Archive for South America
One of the highlights of the past few years for me has been the annual CoDev conference on open innovation sponsored by the Management Roundtable. Top-notch speakers on open innovation and collaboration will speak, sharing their experiences and insights. Speakers from companies like Procter and Gamble, Colgate, Pepsico, General Mills and ConocoPhilips (one of the new companies speaking this year) have much to share. It’s a great venue for networking with many thought leaders and experts. Many of the participants are executives, directors, or managers responsible for collaborative innovation and are the kind of people you ought to know if you or your company care about advancing your approach to innovation.
This year Innovationedge will be conducting a pre-conference workshop on innovation and IP strategy. I hope you’ll be there with us!
The setting is Scottsdale, Arizona, which is the place to be in January. Beautiful region! The conference runs from Jan. 24-26, 2011.
This year I’m especially excited about one of the key-note speakers, my friend Adriano Amaral from Brazil. He was one of the visionary leaders of the government in Brasilia in the past decade who transformed the economy of that state into the strongest economic engine of Brazil. He is a tremendously successful CEO of a for-profit business, POSEAD, and of a non-profit educational organization, CETEB, both of which have transformed education for speakers of Portuguese and Spanish with a remarkably successful business model. He will share some of his story, a tiny part of which I’ve shared previously on this blog. Connecting with this influential leader from Brazil could easily be worth the price of the conference for some of you.
Ethanol as a biofuel may soon reach practical limits in the US and frankly is clouded with questions about its economic and environmental utility. However, the fermentation systems for producing ethanol can be adapted to produce much more valuable products using special microbes developed at some of the most promising green energy and biotech companies. The result is enticing, as we read in “Brazil: The Bossa Nova of Biofuels” from Biofuels Digest:
Another wave of next-generation renewable drop-in fuel companies, Amyris, LS9, Gevo and Dupont, are also investing in and partnering with Brazil’s sugarcane fermentation bioreﬁneries. Why? Because their emerging technologies from cellulosic microbes (yeast, algae, fungus and bacteria) can use the same ethanol fermentation facilities in the US corn belt and in Brazil’s sugarcane belt to produce bio-crude, green diesel, petrol and biojet.
The simplicity is astounding. Here’s the big idea. Take an existing, stranded ethanol factory or conglomerate. Buy it for a substantial discount. Start with cheap sugar. Drop in a new Amyris, LS9, Gevo, or Cobalt microbe/ bug in the same fermentation vat and what do you get? An integrated biorefinery that can use cheap, sustainable sugars to produce renewable diesel, aviation fuel, and biobutanol – fuels that are compatible with existing petroleum pipelines, storage, petrol stations, and vehicle engines today.
In the near future, these fermentation-based bioreﬁneries will be able to convert multiple inputs from cellulosic sugars–bagasse, switchgrass, wood chips, municipal solid waste, and glycerin–into a diverse set Of outputs, including renewable diesel, aviation fuel, bio-crude oil, biochemicals and biopolymers with significant GHG reductions and carbon emissions compared to petrochemical hydrocarbons.
This is an important lesson in innovation. Don’t live with current assumptions. Look at existing technologies, processes, and products as simply a stepping stone to something more valuable, and then ask what is next. If I have raw materials and processing stations that can use microbes to convert sugars into a biofuel, why be satisfied with the least valuable biofuel around? Why not look at the higher-value products that similar technology could produce? That’s the genius behind some of these rising bioproducts companies.
Speaking about bioproducts, let me encourage any chemical engineers out there to join me at the AIChE Annual Meeting, where the Division that I chair, the Forest Bioproducts Division, is hosting numerous sessions dealing with the exciting developments in biorefineries and value-added products from cellulosic biomass. That’s where some of the best potential is: energy and chemical products from something besides the food that people need to eat.
In my ongoing work on analyzing the intellectual property landscape in biofuels, one of the most impressive companies I’ve run across is Amyris, a renewable products company whose clever use of synthetic biology goes far beyond biofuels. Amyris was founded by Kinkead Reiling, Neil Renninger, and Jack D. Newman who met at Berkeley and founded Amyris in 2003, headquartered in Emeryville, California. With a grant from the Bill & Melinda Gates Foundation, they first developed their technology under a non-profit initiative to provide a reliable and affordable source of artemisinin, an anti-malarial therapeutic. It was viewed as a long-shot, but they found success that paved the way for the growth of the company into other areas. They are now developing new microbial strains that can produce other useful molecules from renewable feedstocks. This industrial synthetic biology platform is providing alternatives to a broad range of petroleum-sourced products. he extremely useful molecule farnesene is an important part of their business. It provides a compound that can be used to produce flavors, perfumes, detergents, cosmetics, biodiesel, and other products.
This week Amyris created a stir by announcing a record number of deals and partnerships for a single week (a record among bioenergy companies, according to Biofuels Digest). These partnerships include P&G, Total, Soliance, Cosan, M&G Finanziaria, and Shell:
Amyris has taken it up a notch with a series of stunners surrounding its synthetic farsenene, which it has named Biofene – the first product that Amyris is seeking to produce at commercial scale.
Beyond its success this week with Biofene announcements, which are the basis for the P&G, M&G and Soliance partnerships — there are the broader arrangements with Cosan to develop a platform in renewable chemicals, and the equity agreement with Total that will provide needed capital as well as a broader platform for Amyris’s expansion into hydrocarbon fuels.
The mysterious agreement with Shell, regarding diesel, is one to watch. The decidedly vague disclosure was buried in Amyris’ amended S-1A registration statement, but not otherwise mentioned in a flurry of press releases from the company as it promotes its expansion in this pre-IPO environment. Shell Western Trading & Supply is one of 17 Shell trading companies that buy and sell to customers within and outside of Shell.
This news shows an interesting example of companies forming partnerships with an innovative start-up with great technology and apparently highly valuable IP. According to my Patbase search, Amyris has 21 patent families, quite a large number for such a young company. They clearly have been active and aggressive in pursuing patent protection, and those patents are critical for the meaningful partnerships they are now forming. It’s a great unfolding story of open innovation and technology transfer.
The story extends beyond the US. They have operations in Brazil, for example, which is one of the world’s hotbeds for bioenergy, bioproducts, and collaborative innovation.
Further information comes from today’s article, “Amyris: farnesene and the pursuit of value, valuations, validation and vroom,” also from Biofuels Digest.
My recent visit to three beautiful regions of Brazil included opportunities to learn more about the economic climate and the future of innovation. Entrepreneurial opportunities are tremendous for innovative and bold Brazilians, in spite of the challenges that come with extremely expensive capital, high taxation, and occasional bureaucratic barriers. Brazil continues rising rapidly, on its way to be one of the world’s great superpowers. The spirit of Brazil was contagious!
The opportunities from the agricultural potential of Brazil are mind-boggling. The biodiversity of the few parts I saw was overwhelming, and that was only a minute sampling. By strengthening the airport system in Brazil, there are many opportunities to move away from supplying bulk commodities like fiber and coffee to providing value-added consumer products shipped directly to consumer markets. A nationwide effort to enhance transportation is needed (and is underway). One product area where I eagerly await further progress is in the field of beverages. For example, all over Brazil there are drinks based on the guarana berry from the Amazon, including the wildly popular Antarctica brand carbonated beverage. These are more popular than cola beverages and frankly, they taste much better. This one of many Brazilian flavors waiting to emerge into the US market.
Brazilian businesses have also evolved a variety of interesting business models, including efficient methods for managing buffets where you pay by the kilo. I would welcome that approach here.
The business area that most impressed me for its innovation was in the field of education, and distance education is particular. I had the privilege of meeting with the CEO of POSEAD, a remarkable company offering distance learning service to Spanish and Portuguese speakers. They have drawn upon 40 years of experience in a non-profit educational organization, CETEB, along with many years of commercial experience, to create a rapidly growing business that solves some of the real problems of education and training in emerging nations, where the cost of commuting to a school or training center may exceed monthly incomes. They have developed advanced diagnostics and delivery systems to really understand what a student is doing, what they need, and how to get them to move forward. There are so many mistakes that can be made by newcomers in this area, especially in meeting the needs of Spanish and Portuguese speakers, but they’ve figured out how to avoid them and have created a remarkable efficiency in their systems that results in extremely low cost.
Some of the innovation in education goes back to a remarkable woman, Rosa Pessina, who long ago recognized that the pressure to build more schools to accommodate burgeoning classes in the earlier grades was treating a symptom, not the cause of the problem. Her analysis showed that class sizes were suffering because too many students were failing to advance in school, resulting in low graduation rates and high class sizes as kids went back through the same grade more than once. She then developed programs for accelerated learning to help these kids quickly get back to the right grade for their age, making the students feel better about the class they were in and enhancing motivation. This was the beginning of the non-profit organization CETEB, and those who participate in its accelerated learning programs have a 94% success rate, if I remember correctly–an extremely high percentage that go on to graduate. CETEB’s services include distance learning tools to help Portuguese and Spanish speakers. There is a huge opportunity here for the United States, where we have the children of many Spanish-speaking immigrants doing poorly in the schools. If they do not gain an education, the risk for ongoing poverty and crime is much higher. By accelerating their progress and helping them gain education at low cost, remarkable social good could be achieved here in the U.S. Governors, CETEB awaits your call!
There are layers of innovation in other areas in both CETEB and POSEAD, including how they quality and prepare content, how they form alliances, how they manage the challenges of certification and regulatory burdens, and in general how they identify and meet the needs of students and communities. There are brilliant minds at work here, and I feel that it’s time for US schools, companies, and governments to explore collaborative efforts. I’d be happy to help make a connection.
Innovation fatigue due to inadequate intellectual property rights and property rights in general occurs in many other nations today, and is strongly correlated with economic difficulty in such nations. Hernando de Soto, a Peruvian economist and winner of many awards such as the 2006 Innovation Award from The Economist for the promotion of property rights and economic development, has shown that lack of property rights has been a key factor in keeping poor nations poor. It is respect of property rights that creates the means for men to be equal in opportunity. Intellectual property rights are part of that, and when they are in jeopardy, we should be concerned.
In Brazil, for example, a nation with tremendous potential for further economic development, recent government actions related to a trade dispute with the US over cotton threaten to reduce the value of US patents held by people in Brazil. In “Brazil Close to Declaring War on US IP” over at IAM Magazine, we read about the dangerous actions being taken by the Brazilian government. There may be many long-term costs for whatever short-term gains they obtain. This could harm innovation and economic development in that nation.
One example in the US of the attack on patent rights comes from the recent court case Association for Molecular Pathology v. USPTO in which a body of patents obtained by Myriad Genetics (NASDAQ:MYGN) has been declared invalid by a judge using dubious arguments presented by the ACLU. I am especially troubled that the patents were declared invalid for not treating patentable subject matter under 35 U.S.C. § 101.
Eric Guttag over at IP Watchdog offers some convincing arguments about the absurdity of the ACLU’s position and the injustice of Judge Sweet’s rulings. Please read the full article, “Foaming at the Mouth: The Inane Ruling in the Gene Patents Case.” Here is one excerpt:
What is most alarming about Judge Sweet’s opinion is his characterization (or more appropriately mischaracterization) of the CCPA’s Bergy case. Judge Sweet makes numerous quotes from Judge Rich’s opinion in Bergy on how 35 U.S.C. § 101 should be interpreted. But what Judge Sweet neglects to point out is that Judge Rich ruled in Bergy that a biologically pure culture was deemed to be patent-eligible under 35 U.S.C. § 101. Why did Judge Sweet neglect to point out this highly relevant fact? Instead, if the holding in Bergy is considered in appropriate context, it supports Myriad’s “isolated” BRCA1 and BRCA2 gene sequences as being at least patent-eligible under 35 U.S.C. § 101 because they don’t exist in nature and cannot exist without significant human intervention. . . .
In the end, it is my considered opinion that Judge Sweet knew the result he wanted to reach (i.e., invalidate Myriad’s patents), and simply cobbled together a justification for it. (Treating the claims in Myriad’s patents are a “lawyer’s trick” also doesn’t suggest impartiality.) If nothing else, there is enough of a dispute about the essential facts needed to reach Judge Sweet’s conclusion to deny the plaintiff’s motion for summary judgment of invalidity based on 35 U.S.C. § 101. That Judge Sweet needed to spend 152 pages trying to justify his grant of plaintiff’s motion for summary judgment speaks volumes about why this grant was inappropriate.
At many levels in the US and in other nations, there seems to be an increasing hostility toward patents and intellectual property rights for inventors. One of the best things that can be done to stimulate the economy right now would be to strengthen the USPTO, reduce examination time, and instill a healthy respect in the judiciary for property and intellectual property rights. Adding to the uncertainty, cost, and delay of patent protection only weakens the economy, and hinders innovation through yet another “innovation fatigue factor.”
I recently shared a presentation about the economic innovation in Brasilia, where bold actions to reduce the size of government and strengthen the climate for private sector growth have resulted in record unemployment and social progress. I have some additional information I’d like to share on some of the foundational work that has been done since 2006 to create the ecosystem for economic and innovation success in the future.
If you are interested in taking advantage of the economic opportunities in Brasilia or in better understanding the future of innovation there, let me know. And if you have perspectives that we might be able to share in our next book on some international aspects of conquering innovation fatigue, please contact me. Contact information us at the the end of the Pixetell video, or email me at jlindsay at innovationedge dot com.
Below is a Pixetell recording to share some new information about the economic revolution in Brasília, Brazil, wherein a government in tune with the “voice of the innovator” has worked to get out of the way of business success and to do provide the infrastructure and educational opportunities needed for long-term success. Amazingly, the local government there has had the courage to do more than talk about being efficient and cost-effective, but has actually gone through the painful process of “debureaucratization,” reducing bureaucratic jobs by 20% and the number of government agencies at the state level by 59%. The results of this experiment over the past four years have been dramatic and are paving the way for further innovation and increased quality of life.
Special thanks to Adriano Amaral, Secretary of State for the State Department of Economic Development in Brasília for meeting with me and sharing his insights and experiences. Like many of the leaders in Brasília, Adriano is not a career politician, but an experienced business leader who has led successful startups, stepped in to bring struggling businesses to life, advised large and small companies, and taught some of the best MBA students in the world. The success of the Federal District of Brasília demands further attention, and will be covered in our next book. We continue to look for further experts to interview as we explore the many stories and lessons from this region and from Brazil in general. Let us know if you have experiences and expertise to share! Email me at jlindsay at innovationedge.com, or use the contact page on this blog.
The Pixetell below is set to 640 x 480 pixels). To see the full-sized presentation in higher resolution, click on the full-screen icon in the lower right-hand corner, or to view this in a new window, use this Pixetell link. Pixetell, by the way, is an incredibly easy and extremely innovative tool for sharing information from your computer.