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Innovation and Commercialization Part 3 of 4

Posted on September 27 2013 | Author: Admin

Game-Changers... Same Market or New?
Innovation may be classified as radical, disruptive or incremental.  Radical innovation is invasive. It establishes its own new market and sends incumbent markets into history books.  The automobile displaced the horse and carriage.  Disruptive innovation is one which causes turmoil in an industry, but does not create new markets. As to if smartphones are a disruptive innovation over cellphones depends on whether a new market for hand-held communication devices was created with the smartphone launch.  Both radical and disruptive innovations are game-changers. On-line shopping has certainly been a game-changer in the retail sector.  Has it created new markets (radical) or simply caused turmoil (disruptive)?

How Next Happens
Incremental innovation is how ‘next’ happens. Defined as “an improvement in the cost or functionality of an existing product in an existing market”, a BI Norwegian School of Management Thesis  concluded that “most progress in society is achieved through incremental innovation, which is far more frequent and economically predictable than radical innovation”.  Two car-based examples are the GPS and IPAS (Intelligent Parking Assist System), standard new features on several car brands.  Both were first launched as a personal-car feature 10 years ago, yet only recently matured to a technologically-dependable and cost-effective proposition.  Neither feature is radical (no expansion or displacement in the personal car market).  Are these features disruptive to the automotive sector?  Would a driver examiner permit use of an IPAS during the parallel-parking portion of a driver’s test? If so, is this fair to those without access to an IPAS? The topic would become a moot point should all cars eventually include an IPAS, in which case correct operation could be an evaluation point.  Is a GPS a hazardous distraction from a driver’s attention?  Or, will GPS-equipped cars net on the upside? - due to less time being lost, ability to schedule travel time, less need to frantically confirm the name of a street, more timely arrivals, etc.  As society decides these matters, any market upheaval is a consequence.

Getting to Next
“I don’t see much new here” sighed the trade-show attendee, an IT expert on the fringe of the food industry.  On the surface, an accurate observation.  However, the IFT Innovation Awards Committee evaluated 62 entries, many of which could be described as incremental:  a more soluble, true-salt-flavour sodium replacement; a sanitization system which greatly reduces water and energy usage; an edible gold glitter. Incremental innovation moves in increments (if at all) and is a timely process.  In addition to taxing the patience and resources of the entrepreneur, a willing and engaged consumer is mandatory, to shed a bit of the customary methods so as to make way for, and embrace, the new.

A Course for Improvers
The 1000-year old Buckfast Abbey in Devon, England offers bee-keeping courses to serve three levels of apiarists, or honey farmers: beginners, one-day workshops and… improvers! There is no mention of ‘advanced’ courses here or a place for those who may describe themselves as such.  The Buckfast history provides clues to this choice of words, as the pages are peppered with “drastic change” “immediate and fundamental transformation” and “rebuild” interspersed with long periods of calm and civil livelihood.  Centuries of experience has allowed the apiarists to recognize and value the counterpoint activity of continuous improvement, and the factors which foster it.

An Enduring Example
One of the world’s leading companies in the frozen food sector is “Newlyweds”.  In 1932, a founder created a smash success when he layered ice cream onto a sheet cake and rolled the two into a frozen pinwheel.  The company was re-named “newlywed”, having newly married cake and ice cream. Today, the company owes its success to having “consistently invested in infrastructure, human resources and capacity”.

Carol T. Culhane, PHEc, MBA
President, International Food Focus Ltd.
Bioenterprise Regulatory Advisor

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The Future of Agri-Technologies

Posted on September 11 2013 | Author: Dave Smardon

The World Bank is predicting that our global population will top 9 billion by the year 2050 and these estimates have gone as high as 10.6 billion. We all know that there is only so much arable land on the planet and productivity gains per hector are dropping off, albeit gradually, but is this a harbinger of things to come?  So, how are we going to feed this growing population?

Of course, the issue is far more complex that just feeding a growing planet.  As the population grows, there is an increased migration from rural existence to urban life, particularly in the emerging markets, like India, China and Africa. This migration helps drive greater economic wealth within the urban areas and with this increased income comes a dietary change that is more focused on the consumption of protein. Yes, it seems that everyone wants to adopt a more North American diet. Just to make a point, currently, India’s middle class population is estimated to be 450 million people and growing, larger than the entire population of the United States and Canada combined.  The International Food Policy Research Institute predicts that protein consumption will nearly double across Africa and Asia by 2050.  Another way to state this problem is that there will be 40% more mouths to feed and 70% more calories required. Regardless of how you interpret the numbers, it seems likely that our world is going to experience very significant challenges to food production, competition for protein and affordability. 

While the “food driver’ is most obvious, one cannot ignore other underlying factors such as anticipated future water scarcity, climate change, human health drivers (diet related) and the dramatic affect that petroleum prices exert on agricultural input costs.  We cannot address each of these in this blog, but that in no way diminishes the critical impact that these factors will have on the human population. All of these typically result in producing even greater adverse affects on what is already considered a huge global problem.

But, there is a trend that is looming large within the agriculture community.  It is called agricultural technology or agri-tech and it is the most likely solution to drive greater efficiencies and production increases across the globe.

Take for example, crop inputs, which include the likes of fertilizers, herbicides, pesticides and fungicides. Today, the research, development and commercialization have fallen into the hands of young entrepreneurial firms. With patents in hand and field trials completed, these upstarts are ready to make their mark in the world. From, naturally derived pesticides, organic fungicides and non-petroleum-based fertilizers, these companies have become the “gold” that is being sought by venture capital firms and corporates alike.

Similarly, crop genetics and plant breeding have experienced the same evolution. Crops that are resistant to viruses, fungi and bacteria and those that have built in tolerances for temperature, drought and salinity have sprouted from university research centers, where new companies have been formed. Corporate investors are gobbling them up to expand their product platforms and build sustainable product lines for the future.

This conversation is not complete without the mention of precision agriculture or precision farming. Today, precision agriculture is about whole farm management with the objective to optimize returns on inputs while preserving resources. It relies on new technologies like satellite imagery, state-of-the-art sensors, information technology, and geospatial tools. It is also aided by farmers’ ability to locate their precise position in a field by using satellite-positioning systems like the GPS.

Precision agriculture also provides farmers and suppliers with a wealth of information to build up farm records / historical data, improve traceability, improve decision-making and it is the leading trend driving new investments in “big data”.

All of these are examples of innovations in agri-tech and they will play an integral role in driving global increases in agricultural production.  Who knows, the future Microsofts and Apple Computers may actually be agricultural firms designing innovative technologies that will help feed the planet.

Dave Smardon
President & CEO

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