Until a few years ago, agritech had predominantly niche position within biotechnology and seed genetics. However, with the advent of the technological trends that are fuelling the Fourth Industrial Revolution, this is all changing.
was invested in agritech businesses in 2015
Investment by companies and venture capitalists in agritech businesses is rising rapidly, reaching $25bn in 2015. According to Goldman Sachs Group, this is just the start of a major upswing, and the investment company estimates that the sector could be worth $240bn by 2050. A fertile market.
The growth of the agritech industry is being caused by two key drivers: necessity and technological advancement. Macroeconomic trends in population growth are pushing up demand, while pressures on resources such as water and land usage are forcing farmers to produce more with less. Furthermore, agriculture now accounts for about 30 per cent of global greenhouse gas emissions, according to the US Environmental Protection Agency, and is a prime target for countries seeking to achieve their carbon reduction targets.
These pressures have grown at the same time as the arrival of a range of new hardware technologies, the separation of computing power from desktops (virtualisation), and cloud computing. The creation of ‘big data’ and the ability to analyse this data to create efficiencies and wholly new ways of working, has the potential to be revolutionary. Underlining these developments has been improved connectivity.
In the past, a lack of connectivity on vast, remote farms has been the biggest sticking point on the largescale adoption of IoT.
This is now changing with the increasing use of global satellite systems, integrated with terrestrial network infrastructure for more connected areas. Combine the macroeconomic pressures and these technological improvements, and agritech is in the early stages of a golden age, set to revolutionise how we feed the world.
Many of the gains from seed genetics and bio-technology have reached a plateau, so the next stage of innovation is to gain highly specific data on the environment of crops and livestock to optimise performance and minimise waste. IoT is also forming the starting point for the deployment of automation and robotics in an aim to reduce the impact of labour shortages in the sector.
Agritech is feeling positive – eighty per cent surveyed felt that they were ahead of their competitors when it came to IoT development, and while they can’t all be right, this figure does show a high level of confidence in the pace of innovation that is underway in the sector. Nearly half of agritech businesses have deployed an IoT based solution to market so far and every respondent surveyed expects to have deployed a solution within the next 18 months.
Which of the following statements best describes your organisation's current status when it comes to deploying IoT-based solutions? (%)
This level of confidence is further expressed through the planned doubling in expenditure expressed as a proportion of IT spend in the next five years. A full 68 per cent also stated that between 10 and 20 per cent of their IT budgets would be spent specifically on IoT development by 2022.
What proportion of your organisation's IT spend is dedicated to the deployment IoT and how do you expect this to change in the future?
This extraordinary pace shows the central role IoT is playing at the core of the digital transformation that is underway in the agricultural sector. As well as IoT there is also significant interest in other forms of technology including machine learning, automation and robotics. Combined, the use of these technologies marks a step change across the agricultural industry.
“— Ayan Jobse-Alkemade, Director, AgritechIoT acts as an enabler for many other areas of innovation. Finding new ways to collate new types of data means agritech companies can develop new products and services in previously unimagined ways.
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However, while there is a high level of confidence in the use of IoT, the research did uncover a slight drop when it came to achieving results, with only 62 per cent stating that they were ahead of their competitors.
This slight dip hints at the immaturity of the market. But the technology behind IoT and the ability to manipulate and analyse the data produced at the scale required, just didn’t exist a short time ago. The opportunities to use digitally transformative technology in the agricultural sector are immense and the pressures of population growth, environmental sustainability and the need to reduce cost and use of natural resources will only increase, giving agritech a very bright future.
Where would you place your organisation's position in terms of its use of and plans for IoT compared to its industry competitors? (%)