>>> 15 Nov 1998 08:52:50
Subject: industry's driving forces
From:   Anatole Klyosov <aklyosov@WARREN.MED.HARVARD.EDU>

Horst Doelle (Australia) wrote:
>QUESTION:  What do you have to do to convince industry about
>a new technology, if higher conversion efficiency and better
>feed is not attractive?

ANSWER:    Do not show them higher conversion efficiency and/or better feed. Wrong criteria. Show them the money.

For about twenty years I have followed - mainly as an academic observer - multiple attempts to industrialize bioconversion of cellulosic materials to sugar and alcohol. Some observations had been summed up in an overview (which I wrote as UNIDO consultant a while ago) "Enzymatic Conversion of Cellulosic Materials to Sugars and Alcohol: The Technology and Its Implications" (UNIDO, 1984). Several years ago I have moved to an industrial world (still remaining with academia), and currently run R&D at a public company in the Boston area. Now I can see better the other side of the coin, namely, why on Earth the industry does not grab that wonderful process of making ethanol from cellulosics we are all talking about (and some of us have tested it more or less thoroughly) for such a long time?

There are many reasons why.  The main one - a corporation got to be insane to invest about 20 million dollars or so into a new process that produces a well-known commodity, plentiful on the market, and easily available for relatively little money by well-established and proven industrial means.  Moreover, the manufacturing cost of that "new"/known product is in the same ballpark as the good "old" one.  It could be little less expensive (an optimistic scenario), but it might be little (or much) more expensive. Even IF the new product is little less expensive than the currently available one, how many years would it take to recover the above-mentioned 20 million dollars? Plus an interest for that amount of money invested otherwise?

There is NO DRIVER - currently - for an industrialist to invest into that new technology.  At least nowadays. Otherwise, our company (among many others) would be more than happy to jump into it.  A sharply increased demand for ethanol, new legislation (along with effective ways to enforce it), subsidies, profit, and many other drivers, singly or combined, can be mentioned.

On the other hand, complaints regarding those "heartless" corporations which are "slow", "lack a sense of innovation", "ignorant", etc. would not work.  The principal goal of any corporation is to make money, do we like this goal or not, and this is the most powerful driver in the industry. Including biofuel-producing industry.

Of course, it does not mean that one should cease research into bioconversion of biomass into ethanol, among other products.  However, great science is not enough to move a product on the market. One who blames THE INDUSTRY for not accepting his/her product does not fully understand the industry's driving forces.

Anatole Klyosov