AgTech & Mars’ Perseverance rover, what do they have in common?
Reference: https://www.space.com/perseverance-mars-rover-landing-kid-friendly-activities
"Touchdown confirmed," was followed by a roaring applause from mission control and some interesting corona-safe elbow bumping. Thursday night, NASA’s Perseverance rover had successfully landed on mars and like many families, we followed the landing live. On top of all technology and science excitement, there was another highlight that stuck with me all week. A seventh-grade student named Livia asked this awesome question to Dr. Lori Glaze, Planetary Science Division Director: “What made you want to study Mars and why are you working so hard and willing to wait so many years for a soil sample?” Sparking a passion for planetary science Dr. Glaze replied: “Because we have great new scientists all about your age and in about 10 to 15 years you will be the generation to actually work with these samples.” Bringing a smile to Livia’s face.
In some way, agricultural science is not unlike a complex multi-stage mars mission, the journey from basic scientific discovery to a fully approved new product or technology can span 10 to 20 years and requires multi-million dollars investments. The returns on innovation in AgTech have been often skewed and like the mission to Mars, no one can forecast what researchers will ultimately find. Moreover, the time period over which such risks must be borne is unpredictable. In comparison, Google’s search engine was fully operational one year after the start of the research collaboration.
Since venture funds and capital markets pressure for short-term financial results, even large and successful companies are finding it increasingly challenging to justify this long-term risky investment in AgTech innovation. These funding difficulties resulted in the “seeding” of some new exiting innovation ecosystems in our industry.
According to a recently leaked draft work program, the European Commission is planning to allocate €404 million over the next two years for research projects supporting its Farm to Fork strategy with a proposed €5 million for genome editing research. Last month, VIB launched its first agricultural biotechnology incubator in Belgium and StartLife, a Wageningen based accelerator for agrifoodtech startups celebrated his 10-year anniversary and has been growing steadily over the last couple years. In a climate where M&A’s have reshaped our Ag industry, large multinationals are often pressured to reduce internal R&D investments and have moved towards open innovation, where they develop strategic assets in collaboration with external startup or mid-size ventures. We also see venture capitalists in Food and Ag style themselves more as long-run investors. And there is mushrooming of virtual discovery companies or units, where technology research and development is mostly done by third party contractors.
An interesting new model, proposed for biotechnology and drug discovery ventures, but we should also look into for AgTech is this alternative structure proposed by Lo and Pisano for undertaking long-term, high-risk, capital intensive R&D programs that typify science-used settings. Project-Focused Organisations, also called PFOs are entities that are created with the sole purpose of conducting a specific R&D project. When the project is completed, the PFO is disbanded, residual returns (if there are any) are distributed to investors, and intellectual property and other assets are sold off. Lo and Pisano propose PFOs as an attractive alternative to both the traditional vertical integration model in larger companies and the traditional venture capital/entrepreneurial startup model.
So what does AgTech have in common with the Perseverance Mars mission? The real answer here is probably “Perseverance”. We have to keep on stimulating people to think about new ways to finance and support groundbreaking endeavours in Ag, so we can also hand over these innovations to our next generation and bring a smile to their face.
References:
https://sloanreview.mit.edu/article/lessons-from-hollywood-a-new-approach-to-funding-rd/
