Bioeconomy Leaders and Innovators Q&A

Richard Engler: To start off the conversation, I'd like to hear what you have to say about your approaches to innovation? Do you have an innovation and look for markets for it, or do you identify a market and try to find a technology to satisfy a need?

Christophe Schilling: Our theme at Genomatica is “bioengineering innovation.” We approach innovation from a number of different ways. We have certain innovations that were because we saw a market and we felt we could develop technology that could provide an innovation to disrupt that market or traditional value chain. We also have some innovations that I would say that came as a result of offshoots of other technologies that we were developing. We subsequently found that we had a route to another molecule and found that market opportunity to be attractive. We have some stuff that has come about because we developed an overall technology platform and that led to other innovations that created different opportunities for us. Initially, it absolutely is: here's a product, there's a market, and we developed a technology to innovate in that space. And if we did that well enough, we would start to see a multiplication of that opportunity.

Blake Simmons: At National labs, we really don't have “bottom-line” drivers that underscore everything that we do. We're usually accused of doing “science in an ivory tower.” But recently, spanning the last decade or so, there's been a growing awareness that science for the sake of science has a role, but it can't be the end all and be all for everything that we do. So in addition to the really fundamental science that we conduct every day, both at UC Berkeley and Berkeley lab—and the 17 other National labs that the Department of Energy has where—there's a lot of core scientific and technology development that is really motivated by answering a hypothesis relevant to the “real world”. But now there's more of an emphasis on mission-impact work and trying to make a return on investment for the taxpayer.

EDITOR’S NOTE: This article was derived from a recent Bioeconomy Leaders and Innovators Reception in San Diego, CA. The reception and question and answer session were sponsored by Bergeson & Campbell, the Biobased and Renewable Products Advocacy Group, and Industrial Biotechnology.

The only way that the National labs can do that is through partnering with industry. We can't sell things on our own, thankfully—if the National labs had to sell things to survive, it wouldn't be good. One manifestation of that has been, for example, the Bioenergy Research Centers that were funded back in 2007 for really mission-driven outcomes. These centers have conducted really mission-driven work in renewable fuels and chemicals. For example, at the Joint BioEnergy Institute we have a techno-economic modeling analysis team that helps us identify molecules to go after. This is very important in terms of what we do with synthetic biology, where it is really not a question of what can you make, but what should you make, and what is the driver for it? How do you come to a rational defense of it? We don't have to defend ourselves to shareholders or investors. We can just defend it based on the market opportunity at large, and trying to combine the science with the opportunity to improve it and then work with industry to transform the marketplace. The Joint BioEnergy Institute has 200 invention disclosures, about half of those have been turned into patents, and we've got 5 startups and other licensees from it. And it's only because we've had that approach of what we can do using fundamental science to make a mission impact.

Anna Rath: NexSteppe is entirely market focused. We use technology as a means to the end of addressing a clear market opportunity. The whole impetus behind creating NexSteppe was that there was this emerging set of industries—biofuels, biopower, biobased products—that had gotten started on wastes and residues, and that was a fine place to get going because they were broadly available, but these industries weren't going to get to anything like the level of scale or level of sustainability that we all wanted them to without a set of feedstocks that had been optimized for this purpose. So from the beginning the whole idea behind the company was that somebody needs to do this. No one else is doing this in a focused and concerted fashion so we're going to step in and be the company that is focused on developing feedstocks to meet this whole range of end uses.

We started out with biomass for power, we then added in our Malibu sweet sorghum to provide a source for readily available, fermentable sugars, and in the next couple of years we will be adding a product line specifically aimed at biogas for higher methane production and one for cellulosic biofuels. But in all cases, the way we've done that is to really understand that downstream industry and what would constitute a better feedstock for it—in terms of what would work well in the process, and in terms of where in the world it is being used so what geographic regions it needs to be adapted to. Then we take our tool box, which is the sorghum genome, and all of the technologies we apply to it, and design product lines and multiple hybrids within that product line, that meet the needs of that particular end use.

Richard Engler: What has been your biggest contributor to your success? Is it your technical team, is it the executive team, partner organizations, intellectual properties/portfolio? What has been the primary contributor to the success that you've all achieved?

Anna Rath: It's absolutely team, there's no question. But I wouldn't differentiate technical from management. Management needs to tell technical teams where they need to go, and then the management/commercial team can't get anywhere unless the technical team has given them something work with. I think human resources—having the right people in the right positions all going in the same direction is absolutely the most important thing. But I don't think you can differentiate between the importance of one piece of the team over the other.

Blake Simmons: At the National Labs, it all comes down to people. Management and science—it all involves people. I think the key enabler for us is that our success is our mission. When you can describe the intended impact in decisive terms, it really is a focus element that motivates people and self-selects for those people. I'm sure the scientists at National Labs would say they succeed despite their management, that's just the nature of the beast, but I view National Labs as incredible resources for the public and private sector. The tools that they have at their disposal, what they can really align to a particular when they need to, and having a goal centered around bioenergy, renewable energy, carbon emissions, or renewable fuels—these are really empowering drivers for us. And we really don't have any problem getting people to want to sign up for that mission. In fact we have to turn people away due to resource constraints. It's really that tie between the fundamental science and the world-class expertise that we have in place, and then aligning it to a mission that is important to the US. And then just getting out of the way, but maintaining some semblance of boundary conditions our customer and funder wants. But it's really a mission-driven environment enabled by fundamental science that has really been gangbusters for us.

Christophe Schilling: I'm going to end up saying the same thing. You need a market, you need money, you need technology, you need patents—you need all of this but all of it is really created by people. I often get asked ‘what's the one thing that keeps me up at night?’ I always think about company culture. If we create a great culture, a great environment, and have great people, then they will be highly motivated and will do great things. For us that includes having the right partners early on. For our first product, butanediol, we developed the technology to a certain stage and then we needed to scale up. And we have different partners that we work with to do that. They brought in great capabilities. So at the end of the day it comes down to working with great people.

Audience query: You mention the importance of people, but how important is diversity within your groups?

Anna Rath: One of the things that is fantastic about NexSteppe is that even within the United States, our two locations are the San Francisco Bay area and Hereford, TX. Talk about difference in culture. And then, NexSteppe in Brazil has a similar thing where we have our headquarters in a science center/city of Campinas, and then a research station out in Goias, which is much more rural. And now we have operations in Europe and China. The plethora of cultural approaches and world views is absolutely critical.

Blake Simmons: There are diversity challenges within certain sectors of the National Lab environment, but at Joint BioEnergy Institute, there are partner institutions that give us access to a wide range of diversity in skill sets, language, culture, and gender diversity as well. We've got UC Berkeley, UC Davis and Carnegie, as well as Pacific Northwest, Lawrence Livermore, Lawrence Berkely, Sandia. We have nuclear labs working with science labs, working with universities working with nonprofits. You can't get a more diverse range of perspectives in a room than when you get together.

And that's actually part of the power of meeting our bioenergy mission, is that diversity in perspective, diversity in capabilities, and diversity in expertise. We've got mechanical engineers, chemical engineers, physicists, mathematicians, biologists, synthetic biologists, biochemical engineers, all on the same team, working on the same mission. And that is creating some very nonlinear impacts. We've actually developed synthetic biology toolboxes for plants that we never thought of when we wrote the proposal. We have microfluidics that are doing synthetic biology activities that were only the result of group of seven, amazing microfluidic engineers who refused to accept any restraints based on commonly held assumptions on physics or thermodynamics. It's incredible. It's only by bringing together these different elements under one roof that we've been able to pull a lot of this off. It's a key enabler of success.

Audience query: How important is it to understand every aspect of how the market behaves when trying to insert yourself into it?

Christophe Schilling: I think you have to try to understand as much about the market as you can, but there's all kinds of things that you can't control. You don't control responses by the market players, for example. You can do your best to think about game theory and how people will respond. From our standpoint, one of the tricky things for us with butanediol is that it's a market that's very concentrated, with a small number of key players. With certain groups, we didn't know if they were talking to us because they were interested in our technology or because they're concerned about the threat we pose. And you have to try to gauge all that. That makes it interesting and difficult as well.

Audience query: Over the past two years we've seen a shift in policy. Can you comment on what that means for your work?

Blake Simmons: We live in very interesting times. It has been an unsettled landscape in terms of policy, implementation, and evaluation. Back in 2009 when I was working in support of the California Low Carbon Fuel Standard (LCFS) there was a completely different set of drivers and constraints and considerations. The Renewable Fuels Standard under the Energy Independence and Security Act of 2007—everyone forgets that it was voted in and supported by Republicans across the board. Energy Secretary Bodman was actually the one who awarded the first three bioenergy research centers and started this “hubification” of Big Science at the National labs.

But we live in the world. And the unexpected impact of the technology known as fracking… and shale oil exploration—no one anticipated that, including Big Oil & Gas. That is evidenced by the OPEC meeting that just transpired in Qatar. So you've got a set of economically disruptive influences that are going on, you have an unsettling in the foundation around carbon policy across the world, and you have to balance the competing forces around trying to save the planet while trying to make it affordable. It's very difficult. And when you talk to small-, medium-, and large-cap industries that are involved in low-carbon intensity energy production, what they always say is that they want a steady foundation around these policies so they're not whip-sawed and subject to every two or four years whims of favor.

I think the most sage advice I can give is we have these policy drivers and they need to be given decades of opportunity to succeed. Oil and gas were not developed over a seven-year period. It was developed over 150, 170 years. And that gives them a really strong foundation on the science, technology, and engineering side, as well as one of the captive footholds on the market. And so it's really difficult and that's why we're seeing a diversification around the portfolio of bioenergy to have more and more growing emphasis on renewable chemicals in addition to fuels, because way back in the day it was, ‘We're going to solve the world's problems by creating biofuels and it's going to be 50 billion gallons or bust.’ That is no longer the mantra. And it never should have been the mantra. What we need are diversified solutions to replacing the whole barrel of oil.

I think companies like Genomatica have proven this out—you can go into renewable chemical or material production that is not only a functional equivalent but chemically identical, and you can get some toeholds in the market that aren't centered around petroleum being “evil.” It's the market-competitive nature of it where you can actually make some inroads. What you need to achieve is marketplace parity to succeed. No one today is going to pay a premium for a renewable product. Well, the vast majority won't anyway. You really have to go with this mass appeal of no loss in performance and maintaining a cost profile that can withstand the absence of a policy safety net.

That's just the reality of the market from our perspective. We've learned it painfully well. I always say, ‘We know how to do biofuels wrong really, really well.’ And we need to learn from our mistakes and do it really, really well once or twice. I think renewable chemicals are a good bet, and a lot of the companies that were looking to make a difference in fuels and are diversifying into chemicals. A lot of them will say they need to do it to survive, but I think in the long term it's a much more sustainable value proposition. We need to succeed despite confusions and uncertainties on any carbon policy and the lack of action around it.

Ann Rath: When I first put the business plan together for NexSteppe, one of the things I accounted for was that there were a lot of things about this business opportunity we can't control. We can't control policy around the world. We can't control the pace of technology development, and we can't control the pace of infrastructure buildout. There are all of these things that we need to have happen that we cannot control. So what can we do? We can pick a crop that can be grown basically anywhere in the world, and we can optimize it for all of these different end uses—power, energy, biofuels, biobased products, biogas. And that way on any given day, some of those end uses and some of those regions are going to look more appealing and some are going to look less, but as long as you are the small, flexible company that has the ability to maneuver and go to where the opportunities are, you have the basis for building a business. And then eventually, you'll have the platform from which you can attack all of those opportunities. We always felt it was that flexibility, maneuverability and hedging that was key for dealing with all the uncertainty and forces that we don't control.

Christophe Schilling: The policy question makes me think back to why I got into this industry in the first place. I was in San Diego, getting my degree in bioengineering back in the late 1990s. Biotechnology in San Diego is 95% drug discovery and development. And I had some friends who were in companies developing drugs. And they would work their heart out and they would do great science, and then all of a sudden a toxicity study comes back, it was a bad result, and the company was dead. And I thought, that must be so painful, to put all this time and work into something that ends unsuccessfully.

Not a lot was going on in industrial biotechnology in San Diego, so I started to like the idea of industrial biotechnology. And then I thought to myself, what if something [negative] happened on policy, and that would be equally as painful? So we ended up focusing on chemicals. We were probably one of the first ones to be out talking about chemicals. This was in late 2006, 2007. We thought that chemicals were a great place, partly because of the policy situation. Yes, it would be great if there was policy to support it, that would be helpful, but it wasn't necessary to succeed.

For me, I also felt, just looking at the cost curves we had to get to for chemicals, that there was probably a lot of technology and tools that still had to be developed, a lot of innovation that still had to happen to allow us to be successful. Regarding my technology vision for the future, I am a believer in biofuels, but I think a lot of tools that are being developed today for chemicals need to continue to be improved considerably in order to make something like biofuels successful. Many industry successes thus far wouldn't have happened if we didn't have the environment that was created in 2003–2006 that enabled a lot of policy to be put into place and a lot of capital to be attracted into the industry. But I think what you're seeing is over a period of time, a lot of these technologies are being developed, tools are being perfected, and ultimately there's going to be breakthroughs in these efforts that will create the foundation for a much broader footprint in biofuels. And who knows what the world is going to look like, what the policy environment is going to look like in the future? But I can tell you the technology foundation that will be required to enable cost-effective biofuels is much stronger today than it was 10 years ago.

Audience query: There seems to be a lack of PhD-level scientists actually shaping policy from inside the government. Have any of you considered running for office?

Christophe Schilling: If you look at the landscape of politics today, it probably isn't an environment that makes it inviting for somebody who tends to be more grounded in scientific thought. It may just be that there's such a clash of personalities between politicians and scientists. No, I will not be running for office.

Blake Simmons: There are a tremendous number of AAAS [American Association for the Advancement of Science] fellows and staffers that come from a science and engineering background. So they may not be the ones running for office, but they are informing policy, they're helping to shape policy, and they form an invaluable backbone for science and technology in Congress. There is a big team around science and technology for the United States that both parties have unequivocal support for. STEM is one of those embodiments. You've got a lot of support for fundamental science from both the Republicans and Democrats.

But nonetheless, when I first started going to DC 15 years ago, I thought it was going to be a colossal waste of time because I was going to be speaking to a bunch of folks that don't get science and technology. But it's not that way at all. There are plenty of people who are consummate professionals, scientists and engineers, who are working behind the scenes to make sure that a scientific perspective is on policy wherever possible. And I think it is incumbent on all of us as scientists and engineers that when we have the opportunity to go and interact with Congress or state lawmakers in these workshops or policy forums and discuss science or controversial topics, that we go. It's on us to participate, it's not on them. We don't need to run for office to influence policy. There are a lot of avenues to do that. But I think where we fall down is missing those opportunities. And you see it more and more around the climate change debate, on renewable energy, and on advanced biomanufacturing and synthetic biology and their ethical and legal concerns and potential implications. These things matter. And whether or not we are in office, we need to be part of the process to try and inform the policymakers and be a voice in the outcome.

Christophe Schilling: Also, at the early stages of their career tracks, when people are figuring out what they want to do, one of the things that I always found puzzling was that you get out of graduate school and the options you hear are, ‘Well, there's academia, and there's industry.’ You either go down a track to become a professor, or you go into industry. But there are many alternative careers in science. There are other things that people can do with that great knowledge that they've gained and they can put it to work in different areas. There are many people with great technical backgrounds that are in these influential roles but we don't know them. Unfortunately, they're not very visible to the younger generations of scientists who are trying to figure out where they want to go. And I think having more examples of those other career options would be really helpful in getting more participation.

Anna Rath: I would say where in the world you're thinking of being a politician makes a difference, as well as whether you're considering elected office or public service. I would be very inclined toward public service, but if we're talking about the United States, being an elected politician is not a particularly compelling job. But I think there are many other places in the world where being an elected official is much more compelling.

Audience Query: What we have been discussing here has been focused on the here and now, and your experiences. I'm concerned about the future. I'm concerned about the educational system, and what we can do to bring back the interest in science and mathematics that are going to be required for us to make the advances that you all envision?

Anna Rath: The world needs science doing impressive things. Addressing challenges, fixing the major problems. It's really cool for kids everywhere when someone goes to the moon. And I think we have every bit of opportunity to do things of this magnitude, as these industries are starting to tackle the problems of climate change and environmental degradation caused by fossil fuels, and to have achievements that have the same impact on the future. It's these events, celebrated in the right ways, that create the excitement around young people getting into science.

Richard Engler: Part of it is definitely having kids interested and excited. It is imperative that science communicates to a broader audience about what it is that we're doing, why it's cool, and why other people should be interested in it. It's something that's been lacking for a long time in science education. When you look at advanced education in science, now I think PhDs are realizing they need to be able to communicate to a broader audience. Certainly when I was a graduate student, you needed to communicate to your committee and that's where the emphasis was.

Christophe Schilling: I agree, you need to have some of that inspirational moonshot. What exactly that is, I don't think that's been well laid out. Everybody who does something great can look back and point to something when they were young as inspiration, whether it is to go into science or to train for an Olympics. But at the base level, one of the challenges is that, quite frankly, society doesn't value science and engineering at the level it values other degrees. You're going to make far more money getting a law degree or MBA, and you see a lot of people going into those areas.

I've always felt that one of the big challenges, too, is that we just don't pay teachers enough. Period. You send your kid to school, and think about how much you're actually paying teachers to spend what is a majority of your child's waking hours educating them. Sometimes you pay a babysitter more on an hourly basis.

Blake Simmons: This is a problem that has been recognized for at least two decades. And there are a lot of initiatives underway to address that. The one problem is that education along with science and technology has been politicized. And I think very much for the worst. Especially when you have politicians that want to do away with the Department of Education. That is a rather challenging environment to try and implement systemic education reform. And it's a dichotomy that we live in this technological marvel that is the 21st Century, and we take things for granted every day of our lives that represent the culmination of 50–100 years of science and engineering. Smartphones, the cars that we drive, the computers that we use. We just take it all for granted. And it really is a disservice to the educational systems that have produced the people that go out and make those products that we're not priming the next generation to drive it even further.

For all 17 of the National Labs, and a countless number of universities and high schools, trying to address those shortages in STEM is both an opportunity and a challenge. You see a lot of successful pilot programs; you see a lot of outreach and curriculum development in K-12. National Labs do that now, where we didn't do that 15 years ago. So we are trying to turn the tide. The question is: how do you do so in an effective and larger-scale way in such a resource-constrained environment? And that really is the question that needs to be answered. So if you want to be a voice in the room to try and change things, write a letter to your elected representatives and make sure it's a priority when you go to the ballots.

I think there's a growing awareness in society. People are beginning to talk about this. But the challenge is enormous and it's only getting worse over the short-term. Higher education in America is on the precipice of crisis especially with the homegrown talent being outsourced to other nations because of a better policy environment and better opportunities, and also the influx of international students coming into the university system and then go back home to work. It's a multi-tiered problem that's going to take time to figure out, but we need to make sure our voices are heard through the elected offices. Currently, in a lot of ways, they're not.

Richard Engler: Have you found regulatory challenges? Anything that has been a significant barrier to innovation?

Christophe Schilling: I think it has been relatively straight-forward for Genomatica. We were fortunate that there were precedents. Could it have been faster? Perhaps. But it wasn't something that was a rate-limiting step between development and commercialization.

Blake Simmons: For us it's not so much regulatory issues but public perception issues. Our biggest hurdle hasn't been getting regulatory approvals but getting acceptance from a community in which some people are skeptical of bioengineering. So we have to be proactive in the community and get a dialogue going so that they understand the nature of the work and the benefit of it. They understand the risk of it—we're not trying to sugarcoat it—and helping them understand that NIH Guidelines on Recombinant DNA Technology and others have set the best practices that we adhere to. This is an issue that, if you get it wrong, and don't pay attention to it very early on in the research process or technology development, you are DOA. Especially for industrial biotechnology, [public acceptance] is a really important facet of our existence and something that we are communicating with bioethicists about the full spectrum of what we do in the laboratory.

Christophe Schilling: One of my roles outside of Genomatica is that I am on the World Economic Forum's Global Agenda Council on Biotechnology. This is the number one issue that we all think about: What happens if genetically modified organisms suffer the same fate as what has happened with genetically modified crops on a global basis? It's a risk and it comes down to communication issues. I think the agbiotech community had some missteps and there are things that we can learn from that. I think one of the advantages that we on the WEF council have discussed, is that there are so many innovations today that are happening because of genetically modified organisms. These innovations are literally saving lives. If genetically modified crops were to go away, you wouldn't get the same food productivity. But you can literally say, ‘If you don't want genetically engineered organisms, then everyone who takes insulin dies.’ So if you really don't want genetically modified organisms, my argument is, ‘You don't want people to get life-saving treatment?’ I think that's an opportunity to help address that point. But Blake is absolutely right, just imagine if the sentiment around engineering microorganisms changes to the negative? This entire industry—gone. Done. So it's an important point.

Anna Rath: We don't do transgenics, so that helps us avoid a lot of the regulatory issues that would otherwise be concerning. But in some foreign countries that we are in, their regulations skew towards protectionism.

The other thing that we have encountered, that is a frustration for us, is the degree to which regulations are based on models, the inputs to which nobody knows anything about. So I'll just give you a few examples. The modeling world can't decide if it is better to have a larger-root biomass, because that means you're sequestering more carbon dioxide into the soil, which is good because it locks it away, or whether that is bad because then you're growing more soil microbes that emit more methane, which is a more potent greenhouse gas. Here's another one. The models on land-use change all assume that if you plant a hectare of dedicated energy crops, you necessarily displace a hectare of food crops, and so on and so on, and eventually rain forests are cut down. Our experience in Brazil is that the vast majority of our crops are either grown as the second crop following soybean—in places where you wouldn't have enough water to grow grain crops during that season—or in the renewal period between cane crops where the land would otherwise sit fallow. And when we grow as a second crop after soybean, we actually increase soybean yield about 15% because of the crop rotation. So we are actually having a positive land use change because on the same hectare, you're now growing a food crop and an energy crop, and the energy crop is actually increasing the yield of the food crop. And the model can't predict that. That capability doesn't exist. So much of the decision-making is based on these theoretical models that just don't correspond with reality.