Fall 2016 issue of Horizons
LIFE SCIENCES & TECHNOLOGY
On a larger scale, we see strategic alliances and mergers and acquisition activity on a global scale as well. Since December 2013, Monsanto (U.S. based) has partnered with Novozymes (Denmark based) through the BioAg Alliance to research, develop and commercialize microbials. Syngenta AG (Swiss based) and ChinaChem (China based) were working toward completing ChinaChem’s acquisition of Syngenta by the end of 2016. Also, Bayer AG (Germany based) and Monsanto recently announced an agreement to merge, which once completed, will create one of the largest leaders in global agriculture. Globalization in ag investment is likely related to globalization in general, but also, in our opinion, correlated with the other observed trends of increasing innovation and overall increases in investment. While we don’t anticipate the U.S. losing its lead in ag-related investment any time soon, like the other trends, we do expect to see increased globalization of investment and commercialization continue. Adoption of the Latest Innovations Finally, the end result of increased investment and innovation is ultimately the adoption of beneficial new technologies and systems. Arguably, ag-producers have historically been viewed as slow adopters. However, as new technologies get proven out, the next generation of ag-producers begin to manage operations, and early adopters increase the diffusion of technology, we anticipate that new technology adoption will increase, including an increase in the rate of adoption. Ag-producers and other entities in the agri-business value chain will always face challenges: climate change, climate variability, cyclical input and output prices and a need for sustainable production practices.
as tech investors are now “venturing” into territory once reserved for life sciences focused investors. The significant increases in investment should be a major positive factor for the industry as the capital supports the research, development and commercialization of new technology and helps improve yields, production economics and production security in the decades to come. Globalization of Ag Related Investment There is an increased globalization in investment, across the size and maturity continuum. At the venture level, investment is still predominantly North American based, more pointedly U.S. based, but over 40% of 2015 deals were outside of the U.S., including a respectable number in India, continental Europe, the United Kingdom and Israel. The Yield Lab, a St. Louis, Missouri based ag-tech accelerator, recently announced its expansion into Ireland (the Yield Lab Galway).
page 12 | horizons Fall 2016
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