Digitalization of the Economy: The Case of Bayer AG

by Alfio Cerami                                                                       Rev: 4/06/2018

International Space Station (2014) Photo taken by the EarthKAM camera. Photo ID. ISS15_01. https://www.earthkam.org/

 

Crop Development (April 2018). Planet https://www.planet.com/

 

For my Master (MA) in European Studies (1999-2000), I conducted a research (including quantitative and qualitative analysis) on the productivity and business dynamics of Schering AG. Schering AG was a research-focused pharmaceutical West German company, which had about 150 subsidiaries worldwide (including Japan and USA) with more than 22 000 employees. After the fall of the Berlin Wall, its international attractiveness, revenues and competitiveness increased. As early as of 1990, total sales had risen to DM 5.923 billion. The American Biotechnology company Codon (San Francisco) and the tumor research company Triton Biosciences Inc. (Alameda, California) were also acquired and merged into Schering AG. In 1991, the sales rose to DM 6 billion and Schering established offices in the major cities of the former communist countries (see Schering AG). In 2006, Schering AG was bought by Beyer AG – another leading German pharmaceutical multi-national company, representing one of the world most important pharma merger and acquisition case. The new company expanded its business sectors from pharma R&D to Life Sciences, more in general. Science, technology and innovation became the new keywords and three new divisions were established: Pharmaceuticals, Consumer Health and Crop Science (see Beyer Homepage 2018).

The new company expanded its biotechnology know-how, including new methods of bioinformatics, bioprocess engineering, biorobotics and bioagricultural engineering. More recently, Bayer is planning to acquire Monsanto aiming to become the global leader in agriculture. On March 21, 2018 , at a meeting in Leverkusen, Bayer’s proposed acquisition of Monsanto was approved by the European Commission. The future company plans to invest approximately EUR 2.5 billion in R&D annualy.

In terms of productivity and business dynamics, the company’s new micro-drivers of economic performance are linked to its core concept (mission): Sciences for a Better Life. These involve positioning businesses to mega-trends in health and nutrition, value-generating portfolios and businesses, profitable growth, and meeting societal challenges through Science, Technology and Innovation (Beyer Homepage 2018).

The digitalization of the company (see list of company products) also includes the development of new digital farming applications, such as XARVIO (TradeMark) FIELD MANAGER (application through geo-spatial mapping for crop protection) and XARVIO SCOUTING (TradeMark) (web-based app for agricultural analysis and control, including health of the terrain, diseases, etc.) (see Beyer Digital Farming 2018)

Supervisory boards do not supervise, nor give advice (J. Beyer 2006, p.49). 

Because of technology-based pressure to change, supervisory boards and firms must evolve in order to meet new environmental challenges. These include: path-dependencies and decreasing returns (see David 1985; North 1990), strategic coordination of labor and wages (see also Dolata 2013; Kollmorgen et al. 2015), as well as trade realignments (see also Cerami 2006, 2013; Cerami and Vanhuysse 2009; Cerami 2015).

This will also result in the emergence of new firm-based socio-economic pathways, including radical vs. gradual changes of technology systems, their innovations, the broader socio-techno-economic paradigm (Dolata 2013), as well as sequences of socio-technological innovations (Beyer 2006; Dolata 2013).

To be continued…..

 

References

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