Economics, Technology, and Politics: Opportunities for ... · Economics, Technology, and Politics:...
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8th Annual Farmers COOP Conf.
2005
Economics, Technology, and Politics:
Opportunities for Agriculture
Economics, Technology, and Economics, Technology, and Politics:Politics:
Opportunities for Opportunities for AgricultureAgriculture
Dr. Bernard Y. Tao
Dept. of Agricultural and Biological Engineering
Purdue University
Dr. Bernard Y. TaoDr. Bernard Y. Tao
Dept. of Agricultural and Biological EngineeringDept. of Agricultural and Biological Engineering
Purdue UniversityPurdue University
8th Annual Farmers COOP Conf.
2005
TakeTake--Home PointsHome Points
•U.S. economic growth depends on developing novel products and technologies
•The biological sciences are be the next major technological driver for economic growth
•Immense social needs have created opportunities to re-link ‘agriculture’ and ‘industry’ through vertical integration, industrial partnerships
•Universities are developing the entrepreneurial human resources and technologies needed for this economic growth
•Success depends on infrastructure development and political vision/implementation
•U.S. economic growth depends on developing novel products and technologies
•The biological sciences are be the next major technological driver for economic growth
•Immense social needs have created opportunities to re-link ‘agriculture’ and ‘industry’ through vertical integration, industrial partnerships
•Universities are developing the entrepreneurial human resources and technologies needed for this economic growth
•Success depends on infrastructure development and political vision/implementation
8th Annual Farmers COOP Conf.
2005
Back to the Future:Back to the Future:
Historical PerspectivesHistorical Perspectives
8th Annual Farmers COOP Conf.
2005
Shifts in EconomiesShifts in Economies
Source: Marvin Source: Marvin ZonisZonis & Associates& Associates
May you live in changing times.
- Ancient Chinese Blessing/Curse
8th Annual Farmers COOP Conf.
2005
Shifts in EconomiesShifts in Economies
Real U.S. GDP (adjusted for inflation)
$0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
1750 1800 1850 1900 1950 2000 2050
year
GD
P in b
illions o
f $ b
ased o
n 2
000
dollars
8th Annual Farmers COOP Conf.
2005
How does the U.S. build such a How does the U.S. build such a
historically strong economy?historically strong economy?
�� U.S. economic competitiveness depends U.S. economic competitiveness depends on having innovative, high value on having innovative, high value products to sell products to sell –– Processed food productsProcessed food products
–– High quality steelHigh quality steel
–– Novel polymers and chemicalsNovel polymers and chemicals
–– Automotive/Aerospace transportationAutomotive/Aerospace transportation
–– Electronics/computersElectronics/computers
–– Pharmaceuticals/medicinesPharmaceuticals/medicines
8th Annual Farmers COOP Conf.
2005
How did we get here?How did we get here?
�� Entrepreneurship and Entrepreneurship and education are critical to education are critical to developing new high value developing new high value technologies/products that technologies/products that cannot be made elsewherecannot be made elsewhere
�� U.S. has always been a leader U.S. has always been a leader in innovative entrepreneurship in innovative entrepreneurship in technology and productsin technology and products
�� U.S. always been a leader in U.S. always been a leader in educationeducation
8th Annual Farmers COOP Conf.
2005
8th Annual Farmers COOP Conf.
2005
Who are our competitors in the Who are our competitors in the
next generation economy?next generation economy?
8th Annual Farmers COOP Conf.
2005
How are other nations overtaking How are other nations overtaking
the U.S. economy?the U.S. economy?�� Historical U.S. innovated products are going to high Historical U.S. innovated products are going to high
volume, low cost producer economiesvolume, low cost producer economies
–– Computers, cell phones, steel, automobiles, clothing, Computers, cell phones, steel, automobiles, clothing,
fuels, plastics, chemicals, digital cameras, internet, etc.fuels, plastics, chemicals, digital cameras, internet, etc.
�� The U.S. consumer is funding the capitalization of The U.S. consumer is funding the capitalization of
high volume, low cost producershigh volume, low cost producers
–– China, Korea, India, Mexico, etc.China, Korea, India, Mexico, etc.
�� U.S. schools educate the top international students U.S. schools educate the top international students
who return to their homes to rev up national who return to their homes to rev up national
economies economies
8th Annual Farmers COOP Conf.
2005
Where is the U.S. Economy Where is the U.S. Economy
Going?Going?
�� Without new, innovative technologies and Without new, innovative technologies and products, the U.S. economy will decline products, the U.S. economy will decline (competition for low paying production jobs)(competition for low paying production jobs)
�� What will drive the creation of innovative new What will drive the creation of innovative new technologies/products in this century?technologies/products in this century?
�� BiologicallyBiologically--based technologies, Education, based technologies, Education, and Entrepreneurshipand Entrepreneurship
8th Annual Farmers COOP Conf.
2005
Shifts in EconomiesShifts in Economies
Source: Marvin Source: Marvin ZonisZonis & Associates& Associates
May you live in changing times.
- Ancient Chinese Blessing/Curse
8th Annual Farmers COOP Conf.
2005
Petrochemical
Era
Railroad
Era
Information
AgeSteam Engine
Era
50-Year Cycles “Inherent In
The Capitalistic Economy”
Driven by new Technologies
18301830 18801880 19301930 19801980 2030203017801780
"Bury me on my face," said Diogenes; and when he was asked why, he replied, "Because in a little while everything will be turned upside down." - Socrates
Fundamental Changes in TechnologyFundamental Changes in Technology
Nikolai Dimitriyevitch Kontratyev
Long-Wave Cycle
Biological
Age
20802080
Water Power
Era
•Technology changes driving industrial growth, phase frequency ~50 years•Technology shifts do not mean technology vanishes
8th Annual Farmers COOP Conf.
2005
0
50
100
0 10 20 30 40 50
Years
Economic ActivityEconomic Activity
Fundamental Economic Changes Driving Engineering Fundamental Economic Changes Driving Engineering
Oil In Declining PhaseOil In Declining Phase Biotechnology Initial PhaseBiotechnology Initial Phase
Chemical Engineering Biological Engineering
Implications:•Science has ~20 year lead to shape technology•Investments in industries change in anticipation of new technologies•Industries employing graduates will change•Educational processes usually lag behind technology changes
0
50
100
0 10 20 30 40 50
Years
Economic ActivityEconomic Activity
Internet / EInternet / E--commercecommerce
growth phasegrowth phase
0
50
100
0 10 20 30 40 50
Years
Economic ActivityEconomic Activity
EE/Computer Engineering
8th Annual Farmers COOP Conf.
2005
The Top 25 US Companies by Market Value Economy FocusThe Top 25 US Companies by Market Value Economy Focus
Source: University of Chicago, Standard & Poor’s
1969 1979 1989 1999Rank Company Mkt Cap Company Mkt Cap Company Mkt Cap Company Mkt Cap
1 IBM $41.5 IBM $37.6 Exxon $62.5 Microsoft $601.0
2 AT&T 26.7 AT&T 36.6 GE 58.4 GE 507.2
3 General Motors 19.8 Exxon 24.2 IBM 54.1 Cisco 355.1
4 Eastman Kodak 13.3 General Motors 14.5 AT&T 48.9 Wal-Mart 307.9
5 Exxon 13.3 Schlumberger 11.9 Phillip Morris 38.7 Exxon Mobil 278.7
6 Sears, Roebuck 10.5 Amoco 11.8 Merck 30.6 Intel 275.0
7 Texaco 8.3 Mobil 11.7 Bristol-Myers Squibb 29.4 Lucent 228.7
8 Xerox 8.2 GE 11.5 Dupont 28.1 AT&T 226.7
9 GE 7.0 Sohio 10.8 Amoco 27.9 IBM 196.6
10 Gulf Oil 6.4 Chevron 9.6 Bell South 27.9 Citigroup 187.5
11 3M 6.0 Atlantic Richfield 9.3 Coca-Cola 26.0 America Online 169.5
12 Dupont 4.9 Texaco 7.8 General Motors 25.6 AIG 167.4
13 Avon Products 4.9 Eastman Kodak 7.8 Mobil 25.6 Oracle 159.5
14 Coca-Cola 4.7 Phillips Petroleum 7.4 Wal-Mart 25.4 Home Depot 158.2
15 Mobil 4.7 Gulf Oil 6.8 Procter & Gamble 24.3 Merck 157.1
16 Procter & Gamble 4.5 Procter & Gamble 6.1 Chevron 24.1 MCI Worldcom 149.3
17 Chevron 4.3 Getty Oil 6.1 GTE 23.1 Procter & Gamble 144.2
18 Polaroid 4.1 3M 5.9 Bell Atlantic 21.9 Coca-Cola 143.9
19 Merck 4.1 Dupont 5.8 Pacific Telesis 21.0 Dell Computer 130.1
20 Atlantic Richfield 3.8 Dow Chemical 5.8 Ford Motor 20.6 Bristol-Myers Squibb 127.3
21 American Home Prod 3.6 Sears, Roebuck 5.7 Johnson & Johnson 19.8 Pfizer 125.6
22 ITT 3.5 Merck 5.4 Dow Chemical 19.2 Johnson & Johnson 125.3
23 Amoco 3.4 Xerox 5.2 SBC Communications 19.2 Sun Microsystems 121.0
24 Johnson & Johnson 3.3 Conoco 5.1 Eli Lilly 19.1 Hewlett-Packard 115.9
25 GTE 3.2 Halliburton 5.0 Ameritech 18.4 Yahoo! 113.9
8th Annual Farmers COOP Conf.
2005
What does History Teach Us?What does History Teach Us?
�� Technology is the driver for economic developmentTechnology is the driver for economic development
�� Shifts in technologies for change foundational Shifts in technologies for change foundational industrial/social infrastructureindustrial/social infrastructure
�� Those who adopt changes early have the best Those who adopt changes early have the best opportunities to benefitopportunities to benefit
�� There is about a 20 year lag time between scientific There is about a 20 year lag time between scientific discovery and technical implementation/social discovery and technical implementation/social impactimpact
�� We are currently about 5We are currently about 5--10 years from the next 10 years from the next major shift to biologicallymajor shift to biologically--based technologiesbased technologies
8th Annual Farmers COOP Conf.
2005
Fuel for Thought:Fuel for Thought:
An Example of OpportunityAn Example of Opportunity
8th Annual Farmers COOP Conf.
2005
In 2004, how many of us thought
we’d be happy to pay $2.50/gal?
In 2004, how many of us thought In 2004, how many of us thought
wewe’’d be happy to pay $2.50/gal? d be happy to pay $2.50/gal?
8th Annual Farmers COOP Conf.
2005
How important is domestic energy
to the U.S. national security and
economics?
How important is domestic energy How important is domestic energy
to the U.S. national security and to the U.S. national security and
economics?economics?
8th Annual Farmers COOP Conf.
2005
CampbellCampbell--LaherrLaherrèèrere World Oil Production Estimates, 1930World Oil Production Estimates, 1930--20502050
Campbell
Production Peak
2004
8th Annual Farmers COOP Conf.
2005
Annual Production Scenarios for the Mean Resource Estimate and Different Growth Rates (Decline R/P = 10)
0
10
20
30
40
50
60
70
1900 1925 1950 1975 2000 2025 2050 2075 2100 2125
Bil
lio
n B
arr
els
pe
r Y
ea
r
History
Mean
USGS Estimates of Ultimate Recovery Ultimate Recovery Probability BBls-------------------- ---------Low (95 %) 2,248Mean (expected value) 3,003High (5 %) 3,896
DeclineR/P = 10
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2050 @ 1% Growth
2037 @ 2% Growth
2030 @ 3% Growth
8th Annual Farmers COOP Conf.
2005
TakeTake--home messageshome messages
�� Petroleum availability will peak in the next Petroleum availability will peak in the next decade or sodecade or so
�� International competition for oil will mean International competition for oil will mean significantly greater costssignificantly greater costs
�� Need to develop secure, domestic, economic Need to develop secure, domestic, economic alternatives (national homeland security alternatives (national homeland security issue)issue)
�� Significant opportunities for renewable, Significant opportunities for renewable, sustainable technology/product developmentsustainable technology/product development
�� Need to gain attention of political/consumer/ Need to gain attention of political/consumer/ industrial audiencesindustrial audiences
8th Annual Farmers COOP Conf.
2005
How does society change when we donHow does society change when we don’’t t
have cheap petroleum?have cheap petroleum?
�� Reduced, more expensive transportation Reduced, more expensive transportation
–– more localized industries/manufacturingmore localized industries/manufacturing
–– Changes in national energy infrastructureChanges in national energy infrastructure
�� Alternative energy resourcesAlternative energy resources
–– stationary vs. mobile (solid vs. liquid)stationary vs. mobile (solid vs. liquid)
–– coal, nuclear, wind, solar, biologicalcoal, nuclear, wind, solar, biological
�� Alternative raw materials sourcesAlternative raw materials sources
–– renewable resourcesrenewable resources
�� New technologies neededNew technologies needed
8th Annual Farmers COOP Conf.
2005
Agriculture is TomorrowAgriculture is Tomorrow’’s s
Green GoldGreen GoldChanging view of Changing view of ‘‘AgricultureAgriculture’’�� Extend markets beyond food/feed to industrial productsExtend markets beyond food/feed to industrial products
–– Energy, materials, manufacturing, processing, sensors, medicineEnergy, materials, manufacturing, processing, sensors, medicine
�� ‘‘GreenGreen’’ production/Environmental issuesproduction/Environmental issues
�� New New BioprocessingBioprocessing TechnologiesTechnologies
–– Transgenic modification/productsTransgenic modification/products
–– Processing/manufacturingProcessing/manufacturing
–– Environmental sustainabilityEnvironmental sustainability
8th Annual Farmers COOP Conf.
2005
Energy, Homeland Security, Energy, Homeland Security,
Integrated Domestic EconomyIntegrated Domestic Economy
Changing view of Changing view of ‘‘IndustryIndustry’’�� Foster Foster ‘‘GreenGreen’’ production production
technologies/Environmental stewardship technologies/Environmental stewardship
Develop domestic renewable energy/materials Develop domestic renewable energy/materials
sourcessources
�� Shift from Shift from ‘‘oldold’’ to to ‘‘newnew’’ technologies to grow the technologies to grow the
economyeconomy
�� ReRe--link U.S. agricultural and industrial sectorslink U.S. agricultural and industrial sectors
8th Annual Farmers COOP Conf.
2005
U.S. Ethanol ProductionU.S. Ethanol Production
U.S. Capacity U.S. Capacity -- 2.1 billion 2.1 billion
gal/yr (48 plants)gal/yr (48 plants)
Canadian Capacity Canadian Capacity -- 52.3 52.3
million gal/yr (6 plants)million gal/yr (6 plants)
8th Annual Farmers COOP Conf.
2005
8th Annual Farmers COOP Conf.
2005
Petroleum fuel Petroleum fuel
consumptionconsumption
8th Annual Farmers COOP Conf.
2005
8th Annual Farmers COOP Conf.
2005
Aviation Gas – Turbine Fuels from Renewable Plant Oil
Engine Tests:
• Fuel blends tested in an Allison 250 C-20 turbo-prop gas turbine (stationary)
• Engine performance parameters equivalent to current jet fuels (power and fuel consumption) at operating range from 45% rpm (idle), 50-60% rpm (cruise), and 70% rpm (take – off)
• Decreased NOx and SO2 emissions
•Estimated costs about $3/gallon vs. $3-$5 for commercial aviation fuels
8th Annual Farmers COOP Conf.
2005
Aviation Deicer/AntiAviation Deicer/Anti--IcersIcers
�� 200 million lb/year market in the US200 million lb/year market in the US
�� Currently based on Currently based on –– 70% propylene glycol formulations70% propylene glycol formulations
–– 30% ethylene and 30% ethylene and diethylenediethylene glycol based productsglycol based products
�� Concerns over mammalian toxicity (EG), Concerns over mammalian toxicity (EG), environmental disposalenvironmental disposal
�� High cost ($5High cost ($5--8/gal) (tied to natural gas prices)8/gal) (tied to natural gas prices)
�� Using glycerin from biodiesel production can make Using glycerin from biodiesel production can make deicers/antideicers/anti--icersicers with equivalent performance to with equivalent performance to commercial products at 1/10 the costcommercial products at 1/10 the cost
8th Annual Farmers COOP Conf.
2005
Freezing Points
C D E XVII XIX XX XXIV
-40
-30
-20
-10
0
FP
(oC
)
FP < -38 oC
Anti-Icer Limit
Deicer Limit
Purdue University School of Aeronautics and Astronautics
8th Annual Farmers COOP Conf.
2005
Biosurfactants from Lipids and Carbohydrates
1000x more surface active than sodium lauryl sulfates
8th Annual Farmers COOP Conf.
2005
BioBio--based Products/Technologiesbased Products/Technologies
�� Automotive biodiesel fuel, home heating Automotive biodiesel fuel, home heating
oiloil
�� Polyurethane plastics, insulation foamsPolyurethane plastics, insulation foams
�� Inks, paints, coatingsInks, paints, coatings
�� Surfactants, detergentsSurfactants, detergents
�� Polymers, solvents, lubricantsPolymers, solvents, lubricants
8th Annual Farmers COOP Conf.
2005
Transgenic PostTransgenic Post--synthetic synthetic
Lipid Lipid in vivoin vivo ModificationModification
8th Annual Farmers COOP Conf.
2005
How Do We Get Oils From Plants?How Do We Get Oils From Plants?
Grow Plants
Plants Store OilIn Seeds
Grow Plants
Harvest& ProcessPlants
ChemicallyModify Oils
Plants Store &Modify OilsIn Seeds
Harvest& ProcessPlants
Current Approach :
• Low yields and high purification costs• Byproduct generation and hazardous solvents• High energy input
Proposed Approach:
• Enzymes to catalyze reactions (but enzymes can be slow)• Production within the plant to reduce processing costs
8th Annual Farmers COOP Conf.
2005
Soybean Oleosin ProteinsSoybean Oleosin Proteins
�� Soy oleosins are a group Soy oleosins are a group of closely related soy oil of closely related soy oil body membrane body membrane structure proteinsstructure proteins
�� Soy oil bodies Soy oil bodies –– SubcellularSubcellular
triacylglyceridestriacylglycerides (TAGs) (TAGs) storage particlesstorage particles
–– TAG coreTAG core
–– Monolayer phospholipids Monolayer phospholipids
–– Oleosin protein coatingOleosin protein coatingOil Body 3-D Structure
8th Annual Farmers COOP Conf.
2005
in vivoin vivo micromicro--bioreactor conceptbioreactor concept
using enzymatic reactionsusing enzymatic reactions
TAG
Phospholipid
Oleosin
Enzyme
Create an oleosin-enzyme
Fusion protein in vivo
Create an Create an oleosinoleosin--enzyme enzyme
Fusion protein Fusion protein in vivoin vivo
8th Annual Farmers COOP Conf.
2005
Isolate immature zygotic soybean embryo tissue
Bombard tissue with recombinant genetic material Grow out and select living tissue cells
Use GFP/Antibody/PCR to detect transforrmed tissueGrow out to proliferative embryos
Germinate embryos andgrow recombinant plants
8th Annual Farmers COOP Conf.
2005
Creating New Life FormsCreating New Life FormsCreating New Life Forms�Cloning pets - warm & fuzzy
�Potential economic benefits
�Alteration of definition of life
�Behavioral genetic issues
��Cloning pets Cloning pets -- warm & fuzzywarm & fuzzy
��Potential economic benefitsPotential economic benefits
��Alteration of definition of lifeAlteration of definition of life
��Behavioral genetic issuesBehavioral genetic issues
��Alba, the GFP Alba, the GFP bunny bunny –– chimerical chimerical animal that does not animal that does not exist in natureexist in nature
8th Annual Farmers COOP Conf.
2005
Human ResourcesChampions for Biological Engineering
Human ResourcesHuman Resources
Champions for Biological EngineeringChampions for Biological Engineering
8th Annual Farmers COOP Conf.
2005
Home heating fuel
Entrepreneurial undergraduate Entrepreneurial undergraduate
soybean product innovation soybean product innovation
UV curable plastic
Snow ski wax
Crayons
Emulsionmarkers
Gelatin replacements Protein snack crackers Birthday candles
8th Annual Farmers COOP Conf.
2005
The Soybean Science KitThe Soybean Science Kit
KK--1212
�� The Soybean Science Kit (SSK) teaches basic chemistry and The Soybean Science Kit (SSK) teaches basic chemistry and physics in a fun, safe, handsphysics in a fun, safe, hands--on fashion using primarily on fashion using primarily materials obtained from soybeans and other natural renewable materials obtained from soybeans and other natural renewable materials. materials.
�� Teaches students about the importance of environmental issues, Teaches students about the importance of environmental issues, science, technology and industrial applicationsscience, technology and industrial applications
�� Polymers, proteins, fatty acids, chromatography, enzymes, DNA, Polymers, proteins, fatty acids, chromatography, enzymes, DNA, biodiesel and more biodiesel and more
�� Developed by the Indiana Soybean Board, over 3000 kits Developed by the Indiana Soybean Board, over 3000 kits distributed distributed
�� Approval by State Education CommissionApproval by State Education Commission
�� Reaches est. 60,000 students annually (as well as their Reaches est. 60,000 students annually (as well as their teachers, parents and siblings)teachers, parents and siblings)
8th Annual Farmers COOP Conf.
2005
Teaching Ethics Teaching Ethics
to Studentsto Students
�� Ethics is about choices in behavior Ethics is about choices in behavior
while in relationships/community while in relationships/community
with otherswith others
�� Biotechnology/Agriculture will play Biotechnology/Agriculture will play
a dominant role in society in this a dominant role in society in this
centurycentury
�� With power comes responsibility, With power comes responsibility,
and you will have great power as a and you will have great power as a
Ag school graduateAg school graduate
�� How will you choose to live?How will you choose to live?
8th Annual Farmers COOP Conf.
2005
Who Moved My Who Moved My
Cheese?:Cheese?:
Issues for the Issues for the
Agricultural Agricultural
Community/IndustryCommunity/Industry
How does Agriculture Fit in?How does Agriculture Fit in?
� How should ‘Agriculture’ re-think its purpose, function, and goals in a bioeconomy?
�What should its role be based on new biotechnologies?
�How can Agriculture benefit economically from these changes in technology?
�� How should How should ‘‘AgricultureAgriculture’’ rere--think its think its purpose, function, and goals in a purpose, function, and goals in a bioeconomybioeconomy??
��What should its role be based on new What should its role be based on new biotechnologies?biotechnologies?
��How can Agriculture benefit economically How can Agriculture benefit economically from these changes in technology?from these changes in technology?
8th Annual Farmers COOP Conf.
2005
automotiveautomotiveautomotive
plasticsplasticsplastics
fabricsfabricsfabrics
paints, coatings
paints, paints, coatingscoatings
cosmeticscosmeticscosmetics
detergentsdetergentsdetergents packagingpackagingpackaging
PETROLEUMPETROLEUM
electronicselectronicselectronics
Materials: Polymers, coatings, detergents,fabricsMaterials: Polymers, coatings, Materials: Polymers, coatings, detergents,fabricsdetergents,fabrics
AGRICULTUREAGRICULTURE
8th Annual Farmers COOP Conf.
2005
fuelsfuels
chemicalschemicals
plasticsplastics
coatingscoatings
energyenergy
petroleumpetroleum
19501950--2020 2020 U.S. U.S. Economy/Economy/
Core Core Processing Processing Technologies Technologies based on based on petroleum petroleum refining/off refining/off shore sourcesshore sources
fuelsfuels
chemicalschemicals
plasticsplastics
coatingscoatings
energyenergy
20202020--21002100
Core Core Processing Processing Technologies Technologies based on based on distributed distributed technologies/technologies/geographical geographical sourcessources
biomassbiomass
solar/wind/solar/wind/waterwater
Fuel cellsFuel cells
biotechbiotech
nanotechnanotech
� Opportunities to develop replacements for petroleum in chemicals, fuels, polymers, surfactants, coatings
� Opportunities for Agriculture to become main supplier of raw materials (domestic security/inherent advantages)
� Opportunities for liquid energy fuels
�� Opportunities to develop replacements for petroleum in Opportunities to develop replacements for petroleum in chemicals, fuels, polymers, surfactants, coatings chemicals, fuels, polymers, surfactants, coatings
�� Opportunities for Agriculture to become main supplier of raw Opportunities for Agriculture to become main supplier of raw materials (domestic security/inherent advantages)materials (domestic security/inherent advantages)
�� Opportunities for liquid energy fuelsOpportunities for liquid energy fuels
Shift from single to distributed technologies/geographical sourcesShift from single to distributed Shift from single to distributed technologies/geographical sourcestechnologies/geographical sources
8th Annual Farmers COOP Conf.
2005
Shift to regional energy technologies (?)Shift to regional energy technologies (?)
Solar, biomass, hydroelectric, coal, fuel cell, Solar, biomass, hydroelectric, coal, fuel cell,
LNG, hydrogen(?)LNG, hydrogen(?)
Common electricity grid/power distributionCommon electricity grid/power distribution
Common mobile liquid fuel Common mobile liquid fuel
technologies/geographical distribution (?)technologies/geographical distribution (?)
Competitive global economics/technologies (?)Competitive global economics/technologies (?)
Shift from single to distributed technologies/geographical sourcesShift from single to distributed Shift from single to distributed technologies/geographical sourcestechnologies/geographical sources
8th Annual Farmers COOP Conf.
2005
Opportunities for Rural Economic Opportunities for Rural Economic
Growth/Growth/BiorefineriesBiorefineries
�� Vertical product/market integrationVertical product/market integration
�� ReRe--capitalization of rural economy to capitalization of rural economy to
encompass biorefinery conceptencompass biorefinery concept
�� PartnershipsPartnerships
8th Annual Farmers COOP Conf.
2005
Vertical product/market Vertical product/market
integrationintegration
�� Make products for consumer/industry, Make products for consumer/industry, not only high volume/low price not only high volume/low price commodity commodity feedstocksfeedstocks–– Fuels, protein polymers, antifreeze, etc.Fuels, protein polymers, antifreeze, etc.
–– Example of petrochemical industries Example of petrochemical industries starting with drilling and integrating starting with drilling and integrating through fuels, chemicals, polymers, paintsthrough fuels, chemicals, polymers, paints
�� Higher profit margins, decrease $ Higher profit margins, decrease $ outflow by internal utilization/recyclingoutflow by internal utilization/recycling
8th Annual Farmers COOP Conf.
2005
ReRe--capitalization of rural economy to capitalization of rural economy to
encompass biorefinery processing conceptencompass biorefinery processing concept
�� Expand operational knowledge of Expand operational knowledge of
biotechnology and postbiotechnology and post--harvest harvest
technologiestechnologies
�� Develop expertise/ownership of postDevelop expertise/ownership of post--
production/harvest technologiesproduction/harvest technologies
�� Capitalization of integrated biorefinery Capitalization of integrated biorefinery
processing systemsprocessing systems
8th Annual Farmers COOP Conf.
2005
PartnershipsPartnerships
�� Strengthen relationships with existing support Strengthen relationships with existing support infrastructureinfrastructure–– universities, food processors, industrial grain universities, food processors, industrial grain processors, COprocessors, CO--OpsOps
�� Expand outreach to form relationships with Expand outreach to form relationships with nonnon--traditional entitiestraditional entities–– Chemical eng., life sciences, petroleum refiners, Chemical eng., life sciences, petroleum refiners, chemical synthesis companieschemical synthesis companies
�� Unify agricultural industry to form a strong, Unify agricultural industry to form a strong, corporate entitycorporate entity–– Supply chain strongest linkSupply chain strongest link
8th Annual Farmers COOP Conf.
2005
Big Fish Eat Small FishBig Fish Eat Small Fish
Issues involving scale of Issues involving scale of demand/supply operationsdemand/supply operations
�� Small fishSmall fish
–– Individual farmers, small Individual farmers, small COOPCOOP’’ss
�� Medium fishMedium fish
–– ADM, Cargill, ADM, Cargill, BungeBunge
�� Big fishBig fish
–– MobileMobile--Exxon, BP, Dow, Exxon, BP, Dow, DuPont/DuPont/SolaeSolae
8th Annual Farmers COOP Conf.
2005
Small Fish Can Dominate Big FishSmall Fish Can Dominate Big Fish
�� Strength in numbersStrength in numbers
�� CoordinationCoordination
�� Unity of PurposeUnity of Purpose
�� Ownership of Supply ChainsOwnership of Supply Chains
8th Annual Farmers COOP Conf.
2005
TakeTake--Home PointsHome Points
•U.S. economic growth depends on developing novel products and technologies
•The biological sciences are be the next major technological driver for economic growth
•Immense social needs have created opportunities to re-link ‘agriculture’ and ‘industry’ through vertical integration, industrial partnerships
•Universities are developing the entrepreneurial human resources and technologies needed for this economic growth
•Success depends on infrastructure development and political vision/implementation
•U.S. economic growth depends on developing novel products and technologies
•The biological sciences are be the next major technological driver for economic growth
•Immense social needs have created opportunities to re-link ‘agriculture’ and ‘industry’ through vertical integration, industrial partnerships
•Universities are developing the entrepreneurial human resources and technologies needed for this economic growth
•Success depends on infrastructure development and political vision/implementation
??""Chance favors the prepared mind.Chance favors the prepared mind.””
-- L. PasteurL. Pasteur
Where your treasure is, there will your heart Where your treasure is, there will your heart be also. be also. –– Matt. 6:21Matt. 6:21