Sustech Innovation the Techno-Economic Analysis (TEA) for Biotech, Food-Tech & Sustainable Processes
The Founder’s Guide to Techno-Economic Analysis for Biotech Startups
This guide explains how techno-economic analysis (TEA) for biotech startups helps founders evaluate manufacturing feasibility, production costs, and scale-up strategy before committing to industrial-scale investment.
Estimated reading time: 10 minutes
Over the past two decades, I have worked on scaling up multiple bioprocesses from laboratory experiments to pilot and industrial production.
During this time, I had the opportunity to contribute to projects that moved from gram-scale laboratory experiments to pilot and industrial manufacturing — in some cases reaching thousands of kilograms of product per year — at organizations such as the Centre for Process Innovation (UK), the BioRenewables Development Centre (University of York), Bio Base Europe Pilot Plant, and EW Biotech.
Across these projects, one lesson became clear:
The biggest challenge in biotechnology is not proving that something works in the lab — it is proving that it can work economically and reliably at scale.
Many technologies that look promising in early research turn out to be extremely difficult or expensive to manufacture once real-world constraints such as equipment scale, yields, recovery losses, downstream processing, utilities, and capital costs are taken into account.
This is where techno-economic analysis (TEA) becomes one of the most valuable tools available to founders and technical teams.
When applied correctly, TEA helps answer critical questions such as:
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Can this process ever reach a competitive manufacturing cost?
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What production scale would make economic sense?
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Which parts of the process will dominate cost?
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Where should R&D efforts focus to improve commercial viability?
In this guide, I explain how techno-economic analysis for biotech startups can help evaluate manufacturing feasibility, prioritize development efforts, and avoid costly scale-up surprises.
Why Manufacturing Economics Are Hard to See from the Lab
In early-stage biotech companies, most technical work happens at the laboratory scale. Researchers focus on improving yields, validating biological pathways, and demonstrating proof of concept.
At this stage, the process is still very small, and many of the factors that influence industrial manufacturing costs are simply not visible yet.
Many founders building their first bioprocess company are encountering these industrial constraints for the first time.
For example, laboratory experiments rarely capture constraints such as:
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large-scale downstream purification complexity
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recovery losses across multiple process steps
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industrial utilities consumption (steam, cooling water, compressed air)
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labour requirements for operating and maintaining a facility
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waste treatment and environmental compliance costs
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capital investment required for industrial equipment
Because these factors only emerge during process design and scale-up, it can be difficult for founders to estimate their impact early in development.
In many cases, a technology may perform very well in the laboratory while still facing significant economic challenges at industrial scale.
This is where techno-economic analysis (TEA) becomes valuable.
A well-structured TEA helps translate laboratory performance into a realistic industrial production scenario by combining process design, engineering assumptions, and cost estimation.
Instead of guessing how a process might behave at scale, TEA allows founders to explore questions such as:
• What could the cost of production look like at commercial scale?
• Which steps in the process dominate cost?
• What technical improvements would most improve the economics?
If you are interested in a deeper look at the types of surprises TEAs often reveal, you may find this article helpful:
→ Inside a Techno-Economic Analysis: What Biotech Founders Get Wrong About Costs
What Techno-Economic Analysis Actually Does
At its core, techno-economic analysis (TEA) provides a structured way to look into the future and estimate what a promising laboratory process might realistically look like when implemented at industrial scale.
Instead of focusing only on laboratory development, TEA explores how the process might operate in a commercial manufacturing environment. It connects the science developed in the lab with the engineering and economic realities of running a production facility.
This is why techno-economic analysis for biotech startups has become an important tool for evaluating manufacturing feasibility before large investments are made.
In many cases, the transition from laboratory concept to industrial production introduces constraints that are not visible during early research.
A well-structured TEA typically examines several key questions.
Cost of production
One of the central questions a techno-economic analysis answers is what the cost of production might look like at industrial scale.
This includes raw materials, utilities, labor, maintenance, waste treatment, and other operating expenses that determine the overall cost of manufacturing.
For many founders, the first time they see a realistic estimate of the cost of production per kilogram is during a techno-economic analysis.
Plant scale
What production capacity would make the process economically viable?
The answer is not always “the largest possible plant.”
An economies-of-scale analysis helps determine the most appropriate capacity by considering factors such as market size, production cost, capital investment, and expected payback period.
Many processes only become competitive once they reach certain production volumes.
Capital requirements
How much investment might be required to build a facility capable of producing the target volume?
This includes major equipment such as fermenters, separation units, dryers, utilities systems, and supporting infrastructure required to operate the plant.
Process bottlenecks
Which steps in the process are likely to dominate cost, complexity, or operational risk?
In many cases, downstream purification, recovery losses, waste management, or energy consumption become the main drivers of production cost.
By exploring these questions early, techno-economic analysis helps founders understand which technical improvements matter most for commercial success.
Instead of optimizing every parameter equally, teams can focus their research and development efforts on the variables that have the greatest impact on manufacturing economics.
In this way, TEA becomes not just a cost estimate, but a decision-making tool that helps guide process development toward commercial viability.
The Questions Techno-Economic Analysis Helps Founders Answer
For many founders, techno-economic analysis becomes the first time they see their technology translated into a realistic manufacturing scenario.
Rather than focusing only on laboratory performance, TEA helps answer a set of strategic questions that determine whether a process has a viable path to commercialization.
Some of the most important questions include:
Can this process ever reach a competitive cost of production?
Even when a biological pathway works well in the laboratory, the final cost of production depends on many factors such as raw materials, downstream processing, utilities, and facility operation.
A TEA helps estimate what the cost per kilogram might look like at industrial scale and whether the technology could realistically compete with existing alternatives.
What production scale makes economic sense?
Many founders assume that scaling as large as possible will always reduce costs.
In practice, the optimal plant size depends on a balance between economies of scale, capital investment, and market demand.
Techno-economic analysis allows teams to explore how cost changes as production scale increases and helps identify the most appropriate capacity for a commercial facility.
Which parts of the process dominate cost?
Not all parts of a process contribute equally to the final cost of production.
In many bioprocesses, a small number of steps — such as purification, solvent recovery, energy consumption, or feedstock cost — can dominate the overall economics.
A TEA helps identify these key cost drivers, allowing teams to focus development efforts where improvements will have the greatest impact.
Where should R&D efforts focus?
Early-stage research often involves improving multiple aspects of a process simultaneously.
Techno-economic analysis helps reveal which variables truly influence manufacturing economics — whether that is yield, productivity, recovery efficiency, energy consumption, or equipment utilization.
This helps teams prioritize the improvements that most improve the commercial viability of the technology.
When Should a Startup Do a Techno-Economic Analysis?
One of the most common questions founders ask is:
“When is the right time to run a techno-economic analysis?”
Many teams assume that TEA should only be performed once the process is fully validated or when pilot-scale data is available.
In practice, techno-economic analysis can be valuable much earlier in process development.
Even when many parameters or processing technologies are still uncertain, a preliminary TEA can help teams explore how the process might behave at industrial scale and identify which variables will matter most for commercial success.
Rather than waiting for perfect data, early-stage TEAs often work with ranges and assumptions to explore different scenarios.
For example, a model might examine how the cost of production changes if:
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fermentation yield improves
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downstream recovery increases
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different processing technologies are used (e.g., spray drying vs. freeze drying)
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raw material prices fluctuate
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production scale changes
This type of analysis helps founders understand which improvements or technology choices will have the largest impact on the economics of the process.
As development progresses and more data becomes available, the techno-economic model can be refined and updated to reflect improved process knowledge.
In this way, TEA is not just a one-time exercise. It can evolve alongside the technology and continue guiding development decisions as the process moves from laboratory to pilot and eventually to commercial scale.
If you are interested in a deeper discussion of this topic, you may also find this article helpful:
Techno-Economic Analysis Evolves as the Process Develops
One reason TEA can be useful at multiple stages of development is that the level of detail and certainty naturally evolves as a process matures.
An early-stage model may rely on simplified assumptions and publicly available data, while later analyses incorporate pilot-scale results, detailed equipment sizing, and refined cost estimates.
Over time, the techno-economic model becomes progressively more accurate as more information becomes available.
To help founders think about this progression, I developed the ScaleUpReady™ framework, which describes how techno-economic analysis typically evolves alongside process development.
The framework outlines several stages, beginning with early order-of-magnitude techno-economic assessments and progressing toward detailed analyses that support pilot, demonstration, and commercial-scale investment decisions.
Rather than being a one-time exercise, TEA becomes a continuous decision-support tool that helps guide scale-up strategy as the technology moves from laboratory concept to industrial production.
What Data Is Needed to Run a Techno-Economic Analysis?
One reason many startups delay running a techno-economic analysis is the belief that a large amount of detailed process data is required before a meaningful model can be built.
While a detailed TEA does require significant process information, an early-stage analysis can often begin with a relatively small set of key assumptions. The goal is not to predict the future with perfect accuracy, but to explore how the process might behave when scaled to industrial production.
Some of the most useful inputs for an early techno-economic model include:
Process yield
How much product is generated from the biological or chemical conversion step.
Productivity
How quickly the process produces the target product, often expressed as grams per liter per hour in fermentation processes.
Downstream recovery
The percentage of product that can realistically be recovered after purification and processing. Even if laboratory or pilot trials have not yet been performed, many downstream technologies have well-known performance ranges that can be used as reasonable early assumptions.
Raw material requirements
The quantity and cost of feedstocks, media components, solvents, or other key inputs required for the process.
Utility consumption
Estimated requirements for energy, steam, cooling, compressed air, or other utilities needed to operate the facility.
Target production scale
The annual production capacity the company hopes to reach at commercial scale.
Even when these values are uncertain, TEA can still provide valuable insight by evaluating ranges of possible scenarios.
For example, a model might explore how the cost of production changes if downstream recovery improves from 80% to 95%, or if fermentation productivity doubles as the process is optimized.
As more experimental data becomes available through laboratory work and pilot trials, the techno-economic model can be progressively refined and updated, improving its accuracy with each iteration.
This iterative approach allows the TEA to evolve alongside the technology and continue supporting decision-making throughout the scale-up journey.
If you are preparing for a pilot trial or early process scale-up, you may also find this guide helpful:
Why Independent Techno-Economic Analysis Adds Value Beyond Internal Models
Many startups begin exploring their manufacturing economics by building internal spreadsheets or simple cost models.
This is a useful first step. It helps founders start thinking about production costs, raw materials, and potential pricing scenarios.
With enough time and effort, many teams can develop internal models that approximate how their process might behave at scale.
However, these internal models typically serve as exploratory tools. They help teams understand their technology, but they often lack the engineering perspective needed to evaluate how the process would behave in a real industrial environment.
A structured techno-economic analysis developed by an experienced process engineer goes a step further.
Instead of focusing only on laboratory assumptions or theoretical process conditions, a structured techno-economic analysis incorporates process design, equipment sizing, scale-up constraints, and industrial cost structures, but also draws on practical experience from real manufacturing environments.
Engineers with hands-on scale-up experience understand factors that are rarely visible in early models, such as equipment operability, realistic batch cycle times, cleaning and changeover requirements, integration between unit operations, and the practical limitations of downstream processing technologies.
These operational realities often have a significant impact on plant throughput, capital investment, and cost of production, and they are difficult to capture without practical experience in industrial process scale-up.
In many cases, these operational details can influence manufacturing economics as much as yield or raw material cost.
This distinction becomes particularly important when a company begins preparing for:
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fundraising
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partnership discussions
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pilot or demonstration plant planning
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strategic investment decisions
At that stage, a TEA prepared by an independent expert can become a valuable technical asset. It provides a transparent framework explaining how the manufacturing process is expected to work at scale, what the key cost drivers are, and how improvements in the technology could influence the economics of the business.
For startups that have not yet performed pilot-scale validation, this type of analysis can play an especially important role. In many cases, it becomes one of the first structured technical documents supporting the company’s manufacturing strategy and long-term business plan.
Another benefit that founders often discover during the TEA process itself is the opportunity for structured technical discussion.
Developing a techno-economic analysis typically involves a series of working sessions where process assumptions, technology choices, and scale-up strategies are reviewed and refined. These conversations often help teams identify questions, constraints, or opportunities that had not been considered previously.
In many cases, the process of developing the TEA becomes a valuable sounding board, helping founders refine their thinking about how their technology should evolve toward industrial production.
Internal models are an important starting point. A well-developed techno-economic analysis helps transform those early estimates into a credible engineering perspective on the commercial potential of the technology.
How Techno-Economic Analysis Guides Scale-Up Strategy
Beyond estimating production costs, techno-economic analysis plays an important role in guiding strategic decisions about how and when to scale a process.
As startups move from laboratory development toward pilot and commercial production, they face a series of important questions about scale, timing, and investment.
A well-structured TEA provides a framework for exploring these decisions before large amounts of capital are committed.
What plant size should we build?
Larger plants often benefit from economies of scale, but they also require significantly higher capital investment and carry greater financial risk.
A techno-economic analysis can explore how production cost changes across different plant capacities, helping founders identify a scale that balances cost efficiency, investment requirements, and realistic market demand.
Rather than assuming that “bigger is always better,” TEA helps determine the most economically sensible production scale for a given technology.
When should we scale production?
Scaling too early can expose a company to unnecessary technical and financial risk. Waiting too long can delay market entry and slow growth.
By estimating potential production costs and capital requirements at different stages of development, TEA helps founders determine when scaling the process may become economically attractive.
This type of analysis allows teams to align technical progress, market readiness, and investment timing.
Where should manufacturing take place?
Manufacturing location can significantly influence production economics.
Factors such as feedstock availability, energy prices, labor costs, logistics, regulatory requirements, and infrastructure can all affect the overall viability of a production facility.
Techno-economic analysis allows teams to explore how these variables influence manufacturing cost and evaluate different geographic scenarios for industrial production.
Should we manufacture at a CMO or build our own facility?
Many early-stage startups plan to rely on contract manufacturing organizations (CMOs) to produce their product.
Working with a CMO can be an excellent way to bring a product to market quickly without committing large amounts of capital to building a facility. For companies still validating their technology or market demand, this approach can reduce early financial risk.
However, CMOs are typically optimized for flexibility rather than lowest production cost. As a result, the cost of manufacturing through a CMO is often significantly higher than what could eventually be achieved in a dedicated production facility.
This is where techno-economic analysis becomes particularly valuable.
A TEA can estimate the potential cost of production in a future dedicated plant and compare it to the expected cost of manufacturing through a CMO. This allows founders to understand when operating their own facility might become economically advantageous.
In many cases, the most effective strategy is a hybrid approach:
• early production through a CMO to validate the market and generate initial revenue
• parallel development of a techno-economic model to evaluate the economics of a future dedicated facility
• construction of a production plant once the process and market are sufficiently validated
Without this type of analysis, it can be difficult for founders to justify the investment required to build a manufacturing facility, especially when the true long-term production economics remain uncertain.
A well-structured TEA helps make these trade-offs clearer and supports more informed decisions about when to transition from contract manufacturing to dedicated production capacity.
Which technical improvements matter most before scaling?
Not every improvement in the laboratory has the same impact on industrial economics.
TEA helps identify which variables — such as yield, productivity, downstream recovery, energy consumption, or equipment utilization — will most strongly influence the commercial viability of the process.
This insight helps teams prioritize development efforts before committing to large capital investments.
By providing a structured way to explore these questions, techno-economic analysis becomes more than a cost model.
It becomes a decision-support tool that helps founders design a realistic pathway from laboratory concept to industrial production.
If you would like to explore these topics in more detail, you may also find this article helpful:
→ Scaling Where It Makes Sense: How TEA Guides Plant Location, Scale, and Timing
The ScaleUpReady™ Framework
One of the lessons that became clear to me after working on multiple scale-up projects across different organizations is that techno-economic analysis is rarely a single event.
Instead, it tends to evolve alongside the development of the technology.
In early stages, teams are often working with limited experimental data and many uncertainties. As the process matures and more information becomes available through laboratory experiments, pilot trials, and engineering studies, the techno-economic model can gradually become more detailed and accurate.
Over time, the analysis shifts from exploring possibilities to supporting major investment decisions.
To help founders think about this progression, I developed the ScaleUpReady™ framework, which describes how techno-economic analysis typically evolves throughout the scale-up journey of a biotech process.
The framework outlines several stages that align with the maturity of the technology and the level of information available.
Idea Stage
At the earliest stage, TEA can be used as a first reality check.
Simple order-of-magnitude estimates help explore whether a concept could ever reach a competitive manufacturing cost and what production scale might be required.
Order-of-Magnitude TEA
As basic process assumptions become clearer, a preliminary techno-economic model can evaluate how the process might behave at industrial scale using estimated yields, productivity, and downstream recovery assumptions.
Process Development Decisions
At this stage, TEA begins to guide R&D priorities by identifying the variables that have the greatest impact on cost of production, such as fermentation performance, recovery efficiency, or energy consumption.
Pilot and Demonstration Planning
As experimental data improves, the techno-economic model can incorporate more detailed process design and equipment assumptions, helping teams evaluate pilot plant configurations and future commercial scale scenarios.
Detailed TEA for Commercial Scale
Once sufficient data is available, a more detailed techno-economic analysis can support investment decisions, facility planning, and commercial manufacturing strategies.
Rather than being a one-time exercise, techno-economic analysis becomes a continuous decision-support tool that evolves as the process moves from laboratory concept to industrial production.
In this way, techno-economic analysis becomes not just a financial model, but a structured way to guide how a technology moves from scientific discovery to industrial manufacturing.
The ScaleUpReady™ framework helps founders think about when different levels of techno-economic analysis are most useful, ensuring that economic considerations remain integrated with technical development throughout the scale-up journey.
Final Thoughts
Scaling a biotechnology process from laboratory experiments to industrial production is one of the most challenging stages in the development of any new technology.
Many promising innovations struggle not because the science fails, but because the realities of manufacturing — scale, capital investment, operating costs, and process complexity — are only fully understood late in development.
They don’t fail because the science doesn’t work.
They fail because the economics were framed too late.
Techno-economic analysis provides a structured way to explore these realities earlier.
By connecting laboratory data with process design, engineering assumptions informed by scale-up experience, and cost estimation, TEA helps founders better understand how their technology might behave when scaled to commercial production.
When applied throughout the development journey, techno-economic analysis can help teams:
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identify the key drivers of manufacturing cost
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evaluate production scenarios and technology options
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prioritize the technical improvements that matter most
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explore different scale-up strategies
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assess manufacturing location and facility options
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support investment and commercialization decisions
In this way, techno-economic analysis becomes more than a cost model.
It becomes a decision-support tool that helps bridge the gap between scientific innovation and industrial manufacturing.
For early-stage biotech startups, developing this understanding early can reduce risk, improve strategic planning, and support more confident conversations with investors, partners, and manufacturing collaborators.
If you are evaluating the commercial viability of a new bioprocess, an early techno-economic analysis can help clarify the path from laboratory discovery to industrial production.
You may also find the following resources helpful:
→ Techno-Economic Analysis Readiness Checklist
→ What Data to Collect From a Bioprocess Pilot Trial
Or, if you would like to discuss whether a techno-economic analysis could be useful for your process:
Frequently Asked Questions About Techno-Economic Analysis
What is techno-economic analysis in biotechnology?
Techno economic analysis (TEA) evaluates whether a biotechnology process can be produced economically at industrial scale by combining process design, engineering assumptions, and cost estimation.
When should a biotech startup run a techno-economic analysis?
A TEA can be valuable even at early stages of development. Preliminary analyses often help startups identify key cost drivers and prioritize research before committing to pilot or commercial scale investment.
How accurate is an early-stage techno-economic analysis?
Early-stage TEAs use ranges and assumptions rather than precise measurements. Their purpose is not to predict exact costs, but to explore how different technical and scale assumptions influence commercial viability.
About the Author
Gustavo Valente is a process engineer and techno-economic analysis specialist with over 20 years of experience in biotechnology process development and industrial scale-up.
He has contributed to the development and scale-up of multiple bioindustrial processes ranging from laboratory research to pilot and industrial production, including projects at organizations such as the Centre for Process Innovation (UK), the BioRenewables Development Centre (University of York), Bio Base Europe Pilot Plant, and EW Biotech.
Through his work at Sustech Innovation, he supports biotech, food-tech, and sustainable materials startups in evaluating manufacturing feasibility, production economics, and scale-up strategy using techno-economic analysis.