Summary

The United Kingdom possesses a large, productive and internationally competitive bioeconomy, which encompasses all economic activity depending on biological resources, including farming, pharmaceuticals, forestry, and food manufacturing. It is the fourth-largest in Europe by value added, generating approximately £325 billion in output and supporting 6.4 million jobs. However, the sector currently ranks only 21st out of 28 European countries for growth. The report proposes an effective policy and finance architecture to connect existing assets into a coherent strategy for growth, productivity, and sustainable industrialisation.

Introduction

The bioeconomy refers to the economic value derived from biological resources and processes. It is best understood as a pyramid consisting of a natural capital base foundation, a broad middle of bio-dependent sectors, and an innovation frontier at the top. Despite being one of the most nature-depleted countries in the world, ranking in the bottom 10% for biodiversity intactness, the UK’s natural capital still contributes the equivalent of 72% of GDP stock. Nature conservation and restoration are therefore viewed as preconditions for the growth of the bioeconomy, rather than a parallel agenda.

The UK’s bioeconomy in data

As of 2023, the measurable UK bioeconomy accounted for 13.2% of UK gross value added (GVA) and approximately 19% of total employment. However, it has grown more slowly than the wider economy over the past decade and a half, with GVA growing at 0.73% per annum in real terms compared to the national rate of 1.62%. Services dominate the sector, contributing nearly two-thirds of bio-GVA. The largest single category is services related to tangible bio-based goods (SATBG) at £129.1 billion, led by food and beverage services (£50.0 billion GVA), retail trade (£32.4 billion), and wholesale trade (£20.4 billion).

Trade is integral to the UK bioeconomy, though the sector is more import-dependent than the wider economy, with an export-import ratio of 0.90 compared to 1.07 for the UK overall. The European Union remains the dominant partner, accounting for 49% of imports and 41% of exports. Geographically, bioeconomy activity is more dispersed than the wider economy; London and the Southeast account for only 32% of bioeconomy value added, compared to 40% of total national economic output. In Northern Ireland, 73.5% of firms operate within the bioeconomy.

The bioeconomy frontier

The tip of the bioeconomy pyramid consists of high-value, high-growth sectors such as engineering biology, biomanufacturing, agritech, and precision breeding. Scientific research and development (R&D) provided a strong growth signal, generating £11.3 billion in nominal GVA in 2023. Bio-pharmaceuticals are among the most productive parts of the bioeconomy, with productivity reaching £214,609 per job. Private investment in bioeconomy sectors has increased 7.5-fold since 2013, reaching £14.33 billion in 2023. However, investment flows are currently misaligned with the infrastructure needed for scale-up, with capital flowing towards physical construction and research rather than industrial manufacturing and nature-based businesses.

The bioeconomy as a lever for the UK

A coordinated bioeconomy approach can advance four national priorities: inclusive growth, sustainability and nature-positivity, investment, and resilience. Frontier innovations offer methods to rebuild industrial processes to be efficient and sustainable simultaneously. For example, bacterial nanocellulose can substitute for animal leather, eliminating water-intensive processes and toxic effluents. Transitioning to a nature-positive economy must reshape production and processing across the wider economy, as conservation policy alone is insufficient.

A case for UK leadership in the global bioeconomy

The UK’s G20 Presidency in 2027 and G7 Presidency in 2028 present a rare opportunity to shape the global bioeconomy agenda. The UK’s competitive edge lies in its service sector, where bioeconomy services maintain an export-import ratio of 2.76. By leveraging its financial expertise and research base, the UK can become a global centre for bioeconomy finance, innovation, and international partnership.

A practical agenda for the UK

The UK currently lacks a framework to define and coordinate the bioeconomy. The report recommends adopting a common national definition and establishing an annual ONS Bioeconomy Account. Policy responsibility should be coordinated through joint leadership from Defra and the Department for Business, Innovation, Science, and Trade (DBIST). To bridge the ‘valley of death’ for startups, a coordinated financial market architecture is required. This should include a UK Bioeconomy Investment Platform to make opportunities visible, and demand-side mechanisms like bio-content standards and procurement-backed offtake to create revenue certainty.

Conclusion

The bioeconomy does not require the creation of a new sector from scratch but better coordination of existing bio-relevant policies, research strengths, and financial capabilities. By adopting a coordinated strategy, the UK can turn scattered strengths into a coherent programme for growth that supports nature, strengthens resilience, and enables the nation to lead internationally.