Biomimicry Economic Impact Study

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Copyright 2010 by The San Diego Zoological Society. All rights reserved.The material in this report includes forecasts and projections and may, in some instances, be judgmental in nature. The San DiegoZoological Society, the Fermanian Business & Economic Institute, Point Loma Nazarene University and their afliates all disclaim anyand all liability from the use of this material. Publication or distribution of any portion of this document is prohibited without theexpress approval of The San Diego Zoological Society.


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The Global Biomimicry Eorts:

An Economic Game Changer

October 2010

Commissioned by:

San Diego Zoo Global

> Fermanian Business & Economic Institutewww.pointloma.edu/fbei619.849.2692


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The Fermanian Business & Economic Institute is pleased to present its original research report, Global

Biomimicry Eorts An Economic Game Changer. Sponsored and published by San Diego Zoo Global, our

intention is to provide to leaders rom industry, academia, public policy, government and other interested

elds a highly readable primary source or the emerging eld and industry o biomimicry. Our mandate

was to survey not only the world o biomimicry and what it is in 2010 but to look to the uture and attempt

to envision what it could economically become in the uture. We have careully reviewed research and

inormation rom a wide variety o sources and publications and then selected, interviewed, analyzed,and discussed many o the pioneering companies and products in biomimicry. From this, we then oer an

economic opinion as to opportunity or this eld, and we arm in our report that San Diego is well positioned

to become the global hub o biomimicry. All o the critical components that are needed or the emergence o

San Diego to assume this role are in place, and the possibility o envisioning two similarly powerul global

economic engines in Caliornia, one in Silicon Valley and one in San Diego, is a realistic possibility.

We hope that this report is an important rst step in asserting the economic viability and potential

o biomimicry, and that it oers inormation o use to the critical decision-makers who could work

collaboratively to create this hub. At the Fermanian Business & Economic Institute this is what we reer to

as actionable economics. We are grateul to San Diego Zoo Global or its vital leadership in biomimicry and

in many other areas o conservation, sustainability, and global citizenship and look orward to additional

opportunities to serve our community.

Randy M. Ataide, J.D.

Proessor o Entrepreneurship

Executive Director

Fermanian Business & Economic Institute

About the Fermanian Business & Economic Institute

The Fermanian Business & Economic Institute (FBEI) is a strategic unit o Point Loma

Nazarene University, providing the ollowing services:

The Institute Staff

Randy M. Ataide, J.D. Lynn Reaser, Ph.D Cathy L. Gallagher

Executive Director Chie Economist Director

Courtney Hamad Dieter Mauerman

Manager Research Assistant

FBEI Student Sta

Carlos S. Bonilla > Reka Katona > Bruno Roma > Summer Savik > Daniel Smith > Morgan Wall

Graphics Consultant and Designer

Lauren DiBlasi

> Fermanian Business & Economic Institute

www.pointloma.edu/ei

619.849.2692

LETTER TO THE READER

> Economic orecasting and events > Expert business and economic commentary and speeches > Economic consulting and related services > Proessional and executive development events

> Business and economic roundtables > Economic studies and research > Special projects


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> Biomimicry could represent a revolutionary change in our economy by transformingmany of the ways we think about designing, producing, transporting, and distributing goodsand services.

> Biomimicry, the discipline of applying natures principles to solve human problems,provides the means to achieve both environmental and economic goals. Many of themechanisms and systems found in nature are highly efcient, eschew waste, and aresustainable in a virtually closed system. Biomimicry could be a major economic gamechanger.

> While the eld today is just emerging, in 15 years biomimicry could represent $300billion annually of U.S. gross domestic product (GDP) in 2010 dollars. It could provideanother $50 billion in terms of mitigating the depletion of various natural resourcesand reducing CO2 pollution. Biomimicry could account for 1.6 million U.S. jobs by 2025.Globally, biomimicry could represent about $1.0 trillion of GDP in 15 years.

>The applications of biomimicry to commercial use could transform large slices ofvarious industries in coming years and ultimately impact all segments of the economy.

Industries that could be particularly affected include utilities, transportation equipment,chemical manufacturing, warehousing/storage, and waste management, architecture andengineering.

> Two very different approaches are followed in the use of biomimicry. In some cases,scientists see an interesting concept in nature and then nd a commercial application. Inother instances, rms are seeking a solution to a specic problem and nd an answer in thenatural world.

> Firms selling biomimicry-inspired products in the marketplace have frequently seen adoubling of sales annually in the early years. Many of these products can offer customers

reduced energy requirements, less waste, and enhanced performance while being sold atprices competitive with or even less than those of existing products.

> Constraints faced by rms attempting to commercialize biomimicry products includethe challenge of educating and convincing customers resistant to change, nding sufcientcapital unless backed by a large rm, developing new supply chains, and moving from smallto larger scale operations.

> Investors should be attracted to biomimicry because of the prospects for rapid salesgrowth and high rates of return. Venture capital could ow into biomimicry at a pace atleast equal to that of biotech, estimated at $4.5 billion for 2010.

> San Diego appears well positioned to become a hub for biomimicry. The regionpossesses four key characteristics: intellectual resources, capital, a strong entrepreneurialbase, and a collaborative environment. The San Diego Zoo, with its rich animal and plantcollection together with its existing research institute for conservation, appears well suitedto lead such a hub.

> A cluster of 1,000 biologists, naturalists and other scientists could form in San Diegoover the next 15 years as a biomimicry core to help take solutions in the natural world tocommercial application. Including all of the ripple or multiplier effects, this cluster couldgenerate a total of 2,100 jobs and add $325 million to San Diegos gross regional productannually by 2025. Biomimicry could emerge as San Diegos next major economic driver,complementing and enhancing such clusters as biotech and cleantech.

EXECUTIVE SUMMARY


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I. BIOMIMICRY: THE BRIDGE BETWEEN THE ECONOMY ANDTHE ENVIRONMENT 9

II. REPORT STRUCTURE AND METHODOLOGY 11

III. MAJOR EXAMPLES/CASE STUDIES: APPLICATIONS OFBIOMIMICRY IN VARIOUS INDUSTRIES AND THEIRECONOMIC EFFECTS 14

a. Biolytix 14

b. Biomatrica 16

c. Brinker Technology 18

d. Green Wavelength 19e. InteraceFLOR 20

. Joinlox 22

g. PAX Scientic 24

h. QUALCOMM MEMS Technologies 26

i. STO Corp. 28

j. Swarm Intelligence 29

IV. ECONOMIC POTENTIAL OF BIOMIMICRY AS AN INDUSTRY 30

V. POTENTIAL ECONOMIC IMPACT ON U.S. AND GLOBALECONOMIES 32

VI. INVESTMENT IMPLICATIONS 34

VII. CASE FOR MAKING SAN DIEGO THE BIOMIMICRY HUB,WITH THE ZOO AS THE FOCAL POINT 36

Footnotes 41References 43

TABLE OF CONTENTS


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CHART INDEX

CHART 1 Biomimicrys Estimated Market Impact, 2025 31

CHART 2 Biomimicrys Estimated Impact on U.S. GDP, 2025 32

CHART 3 U.S. Venture Capital in Biotech Resumes Rise 34

CHART 4 Key Components o a Biomimicry Hub 36

CHART 5 The Enterprise o the Future 37

CHART 6 Biomimicry Multipliers are Strong 38

CHART 7 Internet Employment Soars in Silicon Valley 39


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I. BIOMIMICRY: THE BRIDGE BETWEEN THE ECONOMY AND THEENVIRONMENT

Biomimicry--A Game Changer

Biomimicry provides the means to achieve both environmental and economicgoals. As policy leaders throughout the world begin to ocus more on sustainable

growth, the clash between environmental and economic interests could potentially begreater than ever. As job growth ollowing the great recession continues to be subpar,nding the proper balance between preservation o our natural resources and increasingemployment poses great challenges.

While many large corporations and public agencies have implemented greeninitiatives, a ocus on conservation is ar rom becoming ingrained in our culture. Manyenvironmental objectives are being achieved only through legal mandates or subsidies.

A greater emphasis on jobs along with public budget pressures could scuttle many othese eorts. Company programs directed to environmental ends could be vulnerable toanother recession and the need to cut costs deemed not immediately vital to the bottomline

A special report on sustainable business in theFinancial Times1 noted that manycompanies, outside o agriculture, ood and pharmaceuticals, seem to have ew obviousties with the natural world. That perception could be changing. Firms who heretoorehave relied little on plants or animals are becoming aware o how much their wealthdepends on preserving natural ecosystems. 2

Biomimicry could provide a critical bridge between business and the environment.Derived rom the Greek word, bios, meaning lie, and mimesis, meaning to imitate,biomimicry is a rapidly growing eld where solutions ound in the natural world areapplied to human problems. Man has taken inspiration rom nature or centuries to

nd answers. For example, Leonardo da Vinci (1452-1519) attempted to design a yingmachine based on a study o the anatomy and ight o birds. 3

Only in recent years has biomimicry begun to gain true traction. Janine Benyus, authoro six books in the eld, has been one o the key pioneers advancing the discussion. 4Nature is increasingly being viewed as a model, mentor, and benchmark.

It should not be surprising that millions o years o evolution have produced in naturemechanisms and systems that are highly ecient, eschew waste, and are highlysustainable in a virtually closed system. As pointed out by Peter Foley, AssociateDirector o the Cognitive Science Group or Proctor & Gamble,nature entailsoptimizing rather than maximizing. Nature is also a model o sustainability since it is

a closed loop system. 5

In the long-term, policymakers, business, and the public will only embrace eorts toprotect the environment and saeguard our natural resources i it makes economic sense.Biomimicry provides that critical bridge. By increasing eciency and reducingcosts, solutions inspired by nature can allow us to both raise standards o livingand preserve the environment.


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A cost-benet evaluation points to the merits o biomimicry. It holds the potential oreducing three major sources o costs:

--The economic cost o pollution--The economic cost o waste disposal

--The economic cost o natural resource depletion

Based on World Bank estimates, the costs o the depletion o energy and mineralresources and the nations orests, along with the pollution costs o CO2, currentlyamount to about $350 billion in the U.S. 6

The economic cost o pollution alone encompasses a wide range o eects, includinghealth care expenses, lost work hours and wages, crop losses, and reduced propertyvalues.7 The potential economic costs o climate change and global warming are juststarting to be understood.

Solutions rom biomimicry also promise through the growth o new applications andmarkets, along with improved eciency, three major sources o benets:

--The economic benets o improved eciency--The positive impact on jobs--The positive impact on prots

A sense o some o the potential comes rom the experience o rms selling low-carbongoods and services. Research by HSBC has estimated that in 2008, the worldwide saleso rms in the climate change sector (including rms involved in renewable powergeneration, alternative energy, water, and waste management) reached $534 billion.This exceeded revenues o the aerospace and deense sector estimated at $530 billion.

Despite the recession, the sector saw sales rise by approximately 75% rom the prioryear. 8

Biomimicry also is not just about green. New product designs have the potential tolower product costs. This is important or consumers. Although polling suggests thattwo-thirds o American households believe that the environment should be consideredwhen purchasing products, only about hal are willing to pay a price premium.9 Naturesability to inspire more ecient solutions can yield lower-cost products or companies tomarket.On balance, instead o positioning the situation as an either/or debate

between the environment and jobs, biomimicry presents a win-win answerthat allows both to be addressed.


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II. REPORT STRUCTURE AND METHODOLOGY

This report analyzes both the microeconomic and macroeconomic dimensionso Biomimicry. The microeconomic aspects involve a ocus on rm or business issues,including cost structure, competitive positioning, capital costs, and product pricing. Themacroeconomic issues address the overall impact o biomimicry on such actors as grossdomestic product (GDP), employment, and personal income.

Report StructureThe ollowing chapter, Chapter III, analyzes several case studies to understand rom theground level the opportunities and challenges o various rms engaged in taking productsto market that were inspired in some way by the natural environment. This is the part othe report which delves into many o the microeconomic aspects.

Chapters IV and V examine the macroeconomic issues with more o a top-down analysis.Chapter IV analyzes the potential impact on various major sectors o the U.S. economyo biomimicry with a ocus on the proportion o sales that could be impacted by 2025.Chapter V then extends the analysis to quantiying the potential impact on total U.S.GDP and employment. An estimate is also made o the economic losses that could be

avoided rom the depletion o the nations energy, mineral, and orest resources and romCO2 pollution. Finally, an estimate o the impact on total global GDP o biomimicry ispresented or 2025.

Chapters VI and VII include both microeconomic and macroeconomic elements.Chapter VI analyzes the investment implications o biomimicry. It looks at potentialsales growth rates and rates o return. A wider look at the nancial markets examinesprospects or capital ows, possible investment vehicles, and risks.

Chapter VII investigates the prospects or San Diego as a biomimicry hub by analyzingthe requirements o industry hubs and San Diegos capabilities. It presents projectionson the total economic impact a biomimicry cluster could have on the regions economy

in terms o total gross regional product, employment, and personal income. The reportconcludes with an investigation o the San Diego Zoo serving as a possible ulcrum orbiomimicrys hub.

Data Sources, Methodology, and DisclaimerThe case studies in Chapter III relied on personal interviews with the principals othe rms selected or the nature-inspired products. The rms were chosen to captureapplications in various economic sectors, including consumer spending, energy, utilities,transportation, pharmaceuticals, and industrial materials. To understand the processo taking biomimicry concepts to market, companies at various stages o productdevelopment rom pre-entry to successul launch and implementation were included.

The case studies in Chapter III and reerenced elsewhere relied on a combination opublic inormation available on the rms public websites during the time period o May-November 2010 and/or personal interviews conducted by the economic researcherswith the principals o the rms selected or nature-inspired products. Disclosure wasmade to the rms as to the intended use o the inormation obtained rom the interview.Some inormation contained on the websites may have been compiled rom third party


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sources including published and unpublished research, news articles and similar sites.Thereore, no representation or warranty concerning the accuracy o the inormationand content contained in the websites can be made.

The inormation and content is provided strictly on an as is basis. Thereore, SanDiego Zoo Global, the Fermanian Business & Economic Institute, Point Loma NazareneUniversity and their aliates expressly disclaim any and all warranty and liabilityconcerning the accuracy o the inormation and content contained herein. Further, thetrademarks, logos, products and product names, service marks, third-party sites and anyand all related inormation is the property o the interviewed rms. The inormation andcontent contained in this report is intended or general inormational purposes only andit is not intended to constitute legal , nancial, investment, tax or any other proessionaladvice or services and recommendations.

The analysis o the sales potential o various sectors o biomimicry in Chapter IVstarted with an investigation o the various industries classied according to the North

American Industry Classication System (NAICS) to determine which parts o theeconomy might be the most likely beneciaries o biomimicry. Based on the experienceo the rms analyzed in this report and the literature on biomimicry applications,estimates o the sales penetration by 2025 were developed. The base gures orshipments (sales) and value added or the various industries were obtained rom the U.S.Bureau o Economic Analysis.

The year 2025 was selected as the year or all projections to give a consistent timerameor the various aspects o the study. A teen-year horizon was selected as an appropriatemedium-term period consistent with standard economic and econometric practices.This timerame allows or considerable advancement in biomimicry to take place. Whilea longer term horizon would certainly allow or a much greater potential to be realized,this study was ocused on presenting business, investor, and policy interests with moretangible expectations or their planning purposes.

Chapter V developed projections o GDP over the next 15 years with the econometricmodels and estimates rom the Fermanian Business & Economic Institute. Theestimated shares or various sectors developed in Chapter IV were then applied to derivethe total expected impact o biomimicry on the economy on real GDP or 2025. Anestimate o the loss mitigation was based on numbers produced by the World Bank onthe costs o resource depletion and pollution. The employment impact o biomimicryby 2025 was generated by projecting job totals over the next 15 years and assuming thatbiomimicry would aect approximately equal shares o sales, output, and jobs or a given

industry.

The estimates or sales growth and rates o return in Chapter VI were based on thecase study interviews and the typical perormance o start-up industries. Forecasts orventure capital growth were developed by the Fermanian Business & Economic Institute


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The analysis o the potential economic impact on San Diego County o a biomimicrycluster discussed in Chapter VII was derived rom the use o a dynamic input-outputand econometric model. The IMPLAN Model was used to analyze all o the multipliereects (including supply chain and consumption related) o an estimated core group o

1,000 biologists, naturalists, and other scientists that could be ormed by 2025.

Copyright and Conditions o UseThis material is protected by copyright by the Zoological Society o San Diego, 2010, allrights reserved. The material in this report includes orecasts and projections and may,in some instances, be judgmental in nature. San Diego Zoological Society, the FermanianBusiness & Economic Institute, Point Loma Nazarene University and their aliates alldisclaim any and all liability rom the use o this material. Any additional publication ordistribution o any portion o this document is prohibited without the express approvalo San Diego Zoological Society. For additional use contact Helen Cheng at [email protected] or 619.557.3927.


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III. MAJOR EXAMPLES/CASE STUDIES: APPLICATIONS OF BIOMIMICRYIN VARIOUS INDUSTRIES AND THEIR ECONOMIC EFFECTS

Biolytix Water Australia Pty Ltd

Biolytix is an Australian company eaturing a sewage treatment process and equipmentthat produces a much more ecologically riendly and energy ecient system than

traditional technology. The on-site tank converts household sewage, ood waste, andwastewater into high-quality irrigation water.

The rms ounder, Dean Cameron, patented the process in 1994 and the rm has been inexistence since 1996. Biolytix has won a number o major awards, including The AsianInnovation Award, the Global Eco-Tech Award, The EPA sustainable Industry Award,and two Australian and New Zealand Innovation Awards.

Product InspirationMr. Cameron had observed the pristine state o a orest streams water despite thepresence o large bat colonies. He had also noted that the astest decomposition o orestlitter did not take place in rivers but in the moist soil on river edges. Traditional sewage

and wastewater acilities have implicitly assumed that a system emulating a river-basedsystem would be most ecient.

Biolytix has taken natures more ecient approach. A tank (BioPod) contains anecosystem o worms, beetles, and billions o microbes that decompose solid waste intohumus. That humus is then used to lter wastewater into water that can be used orirrigation.

Advantages over Existing ProductsBecause the ecosystem treats the waste, no aerators are necessary, which reducesoperating energy costs by around 90%. Aerators can typically be run up to 16 hoursper day. Sludge transport and disposal are unnecessary. Only one annual servicing isrequired versus 3-4 in the case o traditional systems. The process is odorless and alsodoes not need regular pump outs.

The system can be used both or residential and commercial properties. The BioPods canbe networked or housing developments and towns and are ully scalable. For example,each o the 1,100 houses in Point Boston, South Australia, is designated to have a BiolytixSystem.

The cost to developers or the installation o the Biolytix System can be one-hal that otypical gravity sewerage.


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Sales, Prots, and Future PlansIn its brie 12-year history, Biolytix has seen its sales grow about 20% per annum. Protshave also grown substantially and the company envisions that the technology caneventually be embraced on a larger, global scale.

Market PotentialThe technology has a large potential to replace traditional wastewater systems or be usedwhen new developments are launched throughout the world. The use in both residentialand commercial properties amplies the possible signicance o this technology. Theability to achieve major energy savings, particularly in a setting o rising energy costs orincreased regulation, could spread the systems adoption.

ConstraintsThe microbes and invertebrates necessary or the system can be sourced locally invirtually any country and climate except or the permanently rozen areas o the world.Resistance rom utilities and water authorities probably represents the greatestconstraint. Some o these entities that have been approached have been skeptical o the

new technology, especially since it represents a radical change rom the system that hasbeen used historically. Consulting engineers who typically base their ees on the projectcost have less incentive to advocate the new system since their services o design andengineering or more expensive customized waste treatment acilities are reduced.

Based on Interview with:

Dean CameronManaging DirectorBiolytix Water Australia Pty Ltdwww.biolytix.com


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Biomatrica

Biomatrica is a biotechnology company developing products or preserving biologicalsamples at sample collection, shipping and storage or use in research, clinical, ordiagnostic analyses. The company also develops technologies or enhancing andimproving PCR (polymerase chain reaction) and STR (type o allele) assays. In addition,it provides a laboratory management sotware application to track all samples stored oruse in research and clinical laboratories. Together, they represent products that reducethe need or expensive rerigeration units as well as maintenance and operational costso running cold storage systems.

Product InspirationAnhydrobiosis is a natural mechanism that preventscell degradation. It is ound in some eukaryoticextremophiles such as tardigrades (very smallorganisms) and brine shrimp. Essentially, themechanism causes the organism to dry up whilekeeping its cells intact or extended periods otime. During this time o preservation the sample is

completely protected in a thermo stable barrier thatonly reactivates when the sample is rehydrated.

Advantages over Existing ProductsBiomatricas room temperature-based bio-sample stabilization, shipping and storageproducts oer a signicantly lower cost structure than cold reezers and have addedadvantages o ZERO energy needs, ZERO carbon emission, and a much lower ootprint inthe biomedical research lab.

Sales, Prots, and Future PlansBiomatrica has been doubling in sales every year since its inception in 2004. The pricedierence in comparison to standard rerigeration methods depends on the applicationand the scale. Migrating legacy biological samples rom reezers to room temperaturestorage is a one-time expense, whereas cold storage requires ongoing electrical andmaintenance costs. For the low end o pricing, the entire Biomatrica system could behal the cost or operating a standard research rerigerator or a year. In some cases,the Biomatrica investment could take two years o equivalent rerigeration expense torealize a cost savings.

Market PotentialThe target market or Biomatrica has been academic research laboratories, orensics,government, pharmaceuticals, and diagnostic labs. One o the benets and strongselling points that the Biomatrica system has is how much it lowers the carbon ootprint

as well as energy consumption o an organization. Large universities that havesustainability initiatives can benet greatly rom implementing a Biomatrica system intheir biomedical research laboratories. This can help the university as a whole meet itsenergy cost reduction goals by lowering its energy consumption signicantly, a commonsource o huge expenditure o many research labs.

Biomatrica hopes to have a sizable market share within the next ten years, as energysavings and eco-riendly technology (green-based) become increasingly important inresearch organizations o all sizes.


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ConstraintsThe main constraint that Biomatrica is acing at this point is in educating the potentialcustomer about the benets o migrating rom cold storage systems. Some institutionsdo not have budgets that are exible enough to pay or the conversion to a Biomatricasystem at one point in time. However, over time, this will become less o a challenge asthe signicant benets o managing biospecimens at room temperature ramps up in the

bio-medical research community.


Judy Muller-CohnFounder and CEOhttp://www.biomatrica.com/


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Brinker Technology

The discovery o a marketable platelet technology was originally made through researchconducted at the University o Aberdeen, Scotland. Brinker Technology was then ormedto market and sell the technology in the water and oil piping industries. At this stageBrinker has three product lines: Telepath, Plasma, and Platelets. Telepath and Plasmaare based around the original Platelet product and are designed to help better implement

the Platelets.

Product InspirationDr. Iain McEwan received a paper cut on his nger and realized that the platelets thatare constantly being circulated in our bloodstream start working immediately whena cut occurs. This principle o having the platelets already imbedded in a system wasperceived as being very useul and relevant to a wide range o circulatory systems andapplications.

Advantages over existing productsBrinker has no direct competition that uses the platelet technology. Themain advantage that Brinker has is that it is able to x a leak with minimal

downtime. A leak can be detected and within hours can be sealed with thepipeline owing at normal capacity. Traditionally, similar leaks wouldinvolve shutting down the problematic pipeline or an extended period otime while the leak would be repaired.

Telepath is a sotware program that analyzes the leak and can determinethe best suited platelet mixture to secure the leak most appropriately andeectively. Plasma is a uid that complements the platelet system andcan provide a barrier without solidiying or setting. The Plasma can alsoprevent uture leaks and provide a corrosion barrier.

Sales, Prots, and Future PlansBrinker is a privately held rm and as such much o its company inormation iscondential. Thereore, a company growth rate is not available. However, it is plausiblethat or a breakthrough product such as Brinkers with global applications and markets,customer demand could be extraordinarily strong. Brinker has a dedicated research anddevelopment team that is constantly working on new products to better serve its market,underscoring its value discipline o product leadership.

Market Potential and ConstraintsBrinker would appear to be in a unique position in that it potentially has imbedded inits platelet technology products with minimal need to currently develop additionalmarkets. Since there is currently no competing product that can perorm as eectively

as Brinkers in the eld, the market share opportunity and rm protability potentialappear quite signicant.

Based on:

http://www.brinker-technology.com/


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Green Wavelength

Green Wavelength is a start-up company that is developing a windmill that can be placedin remote locations to provide a small consistent amount o power. The windmill couldalso supplement power to a building that is already connected to the power grid.

Product Inspiration

The windmill design mimics the movement o a bumble bee and a hummingbird. Thegoal is to have a highly ecient, relatively small windmill (20 t diameter) that would be asource o power locally.

Advantages over Existing ProductsCurrent windmills have a maximum eciency o 30% and a maximum theoreticaleciency o 60%. Green Wavelengths goal is to achieve at least 35% eciency, making ita more productive windmill than current technology. The output goal is to produce onekilowatt/month.

Sales, Prots, and Future PlansThe product is still in the design phase and not available or purchase at this time.

The windmill will have a target price range o $5,000 to $15,000. The price will varydepending on the location and size o the necessary tower structure. The windmill needsto be high enough to get adequate exposure to produce the required amount o electricity.

Market PotentialMore market research needs to be completed to better understand the ull marketpotential o this product in terms o where it can be placed and where it can be mostbenecial to a potential customer. At this point, the most suitable application wouldbe or remote structures in wind rich environments that would not necessarily haveeasy access to a power grid. The Green Wavelength windmill would provide the mostimmediate return in such an environment.

ConstraintsThe main constraints or Green Wavelength have been sourcing nancing. Since the rmis a start-up and is pursuing a product in green technology there are some governmentgrants available. The problem has been that there are so many start-ups looking or thissame government unding that it is very dicult to be selected. The application ees orthese loans can also be an obstacle, with some as high as $75,000.


Sabri Sansoy, CEO

http://www.greenwavelength.com/


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InterfaceFLOR

InteraceFLOR is a publicly held carpet manuacturer that created the i2 carpet linein 2000, which is when the Biomimicry mindset was implemented throughout thecompany.

Product Inspiration

The i2 carpet line utilizes carpet squares that are unique and do not ollow a specicpattern. It mimics the randomization o colors that naturally occurs on the orestoor. This design carries several cost-saving benets that can be realized by all partiesinvolved: the manuacturer, distributor, installer, and end user.

Advantages over Existing ProductsThe i2 carpet system is inexpensive to manuacture because it allows each carpet squareto be made without the need to precisely replicate the same pattern and color in everytile. The dye lots that are used during manuacturing do notneed to be matched since each tile is unique. This cuts downon inventory costs substantially. The tile design provides ormore ecient use o space in warehousing and transporting

compared to the broadloom that is large and cumbersome.

TacTiles are single-sided adhesive squares that keep thei2 carpet squares together but do not ax the carpet to theground beneath it, thus eliminating the need or traditionalwet adhesive. They allow or quick changes to speciccarpet squares instead o changing the equivalent o anentire carpet roll. The TacTiles are made rom recycledmaterials and cut down on the use o glue and adhesivessignicantly. The TacTiles also allow or a much quickerinstallation o the i2 system.

Sales, Prots, and Future PlansThe price point or the i2 system is competitive to the rest o the market. This advantagecan be shown by how ast the i2 segment has grown in relation to the companys otherproduct lines. Revenues rom the i2 line have increased by $120 million rom 4.3% ototal sales in 2002 to 39.5% o total sales in 2009.

The i2 carpet tiles are patent protected and the TacTiles are patent pending. Thereare currently no plans to begin licensing, but i demand were high enough thenInteraceFLOR would consider these options. The primary markets that InteraceFLORis targeting with these products are commercial oce, government, healthcare,hospitality, end-use retail and education. They are also exploring other non-traditional

end-uses in the transportation industry such as aircrat and cruise ships.

Market PotentialThe 10-year long-term goal or InteraceFLOR is to increase its market share o the i2product line in the carpet industry. InteraceFLOR also hopes to make the i2 carpet linethe main product the company sells.


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ConstraintsA major constraint acing the company is its own goal o achieving a zero environmentalootprint by 2020, though the company views this as an opportunity, not a constraint.

Another constraint acing InteraceFLOR is the need to educate the dealers anddistributors that it primarily sells to. These distributors are not ully aware o the cost

benets that are available to them with this new technology. Financing or the i2 linewas not dicult to obtain since the company was already well established and had othersuccessul product lines.


Scott W. LandaVice President Business Development

http://www.interaceor.com/


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Joinlox Pty Ltd

Joinlox is an Australian company that has developed a technology to connect or join awide variety o objects, including boxes, pipes, walls, and bridges. It can be used in alarge range o applications involving packaging, storage, transportation, and logistics.

Product InspirationThe product arose rom Mr. Cameron, the inventor o the Biolytix System, who wassearching or a cost-eective means to ship his waste treatment tanks. Plasticsengineers had been skeptical about his eorts to nd a solution. Mr. Cameron, however,had observed the ability o clams and other shellsh to orge a tight seal on rocks usingonly thin high tensile bysus threads. This ability inspired the Joinlox Technology, whichis a spring-loaded joint ormed by wedging together parts with inter-meshing pieces orhooks.

Advantages over Existing ProductsThe Joinlox solution and products have major cost advantages in terms omanuacturing, transportation, assembly, and servicing. Existing acilities or injectionmolding, pressing, laser cutting, and other processes can be used, but production costs

are lower and ew materials are required. Transportation costs can be dramaticallylower. Items can be shipped, ofoaded, and then reassembled as required. Packagingcan then be at-packed and returned or reuse. For example, the cost o shipping plasticdrums rom Malaysia to Australia can be reduced rom about $35.00 per drum to $4.50per drum.

Labor requirements or unpackingand assembly o various shippeditems are generally substantiallylower with the Joinlox solutionthan with typical methods. Becausewelding and other specialized skills

are not required and assembly timesare typically airly short, labor costsavings can be signicant. Servicingcan also be done on-site with minimaldisassembling and reassemblyrequirements.

Sales, Prots, and Future PlansThe company has only been in existence since 2008, but it has already developedsignicant sales opportunities. Joinlox this year signed a global licensing agreementwith Xstrata Technologies to use in Xstratas new ZippaTank line o modular minerals

processing tanks.

Joinlox plans to license its technology widely throughout the world to maximize thespread o usage across geographic areas and sectors.

Market PotentialThe Joinlox technology has major applications or a wide range o industries, includingood processing, water utilities, mining, and automotive. The cost savings or shippingbulky cargos could be particularly compelling.


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ConstraintsThe major constraint will involve the dissemination o this simple and cost-ecienttechnology or various applications in rms where resistance to changes in methods orsupply chains can sometimes be ormidable.


Dean CameronTechnical DirectorJoinlox Pty Ltd

www.joinlox.com


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PAX Scientifc

PAX Scientic is an engineering rm that designs uid handling devices, which includeans, mixers, pumps, turbines, and propellers. PAX Scientic was ounded in 1997 withthe intention o licensing the products that it develops to manuacturers.

PAX Scientic uses geometrics ound in nature to help grow a digital model that can bened tuned or the necessary application. PAX has come up with designs or devices thatin most applications are either more ecient, have reduced drag, use less materials, orare cheaper to produce.

Product InspirationThe product that has had the most commercial success to date or PAX is the watermixer. The inspiration or the PAX water mixer came rom the way that seaweed oundin the ocean orms a spiral.

Advantages Over Existing ProductsThe mixer is used in large municipal water storage tanks up to 20 million gallons in

size. The impeller design provides top-to-bottom mixing in the tank that preventsnitrication, stratication, and the reezing over o water in colder climates. This makesthe water less susceptible to contamination. The mixers unique design reduces theuse o materials and thereore weighs less and consumes less electricity. It also greatlyreduces the amount o chemicals that are added to the water to maintain purication.

The mixer can be powered by a solar unit that could be located on top o the water tank.This would allow the unit to be completely sel sustaining and require less maintenance.

Sales, Prots, and Future PlansSales or the PAX water system have been doubling every year since it was introduced to

the market. The success has been largely due to the act that a specic market problemwas realized; then, a solution was designed to solve the problem.Since going green and reducing carbon ootprints has become more important, PAX hasseen more interest in its designs.

Market PotentialSince PAX Scientic is an engineering rm, it has alreadycome up with designs that are either more ecient,more productive or less expensive to manuacture. Awide range o applications is possible, including ans,mixers, pumps, turbines, heat exchangers, ducts, andpropellers. The Department o Energy and other state

and ederal departments have granted PAX over $8million in research unding that will help PAX urtherits technology and bring it closer to production-readydesigns.

ConstraintsPAX has experienced a dicult time licensing some o itsdesigns to manuacturing partners. The rm has comeup with designs that are benecial in many ways, but theincentive or customers to buy the license and put theinvestment into a acility to produce a product to bring to


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the market has not been great enough given manuacturing cycles and corporate inertia.Thereore, the company chose to build and sell certain products, such as the PAX watermixer, directly to end users. Now, with many more companies looking or ways to reduceenergy consumption and become more conservation minded, PAX is in an ideal positionto meet those needs.


Francesca BertoneChie Operating Ocer, PAX Scientic

Laura BertoneChie Financial Ocer, PAX Scientic

http://www.paxscientic.com/


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QUALCOMM MEMS Technologies

In the late 1980s a company named Iridigm developed a display technology combiningthin lm optics and MEMS that creates color by making light interere with itsel. This iscommonly seen in nature. Typical displays like LCD or OLED dont use pigments or inks(that would be print). They use light passed through lters, polarizers, and liquid crystal (orLCD) or chemicals that illuminate when charged with a current (OLED). In either case, the

dierence is reected light versus created/emissive light.

The motivation was a realization o the possibility o what could be achieved when theseeciencies and technology benets were applied to a display application: visiblity outdoors,low power, and beautiul iridescent color.

Qualcomm acquired Iridigm in 2004 and ormed Qualcomm MEMS Technologies (QMT)Inc., a wholly owned subsidiary. This division is responsible or developing and bringing tomarket Mirasol displays. Mirasol is the rst low power, color, video capable, and sunlight

viewable display based on Intererometric Modulation(IMOD) technology. This unique approach to displaytechnology is inspired by nature and based on the same

phenomenon that makes a butterys wings shimmer insunlight.

Since the acquisition, QMT built a MEMS researchlab in San Jose and a manuacturing acility in Taiwan.QMT will soon begin shipping the mirasol display unitsto partners. While QMT has commercialized a number

o early generation devices, the next generation commercial (and color) version o thetechnology will be in a 5.7 video-capable display or an ereader/tablet like device.

Product InspirationThe technology was inspired by the way colors are created in butteries. The color isgenerated when specic wavelengths are reected o the surace o the buttery andare visible to the human eye. The colors that are reected are based on the microscopicstructure o the buttery wing. There is no pigment or ink, which means that the colors willnot ade or lose their brilliance over time.

Advantages Over Existing ProductsThe product is unique in that this method allows it to be clearly seen in ull sunlight. Batteryunits in devices that use the mirasol display typically last three times the duration o acomparable device with an LCD. With the savings in battery power, mobile devices aremuch more versatile and ecient.

Sales, Prots, and Future PlansQualcomm is very committed to this technology. Qualcomm plans to initially sell the displayto manuacturers o e-reader devices and intends to expand into other mobile deviceapplications soon ater.

Market PotentialThe mirasol display has the potential to be used in almost any mobile device that requires adisplay. That could include cell phones, e-readers, tablets, notebook computers, GPS units,and cameras.


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ConstraintsThe main constraints that Qualcomm aces are in the abrication process. Ramping up highvolume production simply takes time.

Based on two separate interviews with:

Cheryl GoodmanDirector o Marketing or Qualcomm MEMS Technologies, Inc.

Rick VingerelliVP Qualcomm MEMS Technologies, Inc.


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STO Corp.

STO is a corporation based in Atlanta Georgia that produces cladding, coating, andrestoration systems. The Lotusan technology was discovered by a German Scientist inthe 1990s and was produced and sold in Germany beore the technology was used in theUnited States by STO Corp. in 2005.

Product Inspiration

The main inspiration behind the Lotusan coating came rom the lotus lea. The lotus leahas a microscopic structure that reduces the actual surace area that is in contact withwater. This orces water to bead and attract dirt and other particles that are on the lea.Simulating these properties, the lotusan product allows dirt to accumulate and run o thepainted surace with the beaded water.

Advantages Over Existing ProductsThe Lotusan product is a coating and a nish that can be rolled or sprayed on. It is meantor non-metal suraces in outdoor environments. The product is designed to be usedin locations where large amounts o rain all and can then rinse the building walls on aregular basis. The product has had the most success on the East coast, specically Florida

as well as the Northwest.

Sales, Prots, and Future PlansThe cost o production is only slightly higher than conventional coatings, which translatesto a pricing premium o only 10-15%. Part o the advantage o using this coating is itslongevity; it will last 4 to 8 years, where comparable products will only last 3-4 years. Thereduced requency o required repainting produces signicant cost savings. Buildingsthat have been painted with the Lotusan coating that are being sold have appreciated invalue.

STOs primary market is the commercial sector, which is currently seeing growth inrenovation projects. Since introducing the Lotusan product in the U.S. in 2005, sales have

doubled every year. There is no direct competitor in the U.S. market or this technologyand, as a result, market share is growing rapidly as well.

Market PotentialAt this stage, STO is not considering licensing, but it would be willing to i demand werehigh enough. In 20 years STO hopes to have 50% o the market with its Lotusan coating.

ConstraintsOne o the constraints that STO is acing includes pricing. Since the pricing advantageis not realized until a reapplication is avoided many customers are not willing topay the premium or the Lotusan product. Another related constraint has been thecommunication and marketing o the product. Resistance to change and new products issizable. Not enough people know about the product and they are less willing to pay moreor something that does not have as prominent a brand as other conventional coatings.


Michael SweeneyLEED Green Associate Media Manager


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Swarm Intelligence

An idea that is gaining traction with regard to biomimicry has been the implementationo swarm behavior. In nature, these would include ant colonies, bee hives and schools osh. Swarm behavior has a huge potential signicance or computer applications as wellas robotics. This eld o study has become known as Swarm intelligence.

Swarm Intelligence is a orm o Articial Intelligence where the individuals in a swarm

do not think independently but act together to accomplish one common goal. Theyorganize themselves but do not have a central leader. They simply communicate witheach other about inormation around them.

Since individuals in swarms do not think (they simply react to their peers and theenvironment around them), their behavior can be analyzed and predicted using analgorithm. Some o these algorithms are being incorporated in computer sotware tohelp solve complex problems that rms ace every day. Applications to this idea havebeen implemented in computer programs to solve complex problems. Firms that dependon their delivery systems to maintain eciency have already started using sotware withgreat success. AntOptima is one company that has developed such a program. Sotware

programs such as these can increase eciency dramatically. In the case o a deliveryservice, less uel would be consumed and time-sensitive items could be delivered sooner.

Robotics is another application where this technology could have a huge impact. Dr.Dorigo o the Free University o Brussels has been working on the Swarmanoid projectthat will use three dierent types o robots: hand bots, oot bots, and eye bots. Theserobots will cooperate with each other to accomplish one common goal together. Otherorganizations are developing robots that can sel assemble to orm a single unit that canaccomplish tasks that would be impossible or a single robot. Once urther developmenthas taken place, these robots could be sent into environments that would be dangerousor humans, like disaster zones with collapsed buildings or other unstable environments.

Robots are already being used with remote technology or manuacturing, the military,and others. But Swarm Intelligence lets the robot make its own decisions and would notrequire an operator to oversee each individual unit.

Technology is advancing rapidly but these robots are not advanced to the point o beingmore ecient than a human yet. Although the cost o these systems would be lessthan a more complex single robot it is still a constraint at this point. This Biomimicryinspired eld promises to make practical application o articial intelligence much moreattainable in the not too distant uture.

Sources:

Riders on a Swarm ArticialIntelligence, The Economist. Aug 12 2010www.swarmanoid.org


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IV. ECONOMIC POTENTIAL OF BIOMIMICRY AS AN INDUSTRY

Sales and Industrial Potential

The applications o biomimicry to commercial use could transorm largeslices o various industries over the next 15 years. In 2009 more than 900 patentscontaining the word biomimicry were submitted to the U.S. Patent and TrademarkOce (USPTO) data base. New materials, products, designs, processes, and systems

based on emulating the natural environment could all be deployed. Some o the potentialindustry impacts were suggested by the case studies discussed in the previous chapter.Chart 1 shows estimates o the total market shares or various industry groups, dened interms o sales, that could be impacted by 2025.

Mining, Utilities, and ConstructionNew techniques or drilling, exploration, and extraction could aect approximately3% o the oil, gas, and mining industry in 15 years. Ten percent o the utilities sectorcould be impacted, with new products and processes used or various segments, rangingrom energy generation to water treatment. Construction could also be signicantlyimpacted by about 5% by 2025. For example, studying the structure o termite moundshas inspired the construction o buildings with major enhancement in the eciency oheating and cooling systems. 10

ManuacturingNumerous manuactured items could see changes or substitutes with new productsrequiring ewer raw materials, reduced energy, and less waste while also accomplishingmore tasks at lower costs. Many o the materials and compounds ound in naturecould cause biomimicry to inuence around 10% o the textile and 15% o the chemical(including pharmaceutical) industries by 2025. These new products also could result indramatic reductions in product toxicity.

New, more aerodynamic and energy ecient designs could transorm up to 10% o

the transportation equipment industry (including cars, trucks, planes, and boats).The example o enhanced display screens with better energy eciency developed byQualcomm MEMS Technologies, cited in the prior chapter, illustrates some o the majorchanges that could take place in electronics manuacturing.

Warehousing, Storage, and Waste ManagementImproved methods o rerigeration, such as suggested by innovations by Biomatrica inthe previous section, plus other naturally-inspired products and systems could aect upto 10% o the warehousing and storage industry by 2025. More ecient transportation,illustrated by the products o Joinlox, could impact some 3% o the transportationsservices sector. Waste management could see 15% o its industry transormed i some othe closed loop systems o nature are replicated or simulated.

Inormation TechnologyThe research into Swarm Intelligence discussed in the last section suggests thesignicant impact on inormation technology that biomimicry applications couldachieve. An estimated 5% o the industry could be aected 15 years rom now.

Architectural, Engineering, and Related ServicesBiomimicry-inspired designs can be expected to increasingly inuence architecture andengineering in the years ahead, impacting 10% o the sectors sales within 15 years. TheU.S. Deense Sciences Oce (DSO) and its Deense Advanced Research Projects Agency(DARPA) are charged with identiying and promoting major new technologies that can


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Biomimicrys Estimated Market Impact, 2025Percent of industry sales

0% 5% 10%

Paper manufacturing

Apparel, leather, and allied products

Petroleum and coal products manufacturing

Mining, quarrying, and oil and gas extraction

Air, rail, water, truck, and pipeline transportation services

Printing and related activities

Plastics and rubber products manufacturing

Information technology

Food, beverage, and tobacco products

ConstructionComputer, electronic products, equipment, and appliances

Warehousing and storage

Utilities

Transportation equipment manufacturing

Textile mills and textile product mills

Source: FBEI

15%

Architectural, engineering, and related services

Waste management and remediation services

Chemical manufacturing

CHART 1

revolutionize military capabilities. Current examples o these biomimicry inspireddeense applications include the Neovision2. which involves integration o recentdevelopments in the understanding o the mammalian visual pathway with advancesin microelectronics, to increased situational awareness or the warghter. Another

application is the PowerSwim program that explores new concepts in swimmingpropulsion based upon the oscillating oil approach to swimming exhibited by manysh and aquatic birds. This approach is more than 80% ecient in the conversion ohuman motion to orward propulsion. These programs and others have led biomimicryto be targeted as a strategic thrust to develop new materials, platorms, and systems toelevate our deense preparedness.11

The industries that could be impacted in signicant ways account or close toone quarter o U.S. gross domestic product (GDP).


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V. POTENTIAL ECONOMIC IMPACT ON U.S. AND GLOBAL ECONOMIES

Biomimicrys Potential Impact on GDP and Employment

Biomimicrys infuence on various large industries will translate into a sizableimpact on total U.S. gross domestic product (GDP) and employment.

GDP Contributions

Using estimates o the market shares developed in the prior chapter or various sectorsand projections o total output over the next 15 years, biomimicry-based goods andservices could account or approximately $300 billion o U.S. GDP by 2025. To putthis gure in perspective, this year U.S. companies will spend an estimated $282billion on computer sotware. 12 While initially small relative to a total U.S. economythat is estimated to generate approximately $21 trillion o goods and services in 2025,biomimicry will still have a highly signicant impact that can be expected to continue togrow rapidly as knowledge and the eld expand.

Mitigating Economic LossesBiomimicry could also help reduce the economic losses rom the depletion o the nationsenergy, mineral, and orest resources and rom CO2 pollution. Assuming that such losseswould remain close to the 2.36% o U.S. Gross National Income estimated or 2008 by the

World Bank,13 such costs would amount to about $514 billion by 2025 (in 2010 dollars).The capability o biomimicry to shrink these costs by about ten percent could yield anadditional impact on the nations GDP o about $50 billion.

Job EectsThe number o jobs yielded by biomimicry-linked goods and services could also besubstantial by 2025. Based on the market shares estimated in Chapter 3 and the relatedemployment coecients, biomimicry could account or approximately 1.6 million

Biomimicry's Estimated Impact on U.S. GDP, 2025Billions of dollars

Source: FBEI

0

100

200

300

400

Increased Output Reduced Resource Depletion and Pollution

50

300

CHART 2


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U.S. jobs by 2025. While some o these positions would represent substitutes orolder products and technologies, many others would represent whole new markets oradditional and improved goods and services.

Biomimicry could also help the U.S. capitalize on its greatest potential comparativeadvantagetechnology and knowledge-based industries and clusters.

Global ImpactBiomimicry could also spread rapidly on a global scale. Companies in the U.K.,continental Europe, Arica, and Australia are already active in the eld. Assuming asmaller GDP share o 1.0% than the 1.4% calculated or the U.S. (with lesser shares amongless technically advanced nations), biomimicry could aect about $1.0 trillion o theworlds total output by 2025.14


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VI. INVESTMENT IMPLICATIONS

Biomimicry holds the potential to attract sizable capital infows, driven by theprospects o rapid growth and high rates o return. The motivation will not come

just rom the ocus on green products and sustainable systems. The ability to improveeciency, create products that perorm better than those now available, and sell at lowercosts than competing items all speak to the value o biomimicry.

Returns on InvestmentAlthough rms are reluctant to say much about results or individual products, returns o40-50% on new biomimicry-inspired products appear readily achievable. Annual salesgrowth rates o 75% to 100% in the initial years can oten be expected. The economies oscale and advantages o dominant market share should yield advantages as production isramped up. Signicant licensing ees also may be earned.

Capital FlowsVenture capital could fow into biomimicry at a pace at least equal to that obiotech. Venture capital unding or biotech is estimated at about $4.5 billionin the U.S. or 2010.15 As credit markets heal, venture capital should start to risesignicantly over the coming decade ater slumping in 2008 and 2009. Compared to thekeen interest now expressed or green tech, biomimicry could oer less risk since it ismuch less reliant on possibly varying regulations (e.g., mandates or alternative energysources or reduced pollution) as well as uctuations in subsidies.

Returns or biomimicry-based products could be highly variable, especially in marketswhere distribution channels may work against new products. Still, investors lookingor new ideas and themes could direct increasing amounts o capital to the eld as itbecomes better known.

0

1

3

4

6

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e

Source: Pricewaterhouse Coopers / National Venture Capital Association; FBEIe = estimate

U.S. Venture Capital in Biotech Resumes RiseBillions of dollars

2

5

CHART 3


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Investment VehiclesInvestors could invest in biomimicry in one o two undamental ways. They could investin research, consulting rms or organizations scanning nature or possible ideas thatcan then be used or commercial application. Alternatively, they could invest in rms orgroups o rms that have biomimicry-inspired goods and/or services.

Investment options incorporating the biomimicry theme could involve: (1) stocks oindividual rms; (2) mutual unds o several such rms; and (3) exchange traded unds(ETFs), involving an index which would track the perormance o a number o companiesengaged in biomimicry. While individual stock analysts, mutual und managers, equityindex designers, and the investing public will need to become much more knowledgeableabout biomimicry, the potential or above-average returns could cause this learningcurve to be climbed quickly.

Investment RisksThe bursting o the dot-com bubble and the ailure o nanotechnology to gain tractionsuggest the risks that an investment theme o biomimicry could encounter. Yet, thepotential or diversication over a wide range o rms with dierent types o productsand solutions suggests a signicant benet or this type o investment in addition tosizable potential returns.


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VII. CASE FOR MAKING SAN DIEGO THE BIOMIMICRY HUB,WITH THE ZOO AS THE FOCAL POINT

San Diego as a Biomimicry Hub

The translation o concepts o nature to commercial applications, as discussed earlierin this report, can take two routes: Biologists and other scientists can scan the natural

environment looking or useul applications in the economy or companies and otherorganizations can seek solutions to specic problems and ocus on nature to ndanswers. While individual rms may support R&D eorts dedicated to biomimicry, alarger concentration o trained naturalists, biologists, scientists, and other proessionalscould orm a crucial hub or driving answers rom the environment to the economy.

Four primary elements would appear to be keys to creating a biomimicry hub.The San Diego region seems well positioned to become such a hub.

Key Components of a Biomimicry Hub

Collaboration

Entrepreneurs Capital

Intellect

Source: FBEI

CHART 4

IntellectHuman capital is clearly critical or a biomimicry hub in terms o the intellectualresources and scientic methods required. San Diego is well suited in this eld, withan important set o universities: University o Caliornia, San Diego (UCSD); SanDiego State University (SDSU); University o San Diego (USD); Point Loma NazareneUniversity (PLNU); and others. The region has 21 Nobel laureates.16 The San Diegoregion has 37,000 employees engaged in scientic research and development.17


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CapitalSan Diego has signicant access to venture capital, with the region raising around $2billion in both the peak years o 2000 and 2007. The recession has dampened some o therecent inow, but the region should attract venture capital close to $1 billion in 2010.18

Venture capital has been drawn to the areas various technology start-ups and has undedmany o the regions 600 cleantech and 550 biomedical companies.

Entrepreneurs

The San Diego regional economy is based on a large, granular network o small rms. Inthe City o San Diego, there are more than 70,000 small businesses, representing about92% o the total number o rms operating in the City.19

The outstanding public and private universities in San Diego currently oer excellententrepreneurial programs at both the undergraduate and graduate levels, and these oerthe potential or an ecient and expedited capacity or entrepreneurial innovation,application, and technology transer or biomimicry in the San Diego region. In additionto entrepreneur curricula in the elds o sustainability, biology and related eldsapplicable to biomimicry, San Diego State Universitys Entrepreneurial ManagementCenter, University o Caliornia San Diegos Entrepreneurial Challenge, Point LomaNazarene Universitys Entrepreneur Enrichment Program and other co-curricular

programs and resources are just a ew examples o what already exist. These could bepowerul strategic entrepreneurial assets that could be harnessed to urther establishSan Diego as a biomimicry hub.

In 2008, I.B.M. released its 2008 Global CEO Study titled The Enterprise o the Future.Across industries, sectors and regions, this emerging model o enterprise identied byI.B.M. appears to be designed or the eld o biomimicry, as seen in Chart 5.20 The SanDiego region is thus positioned well to serve the model o the New Economy. This is amodel that eschews the old hierarchical structure o top-down decision making in avoro smaller, atter and more nimble organizations ocused on innovation and creativity.21

The Enterprise of the Future

Source: IBM Global CEO Study, 2008

HUNGRY

FORCHANGE

INNOVATIVE

BEYONDCUSTOMER

IMAGINATION

GLOBALLY

INTEGRATED

DISRUPTIVE

BYNATURE

GENUINE,

NOT JUSTGENEROUS

CHART 5


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CollaborationChip Heath, co-author o Made to Stick: Why Some Ideas Survive and Others Die,emphasized in a speech at the 2009 Biomimicry Conerence in San Diego22 the criticalimportance o collaboration to the establishment o a biomimicry hub. He noted therole and value o inormal Friday night meetings as a critical link in the ormation o SanDiegos important biotech sector. The willingness o private and public organizations,including academic institutions, seems to be very much a part o San Diegos culture.Organizations such as CONNECT, a 25-year old group that has helped spawn the

growth o entrepreneurship in the region, is one example. The endorsement ocollaborative eorts in San Diego would serve the needs o a biomimicry hub well.

Economic Impact o a Biomimicry Hub on San DiegoA cluster o 1,000 biologists, naturalists and other scientists could orm in SanDiego over the next 15 years,employed in academic settings, consulting rms, ornonprot organizations. Such a cluster could have a substantial impact on the region.

By 2025, the addition o this core group would generate both direct and indirect eectson the regions economy. As discussed in Chapter II, the various multiplier or rippleeects were modeled using a dynamic input-output model (IMPLAN Version 3.0). Thepresence o the 1,000 core biomimicry team would generate signicant direct eects on

output and total personal income in the region. In addition, there would be substantialindirect or secondary eects. These would include (a) the impact o various personnelhired, materials purchased, and acilities constructed to support the cluster and (b)the eects on consumer spending by all o the personnel employed either directly orindirectly.

CHART 6Biomimicry Multipliers Are Strong

Estimates for San Diego's Biomimicry Cluster, 2025

Source: FBEI

0

0.5

1.0

1.5

2.0

2.5

Output Earnings Employment

2.11

1.49

1.95


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Internet Employment Soars in Silicon Valley

Thousands, monthly

1990 1998 2000 2002 2010

0

2

3

4

5

1992 1994 2006 20081996 2004

1

Source: Haver Analytics and FBEI

CHART 7

Modeling all o these eects, the cluster could add $325 million to San Diegosannual gross regional product and $162 million in total personal income (bothgures in 2010 dollars) in 15 years. As a comparison, 2009 direct delegatespending or the 248 conventions held at the San Diego Convention Centerwas approximately $500 million.23 Further, the biomimicry cluster would alsoinitially generate a total o over 2,100 new jobs. By comparison, a total o just2,800 jobs was created across all sectors in San Diego County during the rstnine months o 2009.24

Multiplier coecients summarize the relationship between the direct eects this initialcore group o researchers would have on the economy and the total impact (due to thehiring o various support workers and the spending by all o the new employees). Therelatively high pay o the core group o 1,000 proessions (average $109,000) results incomparatively high multipliers. For example in the case o employment, the multiplieris 2.11, which means that more than one additional extra job would be created or each othe core group.

These gures represent just the tip o the iceberg. I rms produced resulting productsin San Diego, signicant numbers o other jobs would also be created over time, urther

adding to the regions output and total incomes.

Biomimicry could also be expected to have a much greater impact on the region thanindicated by input-output models o output, income, and employment. Applicationso biomimicry solutions could enhance the competitiveness o many industries in the


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region, enabling them to grow urther.

A biomimicry cluster also has the potential to grow very rapidly. By example, Chart 7shows how employment related to the Internet (search engines, smart phones, and otherweb applications) quadrupled in just 15 years in Silicon Valley (Santa Clara County,Caliornia). Biomimicry could be the next major driver o San Diegos economy,complementing such important clusters as biotech and cleantech.

The San Diego Zoo as the Fulcrum or a Biomimcry HubWith its worldwide reputation, the San Diego Zoo, administered by San DiegoZoo Global, would appear to be in an excellent position to be the leader o abiomimicry hub. The two zoo properties in San Diego County (the San Diego Zoo andSan Diego Zoo Saari Park) house nearly 8,000 animals representing 840 species.25 Inaddition to its vast animal collection, the San Diego Zoo is an accredited botanical gardenwith close to 40,000 plant species. San Diego Zoo Global has been heavily involvedin animal research and preservation as well as conservation through its Institute orConservation Research, which employs 180 researchers with expertise ranging romthe molecular to the ecological landscape levels. San Diego Zoo Global also has a strong

education program, involving 400,000 participants.26

The San Diego Zoo is a primary driver o collaborative eorts in the biomimicry eld. Itsnewly established council, the Biomimicry BRIDGE (Business, Research, Innovation,Development, Governance and Education), is playing a key role in ostering workingrelationships between the regions various universities and leaders in the business andnon-prot sectors.

The Zoo is currently the only acilities-based provider o biomimicry services in theworld. The Zoo plans to build the rst biomimicry research and education network todrive major biomimicry research and commercial applications.

Biomimicry is clearly a major emerging area with huge potential. San Diego andthe San Diego Zoo appear well suited to be major catalysts and play key roles inthe sectors development.


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Footnotes

1 Special Report: Sustainable Business, Financial Times (London): 4 Oct. 2010: 1-4.

2 Special Report: Sustainable Business, quote rom Pavan Sukhdev, head o the GreenEconomy Initiative at the UN Environment Program.

3 Francesca Romei, Leonardo Da Vinci, (Minneapolis: The Oliver Press, 2008) 56.

4 Janine Benyus, Biomimicry: Innovation Inspired by Nature,(New York: HarperCollins Publisher Inc., 2002).

5 Peter Foley, Biomimicry, Innovation and Sustainability, Seminar sponsored by theSan Diego Zoo, 22 Sept. 2010.

6 The World Bank Group, Environment, 2010, Retrieved Sept. 2010, ; see data on adjusted net savings.

7ACE, Pollution, (n.d.), Retrieved Sept. 2010,

8 Fiona Harvey, Greener industries adding power to economy, Financial Times(London) 18 Sept. 2009: 2.

9 BBMG, The Conscious Consumer Report (New York) Release date: 2009.

10 Tom McKeag, How Termites Inspired Mick Pearces Green Buildings, (2 Sept. 2009),Retrieved Oct. 2010,

11 Deense Science Oce Strategic Thrust, (n.d.), Retrieved Oct. 2010,

12 Based on data rom U.S. Bureau o Economic Analysis and FBEI estimates.

13 The World Bank Group (2010).

14 Based on GDP estimates by the International Monetary Fund, Data and Statistics,(30 Sept. 2010), Retrieved Oct. 2010, ; andorecasts by the FBEI.

15 PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report,Total U.S. Investments by Year Q1 1995 - Q2 2010, (Thomson Reuters) Release date:2010; estimate rom FBEI.

16 San Diego Regional EDC, Why San Diego? (San Diego) Sept. 2010.

17 MPLAN Data, CD-ROM, Hudson, WI: 2010.

18 PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report;estimate rom FBEI.

19 The City o San Diego, Small Business Assistance, (n.d.), Retrieved 30 Sept.2010,


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20 IBM. The Enterprise o the Future, Global CEO Study. (New York: IBM Corporation,2008).

21 Randy M. Ataide, Leadership, Center or Wealth and Legacy, University o San Diego,28 Sept. 2010.

22 Chip Heath, How to Create an Innovation Hub: Biomimicry and San Diego,Biomimicry Conerence, San Diego Zoo, 1 Oct. 2009.

23 San Diego Convention Center, FY09 Annual Report (San Diego) Release date: 2009: 6.

24 Nonarm employment, seasonally adjusted data, U.S. Bureau o Labor Statistics.

25 Celebrating Our Wildlie Connections: 2009 Highlights(Zoological Society o San Diego, 2009).

26 Georgeanne Irvine, Associate Director o Development Communications or the SanDiego Zoo and San Diego Zoo Saari Park, 13 Oct. 2010.


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ACE. (n.d.). Pollution. Retrieved rom The Alliance For a Clean Environment: http://www.acereport.org/costs.html

Association, P. V. (2010). Total U.S. Investments by Year Q1 1995 - Q2 2010. ThomsonReuters.

Ataide, R. M. (2010). Leadership. Center or Wealth and Legacy. San Diego: University oSan Diego.

BBMG. (2009). The Conscious Consumer Report. New York.

Benyus, J. (2002). Biomimicry: Innovation Inspired by Nature. New York: HarperCollinsPublisher Inc.

Data and Statistics. (2010, September 30). Retrieved October 2010, rom InternationalMonetary Fund: http://www.im.org/external/data.htm

Federal Ministry or the Environment, Nature Conservation and Nuclear Saety. (2009).

Foley, P. (September 2010). Biomimicry, Innovation and Sustainability. San Diego: SanDiego Zoo.

Green Tech: Environmental Technology Atlas or Germany. Munchen: Verlag FranzWahlen GmbH.

Harvey, F. (2009). Greener industries adding power to the economy. Financial Times(London) , 2.

Heath, C. (2009). How to Create an Innovation Hub: Biomimicry and San Diego.

Biomimicry Conerence. San Diego: San Diego Zoo.

IBM. (2008). The Enterprise o the Future, Global CEO Study. New York: IBMCorporation.

McKeag, T. (2009, September 2). How Termites Inspired Mick Pearces GreenBuildings. Retrieved October 2010, rom Greener Design: http://www.greenbiz.com/blog/2009/09/02/how-termites-inspired-mick-pearces-green-buildings

MPLAN Data. (2010). Hudson, Wisconsin.

Romei, F. (2008). Leonardo Da Vinci. Minneapolis: The Oliver Press.

San Diego Convention Center. (2009). FY09 Annual Report. San Diego.

Small Business Assistance. (2010, September 30). Retrieved September 2010, romThe City o San Diego: http://www.sandiego.gov/economic-development/business-assistance/small-businessSpecial Report: Sustainable Business. (October 4, 2010). Financial Times .

The World Bank Group. (2010). Environment. Retrieved September 2010, rom TheWorld Bank: http://data.worldbank.org/topic/environment

References


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Documents

Biomimicry Economic Impact Study