights already use a 50/50 blend of biodiesel and jet fuel.

Biotechnology can also be used to improve production efficiency. Patricio Manqué discussed the importance of genetics in medicine and in a new scientific field called “synthetic biology”. Synthetic biologists aim to construct artificial living systems in order to perform tasks such as producing pharmaceuticals or energy.

“Synthetic biology brings together engineering and the life sciences in order to design and construct new biological parts, devices, and systems that do not currently exist in the natural world,” said Manqué.

The experiences of Arauco, LAN, and the Universidad Mayor show how Chilean companies are adapting to global competition by investing in biotechnology. Ten years ago, with the proliferation of free trade agreements, Chilean companies saw business opportunities in exporting their products worldwide to countries with low import tariffs. To take advantage of these new markets, the emphasis was on making production processes as efficient as possible without necessarily taking into account environmental sustainability. Now, the challenge of maintaining competitiveness is more difficult for three main reasons.

Firstly, many countries apart from Chile have signed free trade agreements that reduce import tariffs, so this is no longer a significant advantage. Secondly, these trade agreements include environmental commitments and stakeholders are demanding sustainability in production processes. Finally, consumer demands for goods and services have changed. In this context, biotechnology is a way for companies to make their operations sustainable while meeting the evolving demands of consumers.

Chile-Massachusetts partnership

A week after the workshop, AmCham led a Chilean delegation to the 2012 BIO International Convention that was held in Boston, Massachusetts, on June 18-21. This annual convention is the world’s most important biotechnology event, attracting industry leaders, high-level US government officials, and business representatives from more than 60 countries. The Chilean delegation included the Undersecretary of Economy, Tomás Flores, as well as firms from the pharmaceutical, technology, genetics, and agribusiness fields.

During the event, AmCham’s executive director, Rodrigo Ballivián, met with Massachusetts Governor Deval Patrick and Chile’s Ambassador to the United States, Felipe Bulnes, to discuss progress in implementing the Chile-Massachusetts agreement. Chile’s participation in the conference shows how cooperation with Massachusetts is alive and well, especially when it comes to biotechnology.

The president of ASEMBIO, Felipe Camposano, who joined the Chilean delegation, said “AmCham has the necessary resources and abilities to be the private sector’s voice in the Chile-Massachusetts agreement, and ASEMBIO aims to support AmCham in the areas of biotechnology and energy.”

Much of the investment in biotechnology in the United States is concentrated in the states of Massachusetts and California, which are also home to many of the world’s top research universities. In fact, in parallel to the conference, Undersecretary Flores signed an MOU with Harvard University’s David Rockefeller Center for Latin American Studies to carry out joint research projects and facilitate exchanges with Chilean universities.

Chile’s investment in R&D – around 0.4% of GDP – is still much less than in the United States, especially considering that only about a third comes from the private sector. Chile’s agribusiness strategy is to become a “food and forestry power” – the goal is to become one of the world’s top ten food exporters by 2020 – but for this to happen agribusiness firms need to invest in biotechnology to produce products with the characteristics demanded by consumers. One example is the research being done by the University of Chile to breed sweeter Fuji apples for export markets.

In brief, AmCham’s commitment to support biotechnology R&D in the private sector by building on the Chile-Massachusetts agreement demonstrates its vision to help Chilean businesses achieve global competitiveness and sustainability.

María Pía Aqueveque is head of AmCham’s Market Intelligence & Research Department