How valid are long-term government plans? Technological forecasting of the Korean biotechnology industry

Abstract

The biotechnology industry has the potential to add economic spillover effects to a national economy but heavy investment and systematic planning are required. In 2007, Korea started the second stage of an ambitious government-led program, Bio Vision 2016, which is aimed to create an extended market size of 60 billion U.S. dollars by 2016. But, our long-term forecasting techniques predict roughly 5.5 billion U.S. dollars in constant price by 2016. Considering both professional judgment and the degree of current Korean government policies toward heavy investments in the biotechnology industries, however, is crucial to produce an accurate forecast. Thus, after these adjustments, the forecast value of the market size increases from 13 billion to 33 billion nominal U.S. dollars, depending on the investment strategy choices. We explain how our long-term forecasting values are computed and discuss possible reasons for the discrepancy between those prediction values. Also, we provide policy debates on whether the government goals are fully achievable.