Wednesday, 18 May 2011

Financial value of open vs closed science

I was visiting the University of East Anglia today, presenting to their Enterprise and Engagement Club. My rather experimental talk was titled "Extracting value from open science; a commercial perspective" (slides to be posed soon). I wanted to demonstrate my point using an example along the lines of; "project A with open science generated $big, whereas with closed science it would have only generated $small". Whilst not quite exactly that, I did find an interesting financial comparison from the human genome sequencing project;

  • Exhibit A, the perceived cost to the biotech industry of "opening" the human genome; 
"In March 2000, President Clinton announced that the genome sequence could not be patented, and should be made freely available to all researchers. The statement sent Celera's stock plummeting and dragged down the biotechnology-heavy Nasdaq. The biotechnology sector lost about $50 billion in market capitalization in two days" [from Wikipedia].
  • Exhibit B, the total economic impact of the "open" human genome according to the recent Life-sponsored Battelle report;
    "The Human Genome Project [...] wasn't just a money-sucking vanity initiative that only reaped profits for personal genetic testing companies like 23andMe. The project has, in fact, driven $796 billion in economic impact and generated $244 billion in total personal income" [from Fast Company].

    So, it looks like open-science for the human genome project is about $200 billion (personal value) in the black! That's a fair chunk of change by any estimation.

    Disclaimer - I'm not an economist, and do not attempt to justify the validity of the comparison (other than both numbers having the same units) in any way.

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