David, Bill, thank you for the time. We'll do our best to follow up to Maverick Carter. I'm sure this will be as enlightening, maybe in different ways. Let's start with the big story that's affecting both of your companies and organizations, the Iran war. In general terms, David, can you walk me through what's been the fallout in the last six weeks? Financing.
Have you seen any news in the last six weeks? Well, I haven't checked in the last six minutes. Look, the Iran war couldn't have come at a worse time. If you think about February the 27th, the day before the war started, there were 122 million refugees and displaced people, 245 million people in humanitarian need, 170 million people suffering from food crisis of one kind or another. So it couldn't have come at a worse time. And it has this triple effect. There's the direct effect on people in Iran and in Lebanon. I was in Lebanon two weeks ago and one in five of the population have been displaced from their homes and many of them think they're not going to be able to go back. So you've got the direct impact. The indirect impact is then everything that you've read about 30% of fertilizer goes through the straits of Hormuz. Who knew that? West Africa needs the fertilizer today and it's not there. And that will, that's priming a time bomb that is going to go off in June, a food security time bomb. The Council on Foreign Relations called the Iran war a slow motion famine machine. So it's that serious. And just as a small micro example, the world's humanitarian hub for supplies is in Dubai. So all of the medical and other equipment that's there, including $130,000 of medical supplies to go to Sudan, the world's worst humanitarian crisis, is stuck. And then the third element is obviously the wider geopolitics. Just one example, obviously the Russians have done well out of the war. The geopolitics for Ukraine become much more difficult. So in those three ways, it couldn't have come at a worse time and it's having very significant effects.
Can you see if the war ended today? I mean, how quickly could you see IRC's ability to sort of respond to its various sort of operations, get back to what was February?
Well, we have enormous flexibility. We're working harder than we were. But obviously at this time of high and rising humanitarian need, it's also a time of the most dramatic aid cuts that the world has ever seen. 50% cut in humanitarian aid over the last year. And just to put this in perspective, $40 billion has been taken away from the poorest people in the world, the people who are displaced in the world, the people who are hungry in the world, the people who need health care in the world and can't afford to pay for it. $40 billion has simply been taken away from their lives. So we're scaled. We're smaller than we were a year ago, $400 million smaller than we were ago, but we've got 12,000 people working their socks off around the world in the world's conflict zones. So, it's not that we've stopped and we can't rebound. It's when are we going to take seriously that what starts as a civil war in Sudan doesn't stay in Sudan. What starts as a war in Iran doesn't stay in Iran. How many more times do we need to learn the lesson?
Bill, you know, obviously you have different challenges with regards to the Iran war, but I'm curious like how has the sort of fallout been for Bayer?
Yeah, we haven't been particularly strongly affected by the events in Iran. But I do think a lot of this illustrates the importance of, for example, food security. You know, we weren't talking about food security before COVID and since COVID people have sort of woken up to this that yeah, a nation does not have security unless it has food security. And so what you know Bayer is doing around the world, we're the leading provider of seeds in the world, a leading provider of crop protection chemicals. We're trying to make sure that nations can actually feed themselves. So for example, I was last year in Zambia commissioning a new seed production plant and I got to meet some of the farmers who are using this hybrid seed that we take for granted say in the west. These farmers were getting seven to 10 times as much corn from their land that they were getting before. We're doing that in Zambia for southern Africa. I was in India a few weeks ago where we have better life farming centers and these are places where small holder farmers that are farming you know a few acres they can actually get advanced seeds they can get prescriptions in terms of planting plans to increase their yields dramatically. We've trained 10,000 drone operators in India alone who can basically do the work of a man or woman in a field for a day they can do in half an hour with a drone. And so these are the things that we're doing to try to help the nations of the world become food independent.
But from the perspective of you know a CEO of a sort of massive company as well I imagine the sort of the past six years have just been volatility after volatility, crisis after crisis after crisis. I mean just that must change how you have to operate a business.
Yeah for sure. I mean we've put through what's probably been described as the most radical experiment in management in a large company this century. We took, I arrived three years ago. We've taken out more than two-thirds of managers. We kept the individual contributors, but we took out about two-thirds of managers and we basically put 95% of decision-making at the bottom of the organization. When you do that, you get a massive increase in speed and in accountability of the people, the men and women around the world who are doing this work. And this is the ultimate in adaptability is basically putting the power in the hands of people that are in front of customers, that are in the labs, that are in the hospitals, and that is our answer to adaptability and to crisis management. It's not the crisis management department. It's everybody in the company owning what's in front of them.
Let's just stay on the developing, not necessarily Iran, but the long-term fallout of sort of these various crises. I'm curious, you know, one of the things that we want to sort of talk about in these conversations is the kind of growing role of AI and how it can make sort of these drug and sort of pharmaceutical and scientific discovery more efficient, but also the delivery of aid more efficient. I'm curious if you could take me through starting at like sort of the discovery stage, how are you using it? And then David, I'd love for you to talk about it because I know IRC is doing some really cool stuff in terms of like deployment as well.
Yeah. So, every new medicine is now being basically created in silicon. We used to have these banks of chemicals, you know, like thousands, tens of thousands of chemical entities and we would screen them against targets. Now we're basically doing this with computational chemistry, computational biology. Same for crop protection chemicals. We actually have next year launching the first new herbicide, fundamentally new herbicide in about 40 years. It was designed in silicon and so it's like the difference between shooting in the dark and having a precision guided weapon. So this has tremendous promise for the world and we're now going to start to see just in a matter of the next few years the new medicines that are coming are developed that way as well as pesticides.
Like what kind of stuff do you think we'll start seeing?
Well, for example, there's a huge proportion of the interesting biologic targets in medicine, the biological targets are so-called undruggable. They don't have an obvious place to connect a drug to them. And so it's sort of like, oh, the medical scientists know that, oh, this molecule seems to be important in cancer, but you know, a molecule in the body, but we don't know how to drug it. Well, we have a subsidiary company called Vidian that's basically what they're doing. They have a proprietary method that is highly AI dependent for attaching a drug to a place on a biologic molecule that was formerly thought to be undruggable that makes it druggable and we have the first of these compounds now are in the clinic.
That's fascinating. David, I know you're doing...
Well, I'll give you one example and then one bigger idea. The example is that the traditional way to just diagnose whether someone had sleeping sickness in the Republic of Congo was to take a blood sample and send it off to Kinshasa and then maybe you'd get a response after a run through the lab. We're today using AI to photograph a lesion on the body and diagnose with 98% confidence whether that person has sleeping sickness. There are 200 other rare diseases in Africa that are often at the back end of the chain when it comes to diagnosis. This is an opportunity to vault them towards the front end. So that's the example that's exciting. I think the bigger idea is to turn the idea of humanitarian aid from being something that happens after a disaster to something that happens before a disaster. The obvious case is the climate case. We can predict climate disasters with increasing accuracy a week to 10 days in advance, in some cases longer in advance. We've already done the impact evaluation. If you give a farmer cash before the flood strikes, they'll make much better use of the cash than if you give it to them after. We've done a randomized control trial in northern Nigeria to prove the common sense point. If we can do it for politics though, that's significant as well. A lead indicator of conflict is when people start to move.
So just having the, using AI to be able to take a little bit of information and then have some kind of forecast of trouble coming.
