Technological innovation in the agrochemicals, biotechnology and seeds industries has the potential to deliver more socially and environmentally sustainable farming systems and to improve the quality of life in Europe. However, although policies developed in different areas may all aim to improve the quality of life, in practice, in their influence on company strategies, they do not always add up. PITA aims to develop an integrated analysis of policies and market factors and then investigate the impact of these on the strategies and decision making of companies and the downstream implications of these decisions for employment, international competitiveness and environmental benefits.

Preliminary findings concerning innovation strategy and decision-making include:

Companies are engaged in a wide range of strategies and practices, particularly by adding biotechnological competences to their agrochemicals and/or seeds core competences. No company suggests that it has yet successfully fully articulated synergy between chemistry and biology. Companies are struggling to integrate biotechnology into their businesses. No new mega-company is emerging. Nevertheless, dramatic changes are taking place. The recent period has seen a ‘merger mania’ with many companies involved in mergers, acquisitions, and a wide range of alliances.

Companies are facing major problems building Life Science groups – particularly between the pharma- and agro- parts of their businesses, an important rationale for the ‘merger mania’. There has been a partial retreat from this strategy, with some seeking to separate their agri- from pharmaceutical units.However, some companies are persevering in building synergy, in the knowledge that theirs is a long term vision

Plant biotechnology is taking an increasing, but as yet minority, share of innovation resources. Routine innovation is quite productive in terms of combining existing active ingredients and new formulations. However, big companies are building new alliances and research consortia to investigate second and third generation quality outputs

The ‘slow down’ on commercial approval of gm crops, along with farmer uncertainty, has perturbed companies. The ‘slow-down’ in Europe has strengthened the global perspective of seed companies, which continue to develop gm crop varieties for the American markers. Most companies are operating on a relatively long term innovation trajectory. While there is frustration at the uncertainty, they accept that time is required to resolve the present situation

Preliminary results concerning public policy and environmental influences include:

Various types of policy signals are distinguishable in companies, with different impacts and responses. Some signals are easier to take on board, since they are clearer or more familiar. CAP signals fall into the former category and science and technology promotion measures fit into the latter. Some companies have responded to the pesticides directive with a range of ingredients which gained approval under the more stringent criteris of Annex 1, by basing ingredients on naturally occurring ones. But overall, environmental policy signals are considered by industry as being too drastic and unclear

Companies have a lot of experience of dealing with agencies of government (national) where they know the actors and system. But they find it harder to think about and relate to ‘the public’ more generally. Companies still see civil society as institutions of government, leavened by euro-institutions and business and other associations to lobby. They are less able to conceive of society that has single-issue political agendas, ngos, and broader coalitions that cannot easily be tied down or lobbied

Agrochemical and seed companies are becoming more concerned with demands from ‘stakeholders’ beyond their direct customers, the farmers. In particular, the expected introduction of gm crops pressed them to consult with food processors and food traders

We have noted various environmental discourses within companies: policy discourses, like the productionist/sustainable development discourses; and managerial discourses that are more pragmatic since they do not need a normative stance. The latter discourses include the right to information, and the need for traceability and buyers guides

Preliminary results from our employment survey suggest that changes in employment will be small in the next three years. In seeds, employment is expected to grow by 7% and is not expected to be much affected by type of technology. In pesticides, less employment growth is expected, but with rapid growth in bio-pesticides employment from a small base.

Dr David Wield
Director
Centre for Technology Strategy
Faculty of Technology, Open University,
Walton Hall, Milton Keynes, MK7 6AA
Great Britain

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