The social and economic benefits of the bioeconomy will depend on good policy decisions. The required mix of policies is linked to the potential economic impacts of biotechnological innovations on the wider economy. Each type of innovation can have incremental, disruptive or radical effects. In many (but not all) cases incremental innovations fit well within existing economic and regulatory structures. Disruptive and radical innovations can lead to the demise of firms and industrial structures, creating greater policy challenges, but they can also result in large improvements in productivity. This chapter identifies policy options to address challenges in primary production, health and industrial biotechnology. It also looks at crosscutting issues for intellectual property and for knowledge spillovers and integration, global challenges, and the need to develop policies over both the short and long term. Primary production provides a diverse range of policy challenges. Examples include the need to simplify regulation, encourage the use of biotechnology to improve the nutritional content of staple crops in developing countries, ensure unhindered trade in agricultural commodities, and manage a decline in the economic viability of cool-climate forestry resources for low value commodities such as pulp and paper. The main challenges for health applications are to better align private incentives for developing health therapies with public health goals and to manage a transition to regenerative medicine and predictive and preventive medicine, both of which could disrupt current healthcare systems. Industrial biotechnology

faces multiple futures due to competitive alternatives from both outside and

within biotechnology. Policy needs to flexibly adapt to different outcomes

and prevent “lock-in” to inferior technological solutions.