ACADEMIA-BUSINESS COLLABORATION FOR FOOD SECURITY
CONDUCTED BY JINGYI LIU SHOTA AIWAZA
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PARSONS THE NEW SCHOOL FOR DESIGN MS IN STRATEGIC DESIGN AND MANAGEMENT SUSTAINABLE BUSINESS MODEL PDGM5110 - SECTION E PROFESSOR SUZANNA SCHMEELK FALL 2014
TABLE OF CONTENTS I. INTRODUCTION / 3 II, EUGLENA / 4 BACKGROUND A. COMANY / 4 B. LEADERSHIP / 5 INNOVATION / MANAGEMENT / EVALUATION / III, BGI / BACKGROUND A. COMANY / B. LEADERSHIP / INNOVATION / MANAGEMENT / EVALUATION / IV. CONCLUSION / STRATEGY COMPARISON / FOOD SECURITY SOLUTION / V. APPENDIX /
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I. INTRODUCTION In our classes, we have gone through the United Nations document in the title of “Our Common Future�, published in 1987 when Mrs. Gro Harlem Brundtland was in power as a chairman at World Commission on Environment and Development. One of topics the Commission focused on is the area of food security to sustain the potential. In the report, the problems of foods between developed countries and developing countries are discussed in terms of production, consumption and distribution.
OUR THEME For our final project, we have examined how businesses and academic institutions have approached the food security problem nowadays. According to our research and analysis, we observed more intensive collaboration between business corporations and academia than ever before. We chose two companies which are engaged with the food security problem in the collaboration of academia and business to discuss how these companies successfully incorporated open innovation.
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II. EUGLENA /BACKGROUND Euglena Inc is a biotech venture that researches, develops uses for and markets products made from euglena, a single celled organism(microalgae) that can photosynthesize using its chloroplasts. Euglena has the characteristics of both plants and animals. It creates energy through photosynthesis but can move around by twisting its tiny, 0.05 mm body.
COMPANY
This biotech venture was founded in 2005 in Tokyo. Euglena Inc had the world’s first biotechnology success in the mass cultivation of euglena. The technology was developed by scientists in the university of Tokyo, and Euglena Inc has strong linkage to the university in terms of technology development. Euglena Inc has engaged with food and environmental problems by utilizing euglena. This company was listed on the market as a High Growth and Emerging Stock in 2012.(Also, listed on the market of the first section of the Tokyo Stock Exchange in December 2014.) Total sales in 2012 were around 20 million USD while EBIT was 1.7 million USD. The number of employees of the company excluding subsidiaries are 46 as of September 2013. The employees are young; the average age at this company is 33 years old.
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LEADERSHIP
As the founder and the president of euglena Inc, Mitsuru Izumo has a bachelor’s degree in agricultural and resource economics from the university of Tokyo. History of euglena Inc began in 1998 when he went to Bangladesh for a field trip as a student. He saw the lives of poor children in Bangladesh. He decided to continue staying in the country by volunteering at the Grameen Bank, and he found out that real poverty did not come from lackness of food, but came from malnutrition. He set his goal to resolve these problems. After two years, his classmate, Kengo Suzuki, told Mitsuru Izumo of the potential that euglena has in terms of nutritional and carbon capture capabilities although nobody in the world thought mass cultivation of euglena would succeed.
MITSURU IZUMO (CEO)
Mitsuru Izumo entered Bank of Tokyo Mitsubishi after the graduation while Kengo Suzuki entered a graduate program to research mass cultivation technology for euglena. They continued to discuss the possibility of the mass cultivation technology on weekends by visiting the professors in the field. His passion for euglena led to him quit the bank and make commitments on the startup of business. Mitsuru Izumo and Kengo Suzuki established euglena Inc in August 2005. In December that year, euglena Inc succeeded in producing euglena outdoors at a commercial scale with the support of laboratories in universities such as Tokyo University.
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/INNOVATION 5“F” OF BIOMASS They have currently commercialized euglena for food, supplement and cosmetics(e.g. skin lotion, face cream). The research and development of the mass cultivation technique is already innovative, but the management team considers far ahead of food and cosmetics. In addition to developing and marketing functional foods and cosmetics, euglena Inc utilizes its mass cultivation technology for water treatment and biofuels. Regarding the energy and environment division, their ambitious aspiration aims to fly a plane with biofuels distilled from euglena by 2020.
In their business strategy, euglena Inc intends to develop 5 fields of business, what they call “5Fs of Biomass”. Their strategy is to start from the development and production of commercial foods which have the highest value and to shift to commercialize into Fiber, Feed, Fertilizer and Fuel by developing new technology and reducing the cost.
Euglena Inc has raised the foods and cosmetics business segments to the stable profit pillars, and invests the profit from these businesses in the energy and environment segment.
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/MANAGEMENT STRATEGIC PARTNERSHIP
The characteristic of their management style is to make strategic alliances with large corporations as well as universities while Euglena Inc has three four themes of research and development in the energy and environment domain: biojet fuels, carbon capture and storage, purification of water and application to feedingstuff. As basic research throughout these themes, euglena Inc has conducted joint research with Tokyo University, Osaka Prefecture University, Osaka Prefecture University, Kinki University and University of Hyogo. Regarding the research of biojet fuel, euglena Inc has cooperated with JX Nippon Oil and Energy Corporation and Hitachi Ltd. The feasibility of biojet fuels distilled from euglena is being studied by refining technology from JX Nippon Oil & Energy Corporation and plant engineering technology from Hitachi Ltd.
In terms of carbon capture and storage, euglena Inc has shown promise as a way to deal with air pollution by utilizing the capability of capturing CO2 per acre a few times more than tropical rainforests. Euglena Inc is conducting with joint research with thermal power plants operator, Sumitomo Joint Electric Power, to evaluate the carbon capture capabilities of euglena cultivated with emissions gas and its commercial applications.
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WHAT MAKES EUGLENA SUCCESSFUL In my evaluation, I can point out three points as its competitive advantage. Firstly, their strategic alliances with universities and large corporations lead to the reduction of R&D cost to improve euglena cultivation technology as well as the development of new business. Secondly, euglena Inc creates and enters totally new market. Fossil fuels release CO2 into the atmosphere and cause global warming. However, euglena absorbs CO2 from the atmosphere during its cultivation and contributes to reduce CO2 emission. In addition, biofuels distilled from euglena cultivated in the special equipment realizes the more efficient use of lands unlike biofuels from corn and sugarcane which compete over farmland. The facility for euglena cultivation is constructed in the unsuited field for agricultural crops in the underpopulated area. Thirdly, euglena has appealed to empathy from consumers. In fact, euglena Inc opened the office in Bangladesh in October 2013 to grapple with their aspiration to make poor children even healthier since CEO founded the company. Euglena has engaged with varieties of world problems from food security, environment to poverty of children.
/EVALUATION
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III.BGI /BACKGROUND BGI, founded in 1999 with the vision of using genomics to benefit the human race, is now the world’s largest genomics organization. In 2007, BGI’s headquarters was relocated to Shenzhen as the first citizen-managed, non-profit research institution in China. BGI (which includes both private non-profit research institutes and sequencing application commercial units) and its affiliated offshoots, BGI Americas and BGI Europe, have established partnerships and collaborations with leading academic and government research institutions as well as global biotechnology and pharmaceutical companies, to support a variety of healthcare, agricultural, environmental and related applications. After 15 years of development, BGI has evolved into a very broad scientific and technological organization, giving its academic and business scope global reach.
COMPANY
Currently, BGI comprises of 4 regions: BGI China (Mainland), BGI Asia Pacific, BGI Americas (North and South America) and BGI Europe (Europe and Africa). BGI aims to develop research collaborations and provide scientific support to scientists worldwide, thereby contributing to the advancement of innovative biological research, molecular breeding and improved healthcare. A combination of its high-throughput, cost-effective genomics platform, its large sample collection and storage capability, in-depth bioinformatics analysis, a core commitment to education and media liaison, a team of talents to support its scientific research program, has made BGI a unique entity dedicated to ensuring that omics science and technology can be made to work for the benefit of everyone. BGI can provide innovative support for global communities, novel opportunities for researchers, and a regionally tailored application services in the fields of healthcare, agriculture and the environment.
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LEADERSHIP
Dr. Wang is a chief scientist of 973 research projects, a visiting professor of the Universities of Copenhagen, Aarhus, Peking and the University of Hong Kong. Dr. Wang obtained his PhD. degree from Peking University. His fields of study include genomics, genome assembly, annotation, expression, bioinformatics, comparative genomics, molecular evolution, transcriptional regulation, polymorphism and other fields. His research focuses on genomics and related bioinformatics analysis of complex diseases and agricultural crops, with the goal of developing applications using this genomic information. Since 1999, he has been building BGI’s large-scale high-throughput bioinformatics platform. He developed sequencing assembly, alignment and annotation algorithm and software. He has coauthored over 100 papers, 35 of which are published in Science and Nature (including Nature cover story), and led research projects including the International 1000 Human Genome Project, as well as many sequencing projects including the human gut microbiome, ancient human, soybean, maize etc.
JUN WANG (CEO and Director)
Dr. Wang has been recognized with an award from His Royal Highness the Prince Consort’s Foundation in Denmark, an Outstanding Science and Technology Achievement Award from the Chinese Academy of Sciences, Top 10 Scientific Achievements in China, and the prize for Important Innovation and Contribution from the Chinese Academy of Sciences. He was also named by Nature “People Who Mattered This Year” in 2012.
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/INNOVATION MAKING DNA SEQUENCING MASS-MARKET. By investing in more cutting-edge genome-sequencing hardware and training more analysts to make sense of reams of data output than any research institution or university in the world, BGI has turned itself into a go-to destination for global scientists seeking collaboration on ambitious projects to unlock the mysteries of plant, animal, and human DNA. The Shenzhen, China–based institute (it was founded in Beijing) is now the most prolific sequencer of human genomes, using technological advances to drive steep drops in the cost of sequencing complete genomes, from $3 billion in 2003 to mere thousands today. Its goal is to organize the world's biological information and make it useful and accessible to all—like a biological Google.
Under its director, Dr. Jun Wang, its projects are wide-ranging, from decoding rice genomes for improving agriculture to parsing the biological roots of human intelligence. In March 2013, BGI turned its attention to the West, acquiring California-based Complete Genomics, a leading developer and manufacturer of genome-sequencing machines, for $118 million, giving it even more firepower.
They start from DNA sequencing with most advanced facilities to unveil the mask of plant, animal and human DNA, making the research system a co-creation platform for scientists and biological encyclopedia for public, which finally leads to the application of services and products in agriculture (food) , healthcare (medical service) and environment (solution).
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/MANAGEMENT ACADEMIC COLLABORATION As a leading biotechnology organization, BGI attempts to provide innovative biological research and application services, on an international level, to researchers and diagnosticians as well as ordinary people. In order to support dedicated efforts to promote applications in different fields, nine sub-organizations of BGI were spawned in 2012. They are BGI Research, BGI Tech, BGI Diagnosis, BGI Agriculture, BGI College, BGI MFG, China National GeneBank (Shenzhen), Complete Genomics and GigaScience. Since their mission is to use genomics technology to benefit human races, they believe academic research and development is the core value of their process. BGI not only has its internal collaboration, it also cooperates with a lot of scientists, institutes, colleges and industries to foster a combination of scientific discovery, technological development and industry innovation.
BGI also imports a mode of cloud management which is based on the big data analysis. It is basically the software and technologies designed for operating and monitoring applications, data and services residing in the cloud. The strategy typically involves numerous tasks including performance monitoring (response times, latency, uptime, etc.), security and compliance auditing and management, and initiating and overseeing disaster recovery and contingency plans. With the cloud management, BGI develops a more clear value chain. What’s more, BGI gives a lot of opportunities to the young generations. It corporates with famous academic institutions and builds the BGI college. They don’t acquire their employees to get master or PHD. They believe that young people have the passion to explore and can bring up much innovation. The young generations did make a lot of contribution to the discovery, development and innovation of BGI.
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INNOVATIVE WHILE NOT WELL ORGANIZED Strength: 1)BGI is now the world’s largest genomics center. It has advanced high-throughput sequencing technology, a highly efficient data analysis capability, uniquely rich biological resources, and a multidisciplinary scientific research system. It is outstanding in the genomics area. 2)BGI has strong international power. It comprises of 4 regions, including BGI China (Mainland), BGI Asia Pacific, BGI Americas (North and South America) and BGI Europe (Europe and Africa). It also has 115 papers published on top international scientific journals like Nature and CEO once nominated as “People who mattered this year”. 3) BGI has wide-ranging institutes and industries collaborating with each other. It has 9 affiliated offshoots; they are BGI Research, BGI Tech, BGI Diagnosis, BGI Agriculture, BGI College, BGI MFG, China National GeneBank (Shenzhen), Complete Genomics and GigaScience. They also cooperate with outside academic partners. 4) BGI brings up some innovation in strategy. It is making DNA sequencing technology mass-market to benefit public. It also makes itself an open innovation platform for scientists to seek collaboration. It has a young generations management system and gets some young people to core part of BGI.
/EVALUATION Proposal: BGI is really innovative and leading in its area. The collaboration, co-creation and unique technology are all key element of BGI. However, it still has weakness in management system. Just bringing young generation to core part is not enough. Meanwhile, competitors are getting stronger. BGI must keep their advantages and try to improve their mansgement system to maintain their place and get development in the long run.
Weakness: BGI is lacking of advanced management system of junior staff. Some employees don’t like the environment and leave. Opportunity: BGI can utilize its power and connections in different fields and look further into future. BGI should also collaborate more on business part to add more value to their product industry. Threat: There are more and more competitors in sequencing area.
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IV. CONCLUSION
/STRATEGY COMPARISON We define the value chain of technological development as 4 steps of Research, Evaluation, Development and Commercialization. Firstly, scientists put a large amount of efforts in the research of technological seeds, which may turn into be big impact on our lives. Secondly, scientists demonstrate the verification of the technological seeds by testing and evaluating. Thirdly, they transit the phase to trial production by the verified technology. Fourthly, the space of the applied technology to meet business needs should be defined. In these processes, Euglena Inc mainly places themselves in the product development phase. To improve the production technology efficiently, Euglena Inc conducts the joint research with universities. In addition, Euglena Inc makes strategic alliances with the top tier corporation in each business domain. By involving these business partners in the development process, Euglena can reach out to the end customers. In terms of food business, Euglena can establish the distribution channels through the partnership with Itochu to
Lawson, large convenience store in Japan, and customers who often come to Lawson. On the other hand, BGI corporation mainly funnels their energy to analyze and evaluate the effectiveness in the genomics and related bioinformatics realm. BGI provides platform for scientists to collaborate with researches in the different projects, which gives researchers valuable opportunities to use innovative research system BGI holds and BGI itself the scientific gains from open innovation and co-creation at the same time. In agriculture projects, BGI also makes alliances with some manufacturer so that they can lead to commercialization of the technological seeds BGI demonstrated. In the healthcare segment, they also get cooperation with hospitals to put their medical services into wide application.
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/FOOD SECURITY SOLUTION According to the Union Report, Blends of traditional and modern technologies offer possibilities for improving nutrition and increasing rural employment on a sustainable basis. Biotechnology, including tissue culture techniques, technologies for preparing value-added products from biomass, micro-electronics, computer sciences, satellite imagery, and communication. technology are all aspects of frontier technologies that can improve agricultural productivity and resource management. Euglena and BGI are trying to solve the food security problems by their unique biotechnology and commercialization perspectives. Since Euglena has the mission of using the characteristics of euglena to solve food and environmental problems, it is focusing on the product development based on euglena. It is solving the problem to some extent by providing the product which is made from euglena to people in poverty, preventing poor people from having no healthy food to eat without money. It is relieving the pressure on both food security and social health care problems.
Regarding BGI, the mission is different. BGI believes in using omics science and technology to benefit human races. Thus, their core value is in the phase of technology evaluation to make sure the technology can be used to develop agriculture and cultivate good food resources. It somewhat solves the food security problem by improving the food quality. With advanced technology developed from decoding the plant DNA, the productivity will be increased as well.
Through these actions, we can come to the conclusion that the collaboration of academia and business with different focus may have different solutions for food security problem; and both of them are effective.
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V. APPENDIX /REFERENCE 1. Euglena Company Website, Euglena, http://www.euglena.jp/en/labo/research.html, retrieved on Nov 29, 2014 2. BGI Corporation Website, BGI, http://www.genomics.cn/en/navigation/show_navigation?nid=64, accessed on Dec 4, 2014 3. World’s Most Innovative Company 2014, Fastcompany, http://www.fast3. company.com/ most-innovative-companies/2014/bgi, accessed on Nov 22, 2014 4. Our Common Future: Report of the World Commission on Environment and Development, United Nations. March 20, 1987
/EUGLENA A single celled organism that can photosynthesize using its chlorplasts
Minerals Vitamins
Chloro plast
Amino Acids
Fatty Acids
/DNA SEQUENCING
From Library Preparation, Cluster Generation, to Sequencing by Synthesis and finally Data Analysis
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/BUSINESS MODEL CANVAS
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/COMPARISON
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