The Business of Stem Cells
| An Emerging Market | ||
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The promise of stem cells has not been lost on capitalism. More than 1,000 private, for-profit companies are now engaged in the various forms of stem cell activity. From building the complex equipment needed in this field to actually manufacturing stem cells, the business of stem cells is emerging as the "next big thing" in the biotechnology industry. Investors are betting on a set of highly promising but still unproven technologies. They are technologies that — like satellite television in the 1980s or Web browsers in the 1990s — seem to be standing on the cusp of history, eliciting a complicated mix of commercial interest and social concern. They are technologies, moreover, whose evolution will be shaped by business as well as science — by the markets they create, in other words, and the people who clamor for their goods. 
Currently, the market for stem cells is distinctly immature. However, this still-small business is likely to expand dramatically, following along the well-trod path of similar breakthrough technologies. The economics here are simple. |
Already, there is a widespread, deep-seated demand for the products that stem cells may eventually provide — treatments for diabetes, regenerative medicine, and customized therapies. As the science matures, there will also be firms with the capacity to supply these very same products. And once demand and supply exist together, they will naturally create a market. Governments can try to prohibit or constrain this market; they can push the market abroad or underground. But history suggests that such prohibitions will inevitably be short-lived, because if demand is intense enough and supply available, then would-be buyers and sellers will eventually constitute a market of their own, either by circumventing the law or by pushing the state to relax its restrictions. We have seen this dynamic of prohibition repeated throughout history, playing itself out with regard to a range of technologies that were just as radical in their own time as stem cells are today. When the printing press was invented in the 15th century, for example, established authorities regarded it as a subversive force, since it put the power of words, for the first time, in the hands of common people. When radio emerged around the turn of the 20th century, governments tried desperately to control its use, fearful that the spread of information across the skies would create havoc on earth. And when reliable means of contraception |
became technologically possible, both social critics and government authorities spent decades trying to squelch their use, arguing (with a faint foretaste of current debates) that any intervention in the process of reproduction was both unnatural and immoral. In the end, however, all these technologies generated both profitable markets and more accommodating policies. Society grew accustomed to the science, customers demanded what the science could provide, and governments agreed to regulate what they no longer cared to ban. A similar progression is likely to occur in the field of stem-cell research. Yes, the science is path-breaking, both medically and in terms of social impact. Yes, stem-cell technologies have the potential to change both how we treat disease and how we understand life.  But the very potential of the science also means that markets will cluster rapidly around it, pushing stem-cell technologies out of the realm of the awesome and into the more comfortable world of the real. Government restrictions cannot prevent this transition from occurring. They can, however, exert a powerful influence on how and where the stem-cell industry develops. |
