Editor’s Note: Sarah Nolet is a recent graduate on MIT where she received a masters in System Design and Management and ran the Food and Agriculture Club. She also launched MIT’s first Food and Agribusiness Innovation Prize, and wrote her thesis on “Accelerating Sustainability-Oriented Innovations in Agribusiness”. She has recently moved to Sydney, Australia where she is launching a consulting practice. Nolet also holds a B.S. in both Computer Science and Human Factors Engineering from Tufts University.
The global food system is ripe for disruption. Population growth and increasingly salient impacts of climate change are putting new demands on the system, and incumbent players are under pressure and struggling to respond. It is clear that the industry needs novel solutions, and that technology can help.
Globally, agtech is getting a lot of attention. Investors of all types and from all sectors are deploying capital into startups with ambitions to revolutionize agriculture and bring the industry into the technology-enabled future.
In Australia things are similar. Energy around the potential of agtech is increasing, especially after recent events like the 400M Forum, where AgFunder’s CIO Michael Dean spoke, and the Digital Disruption in Agriculture conference.
Agriculture continues to be an important industry for Australia. Agriculture and related activities comprise around 12% of Australia’s GDP — more than double the US. Australia is also a key player within the global food system. A net food exporter, Australia sends over 60% of what is produced to countries all over the world. Australia’s relative proximity to Asia is a huge opportunity, as demand for their main commodities such as beef, grains, and dairy is skyrocketing. Technological innovation that enables efficient domestic production is therefore a strategic imperative for Australian agriculture if they are to remain competitive in global markets.
The Australian agricultural industry in general, including farmers and industry groups, is enthusiastic about the potential of technologies to improve operations.
But the Australian agtech innovation ecosystem is immature.
Though undoubtedly a challenge, I believe this gives Australia a unique advantage and creates an exciting opportunity for the future of agtech down under.
A big challenge for agtech in Australia is the lack of a robust commercialization and funding pipeline for foundational technologies. To create economically viable, transformative companies, entrepreneurs need to have support and incentives. In Australia, public sector funding intensity is higher than the US and the equivalent of $1 billion, or approximately 2% of the value of gross agricultural production, is spent annually on the industry. Important foundational research is already occurring through organizations like CSIRO and at universities. However, Australia struggles to convert their research and development efforts into scalable commercial ventures. Further, Australian private sector investment is significantly lower than the US and many other developed countries.
But this is starting to change. Recently the government made a $1.1 billion commitment to the innovation agenda, including support for SproutX, the country’s first agtech accelerator. This public sector activity has caught the attention of the private sector. Investors, such as Bio Pacific Partners, Finistere Ventures, and AgFunder are looking to fund agtech in Australia. Simultaneously, Australian agtech startups like Observant, AgDNA, AgBiTech, and The Yield are gaining global recognition and even attracting corporate funding.
Australia has a late-mover advantage in developing an agtech ecosystem. It can learn from the successes and failures of others, thereby avoiding known mistakes and ultimately leap frogging the leaders. For example, one challenge we’ve seen in other agtech innovation hubs, like Silicon Valley, is that capital alone is not sufficient. Successful innovators need to understand the local context and identify challenges that users (e.g., farmers) are facing. Then — and only then — can they begin the iterative process of developing and testing technologies that can be applied to solve these domain-specific problems. Australia has the opportunity to think prospectively about what a successful Australian agtech ecosystem will look like. This may mean early involvement of key industry groups and corporations, like Cattle Council, National Farmers Federation, John Deere, and Telstra, to be sure that solutions are grounded in real needs for Australian agricultural producers.
In addition to a nascent early-stage agtech innovation ecosystem, Australia faces other challenges that are similar to those in the developing world. Here, solutions will need to go beyond on-farm technologies to include cross-sector collaborations and political and organizational innovations. Again, this is a huge opportunity for Australia.
Many rural and remote areas of Australia still lack critical infrastructure (e.g., connectivity) that is necessary to enable widespread adoption of agtech solutions. In addressing this challenge, Australia can pioneer new technical and organizational approaches that will establish them as a global leader, while also laying the foundation for future innovations in agtech. Australia has a track record of cross-sector innovation efforts, as evidenced by the cutting edge water management policies implemented during the Millennium Drought.
Australia will undoubtedly play a role in feeding the future. Though the benefits of agtech have not yet transformed agricultural operations, Australia is rapidly laying the groundwork and building momentum. The potential is there for Australia to soon be a global leader in agtech innovation.
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