81
outputs into commercial products. In addition, while research usually represents an
SGA (selling, general, and administrative) cost item from a budgetary perspective,
development is typically allocated to business units and structured as part of profit
and loss statements. Therefore, a functional and financial disconnect between
research and development activities became more prevalent in many large corporate
R&D organizations (Chesbrough 2003).
In more recent years, the closed innovation mindset has found itself increasingly
at odds with the way that knowledge currently flows. There are several aspects
which have severely undermined and challenged closed innovation, the most relevant being:
1. The availability of an increasingly more mobile pool of skilled researchers.
Companies can build upon others’ investments in a more effective way than
before, for instance, through hiring skilled staff from other companies or through
contracting consultants who provide advanced expertise in specific areas.
2. The availability of venture capital, which enables startups to pursue both research
and development activities in a nimbler way than larger corporations. Venture
capital has enabled independent startups within the agricultural domain with the
funding needed to make significant and fast progress. For instance, Inari, a nextgeneration seed company which develops traits and cutting-edge technologies
based on gene editing, raised $89 million in its series C financing round,
5
whereas
Provivi, a company developing novel methods to control agricultural pests using
naturally occurring pheromones, has raised over $36 million through its series B
financing round.
6
3. The increasing availability of external suppliers of R&D, both in numbers and in
terms of the expertise they provide. For instance, the success in the ability to
develop commercially effective Bt genes (used to develop biotech seeds with
intrinsic resistance to insect damage) by Dow (now Corteva Agriscience) and
Monsanto (now Bayer) can be traced back to the access of extensive libraries of
Bt genes developed by smaller, specialized companies with a strong expertise in
the field, such as Mycogen
7
and Ecogen,
8
respectively. While the development of
transgenic drought traits has fallen short of expectations, with only Monsanto’s
DroughtGard™ hybrid maize reaching project launch status, 20 years of R&D
and collaborations with startup companies such as Mendel Biotechnology, Ceres
Inc., or Evogene have significantly contributed to increasing the scientific community’s general knowledge of the molecular basis of drought resistance in
plants (Nuccio et al. 2018). In recent years, the trend of favoring early stage
discovery at startup companies has become the mainstream, since corporate venturing has allowed a large number of startup companies to be created not only in
5 https://inari.com/wp-content/uploads/2019/08/PR_Inari-Raises-89-Million-to-Bring-InnovativeDisruptive-Technologies-to-Growers-1.pdf
6 http://provivi.com/provivi-announces-expanded-series-b/
7 https://www.aphis.usda.gov/brs/aphisdocs/03_18101p_pea.pdf
8 https://pestweb.com/news/a2768/ecogen-confirms-monsanto-is-using-its-bt
3 Open Innovation and Value Creation in Crop Genetics
outputs into commercial products. In addition, while research usually represents an
SGA (selling, general, and administrative) cost item from a budgetary perspective,
development is typically allocated to business units and structured as part of profit
and loss statements. Therefore, a functional and financial disconnect between
research and development activities became more prevalent in many large corporate
R&D organizations (Chesbrough 2003).
In more recent years, the closed innovation mindset has found itself increasingly
at odds with the way that knowledge currently flows. There are several aspects
which have severely undermined and challenged closed innovation, the most relevant being:
1. The availability of an increasingly more mobile pool of skilled researchers.
Companies can build upon others’ investments in a more effective way than
before, for instance, through hiring skilled staff from other companies or through
contracting consultants who provide advanced expertise in specific areas.
2. The availability of venture capital, which enables startups to pursue both research
and development activities in a nimbler way than larger corporations. Venture
capital has enabled independent startups within the agricultural domain with the
funding needed to make significant and fast progress. For instance, Inari, a nextgeneration seed company which develops traits and cutting-edge technologies
based on gene editing, raised $89 million in its series C financing round,
5
whereas
Provivi, a company developing novel methods to control agricultural pests using
naturally occurring pheromones, has raised over $36 million through its series B
financing round.
6
3. The increasing availability of external suppliers of R&D, both in numbers and in
terms of the expertise they provide. For instance, the success in the ability to
develop commercially effective Bt genes (used to develop biotech seeds with
intrinsic resistance to insect damage) by Dow (now Corteva Agriscience) and
Monsanto (now Bayer) can be traced back to the access of extensive libraries of
Bt genes developed by smaller, specialized companies with a strong expertise in
the field, such as Mycogen
7
and Ecogen,
8
respectively. While the development of
transgenic drought traits has fallen short of expectations, with only Monsanto’s
DroughtGard™ hybrid maize reaching project launch status, 20 years of R&D
and collaborations with startup companies such as Mendel Biotechnology, Ceres
Inc., or Evogene have significantly contributed to increasing the scientific community’s general knowledge of the molecular basis of drought resistance in
plants (Nuccio et al. 2018). In recent years, the trend of favoring early stage
discovery at startup companies has become the mainstream, since corporate venturing has allowed a large number of startup companies to be created not only in
5 https://inari.com/wp-content/uploads/2019/08/PR_Inari-Raises-89-Million-to-Bring-InnovativeDisruptive-Technologies-to-Growers-1.pdf
6 http://provivi.com/provivi-announces-expanded-series-b/
7 https://www.aphis.usda.gov/brs/aphisdocs/03_18101p_pea.pdf
8 https://pestweb.com/news/a2768/ecogen-confirms-monsanto-is-using-its-bt
3 Open Innovation and Value Creation in Crop Genetics