The words "biotechnology" and "biotech" are often used by the press and industry observers in limited and inconsistent ways. Those words may be used to describe only pharmaceutical products, or in another context only the industry surrounding genetically modified plants, while in yet another context a combination of biofuels, plastics, chemicals, and plant extracts. The total economic value of biotechnology companies is therefore difficult to assess, and it is challenging to disentangle the component of revenue due each to public and private firms.
I've managed to get a rough idea of where the money is for industrial biotech, agbiotech, and biopharmeceuticals. Based on surveys from Nature Biotechnology, the U.S. Government, various organizations in Europe, and several private consulting firms, it appears estimates of total revenues range from US$ 80 to 150 billion annually, where the specific dollar value depends strongly on which set of products are included. The various surveys that provide this information differ not only in their classification of companies, but also in methodology, which in the case of data summarized by private consulting firms is not always available for scrutiny. For whatever reason, these firms tend to produce the highest estimates of total revenues. Further complicating the situation is that results from private biotech companies are self-reported and there are no publicly available documents that can be used for independent verification. One estimate from Nature Biotechnology, based on data from 2004 (explicitly excluding agricultural, industrial, and environmental biotech firms), suggested approximately 85% of all biotech companies are private, accounting for a bit less than 50% of employment in the sector and 27% of revenues.
A rough summary follows: As of 2006, biotech drugs accounted for about US$ 65 billion in sales worldwide, with about 85% of that in the U.S. Genetically modified crops accounted for another US$ 6 billion, with industrial applications (including fuels, chemicals, materials, reagents, and services) contributing US$ 50-80 billion, depending on who is counting and how. Annual growth rates over the last decade appear to be 15-20% for medical and industrial applications, and 10% for agricultural applications.
I am not going to go through all the details here at this time. But the final amount is pretty interesting. After sifting through many different sets of numbers, I estimate that revenues within the US are presently about US$125 billion, or approximately 1% of US GDP, and growing at a rate of 15-20% annually.
1% of GDP may not seem very large, but a few years ago it was only 0.5%. At some point this torrid growth will have to slow down, but it isn't clear that this will be anytime soon. Nor is it clear how large a fraction of GDP that biotech could ultimately be. That is my next project.