Sven Denecken: Embrace the digital economy or be left behind

Following on from The New Economy’s coverage of Cloud World Forum, we spoke to Sven Denecken from German software giant SAP, on how to re-imagine business processes and develop a digitised core.

The New Economy: Technology is being harnessed in an unprecedented manner, as global business models are being built. Here to share insight on some of these trends: Sven Denecken.

Now, let’s begin by briefly discussing some of the key digital trends that companies are embracing today.

Sven Denecken: So, there are four which I would like to mention. The first one is customer-centricity. Digital technology has changed the game completely, but customers change the rules as well.

The demand simple, seamless, and personalised experiences across any channel, any time, anywhere, and actually, on any device.

Number two would be, we need to be operationally simple, because the world is getting smarter in the digital economy. But the complexity is killing that innovation right away, because the external negative pressure on the collective bottom line is there. So we need to find ways to simplify – actually, everywhere.

Number three for me is the global e-network. There are trillions of dollars of commerce moving into silos, and millions of companies attempting to innovate, just on their own. So I think this is a lost opportunity to improve the lives of billions of end users.

Last but not least, number four: there is technology innovation. Take the internet of things, or take big data. The most dramatic change in the digital economy will be driven by that hyper-connectivity, and big data. This will transform nearly every business model out there.

The New Economy: So, how are companies meeting these targets through technology?

Sven Denecken: First of all, we think technology is not a means by itself. It always should be the enabler for that innovation; and trends like big data, connectivity, and cloud, have been around for a while.

Now, you see the combination technologies coming up: actually, they’re real game-changers, and they have potential. Like, 3d printing influencing manufacturing. Like internet of things influencing classical business to get to a service-oriented business. Or augmented reality in geo-spatial, which are capabilities that are influencing buyer behaviour.

All of this is asking for in-memory, real-time platforms, so you really can make use of it.

The New Economy: Beyond a digital strategy, what role does a digitised core play?

Sven Denecken: That’s a very good question. The digitised core, I think, is key to transforming business and preparing it for the future.

Every business process, someone sooner or later will touch the core. And almost certainly it is dependent on it. But now, the big question is, how to make your business faster, simpler, and further automate your process. Because you need to seamlessly integrate across all value chain processes: from client interaction, digital R&D, production, administration, and much more.

For us, it meant as a consequence to entirely re-think what a business core looks like in the 21st century. And here is where, at SAP, our new business suite S/4 HANA comes in.

Three things. Number one: the entire value chain is digitised, including the digital core, which serves as a foundation for the business innovation and optimisation.

Number two: the digital enterprise interconnects all aspects of the value chain, to drive and anticipate the business outcomes in real time.

And number three: enterprises across industries can lead with that digital transformation by completely re-imagining business models, business processes, and their work.

So, this helps SAP customers – and the ecosystem – to reimagine their business in the digital economy.

The New Economy: Excellent. So what is the next wave of innovation you’re looking to embrace when building strategic business models?

Sven Denecken: So that’s that crystal ball question, right? We think companies will re-map their entire business along efficiency, effectiveness, and agility: the framework of the digital transformation.

We recommend choosing the business process very wisely. Transform – or even disrupt – yourself quickly, and on the right true in-memory platform. This is what we see.

Today, two clever kids can do what you needed entire corporations and their infrastructure to do three years ago. So I think it’s time to make that move, and embrace the digital economy – or someone else will do it before, or do it instead of, you.

The New Economy: Okay; Sven, thank you so much for joining me today.

Sven Denecken: Thanks for having me.

Six pack or 1080-pack? Exploring high definition lipo-sculpture

Plastic surgery is on the rise, and the latest trend is high-definition lipo-sculpture: sculpting the perfect, muscular, athletic form into human bodies. Dr Alfredo Hoyos, leading Colombian plastic surgeon, explains the process.

The New Economy: Thinking of getting some sun in South America? How about a little nip and tuck while you’re there? Well, plastic surgery is of course on the rise around the world, and many are flocking to Colombia for their procedures. Here to tell us more is Dr Alfredo Hoyos.

Now, you specialise in high-definition lipo-sculpture; what does that involve?

Dr Alfredo Hoyos: Actually, that is my invention. It is what we call an advanced type of liposuction, and it involves two things. One is a technology, called VASER, which is literally something that can make you have a more defined job. And the other one is a technique, which is the one that I created. It involves having differential liposuction, which means that we have to do superficial and deep liposuction in order to get a more athletic appearance in the patients.

The New Economy: So how are you able to achieve high definition as you’ve just described, in someone who wants to have a six-pack?

Dr Alfredo Hoyos: Well, that’s a very interesting question, because there are people who are considered very good patients for doing liposuction. This liposuction is different, because it can be done in people who are not very perfect candidates.

So for instance, a person who is very athletic, but doesn’t have the six-pack, can now have the six-pack through this. And the person who is very slim, we can actually achieve a more athletic result as well.

And of course, in people who have a few kilos extra, we can take some out and we can do a little bit of finishing.

The New Economy: So, there’s obviously limits to how much success a patient can achieve?

Dr Alfredo Hoyos: Yes, of course. The idea is that we can do this in regular, normal patients. The idea is, not extremely overweight, not extremely obese patients, and not in patients who have… massive weight-loss patients, for instance. The ideal is to have very healthy patients.

The New Economy: So what then happens to a patient who puts on weight after the surgery?

Dr Alfredo Hoyos: Well, that’s very interesting. Because if you have athletic job, the idea is that people tend to conserve it over time. Usually, when you see the six-pack, and you are actually very fit: you go to the gym, you start a new trend of life. The thing is, this is what we call a dynamic surgery. It’s not like a nose job, where you preserve the shape over the years.

This is dynamic, in the sense that, if you eat… you’re going to lose the results if you don’t eat properly. You lose them over time.

The New Economy: Well I have to assume that many men are having this surgery; they’re the ones that, you know, like the six-pack on their abs. What else are men getting done?

Dr Alfredo Hoyos: We have an increasing perception of beauty and preservation in men as well. You know, it’s something that we didn’t have before. So, men actually want to get more healthy, and look younger, as well. So they want to have the six-pack, for instance. Usually, what we see over 40s or 50s, they try to have a bleph[aroplasty] done: you know, take out the extra skin on the eyelids; usually nose jobs. These are the most common surgeries that we do in men.

The New Economy: With respect to women, of course, breast implants seem to be all the rage, but PIP implants really come under fire recently – scrutiny being that, you know, these French-made implants were in some cases rupturing. When a woman is deciding whether she should have this surgery, what should she be keeping in mind when she’s shopping for the right surgeon?

Dr Alfredo Hoyos: There are two things that you have to have in mind. First, to have a board-certified surgeon. You know? We have to have very good training, and we have to keep updated in the field. So usually, board certified surgeons know what is best for you.

The second part is specifically about implants. And the main thing that we have to have in mind is that they are certified as well. That’s usually having an FDA approved, and CE approved – it helps us have a little more relief in that sense.

The New Economy: Dermal fillers now are kind of the wild, wild west of the cosmetic world – it’s so enticing, the idea of just being able to snap your fingers and reverse time. But there are some complications of course – can you tell me, how can someone decide what is the best type of filler to use, if they want to achieve the results and still be safe?

Dr Alfredo Hoyos: When you put a filler that is permanent, you can also have permanent complications. So usually what I recommend is to have temporary fillers. Something that is resoluble. And specifically hyaluronic acid – that is the one that we promote more, because it has very proven safety, it’s effective, and over time just goes away usually in a period of a year. Or nowadays almost two years.

But the main thing is that the patient can choose what he or she can have done later. If you say, ‘Oh, my cheeks were too high last time! Let’s put a little bit less in next time.’ So, it has these two advantages: that if you have a temporary complication, it’s gone in some period of time; and you can actually, over time, choose the best way and the best places to do it.

The New Economy: Now Colombia of course is one of the most popular countries to travel to for surgery. But if someone is trying to decide, don’t you think they should rather go with a local expert, versus someone who is overseas?

Dr Alfredo Hoyos: Usually the experts are not just in one place. So, usually if you want to find an expert in the face, you’ll go wherever you have to go to have the surgery with this specific person.

In the sense of Colombia, we have one of the safest and more advanced fields in plastic surgery in the world. We have the expertise as well. And the government itself is promoting to have medical tourism. So we’re building new hospitals, new clinics; everything has to be board-certified.

So I think the government backup is quite important for us as well.

The New Economy: Do you think that South America’s ever going to shake that reputation that it is somehow a cheaper alternative to seeking out surgery in the western world?

Dr Alfredo Hoyos: I think it’s a slow process. Because you have alternatives that, because of the economy, are actually cheaper than in first world countries. But I think slowly what we are seeing is that the patients are not coming because of having cheap surgery, but actually they are seeking the best surgeon to do the job.

People are becoming aware that when you do a surgery, sometimes it’s something that you have to choose carefully and rightfully, in order to get the best result.

The New Economy: Dr Hoyos, really that was such a fascinating conversation. Thank you so much.

Dr Alfredo Hoyos: Thank you very much for the invitation.

“Bet on the jockey, not the horse”: HKSTP launches $6.5m fund for tech start-ups

For the first time ever, a Hong Kong government-owned body is injecting money directly into the technology business ecosystem. Allen Ma, CEO of the Hong Kong Science and Technology Parks Corporation, the statutory body behind the $6.5m corporate venture fund, discusses the success stories from HKSTP, and the corporation’s plans for the fund.

The New Economy: Hong Kong startups are receiving an extra $6.5m over the next few months, courtesy of the Hong Kong Science and Technology Parks Corporation, the statutory body in Hong Kong driving the city’s innovation development and grooming technology start-ups. It’s the first time that direct investment has been injected in young science and technology companies from HKSTP. 

Joining me is Allen Ma, CEO of the corporation; Allen, tell me about Hong Kong’s start-up scene. What kind of young businesses you supporting? Tell me about some of their innovations.

Allen Ma: The start-up scene in Hong Kong actually has been extremely promising. Firstly, over the last couple of years the number of newly registered companies has gone up by almost 100 percent. And we are the biggest incubator in Hong Kong. We are incubating more than 175 companies right now. In the last two years the number of applicants has actually gone up by more than 100 percent.

Today we are investing into five technology clusters: electronic, ICT, green-tech, biomedical, to new materials and precision engineering. All these five technology clusters, are going to affect the way we serve the ageing population, the way we are going to build smart cities and how we are going to use robotics for our re-industrialisation in the next five to 10 years.

A couple of early success stories so far. We have groomed a company called Vitargent, which makes use of a technology started from the City University of Hong Kong. And they have now been able to use DNA modified fish to find out whether a certain type of food or solution contains a toxic substance in it.

In the electronic area we have also groomed a company that has built, what we call a ‘Hand of Hope’ to help people who have stroke problems to rehabilitate.

So there are many successful stories that we have groomed across these five technology clusters.

The New Economy: How do you identify the companies that you want to support? Do you choose them for their commercial viability or their innovations for good?

Allen Ma: You know, in our industry we have a saying that we do not bet on the horse, we bet on the jockey. So the centre of attention is on the entrepreneur: the founder of the start-up business.

We look at whether he is really creative, is willing to take risks? Does he have the entrepreneurship? And also, does he have a good business sense?

At the end of the day it’s about translating ideas into things that have a market. And that’s why we have to go through the entire journey of commercialisation.

The New Economy: Now this $6.5m you’re investing is the beginning of your corporate venture fund. Tell me more about this.

Allen Ma: This is a co-investment fund. Essentially, we’ve put out $6.5m and we hope that we can find other matching funding to the same level.

The companies that we are willing to put our money into are essentially companies that operate within the Science Park or companies who have graduated or are still in an incubation programme. So you can understand that we know all these companies, including their founders, extremely well.

So it’s a kind of low risk approach to start with. The significance of this programme is really that a Hong Kong government-owned statutory body is putting money into the ecosystem and we hope to groom the people and give them some help during their seed-funding phase.

The New Economy: Now, here in London there has been some criticism of our incubators – that they are not really adding value to the companies they are supposed to be serving. That they’re basically nothing but glorified office spaces. What’s your take on this?

Allen Ma: Interesting comment. Our company has about roughly 15 years of history. To be very frank with you, when we started this company, people perceived this as really the government putting money forward to build infrastructure.

Over the last 15 years, we have transformed. We have moved away more and more from a facility and infrastructure based business model, to what we call a service-based model now.

The wide range of services that we are offering ranges from what we call Industry Connect: we connect the people here into the various industries, so they can see the marketplace and see the supporter.

We also have a programme called University Connect, where we connect a company here with innovators in the university, so they can meet and find ideas that can be commercialised. And we provide a full range of business support services. So it’s really a service-based model that we are offering, and I believe it’s the right model to move forward.

The New Economy: I am glad you mentioned University Connect, because your chairperson Fanny Law recently said that Hong Kong Science and Technology Parks hasn’t really enjoyed the support from academia, since your inception, that really you would wish for. What are you trying to do to address this?

Allen Ma: The trouble we have in Hong Kong is that although we have well-run universities, the right number of students, graduate students going through post-doc programmes. And very good, world-class university professors – but not too many of them are willing to take risks.

And what we are trying to do is to go into the university to reach out to those professors or research people and encourage them to at least come to the science park and talk to the people there. Demonstrate what they have done in their basic research and hopefully through this connection, we will have entrepreneurs talking to the right research professor and pick ideas and start the commercialisation journey.

What we are doing today is, a three C strategy. Three C means connecting the dots, collaborating with people, and catalysing their ideas.

By connecting people, they will be able to find partners and spark ideas. Collaboration between industries and entrepreneurs. Collaboration between university professors and entrepreneurs. And the last C is about catalysing: it’s about accelerating the path of innovation. And by providing all the support services at the science park, we believe we will be able to help them accelerate.

The New Economy: Finally, what is it about Hong Kong that is attracting science and technology firms?

Allen Ma: Actually, Hong Kong is unique in a number of ways. In terms of innovation technology, firstly we have a well-run university. Secondly in research and technology – you need to think about IP protection when you have the result. In Hong Kong we have the British-based rules of law, and people respect IP. And thirdly when you are into operation you think about the tax system. We probably operate the simplest tax system in the world.

We offer the lowest tax rate for entrepreneurs – so this is very important. If you look at the infrastructure – particularly ICT infrastructure – we probably run the world’s best broadband Internet and wireless communication infrastructure. All these are very important, for people to start their innovation technology businesses.

Caladrius Biosciences: Teaching immune systems how to recognise and fight cancer

Dr David J Mazzo from Caladrius Biosciences introduces CLBS20, which has recently moved into its phase three trial – named the Intus trial. He explains how the drug works, discusses the stage two findings, and outlines his hopes for FDA approval in 2018.

The New Economy: Being diagnosed with cancer was once likened to receiving a death sentence. But great scientific innovations have helped patients in the fight against the disease. Here to put a spotlight on just one cancer immunotherapy that is in a phase three clinic trial stage: Dr David J Mazzo of Caladrius Biosciences.

First, can you tell me about your therapy that’s under development: what is it called, and how does it work?

David J Mazzo: Our therapy is actually called CLBS20, formerly known as NBS20. It is a therapy that is derived from the isolation of the cancer inducing cells that one finds in a melanoma tumour: those cells that are self-proliferating, and actually cause the metastases that ultimately result in in death when someone has late stage melanoma.

We teach that patient’s immune system, using their dendritic cells, to specifically target and attack those cells. The idea is to prevent the distant metastases and to prolong life.

The New Economy: Now, who is this treatment really targeted for? I mean, how is it different from other melanoma therapies, both on the marketplace and in development right now?

David J Mazzo: Well, the treatment is currently being studied in patients with late-stage melanoma – those that have what’s known as recurrent stage three or metastatic stage four melanoma. These are the people who are in the end stages of the disease, and have had an opportunity to try many other therapies, often without much success.

The other therapies that exist really fall into two general categories. There are those that are chemotherapeutic, and then there are those that are immunotherapeutic. And the chemotherapeutic agents are, if you will, selective poisons that try to kill cancer cells without doing much harm to the cells adjacent to the cancer – often without great success.

And then, the other immunotherapies that are in development are really looking at trying to unleash a latent immune response in a patient that is a naturally occurring response. And many patients don’t have that, so those types of immunotherapies – checkpoint inhibitors would be one example – have a limited success thus far in prolonging life.

Ours, because it focuses principally on the cancer inducing cells, looking to prevent the distant metastases, has shown in phase two a great potential to prolong life.

The New Economy: I see. Now tell me: what did the phase two data then show you?

David J Mazzo: Well, the phase two data actually was really compelling, from really a multitude of perspectives. In the first study that was done, which was just a single arm uncontrolled study, we demonstrated over the course of a five year follow-up a true, 50 percent survival rate in patients with the late stage melanoma.

That is somewhere between three and five times greater than the expected survival rate at five years for patients undergoing standard of care at the time of the study.

We then followed that study with a controlled, randomised study, where the control group was actually just our isolated and immobilised cancer-inducing cells, without the dendritic cell component. And of course the therapy was as described previously.

And in that study we demonstrated a 72 percent two year survival rate, versus 31 percent for the control group against the backdrop of approximately 25 percent anticipated survival rate for people receiving standard of care at the time.

So clearly a very statistically significant improvement in the reduction of mortality, and also great consistency of results from study to study.

The New Economy: So can you tell me now about a grant from the California institute for Regenerative Medicine that you received for this trial?

David J Mazzo: The achievement of a grant from them not only represents additional financial support – which is always helpful when conducting a large clinical trial – but also represents an endorsement of the potential that is viewed from this particular therapy in this particular medical indication.

The New Economy: Okay. So what are the details, doctor, of the phase three trial; and when do you hope for the treatment to reach the marketplace?

David J Mazzo: Well, our phase three trial, which has been named the Intus trial, is a trial that we hope will be confirmatory in comparison to the two phase two trials.

It is studying patients from the same patient population, using the same therapy, with the same dosing regimen and the same overall survival endpoint.

It’s enrolling 250 patients; it has actually been screening patients since earlier this calendar year. We’ve already randomised our first patient, and the goal is to have all patients enrolled within a 24 month period, and to be at the point of analysis of the first interim analysis after 99 events, sometime in the second half of 2017.

The anticipation is that we’ll be able to demonstrate a statistically significant improvement in the reduction of mortality at that time – and then the earliest possible biologic licence application will be filed in early 2018. With the fast-track designation that this programme has received from the FDA, we expect the earliest approval could come late in 2018.

The New Economy: Okay, very interesting. Dr Mazzo, thank you so much for joining me today.

David J Mazzo: I appreciate the interest in our company. Thank you very much.

 

Philips-Volcano acquisition sets stage for cardiac imaging innovations

Heart disease is one of the major killers the world over, and to help treat it we need better imaging technologies. Michele Perrino, President of Volcano, discusses the latest innovations the company is developing, before Bert van Meurs of the Philips business group Image Guided Therapy explains why Philips recently acquired Volcano.

The New Economy: Heart disease is one of the major killers the world over. But with medical technology constantly evolving, mortality rates are dropping. Joining me down-the-line to discuss the cutting edge in these developments is Michele Perrino from Volcano, a Philips business.

Michele, the current treatment for this is very invasive, and can’t be used for everyone. What technology are you developing to better the current procedure, and what sort of impact do you predict this will have on mortality rates?

Michele Perrino: Volcano is developing technology to enhance precision image and sensing guided therapy, to overcome the shortcomings of the e3 angiograms.

How we do that is mainly through two technologies: one called FFR, the second IVUS.

Let me first describe what FFR is. It’s a physiological assessment through a sensor that’s mounted on a wire. It allows the physician to assess which critical vessel needs to be treated, versus which vessel needs to be deferred.

IVUS gives a different perspective – again, complementary to the angiogram – because instead of physiological information, it gives morphological information. If an IVUS catheter with a transducer mounted on it is introduced in the artery, and then through the artery gives a 360 degree view of the plaque and the vessel wall.

Very soon, Volcano will introduce to the market a new software and hardware that will allow us to combine angiogram with physiological information, as well as IVUS. And this is a tremendous step forward, because the physician will have on the same monitor, all the different information they need.

The New Economy: So how widely is your technology used around the world, and what are the advantages of this real-time technology?

Michele Perrino: The advantages of this technology are very well known to physicians, and are also very well supported by strong clinical evidence.

Unfortunately, the adoption in Europe is not so high. It remains still in the range of six percent, on average, for both technologies – FFR and IVUS. This is our major challenge. But at the same time, also our opportunity.

Because what Volcano is really focused on is sharing the evidence, sharing the clinical utility that this technology brings, and trying to convince the clinical and non-clinical stakeholders that using FFR and IVUS really makes sense.

The New Economy: Of course, the medical industry is also a business, so, what are the cost-cutting advantages?

Michele Perrino: If we look at the short-term, there is an additional cost for the hospital. But our view moves more towards the longer-term: there is of course much higher clinical benefits, and much lower costs, that the hospital will have.

Just to give an example, if we have a three vessel disease, thanks to the FFR assessing the vessel, we could have cases where the patient could have one or two vessels treated, and the other deferred. And as a consequence of that, in some cases this could also mean that instead of getting bypass surgery, it will just have a PCI intervention: it’s much less invasive.

And you can clearly understand the cost, also the consequence for the patients themselves.

We are really selling a cost-saving technology.

The New Economy: Now, in February of this year, Volcano was acquired by health-tech giant Philips. Bert van Meurs is senior vice-president of the Philips Business Group Image Guided Therapy. Bert, how important is this acquisition to Philips’ strategy?

Bert van Meurs: For Philips this is a major acquisition. Philips has had a vision and a strategy, really to organise itself across the health continuum.

We do have a major position, a leading position, in the image guided therapy space, through our interventional x-ray labs. But this is just part of such a solution. And now we are making a significant step in a new space, which means interventional devices. And through this acquisition, we now can combine devices with systems, which will allow us to provide our customers a much more, overall, integrated solution.

The New Economy: What’s next for the image-guided therapy business, and how do you see technology in the medical industry changing in the years to come?

Bert van Meurs: This is just the start. The development of minimally invasive therapy is a tremendous change in the way care is being delivered for patients.

Through minimally invasive procedures you can deliver treatment in a more effective way; less impact to a patient. And a lot of new applications and new procedures are being developed, thanks to new technology that provides better guidance, more selective delivery of that treatment inside the patient.

Right now we do have a strong position in PCI coronary interventions. Also in peripheral, which is growing; it’s rapidly growing.

But we will go also into structural heart disease, where we’re tackling procedures for the replacement of aortic valve, micro valve repair; and even into electrophysiology. And a whole lot of new applications.

Combining both our companies will allow us to have more capabilities to develop new technologies. But this is just the start to really grow the minimally invasive therapy space, and to continue to have the best solutions for our customers, and continue to develop that as a leading company.

Daneshvar: Political sanctions have boosted Iranian tech entrepreneurs

The New Economy speaks to Nazanin Daneshvar, founder of Takhfifan, the country’s most popular voucher buying website, who highlights how she and other local entrepreneurs can build their business vis-à-vis a limited competitive landscape.

Come back later for a full transcript of this video.

Technology fuels agricultural growth

The agricultural sector is in a “race towards automation,” says AGCO’s Matt Rushing, as he and Chris Rhodes tell The New Economy about the latest technologies helping the world’s growers to grow.

The agriculture sector is more inclined towards the use of advanced technologies, to meet the increasing demand of food grains and other food products, translating into big opportunities for manufacturers. With me now is Chris Rhodes and Matt Rushing from AGCO, a global leader in the design, manufacture and distribution of agricultural solutions.

The New Economy: Well Matt if I might start with you, from the traditional tractor how is the farm machinery and technology industry developed? And what machinery is most in demand today?

Matt Rushing: So if you look back across the last 50 years of agriculture, there’s been significant growth in machinery and also in the size in the machinery. We look at farms 50 years ago where they would traditionally have feed between 10 and 20 people. Now farms are feeding over 200 people.

So significant improvement in the machinery itself but also in the technology around the machinery, we’re seeing significant advancements in PrecisionAg technology which drives a lot of data creation on the farm. And the leveraging and using of that data to improve yields and reduce waste on the farms, has become very paramount.

The New Economy: Chris, you saw machinery worldwide, how does demand in different countries differ and where is the biggest market today?

Chris Rhodes: What’s really interesting about the agricultural equipment industry, is how that demand varies in different places. If you look at the US, Europe, Australia most of South America, everyone is mechanised it’s just a matter of degrees how much technology they are using. If you look at Africa and Asia and you see some of the biggest most sophisticated farms using the latest the technology, but you also see the potential in literally hundreds of millions of farmers who haven’t mechanised at all yet.

The New Economy: And farm subsidies are huge in the news in the UK at the moment, and in America there is a call for tax credits on farm machinery. So which side of the argument do you stand?

Chris Rhodes: AGCO for sure benefits in certain countries from farm subsidies, but on the other hand in some countries, and these are important agricultural countries, we’re at a disadvantage. That may be because of where we manufacture, maybe because where our public listing is or, what some of the technologies we have or don’t have on some of our equipment

So what we try to do at AGCO on the whole is pursue ethical business practices, and involve ourselves in as many government programs as really are applicable. As we look ahead about farm subsidies, there may come a time where farm subsidies will be based on farming practices, so the yield of the farm or which fields lay fallow all those types of things. And that’s going to require good data management technology, like ours that can collect and analyse and report data, so that the subsidies can be given out equitably.

The New Economy: Matt of course since the financial crisis farmers must have been spending less on machinery, this must have had a substantial impact on AGCO.

Matt Rushing: Well as in any industry there is always a pause, and right now we’re seeing a pause in the agricultural industry, but the future is still very bright. If we look at the population growth for example, we look at the change in everyone’s diets trending more towards protein we still see a lot of big growth coming for the future in agriculture.

One of the things you are going to see over the next several years, is the adoption of technology increase, so you’re going to see more and more technology not only going on new equipment but also on current equipment or older equipment, to help that farmer increase that productivity on the farm. There is going to be a need for that productivity gain over the coming years, just to feed more people.

The New Economy: So Chris, once farmers have made the initial investment in AGCO equipment and technology, what kind of savings advantages are they looking at?

Chris Rhodes: Well using Fuse technologies; which is AGCO’s technology strategy that connects everything on the farm together, we think we have some areas of advantage over our competition.

The first is we have a two pipe data strategy, that means we only ask for information from the farmers about the machines, we’re unique in that we don’t get any of the farmers confidential information about the farm.

The second area where we provide value is in our mixed fleet, so AGCO is a product of mergers and in fact we are just celebrating our 25 year anniversary this year. But we have always been a mixed fleet because of that, we understand that customers buy different equipment for different reasons, so we want to make sure that our system is open so that they can utilise their full fleet.

The third area of advantage for us is our focus on mobility, so we’re working with partners who are from the consumer side of the electronics industry, to make sure that we deliver on that promise. And in the fourth area is really about partnerships, we don’t think that any company can deliver the best solution for every agricultural challenge, so we are going to focus on the interface of integrating technology into our machines.

The New Economy: Well finally Matt, looking to the future now and what technologies is AGCO working on and what challenges are they designed to overcome?

Matt Rushing: You can see a lot of a race towards automation, less and less labour is available, less and less skilled labour is available, I think that’s where we are going to focus. I think we are going to see more and more sensor technology, more and more sensor fusion on the machine which would ultimately drive almost a central nervous system, where the machine almost becomes more aware of what it is doing and how it is doing it.

I think the other place that you are going to see a real revolution, is in the data side of what’s happening on the farm. There’s lots of data being collected on the farm, if you think about all the data points, sensors and other pieces of information that are collected everyday the farmer goes to the field, that data is not being adequately leveraged today to improve the operation.

So we can see in the future where more and more data is going to be collected, analysed in real time and then provided back to the grower, so he can utilise it to improve his business. We also want to leverage the data for the agronomic value that it provides right, there is lots of information coming out on how we can improve yields, how we can improve fertiliser application, how we can improve soil health. That’s where we really see the future going, and that’s where we see some real revolutions, and again Fuse technology is perfectly positioned to be able to provide that value.