This article by TechAccel President and CEO Michael Helmstetter originally appeared in Forbes on Aug. 3, 2018.
To feed 9 billion people, it’s going to take more than equity and mega-mergers. When the U.N. Food and Agriculture Organization (FAO), The Gates Foundation, United Nations, The Center for Food Integrity, and The Office of the Director of National Intelligence all agree on one topic, you should probably sit up and take note. Right now, these organizations align that we’re at an ‘all hands on deck’ to prevent a looming crisis in the global food supply.
By 2050, there will be more than9 billion peopleon the planet, which means that we will need 70 percent more food than what is produced today. One issue in this projected need is that there simply isn’t 70 percent more land to produce said food on—the FAO reports that added farmland can only produce 20 percent of additional food required, and that another 10 percent of food will come from cropping intensity. This leaves a 40 percent gap in food growth for technology to fill.
This is a huge task, and that’s before you even consider water concerns, global climate change and the growing demand for meat from an exploding global middle class. We need all hands on deck nowif we are to generate the broadest possible range of innovations in productivity, sustainability, plant traits and animal husbandry. We need to do more with less—more food with less land, more innovation with less funding. That means the cycle from discovery to market adoption needs to be as efficient as possible, and right now there are two yawning chasms in that cycle—an innovation gap and a market adoption gap—swallowing up some of our most promising breakthroughs.
The Innovation Funding Gap
We seem to be short of hands when it comes to generating innovations, and the hands that do exist are receiving less R&D funding than they need. According to a USDA studyconducted between 2008 and 2013, “real (inflation-adjusted) public food and agricultural R&D fell by about 20 percent” in the United States. And industry R&D trends have historically paralleled federal trends. As you watch the Bayer-Monsanto mergermove forward, you’re seeing two major R&D budgets freeze until they can be integrated into one unit, likely with a more limited mandate.
To address the funding gaps, we must first understand how and why they occur.
The first pitfall innovators and investors routinely face comes between basic research and the commercialization of a new product. This gap most often occurs when public investments are made in very early stage research without sufficient attention to the likely investment needs and decisions at later stages of the innovation process. Academics are great at discovery, but not quite so good at commercializing these ideas. As many as four in five technologies fail to cross the funding gap.
The gap is further exacerbated by a discrepancy of focus between public- and private-sector investments. Public investment typically leans toward early, high-risk R&D and broadly applicable basic research. Private investors make investments in businesses that emphasize strong management teams and products, not technologies.
The Market Adoption Gap
The second part of gap stems from the challenges of pushing an innovation out to a broad market. As Geoffrey Moore, Stanford University business professor and author of the best-seller “Crossing the Chasm,” has argued, “it takes significant funding to cross the gap between reaching early adopters and mass market acceptance. The problem is, that need for cash often crops up just as companies are struggling with the low cash flows caused by the innovation funding gap.”
The major challenges of the technology life cycle, the funding gap, and the adoption gap all hit simultaneously. Together they form a ‘Valley of Death’ that stifles some of the best tech opportunities we have attempting to address the grand challenge agriculture faces in the years ahead. Clearly, we need to rethink the way we fund and develop technology.
Bridging the Gap with Equity-Plus
To move new discoveries to the marketplace, private industry needs to do more than make investments. We must learn about the discoveries that scientists have made in their labs and bring those ideas into a marketable form. Equity plus science advancement.
In some cases, it is about bridging the innovation funding gap from discovery to commercialization. For these scenarios, accessing help to advance and de-risk stranded or stalled technologies may just be how we feed the world. Many stalled projects exist at universities, where basic research dollars are exhausted and the technology hasn’t progressed enough to be picked up for industry development. Or maybe projects stall out at strategic global industrial firms because of a high risk profile.
We need to think more creatively about how to drive progress forward and change trajectories.
This takes shape by spanning the market adoption issue by locating adjacencies (applying a new innovation or technology into related markets or products) that share risk. By identifying pain points in adjacent industries, there can be a collective pool of ag and animal health and research institutions that, together can de-risk and advance research.
Deploying a focused approach to market creation and other mechanisms can accelerate time to market and bring technologies to markets where they can make the greatest impact—two absolute musts. As the future draws near, we need to make moves about how we intend to bring agriculture and animal health innovations forward to solve global challenges. We need all hands on deck now to secure the future of the world’s food.