 I'm the head of new business development and my role is really looking at sourcing technology scouting in Australia and trying to fit that into our global R&D effort. My presentation this morning will attempt to give a slightly different view, which is the view really coming from the other side, painting a picture of the global innovation environment and pose the question as to whether Australian investment, is it an opportunity or a challenge for us? I'll offer some personal suggestions on that may benefit us all working in this field. That's sort of a map of what I'm going to do. I think I'll just get into it. So just a brief introduction to Bayer. So Bayer is a life science innovation company. We're 150 years old, a couple of years ago actually, and we have core competencies in healthcare and agriculture. We believe our products are really helping to contribute to face some of the critical challenges we're all facing, which is a growing and aging world population, which require certainly improved medical care and an adequate supply of food. I think we're all aware of the challenge of food production going forward. We're very much innovation based. Our mission statement reads as science for a better life. Just a few figures to give you some dimensions. We're based in northwestern Germany and it's a pretty big company. It's actually the biggest German company by market cap now. We are investing around about 3.5 billion euros in R&D per year, 104,000 employees, 302 subsidiaries around the world and 41 billion euros of turnover. So not a small beast. Agriculture broadly is 25% of that. You can just draw a line right down through the middle. All the figures divided by four is roughly what we're doing in agriculture. And just for reference, Australia, we do about a billion dollars of turnover. So we're around about 0.7% of the world, of the whole company. So, yeah. So if we look at crop science, we have three business units. The core of our activities is still crop protection, insecticides, fungicides, herbicides, etc. We have been building up our seeds division, vegetable seeds, and in particular in cotton, canola, rice, wheat, and soybeans, and the associated traits. And we have environmental products, which are the products you use in the home, around the home, in golf courses, forestry, and so on. So after 89 years of operation in Australia, Bay crop science is one of the leading crop science companies in Australia. Our 250 staff are committed to our local mission, which we state as advancing Australian agriculture. We have the largest in-house development team in the industry, which tests completely all of our products for their performance and safety. We are one of only two international companies that have our own dedicated production facilities in Australia, and we have two factories producing around about 200 products. In 2014, we opened a $14 million wheat and all-seed breeding station on the long-run on-campus in Horsham. And finally, we have extensive sustainability programs, including five separate ag education programs. We support several rural, mental, and physical health initiatives. And we're a core member of the Sustainable Agriculture Initiative of Australia, along with a lot of large food companies. So I think over all these investments, long-term investments emphasize that we have a long-term commitment to Australian agriculture. So I don't want to make it a product presentation, but I just thought I'd highlight some of our recent product launches, which sort of indicate the diversity of technologies that we've been recently introducing. So in fact, over the last five years, we've introduced 22 new products, four of which are based on new active ingredients. I'll highlight on the top left-hand side, Sakura, which is a new herbicide controlling resistant ryegrass, which is a key resistant wheat management tool in the Australian wheat production systems. And I think it's probably the biggest product sold in Australia at the moment. Belt is a new selective insecticide that allows pest control programs incorporating biological products. And these programs are actually recognized with two national awards over the last couple of years for the innovative way in which we put a whole consortium of different companies and products together. Podgard canola is a new variety launched last year, which reduces the natural process of pod shatter in canola. So direct heading of canola is possible, which reduces the seed and yield losses. And finally, Lunar Sensation is a new generation fungicide which can extend the shelf life of different fruit through exceptional in crop disease control. So such innovations help Australian farmers keep at the cutting edge of low impact sustainable and globally competitive farming systems. I'll talk a little bit now about the innovation pipeline sort of going forward. I mean those products are sort of classically in where you might expect us to be developing products, but there's a lot of activity more broadly looking forward. So our historical strength has, and I'll just comment that this is the sort of general trends we're doing it, but certainly some of the other companies are doing it as well. Bayer's historical strength has been in chemistry and as production and biological systems evolve, there's a continual need for better, more targeted and safer chemistry. And we've kept a lot of activity in that space. Since 1990, there's been a strong focus on seeds and traits along with many companies. Trait targets have now moved from herbicide insecticide resistance to yield optimization, photosynthetic efficiency and drought tolerance. Sorry, that should have been there. Sorry, excuse me. The last 10 years have seen almost an explosion of different types of tools that have really opened up possibilities in different areas. So molecular breeding, computational biology, diagnostic tools, proteomics, epigenetics, that next one I can never say, and synthetic biology. We are getting a picture of biology in a way that we never really had in the past, and that is opening really new areas of research. I'll point at the second one, first biologics. We are now one of the leading companies in biological pest control. And again, our understanding of how these biological agents work is much better than it ever was. So we can actually start to use those to have really effective pest control. Crop efficiency is directly impacting the stress factors that are occurring in crop, of course, digital agriculture, new breeding technologies. We've all heard about CRISPR and various other new breeding, very precise breeding technologies where there's a lot of effort going into. And finally, sustainability research, which really emphasises that we're really doing a lot of activity and research about the actual end-to-end sustainability impact of these technologies and integrating them in integrated systems that ensure the long-term sustainability of those systems. With the broadening of these R&D fields, global R&D companies have rapidly increased their R&D spending. So this recent report indicates that the top six companies, which actually in a few days will be the top five companies and possibly the top four, are now investing in excess of US$8 billion per year in R&D in these spaces. So it's a very substantial amount of money. You may wonder how you can get to spend so much money. So I thought I'd just show you a couple of pictures just looking at the chemistry research. And this is our headquarters in Monheim in northeastern Germany. Around 2,000 people work at this site, but the process across the whole site, but the process actually starts at a very unimpressive building, which is really a glorified shed, which we call our Sample Logistics Facility. So that building is actually a robotic building which stores 1.5 million vials of chemicals, which is the accumulated history of more than 100 years of research at Bayer Crop Science. About 50,000 bottles are added each year and the bottles are sampled continuously. The five robots each travel 5,000 columns per year continuously sorting in what is called a lovely German English translation of double chaotic system. So the bottles I often say is that you're talking about the building or the company as a whole, but you know they don't seem to get that joke. The bottles are randomly sorted in the trays and the trays are randomly sorted in the building to continually minimize the space that's required. So the building is worth 110 million dollars and the contents is worth well over a billion dollars. So the capital investment and that's just the start of the process. I mean you know we screen about 100,000 molecules a year so as you go through it's replicated all around the world. So there's massive you know capital investment required to develop these products and it's done over a long time frame. You may have seen this sort of graph. It's roughly 10 years of extensive trials all around the world to bring one of these products to market and the costs are consequently huge. You know this external study done seven years ago showed that the cost was 250 million dollars per product. I believe we basically think about 500 million dollars per product now to bring one active ingredient to market. I want to stop here and make a point about genetic traits about what they would cost. Superficially they should be relatively cheap but when we consider all of the money that's been sunk in GM crops over the last 20 years and the fact that there probably are only five or seven or eight events that have actually been deregulated all around the world, the cost is probably the same or higher per genetic event. So you get something like 500 million dollars by reference in pharmaceuticals they always talk about a billion dollars for a new drug so the costs are very very high. So an increasingly strong feature about these global R&D efforts is that the IP is increasingly broadly held which necessitates international collaboration. Leading Australian scientists can legitimately be part of these collaborations and can help shape the direction of the research and increase the chance that the outcomes are more directly applicable to Australia. Australia however faces some real challenges in in in these collaborations and I just want to we should be very clear right about what they are. The first one of course is dollars. You know transformational R&D requires real money as you've seen and we we have a limited amount of it but having said that I think the particularly through the RDC system which really funnels the money through a number a small smaller number of doors it can be effectively allocated and it's still very attractive to international players. The second is the challenge of distance, kilometres, time, market size, culture. This sign at Qiyong I saw at Qiyong I think it's fantastic it just indicates that we're 16,000 kilometres from everywhere. We're a small distant player we are 0.3% of the global population we do well we feed 0.9% of the world population on you know on a good day and we invest a few percent of the R&D. It basically means that global major companies are not developing technology directly for Australia so we really have to figure out how we can engage with them to get their interest. Having said that it can be done and I'll give you some examples of how it has been done. I think the biggest challenge though however I've invented a new word called discolouration. We are demonstrably not very good at setting up these and managing these types of collaborations. This problem really started came to light in 2014 with the publication of the OECD STI survey which is science technology and innovation which indicated that Australian companies were third last in the OECD in terms of international collaborations. However we led the world in a negative sense when it came to business and collaboration between business and academia where we were stone dead last behind Mexico and Chile. This has impacts and we saw that it was picked up by Larry Marshall in the CSIRO strategy and then also picked up by the Prime Minister pointing out that we are ranked 10th in the world in terms of innovation input. We are 81st in the world which would be well behind many third world countries in terms of our innovation efficiency that is bringing products to market from the dollars that we spend in R&D and it even got coverage in the economist on January the 9th which pointed out that there are a few innovation based startups in Australia and only one to two percent of companies can be described as innovating. I thought that was pretty harsh however you know for whatever it is whatever the reason we are starting to build a reputation and not for the good reasons not for good reasons. Whatever the background we as a country and individuals need actively to take these challenges on and do do better seek how we can solve them. Probably best to forget you know the reasons for this and really look at what are our strengths that we can leverage going forward so what are these opportunities and this is just my my opinions. I think we should start from the fact that we have great R&D here there's absolutely no doubt we have apparently nine of the top 100 global life sciences universities conducting world class research CSIRO is undeniably a world leader and and a world leading brand as well. The Australian environment creates some specific set of outcomes which are of interest globally. We have established skills skills in low-input dry land agriculture which will become increasingly relevant under a climate changing world. Secondly we have a focus on efficient agriculture driven by a complete lack of government subsidies there is an upside. We you know we are very efficient in in what we do and you know when we do something it is really it really produces result on the ground and not to support sell one too much but point out that the PERD Act and the RDCs are really a great you know a great innovation you know in in an organisational sense it provides a one door entrance point for companies such as Bayer which really cannot be underestimated. You can go there you can get a picture of all of the R&D activities in the country and there is the opportunity for some potential co-co funding. So to give you hope I want to give you some examples of what we've done at Bayer through you know intensive engagement from our side and tremendous support from the institutes and the RDCs involved we've managed to attract some strong focus from our global R&D organisation over the preceding years. We'll start with the example of CSIRO we've collaborated with CSIRO for some 20 years in cotton and wheat breeding research as well as fundamental science research such as the invention or the demonstration of gene silencing in plants in the middle of the last decade. Bayer has marketed CSIRO cotton varieties in US and around the world since 1997 which has returned royalties to underpin further Australian research. This and other collaborations were key in convincing our company to invest the $14 million dollars necessary at Longrenong which is supporting the revitalisation of that historic agricultural campus but more importantly of all you know turning the research into reality for farmers you know creating the varieties that they can use on their farms and I've pointed out that we cooperated with those various organisations on the bottom right hand side in that partnership. Most recently we announced the Bayer GRDC herbicide innovation partnership last year which saw the signing of a $45 million herbicide a global herbicide innovation partnership which will see Australia raised to the top tier a top tier country in herbicide focus for Bayer including local testing of early candidates in Germany the subsequent testing of all of these candidates in Australia much earlier than has been done in the past and the training of 30 Australian post-doctoral fellows in advanced herbicide research and you see two happy people from Curtin University who are over there now they started on the 1st of December last year we're opening at next opening that laboratory next Wednesday it's a unique collaboration which you know places Australia at the cutting edge of of that activity of herbicide research so just to finalise so is it a challenge or an opportunity well I think it's a challenging opportunity transformative ag innovation is a global activity you know Australia needs to access global technologies to meet local local challenges R&D collaboration is critical cross country cross institution cross company Australia has unique opportunities based on our special skills and and and environment the PERD and and the ARC systems are real assets Australia however faces some key challenges which shouldn't be underestimated the distance the dollars the disc collaboration we must develop a global innovation mindset defend and grow our core structures universities CSIRO and the PERD the PERD institutions it's absolutely critical that we at least in certain areas we remain world leading and then we can attract the interest of global companies we need to build a global a long term skills in global collaboration you know it's not for the faint hearted dealing with the big companies I admit that but you know it's something that has to be done and we need to build those skills and where we are a global leader we really should take up the culture we should lead you know at a global level so I'd like to finish with my a slide of the global youth ag summit held in Australia last year another type of a broad broad-based collaboration and you can see the various institutes we we collaborated with there we had a hundred young people from around the world and they discussed the issue of global food security we developed or they developed a global youth ag declaration which we took to the FAO and it resulted in 300 international news articles and more than 24 million social hits social media hits as far as we can see all of them were positive so it's an example of what we I think we all need to do we need to actively promote our country to the world if we don't do it no one else will thank you very much