Agtech and Understanding When to Adopt Technology
Date : 26th May, 2022
with Ian Scutt: Aglink Australia
According to Finistere Ventures’ 2020 AgriFood Tech Investment Review, a report developed in collaboration with PitchBook Data, total global investment in agrifood tech companies in 2020 surged to $22.3 billion of which $5 billion was in agtech and $17.3 billion in foodtech.
Biotechnology attracted $1.3 billion in 2020 whilst interest in indoor ag spiked, driven by supply chain and sustainability factors reaching $1.3 billion in funding for 2020, more than doubling the $601 million raised in 2019. Due in large part to pandemic pressures, animal tech investment exploded in 2020 reaching $847.8 million.
Other sectors including digital technologies, precision agriculture, plant sciences, ag marketplace and fintech also broke investment records in 2020 as stakeholders made their commitment to help growers manage climate change and overcome mounting sustainability pressures clear.
These are big numbers and should translate into exciting times ahead! But how will this really translate when it comes to Australian agriculture, in particular i) the adoption rate and ii) the ongoing use and reliability of new agtech solutions?
The Australian agricultural industry is known for its entrepreneurial approach and as such had its fair share of technology success stories over the years. Too often though, new technologies make bold promises with our industry (retail distribution and farmers) enticed into technology where the expectation hasn’t aligned with ‘the promise’. This can be for many reasons, some legitimate and some perhaps not so.
We understand that Agriculture is a risky game and measured risks are part of the everyday decision-making. But how can we minimise this risk when it comes to agtech?
Introducing the Gartner Hype Cycle. The below graphic provides a representation of the maturity and adoption of technology and how these applications provide solutions to solving business problems.
For a business in agriculture, the key question should always be asked – “where does the technology I am looking at fit on the curve”. The risk of engaging with an agtech solution during the ‘peak of inflated expectations’ can potentially be costly and in some cases, if the technology fails (e.g. start-up business fails), a feeling of disillusionment inevitably creeps in.
Early adopters are more akin to this risk but more conservative individuals would feel a deep sense of disappointment as their expectations would be that the technology is robust, tested and reliable (fit for purpose).
Given the level of global investment in agtech, we will (and are) expect to see a plethora of solutions offered within the agricultural market over coming years. Exciting as this is, some will be game changers and some will fail. Asking the right questions when assessing these opportunities is critically important to help determine where the technology sits along the hype curve. Hopefully in doing this, you will select a solution that is either on the ‘slope of enlightenment’ or on the ‘plateau of productivity’.
As Scott Pape from the Barefoot Investor says “tread your own path”.