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TEAGASC 2030 OUT OF THE BOX THINKING WORKSHOP DUBLIN 25th JULY 2007

TEAGASC 2030 OUT OF THE BOX THINKING WORKSHOP DUBLIN 25th JULY 2007. Jørn Bang Andersen Special advisor innovation Ministry of Foreign Affairs of Denmark Trade Council of Denmark. Adding value. Denmark responded to the fall of the price of wheat in the 1880s, in a dynamic way.

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TEAGASC 2030 OUT OF THE BOX THINKING WORKSHOP DUBLIN 25th JULY 2007

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  1. TEAGASC 2030OUT OF THE BOX THINKING WORKSHOPDUBLIN 25th JULY 2007 Jørn Bang Andersen Special advisor innovation Ministry of Foreign Affairs of Denmark Trade Council of Denmark

  2. Adding value • Denmark responded to the fall of the price of wheat in the 1880s, in a dynamic way. • Rather than the static liquidation of the agricultural sector that took place in Britain. • Denmark switched from exports to imports of grain as an input in new industries of dairy products and meat production. • Lesson: History shows that in times of changes only those who are ready to make a causual bet and adjust become tomorrow’s winners of that change.

  3. Discovered elsewhere • 1871 Rudolph Schatzmann, Swiss, wrote a paper on the importance of scientific control of coagulents and cultures for cheese production. Paper was given to the Dane Christian D. A. Hansen, a pharmacist from Copenhagen University • 1873 established production based on scientific methods for coagulents and cultures in cheese production. Production based on calve stomachs - a waste product at the time • Today Chr. Hansen Lab has development centers in Denmark, the USA, France and Germany, application centers in over 20 countries and extraction and production plants on four continents • Virtually unknown outside their specialised field, several hundred million people around the world enjoy their products every day in the foods they eat. Recently bought by PAI Partners Capital Fund • Lesson: Danish pharmacists have been leading in turning animal production into multinational pharma companies

  4. Discovered elsewhere • In 1922 German scientist discovered insuline treatment from oxe pancreas. • 1923 Danish physiologist and nobel laureate August Krogh went to Toronto and learned about treatment of diabetes using insuline from the oxe’s pancreas. • He went back to Denmark and developed the methodology together with pharmacists. 1960s pig-insuline proved superior. Today Novo Nordic is the world’s largest pharma company on insuline. • Lesson: Many inventions and discoveries are not commercialised by the country, company, person or even industry where the discoveries originated.

  5. Supply chain problems • In 1960s the Danish shipping company DFDS and Danish Food Exporters Association made an agreement to use container ships in food exports for the UK market. • Reason: Strikes in English ports damaged the trade and goods. Containers solved partly the off-loading issue for food. And DFDS had a business case for entering the fairly new container market. • Lesson: Innovation and problem solving primarily happens when different industries co-operate.

  6. Biz Innovation • National Danish Robo-cluster network – annual innovation day for agriculture business using robots and sensors. • The DeLaval Voluntary Milking System--called "voluntary" because cows return to the system on their own--has reduced farm's labor costs by 75% and raised milk production by 15%, "Robots don't get sick, need health insurance, have birthdays, get drunk, and they always show up,”. • Lesson: User-producer linkages are the key to innovation in all branches.

  7. Oresund Food Network • Aim to strengthen innovation and product development within the agri-cluster and especially within SMEs of the region. • Collaboration between Danish-Swedish govt. People from leading companies, universities, branch.organisations, leading restaurant chefs, universities, academy of science, Gastronomic Academy. • Lesson: Innovative region’s are not bounded by national borders. And network’s should encompass all actors in the value chain.

  8. Global Farming • The last 10 years the Danish Ministry of Foreign Affairs have had a soft loan scheme for production in Eastern Europe, Russia and Ukraine. • Danish farmers have used the scheme to establish huge farms in Ukraine, Russia and Poland • Production still sold as Danish premium brands around the world. • Lesson: Globalisation is leading to industry concentration across the entire value chain. Global hubs for R&D, production, ports. Only those with capital for investment and bargaining power in the value chain will avoid being diluted in this process.

  9. Denmark’s Approach • Government’s Globalisation Council 2006 • Denmark world’s most competitive and innovative economy by 2015 and onwards.Key trends were identified, and today’s and future global hot-spots mapped with Danish industry clusters • Basic facts: Denmark produces about 1% of world R&D results. 99% to be accessed from elsewhere. Hence, established Innovation Center Denmark in Silicon Valley, Shanghai and Münich • Lesson: History has taught Denmark that you can’t see the ocean if you are not prepared to look away from the shore.

  10. Scenario 2030 • 10-20 Global R&D centres and innovation hot-spots for every industry. Access to these centres will be key to succcess in sourcing relevant knowledge. • The nations that will be best positioned are those who are already taking action today, because they are shaping the networks, institutional ramifications and rules of the game that will prevail 2030. • User-driven innovation dominates over producer driven innovation. Access to lead users become crucial • Adding value will have less to do with products and more to do with brands and users perception of what constitutes value. Design in food packaging will add more value than the product itself. • Access to markets will go through those with global brands and access to retailers • Differentiating markets and global consumer communities drive developments. Example Valio’s lactose-free milk • Managing collaboration in open innovation environments becomes the standard for success. As opposed to cut-throat competition. Win-win instead of win-loose. • National governments still have a role to play as market states.

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