Final answer:
Plasmids are crucial in biotechnology as vehicles for introducing foreign genes into bacteria, facilitating the production of recombinant DNA and proteins like insulin.
Step-by-step explanation:
Plasmids are important in biotechnology because they are a vehicle for the insertion of foreign genes into bacteria. This characteristic allows for the creation of recombinant DNA molecules, which consist of DNA pieces from different sources joined together. Plasmids, being small circular DNA molecules, are engineered to include multiple cloning sites (MCS) for ease of incorporating foreign genetic material. The process involves using restriction endonucleases to cut both the plasmid and foreign DNA at specific sites, which after getting ligated together by DNA ligase, form plasmids with the inserted gene of interest. These recombinant plasmids can then be introduced into bacteria, allowing for the production of proteins such as insulin and human growth hormone in a process vital for research and pharmaceutical industries.