Volume 15, Number 3 - November 2018
Welcome to the latest edition of EntreWorks Insights, a quarterly newsletter that reports on business trends, policy developments, and other issues affecting the business of economic and workforce development. You’re receiving this note because you’ve asked to subscribe or because you have some previous interest in the work of EntreWorks Consulting. If you wish to subscribe or be removed from this list, please send an email to info (at) entreworks.net. If you’re interested in the newsletter, please read on. Please feel free to share with friends, family, colleagues, and other loved ones. Comments and constructive criticism (and praise) are also welcome. You are also encouraged to visit and comment on the EntreWorks blog at http://entreworks.net/blog. Thanks for your interest.
Given its eons-long role in the rise of human civilization, it’s pretty tough to speak of agriculture as “the next big thing.” But, there is a fascinating and transformative revolution underway in the world of food and agriculture. At the broadest level, it’s likely to change everything about how we live, but it will also create lots of interesting market trends and business opportunities in the process. Smart communities and smart economic developers can and should try to understand what’s on the way. This issue of EntreWorks Insights attempts to provide my own take on what’s happening. I’m no expert on agriculture, but I’ve been in the midst of a learning adventure in recent months—thanks in part to some ongoing work on behalf of AgriNovus Indiana, the state’s lead advocate for the agbiosciences. The good folks at AgriNovus deserve no blame for any errors I might present below, but they have inspired me about the exciting potential that surrounds the agbiosciences.
Agbiosciences is a somewhat awkward term, but it accurately captures what seems to be happening in food and agriculture-related industries where we’re seeing a convergence of innovations across several industry sectors, such as plant science, animal and human health, and high-tech agriculture or agtech. These innovations also encompass many critical enabling technologies such as data-enabled agriculture, automation and robotics, supply chain and logistics related to food security, and biofuels and bio-based energy.
A couple of cool business concepts and technologies should further elucidate what we mean when we talk about the agbiosciences. How about using blockchain to track beef (and other products) to ensure that it is grass-fed, organic, or comes from a certain location? Or using data analytics to determine how much water, fertilizer, and other inputs to provide for each specific plant on a farm? Or tapping into the Internet of Things (IoT) to provide farmers with real-time and historical data on how their equipment, their crops, and their fields are performing. Or using gene editing to develop healthier and more sustainable plants? These ideas and more are now out in the marketplace thanks to emeriging companies like BeefChain, Advanced Agrilytics, FarmMobile, and Pairwise Plants. In addition to these new firms, larger corporations, are investing in startups and fostering their own innovations too.
Three big historical trends are at work here. First, booming populations mean a boom in demand for food and nutrition. Feeding a planet of nearly 10 billion people (as projected by 2050) will not happen with business as usual. We’ll need new ways to grow and manage our food resources. These inexorable population pressures are accompanied by new consumer demands for more sustainable products and production techniques, and a host of new products, including new forms of protein (such as insects or manufactured meat), organics, and the like. Finally, a host of new technologies, such as IoT, artificial intelligence, and genome editing, are also transforming the industry. It’s a complicated, but exciting, period.
The potential for the agbiosciences is no secret. Since 2012, venture capital investments in the agbiosciences have jumped by a whopping 80 percent, leading the Boston Consulting Group to predict a new “green revolution” based on “a wave of start-up activity in agricultural technology.” This growth is impressive, but other observers suggest that more is on the way. For example, the 2018 Global Startup Genome report notes that agtech and food companies account for less than 2% of all global venture investments, and that food and agriculture still remains one of the world’s least digitized industries.
This combination of growing market demand and exciting new technology developments means that the agbiosciences sectors are in the midst of revolutionary changes that will transform companies, communities, and our individual lives as well. How can your region and your community capitalize? What can you do as an economic developer to help your region become a hot-spot for agtech and the agbiosciences? Success in these endeavors requires a deep understanding of the industry’s unique current futures.
What do Producers Want?
Contrary to some claims, farmers are not necessarily risk-averse. They are willing to invest and try new technologies, but they can ill afford to take a chance on a minimal viable product with a limited track record. New firms will need to develop real partnerships with farmers where they can test new products and share the benefits of technological improvements and cost reductions. One-time customer transactions won’t work; mutually beneficial partnerships are needed.
What New Opportunities Exist?
How to Build Better Networks?
The actual policies and programs that seem to work best in agbiosciences support are similar to many other cluster-development initiatives. Lots of interesting work is already underway. America’s Midwest is an important player in the field, with a strong concentration of both public and private organizations focused on the potential for massive growth in agbioscience-related business and innovation opportunities. Agribusinesses, large public and private universities and catalysts for economic development all recognize the importance of this sector. The Midwest is very competitive because of these organizations, as well as its well-established supply chains for agriculture. The Midwest, after all, is one of the most fertile crop production areas in the world, with unique advantages in transportation, processing, human capital and research and development. However, the region also suffers from a lack of equity capital and a limited base of home-grown technology companies. These factors can create real challenges for new agtech start-ups.
A few states and regions are doing this well. Indiana is a leader with AgriNovus Indiana, but other state and local programs are also gaining traction. A number of promising local and regional efforts are underway, including:
Most of these programs operate in a similar fashion. They typically promote events and networking opportunities, and also serve as their local champion for the agbiosciences. Some programs offer investment funds, and others manage accelerators to support new start-up ventures. Workforce training and outreach to education partners are also part of the program mix.
Current efforts in St. Louis offer a glimpse of what many regions are attempting to do. It is home to world-class research talent and facilities, thanks to the presence of the Danforth Center, major Bayer (formerly Monsanto) facilities, and the new 39 North agtech innovation district. In Indiana, similar synergies are emerging thanks to Purdue University’s world-class research capacity, major firms like Corteva and Elanco, and future innovation districts planned at Purdue Discovery Park and Indianapolis’ 16Tech.
To date, successful regions are embracing a number of strategies that include championing the industry, connecting producers and innovators, grooming new generations of researchers and entrepreneurs, and training a new workforce for new industries. Agriculture may be an ancient industry, but this new agbioscience revolution is going to require new approaches to industry support, development, and promotion.
If you’re interested in learning more about the coming boom in the agbiosciences, please check out the links noted above. In addition, here are a few more worthwhile resources:
If you know of other good resources, please share them by sending an email to us at info (at) entreworks.net. We’ll share them in future blog and newsletter posts.
We’re winding down from a busy and rewarding 2018 and looking forward to new challenges in 2019. We’ve added several new items to the EntreWorks library: