Looking Beyond the Bottom Line
Production of "low value products" is difficult to motivate in capitalist economies, but the task can be accomplished when viewed from a broadly-defined economic perspective. The key negative aspect at issue is the fact that "low value products" detract from a company's "bottom line" profits. A company's economic value is diluted both directly and indirectly when "low value products" are under consideration. Genetic engineering is seriously confronted with these conflicts of interest. The technical aspects of genetic engineering are forced to a secondary level as economic considerations force themselves to the forefront of this debate.
The direct impact of "low value products" is by definition limited profitability without exponentially large sales figures. The indirect impact is that the low value products divert resources away from investment in high value products at all stages of research, development, production and marketing. Economically, the problem facing low value products is production costs rising above the product's selling price. In some manufacturing contexts, the largest component of the production cost structure is expenditure on labor. This situation may not consistently exist in terms of genetically engineered products, but does illuminate an interesting angle of the situation. The low selling price of the product is not necessarily the most problematic as the situation can also be considered one of high labor costs. In other words, supply side characteristics are perhaps the more viable sources of a solution than demand side manipulation. Altering individual consumer behavior is much more daunting than changing market supply motivation.
The highest hurdle in this situation is getting management and creditors to look beyond the bottom line in favor of the societal benefits that their low value products are capable of producing. In the case of developing countries, there is a plausible scenario for motivating production of low value products with societal benefits. In the majority of developing nations, prevailing wages are significantly less than those of developed economies. Allowing a company based in a wealthy economy to build a facility in the developing nation may be incentive enough to promote the production of low value products. This construction on foreign soil is a significant advantage for a number of reasons: 1) Costs-to-Market are significantly reduced. Transportation to vendors becomes less expensive. 2) Labor costs are decreased. Cheap labor reduces the cost component and could allow for profit making at lower selling prices. In extreme cases, the cost reduction may transform a low value product in domestic markets into a high value product in foreign markets. From here economies of scale may allow production on such a large scale that it also reduces the cost per unit in domestic markets to boost domestic profits. Under these circumstances, the developing country...