Building Scalable Biotech Industry Networks - The Biokeiretsu

Cam Watson is a faculty member at Xi’an Jiaotong-Liverpool University, working at the intersection of engineering biology, artificial intelligence, materials science, and automation. He helps deep-tech start-ups (including in biotech) launch, scale, commercialize, and secure funding - and is deeply interested in exploring coordination within the biotech industry (hence this article - read on below).

Originally published on Substack on November 13th, 2025. All the below is Cam Watson’s writing, and republished here with his permission.

I work at the intersection of biotechnology, AI, and industrial strategy, moving between the United Kingdom, the United States, and China. Across these ecosystems I’ve seen how hard it is for biotechnology to scale beyond the lab: brilliant science often stalls because coordination fails faster than capital. This article is an open draft of an idea that has been forming through those experiences — the Biokeiretsu — a model for how biotech might scale through cooperation, patient capital, and shared infrastructure. I’m publishing it here to invite feedback and critique from founders, investors, and policy thinkers who are building this future in practice.

A longer version of this piece, with schematics and expanded analysis, is in progress. I’m looking for collaborators who might want to refine or contribute to that version. If you’d like to take a look, please get in touch.

Biotechnologies Are the Petrochemicals of the Electric Tech Stack

Biotechnology is becoming the industrial infrastructure of the twenty-first century, replacing petrochemicals as the foundation for energy, materials, and manufacturing as electrification spreads across every sector in the new electric tech stack.

China arguably leads this transition through disciplined manufacturing and long-term coordination across entire value chains, while the United States remains the global engine of invention but struggles with the economics of large-scale production. For others, from Europe to Latin America, the challenge is how to compete in a system splitting between innovation and execution.

Yet this same decoupling opens a window to design distributed, cross-border architectures that let innovation and manufacturing evolve together rather than drift apart.

The Structural Problem Beneath the Bioeconomy

Biotechnology has advanced faster than the systems built to support it. The field stands on the edge of industrial maturity, but its infrastructure, financing, and market adoption remain fragmented and unable to scale efficiently.

Deep Fragmentation

Research, venture creation, and manufacturing still operate in isolation, each optimising for short-term outcomes rather than collective efficiency. Companies rebuild the same labs and pilot plants because shared facilities and quality systems are rare. The enabling-technology layer of automation, reagents, and data tools still serves pharmaceutical clients, leaving synthetic-biology ventures with misfitted platforms. Too small to justify specialised tools yet too fragmented to mature without them, the sector remains trapped in a loop of duplication and inefficiency.

Technologies are also developed far from their target markets. Biologists design products for consumer or industrial use with little integration or shared standards. Beneath all this lies a missing matrix linking vertical value chains (feedstock → process → product) with horizontal capability layers (infrastructure, data, automation, regulation, quality). A mature ecosystem would let these layers serve multiple verticals, improving interoperability and capital efficiency. Ventures could act as T-shaped nodes, deep in their specialisation but connected through shared assets and governance.

Capital and Scaling Bottlenecks

Venture capital still favours fast, high-multiple therapeutic bets over the infrastructure-heavy realities of industrial biotechnology. The result is an hourglass economy: (relatively) abundant funding at the research and late-stage ends but a constricted middle where scale-up should occur. Incentives are misaligned. Start-ups chase valuation, governments visibility, and investors liquidity, yet industrial biotechnology depends on patience and long-term capability. With no institutions bridging these horizons, the field swings between hype and stagnation, leaving a trail of prototypes and idle pilot plants.

Policy and Geoeconomic Constraints

Even actors who use the same vocabulary mean different things. “Scale-up” for an enzyme manufacturer might mean 100 litres; for cellular agriculture, 10,000. This confusion fragments incentives and wastes public spending.

Biomanufacturing remains energy-intensive and cost-sensitive, concentrating production in regions with cheap feedstocks and logistics advantages such as China, Southeast Asia, Latin America and even parts of mainland Europe. Superpower models such as China’s state coordination or America’s subsidised BioMADE strategy cannot be replicated by smaller economies, yet many still attempt uneconomic localisation.

Designing a New Bioindustrial Architecture

The answer to this fragmentation is not another fund or accelerator but a new industrial architecture that treats biotechnology as an integrated manufacturing system built on shared infrastructure, aligned incentives, and coordinated scaling.

A functional model would raise entire value chains together, linking ventures through shared facilities, data systems, and regulatory platforms to cut duplication and accelerate time to market. It would also reconnect start-ups to end users. Early collaboration with corporates brings demand visibility and validation, ensuring that technologies are designed for real markets, not hypotheticals. Co-development replaces guesswork with a continuous feedback loop between innovation and demand.

Geographic flexibility is equally important. Production should happen where economics make sense, near low-cost feedstocks and skilled operators, while innovation, intellectual property, and coordination remain anchored in regions that do them best. This encourages national specialisation and global interdependence, replacing protectionism with pragmatic coordination.

The model rests on five principles: vertical coordination, horizontal efficiency, interdependence between companies over isolation, geoeconomic flexibility, and long-term investor stewardship. Together they create an organisational architecture where many small actors can behave as one adaptive industrial organism.

The Biokeiretsu: Aligning Innovation, Capital, and Industry

Nicolas Colin has argued that modern economies need a new form of keiretsu: an industrial architecture that aligns investors, firms, and the state around long-term value creation. The Biokeiretsu reinterprets this model for the bioindustrial era.

It is not a venture studio or accelerator but a governance framework connecting investors, ventures, corporates, and governments within a distributed yet coherent system. Its purpose is not to centralise control but to build mutual capacity, a trust-based network where small and mid-sized actors behave like a single adaptive organism, scaling faster, learning collectively, and compounding capability over time.

Industrial biotechnology succeeds only when entire supply chains scale together. Investors, public or private, are the few actors with visibility across the chain: close enough to founders to identify promising technologies, close enough to corporates to understand demand, and equipped with the mandate to connect the two.

Rather than scattering bets across unrelated start-ups, investors would allocate capital vertically along value chains, linking upstream feedstocks and enzymes with midstream manufacturing and downstream applications. Cross-equity stakes, shared services, and pooled contracts align incentives and make collaboration rational. The investor’s role becomes architectural, curating interdependence rather than competition.

Start-ups remain the creative core. Plugging into shared infrastructure lets them focus on differentiation and product–market fit rather than plant construction or compliance. Corporates act as market anchors, bringing demand visibility and offtake agreements that de-risk innovation. Many already seek bio-based alternatives but lack the bandwidth to navigate early-stage ventures; the Biokeiretsu provides a structured interface between them.

The enabling layer of automation, AI design tools, reagent suppliers, analytical services, and manufacturers forms the connective tissue between discovery and production. Integrated through shared standards and transparent data, it ensures that capacity, quality, and demand evolve together.

Governments act as enablers and limited partners, co-investing in shared infrastructure and setting mission priorities. Success should be measured by long-term capability and resilience, not short-term job creation.

Together these mechanisms create a handshake between exploration and industrialisation. Vertically, investors and corporates coordinate along value chains to align innovation with demand. Horizontally, ventures that do not compete directly share infrastructure and learning. The result is an ecosystem that compounds capacity instead of duplicating it, scaling as a coordinated industrial organism rather than a collection of isolated parts.

Capital as Architecture

At the financial level, this model functions less like a venture portfolio and more like a long-horizon strategic investor. It blends elements of corporate venture capital and sovereign innovation funds but operates through network logic rather than single-entity control.

Cross-equity participation, shared-service revenues, and royalty flows create a web of aligned incentives across ventures. Instead of extracting short-term returns, capital is recycled into expanding shared infrastructure and collective R&D.

The goal is not faster exits but deeper, more resilient scaling. By spreading risk across interconnected companies and investing in shared assets that reduce duplication, the system achieves higher compounded returns with lower volatility. Over time, this reinvestment loop builds both the physical infrastructure and the relational capital of a genuine bioindustrial ecosystem that grows stronger with every new participant.

Anchoring Innovation Without Protectionism

A recurring challenge in innovation economies such as the UK is that promising start-ups, once they mature, either relocate to the United States to access growth capital or are acquired by foreign corporates. The Biokeiretsu addresses this by changing the incentives that drive such behaviour and anchoring value without protectionism.

Where a company manufactures matters less than what a country retains within the value chain. Biomanufacturing is global: cost and logistics determine competitiveness. Attempting to localise every stage of production in a high-cost economy is not industrial strategy but nostalgia. The Biokeiretsu offers a pragmatic alternative that lets countries double down on their strengths while remaining tied to the global value network.

Under this framework, economies like the UK’s advantage lies in innovation and orchestration: research, venture creation, AI-driven design, regulation, and capital deployment. These high-value layers remain domestic by design. Start-ups may manufacture abroad but keep intellectual property, data, and reinvestment flows anchored at home. This is distributed production with domestic control.

Structural incentives make network membership economically sticky. Shared infrastructure, cross-equity, and reinvestment loops bind companies to their origin ecosystem. Governments can reinforce this gravity by co-investing in shared facilities, offering scale-up finance, and prioritising procurement from ventures that stay within domestic or allied networks.

The Biokeiretsu reframes retention itself. The goal is not to keep every bioreactor onshore but to ensure that knowledge, data, and decision-making remain embedded where innovation begins, creating a new form of industrial sovereignty based on connectivity, not isolation.

Implementation Pathway

Turning this vision into reality does not require a vast institution from day one. It can begin as an experiment in coordination, testing whether vertical integration and orchestration across a small cluster of ventures can create measurable value. From there, the model evolves through successive stages, each deepening interdependence and refining governance.

Phase 1 – Venture Partner Model
A small venture-partner team works across a handful of synergistic start-ups, connecting stakeholders, identifying shared needs, and brokering collaborations. The goal is to test whether vertical visibility improves success and whether natural collaboration emerges.

Phase 2 – Mission-Driven Vertical Funds
Specialised funds form around defined verticals such as bio-cosmetics, food ingredients, catalysts, or fuels, each operating as a small-scale keiretsu. Cross-equity and co-development formalise incentives, and capital is deployed along value chains to preserve coherence through scale-up.

Phase 3 – The Biokeiretsu Network
At maturity, multiple clusters interconnect through a coordination layer, a “bioindustrial bank” managing shared infrastructure, standards, and reinvestment loops. Mature companies begin to invest in one another, creating a self-reinforcing industrial fabric capable of long-term compounding.

Across all stages, mindset matters as much as structure. The Biokeiretsu depends on active, service-oriented investors rather than passive capital. What begins as a small experiment in orchestration can grow into a durable, distributed industrial ecosystem.

The Case for Coordination

The Biokeiretsu is a proposal for thinking differently about biotechnology, not as a collection of isolated start-ups or state-led programs, but as an interconnected system capable of learning, compounding, and enduring. The challenge is no longer scientific discovery but coordination at scale.

In an era where innovation and manufacturing are decoupling, advantage will belong to those who can align them again. Building such an ecosystem will not come from policy slogans or investment hype but from disciplined collaboration, trust, and shared incentives.

The Biokeiretsu offers a path toward that future: a model for how distributed actors can operate as one intelligent organism, resilient, efficient, and collectively greater than the sum of its parts. It is, above all, an execution network for the bioindustrial age, an operating system for coordination rather than control, designed to turn today’s fragmented bioeconomy into a distributed industrial organism.

Big thanks again to Cam Watson for letting us republish this article!