Good morning. It is indeed a pleasure to be with you today...a great honor to be invited to give the keynote presentation.
I first want to compliment the meeting organizers on choosing a very important topic, one very timely for our industry. As we look to the distant future, accelerating innovation and productivity across the food industry is perhaps the most enduring issue facing global society.
And, I appreciate the opportunity to reintroduce many of you to the new John Deere. All of you know John Deere...but many of you may not be aware of the great growth and strides the company has made in the past dozen years or so or be aware of our role in innovation and productivity. So, I am pleased to have an opportunity to update you this morning.
I would like first to update you on Deere, then review the long-range challenge facing global society and then spend some time discussing innovation and productivity at John Deere. After a couple of concluding remarks, I look forward to a general discussion of the topic.
Today, John Deere is a growing global brand, well into our 176th year.
We are well known as a leading global provider of advanced technology products for the ag, forestry and construction industries. But, few know we are the second-largest maker of off-highway diesel engines, behind only CAT, but ahead of Cummins and Volvo.
And, we have exciting new entities that are taking their place alongside the more established ones. JD Intelligent Solutions Group (ISG), Landscapes, and Water Technologies are at the forefront of these.
Our employment has reached 67,000 worldwide with about 33,000 of those in the U.S. We manufacture in 29 countries and have operations in 35, including parts depots, while our sales organizations now extend to over 130 countries.
Our product portfolio extends across the ag spectrum with all sizes and types, across the construction equipment industry, leads the forestry industry, and a joint venture with Hitachi takes us into very large construction and mining equipment.
The breadth of the portfolio for agriculture equipment includes tractors from small-horsepower, low-spec tractors for smallholder farmers, to the most advanced large ag tractors over 500 horsepower—and we have everything in between for farms of all sizes and types all over the world. It's amazing how technologically advanced agricultural machinery is today. For example, our 7R tractor contains five times the amount of software code in the space shuttle's flight-control software. And, many more exciting developments are in the pipeline.
We also are very pleased with the operating performance advances that were made over the past decade or so under former chairman and CEO Robert Lane, whom some of you know.
In 2010, Sam Allen succeeded Bob and we launched a revised strategy with a strong growth focus to take advantage of the expected industry tailwinds. While we aspire to double the size of the company, we want to retain and improve our operational performance and have specific goals for profitability and asset efficiency, as well.
But, while we are in pursuit of an ambitious goal, we never forget what we are really about—we are committed to those linked to the land. We focus on our customer base, here in North America and worldwide.
We have a portfolio designed to meet customer needs wherever they may be and for all farming conditions.
We offer a premium product with advanced technology available.
And, we hold dear to our traditional values—of how we do business—we respect our 176-year legacy. And, we strive everywhere to be great corporate citizens.
We also believe that providing a premium product that customers want to buy for 176 years, while amply rewarding and respecting our employees, providing a competitive return to our shareholders, and supporting our communities, is a significant contribution to society.
Now, with that brief reintroduction to John Deere, let me shift topics. We all are indeed fortunate to have our careers, our life's work, associated with a grand purpose, indeed a noble calling—helping to enable feeding the world in the next 40 years, perhaps the greatest challenge humanity has ever faced.
We are all now familiar with the essence of this challenge: feeding another two-plus billion people—well over nine billion people with increasing purchasing power and desire to eat more and better. But, this greater demand coincides with ever more binding resource constraints—on land, water and skilled labor—at the same time we are experiencing unprecedented urbanization and climate change with still unknown implications for agriculture. And, societies everywhere are requiring a decidedly smaller environmental footprint for agriculture. So, this becomes a tall order indeed and clearly accentuates the obvious necessity to accelerate agricultural productivity—we simply must produce more with less!
Productivity still is not a well-understood concept—it is not simply producing more but is the amount of output in relation to the amount of inputs used...and this is where creativity and innovation come into play. And, our topic here today is mechanization—how innovation plays a big role in increasing farmer productivity.
Now, let's look at the megatrends and big drivers affecting agricultural mechanization...we are all familiar with most of these...the last two shown here are perhaps newest. Despite the growing population worldwide, there is an increasing shortage of skilled labor for agriculture production—while obvious in North America, Russia and Japan, it also is true in populous areas like India and China. And, the convergence of several new technologies are making possible a new, major driver in the historical agricultural story—precision agriculture.