Reindustrialization: Using the bioeconomy to enhance reindustrialization | Industry | Business

Colombia’s reindustrialization has been one of the cornerstones of President Gustavo Petro’s agenda. However, a report prepared by the University of Rosario’s School of Economics, It was revealed that the development of these policies in the country has been reduced.

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One of the reasons for this decline is the low value added of goods and services, coupled with the country’s high dependence on the mining and energy sectors. The bioeconomy has begun to be seen as an axis of change for this policy.

A detailed analysis documents the country’s declining level of reindustrialization, From 1956 to 1975, this indicator accounted for 18.8% of Colombia’s GDP, but according to the analysis from 2016 to 2022, it only accounted for 11.3% of the economy.

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Andrés García-Suaza, dean of the School of Economics at the University of Rosario, said that although the problems that led to the slow economic development have been addressed through public policies, “Failure to recognize that Colombia is a country with a highly heterogeneous structure that requires different means and levels of differentiated intervention depending on the level of territorial development.”.

In this context, the URosario document emphasizes: Compass 4129-2023Aiming to promote re-industrialization by strengthening environmental sustainability, promoting innovation and circular economy, the bioeconomy can be used as a transformation axis.

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“Incorporating the bioeconomy into the public policy agenda is relevant because it promotes sustainable approaches to production and consumption and because, through the use of renewable bioresources, it contributes to the environment and to climate change mitigation.”, they explained.

This type of economy helps diversification, they added, as it can promote the creation of new jobs in sectors such as sustainable agriculture, biotechnology and bioenergy. Reduce reliance on other sectors such as energy extraction, which have so far hurt the country’s industrial development.

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Likewise, the author maintains that the reindustrialization policy will be effective for 11 years, from 2024 to 2034. Total cost: $7.8 billionplays a leading role in the bioeconomy.

Digging deeper into the figures, the document shows that at the national level, in 2019, Colombia’s bioeconomy employment rate is 98%. By 2023, this proportion will drop to 70%, a decrease of 18 percentage points (pp).

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Meanwhile, the unemployment rate shows that the bioeconomy sector has a lower unemployment rate, but it increased by 6 percentage points between 2019 and 2020. However, In the following years, the national situation improved and the unemployment rate fell to 8% in 2023.

In his analysis, Compes advocates a policy of reindustrialization of production models, coupled with increased innovation and research, to generate Biotechnology products such as pharmaceuticals, fertilizers, biogas and radiopharmaceuticalsThese measures could be strengthened to achieve, among other things, the goal of reindustrialization.

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Ana Gaona, a researcher at the University of Rosario’s School of Economics, added: The current economic model faces challenges and bottlenecks If handled properly, it can bring economic and social benefits to the people of the country.

“For example, the development of industries such as the bioeconomy will not only promote the development and well-being of production factors directly related to the industry, but also have a chain effect. This production line is innovation-intensive and requires improvements and training at all stages of the production chain, which will have obvious benefits in the short, medium and long term.“, he analyzed.

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diagnosis

Considering the use of bioeconomy as one of the drivers of reindustrialization policies, The researchers identified a range of issues that are preventing these measures from making positive progress in the country.

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In general, some concerns stem from the low value added in Colombia, which is related to Inefficient production of goods and servicesleading to a widening production gap.

In addition, they point to the poor diversification and sophistication of the supply of goods and services for domestic consumption and export. It should be noted that at this time, the former Minister of Commerce, Industry and Tourism, Germán Umaña, assured that the lack of supply of new products in Colombia is one of the focal points that must be addressed, Because to some extent, the policy has not worked for foreign trade.

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Another outstanding aspect is Weaknesses of production chain integrationThe country suffers from low trade integration, especially with Latin America and the Caribbean, Asia and Africa, and weak institutions.

Angie Mondragón, a researcher at the University of Rosario’s School of Economics, said: Diagnosis of a country’s bioeconomy is crucial to identify sectors with potential for development.

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“The bioeconomy requires research and development of new technologies, products and processes based on biological resources, which will lead to greater competitiveness in the long run. In this way, Conpes 4129 proposes to place Colombia on a common agenda with OECD member countries at the center of solid waste management and energy production”, he commented.

Finally, they explained that last year,Transformative role of Bogotá Regional Bioeconomy Innovation Hub identifiedidentifying gaps in institutions and governance, knowledge management, participation and market access, culture and education.

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“Actors with the capacity to strengthen the bioeconomy ecosystem are also described and key indicators are calculated to diagnose and identify actions to strengthen the sector.”, they pointed out.