The fertility business
Feb 16th 2006 | NEW YORK
From The Economist print edition
A baby-booming business
THERE is no better time than the commercial orgy that is Valentine's Day to consider the baby business. So with impeccable timing, Debora Spar, a Harvard Business School professor, has just published a fascinating book exploring how “money, science and politics drive the commerce of conception”.
Happily, this is not an attempt by the management profession to reduce baby-making to strategic alliances and stretch values. But in “The Baby Business” (Harvard Business School Press) Ms Spar does take seriously the idea that there is enormous demand for better ways of creating children coming from those who find that the old-fashioned way does not work—or gives them too little control over the screaming end-product. This demand is creating a spectacular increase in supply of techniques, technologies and businesses that span everything from the egg to the mother.
Fertility treatment is a business with more than 1m customers and revenues of $3 billion a year in America alone. Top-quality eggs—from a female HBS student, say—cost about $50,000. A surrogate mother costs about $59,000. Guatemala generates around $50m a year by exporting babies at around $25,000 a time. These businesses thrive, in part, because they are in a global industry that is regulated nationally, which leaves huge loopholes to be exploited by the customer willing to travel.
Thus, the Cryos International Sperm Bank in Denmark is the world's largest exporter of sperm (no news yet on whether an Islamic boycott has hurt business). Guatemala's baby exports are facilitated by comprehensive, but permissive, adoption laws. And America has become a global centre for fertility treatment, because—unlike in, say, Britain—the industry is largely unregulated.
Ms Spar, however, believes in the need for better regulation. She argues that governments confuse four different models of the baby market—the “luxury model” (buying a baby is like buying jewellery); the “cocaine model” (it should be banned); the “kidney model” (donation okay, trading not); and the “hip-replacement model” (some subsidy, some private supply). Instead, she wants governments to agree on regulations that curb abuses, but allow the market to function. However, given the political and ethical issues that the baby business raises, such a global consensus seems, well, inconceivable.