The UK is no stranger to agricultural innovation (agritech). The country led the agricultural revolution of the 18th century, introducing innovative farming practices such as crop rotations and new equipment such as horse-drawn seed presses, to other parts of the world.
During the ‘green revolution’ in the 1960s and 70s, research and new cultivation methods from the UK’s Plant Breeding Institute (PBI) contributed to an almost doubling in wheat yields. Through the development of the semi-dwarfing gene, John Innes Centre (formerly PBI) has helped to increase UK wheat production by £75 million ($99 million) per annum; and its contribution to world wheat production is estimated at £3.4 billion ($4.4 billion).
The small island nation also punches above its weight when it comes to agricultural output; over 70% of land in the UK is used for agriculture, an industry valued at £26 billion, representing over 7% of Europe’s total agriculture market. Contributing around £24 billion in revenue and around £8.5 billion of Gross Value Added to the UK economy in 2015.
The World’s Oldest Industry Working Hand-in-Hand with the Newest
With highly skilled talent in many disciplines from animal and plant sciences to land management, the UK has a proven ability to develop and market new technologies and products with commercial partners. UK partners are increasingly embracing these new technologies, such as precision agriculture, to drive efficiency, maximise yields, protect the environment and increase profitability.
The UK government has placed an emphasis on the development and adoption of agriculture technologies to increase the productivity of agriculture globally against a backdrop of decreasing land availability and available labour. Already, the UK agritech sector is worth more than £14 billion and employs over 500,000 people with the government planning to invest a further £90 million by the end of 2018 alone.
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Investments such as the Strategy for Agricultural Technologies (£160 million over five years) in the Agri-Tech Catalyst and the four new Agri-Tech Innovation Centres, have improved the flow of ideas and solutions from laboratory to farm; and the recently launched Industrial Strategy Challenge Fund (worth £90 million) aims to enable greater take-up of innovation on farms.
Why Are Agritech Companies Choosing the UK?
The country has become a destination for agritech companies globally to establish their businesses, with leading names setting up operations in various parts of the country including agricultural equipment companies JCB and Denso, as well as the leading crop inputs businesses Syngenta and Bayer; and animal health companies Elanco, Merck and Zoetis.
The country’s startup ecosystem is also developing rapidly; the UK was the third most active country for agrifood tech startup funding in 2017 as startups raised over $500 million in 2017 across 69 deals, according to AgFunder data.
So, what does the UK offer international agritech companies to make it an attractive destination and base for their businesses?
Here are three key features:
1. World Class Science
The country is a world leader in plant and animal science and home to some of the most established agricultural research institutions in the world such as Rothamsted Research, founded in 1843 and hosting the world’s longest running agronomy experiment. With 20% of the workforce in science, the UK is home to 100 science parks and the top ten veterinary schools in the world, providing a strong knowledge base.
In recent years, the UK government has supported the establishment of four Centres for Agricultural Innovation.
The centres are a unique collaboration between the UK Government, academia and industry to drive greater efficiency, resilience and wealth across the agri-food sector. A £90 million investment from the UK’s strategic innovation agency, Innovate UK, is enabling the four centres to harness leading UK research and expertise as well as build new infrastructure and innovation:
Agrimetrics opened in October 2015. It is focused on agricultural informatics and metrics of sustainability. Agrimetrics uses data science and modelling to build a more productive, sustainable and efficient food system.
Centre for Crop Health and Protection (CHAP) will revolutionise how farmers manage crop threats including pests and disease, both in the UK and overseas.
Centre for Innovation Excellence in Livestock (CIEL) will create new livestock technology and products to boost the profitability and productivity of livestock farming.
Agricultural Engineering Precision Innovation Centre (Agri-EPI) operates in the new, fast-moving market of precision agriculture to help the UK’s agri-food sector develop advanced technologies that will increase productivity and sustainability in UK agriculture.
Universities such as the Telford-based Harper Adams are providing the infrastructure for agricultural innovation. Close to 60% of the research by Harper Adams in Agriculture, Veterinary and Food Science is deemed to be “internationally excellent or world-leading,” according to the UK’s Research Excellence Framework (REF).
Dairy Crest, a leading British dairy company known for market-leading brands such as Cathedral City, Clover and Country Life, set up its new Innovation Centre of 30 full-time R&D staff in November 2015 at Harper Adams University. It features cutting-edge facilities and equipment, including micro-analytical technology, development kitchens and packaging labs. There is also a large pilot plant on site that allows staff to scale up production, with room to expand when new technology comes on line.
“Why wouldn’t we want to have the opportunity to use the facilities and academic strength of Harper Adams? We are building a partnership with a centre of excellence in food, farming and science,” said Mark Allen, CEO of Dairy Crest.
Fritzmeier, a German technology provider, also worked in Telford to validate the ISARIA technology, demonstrating that use of sensors in agriculture, integrated with historical databases, can increase crop yields 3-12% while increasing environmental benefits through reduction in the use of fuel, fertiliser wastage and nitrogen leaching.
2. An Innovative and Connected Farming Supply Chain
UK agriculture and fishing contributed £9 billion to national Gross Value Added in 2016, and some 71% of land in the UK is used for farming (17.2 million ha.) The UK is home to many farmers who already integrate technology into their work with excellent results. They recognise the potential – through the use of precision agriculture – to increase productivity drive efficiency, maximise yields, protect the environment and increase profitability.
With the EU exit on the horizon, and the break from the EU’s Common Agricultural Policy, a new agricultural policy for the first time in almost 50 years will make it easier for farmers to embrace agritech and to be innovative, and transform the agriculture, horticulture and forestry sectors. The recent Agriculture Bill sets an ambitious future for domestic agriculture policy, helping deliver a cleaner and healthier environment for future generations, underpinned by increased productivity and investment in the latest technology.
3. A Dynamic Business Environment
It is easier to do business in the UK than in any other major economy in Europe after Denmark, according to World Bank rankings.
Not only is it easy to set up a business in a matter of days, but the UK government incentivises collaboration between industry and science with R&D tax credits. It also offers innovators tax incentives on patents developed in the US, including the sale of goods relating to those patents.
Strong IP regulations compared to many nations globally, particularly in Asia, also add strength to the UK’s business environment, as well as its low 19% corporation tax rate, which is set to fall to 17% by 2020.
For startup businesses, the UK provides access to one of the world’s leading venture capital industries and a major global financial centre. Venture capital investment in the UK is booming, with 2017 a record year for UK tech investment, according to Pitchbook. The UK is Europe’s leading country for global tech investors, with British tech firms attracting more venture capital funding than any other European country in 2017.
UK tech companies attracted almost four times more funding in 2017 than Germany (£694m) and more than France, Ireland and Sweden combined. The reliability of the investment climate is another draw.
The UK’s new trade policy and the Government’s future agricultural policy for England offer an opportunity for investment in the excellence of the UK agritech sector to grow new businesses and export overseas.
Government support for International Agritech Companies
The investment opportunity in UK agritech is underpinned by a government support structure at national and local levels. As well as offering specialist guidance on skills, visas and migration, the UK government can also support with recruitment advice, access to funding and introductions to local academic institutions.
If your business is based outside of the UK and wants to take advantage of this fantastic opportunity and establish itself as a leader in high productivity food production, please get in touch via the UK government website.
**This post is sponsored by the UK Department for International Trade. To find out more about the AgFunder Network Partners program, click here.