The agricultural sector faces a number of challenges that have global implications, such as water and other resources scarcity, climate change and world population growth, among others. The use of technology appears as a useful tool to face these challenges, being digitisation and the use of mobile devices key-factors for its penetration in agriculture. However, agriculture is one of the least digitalised sectors in the world.
In recent years, particularly since 2014, there has been considerable growth in startups that are developing technological solutions for the agricultural sector worldwide. The investment in agtech startups has grown exponentially and by 2017 this investment has already exceeded 100 million dollars.
The agricultural sector has attracted special attention from these startups who have changed it in several aspects, bringing the technology to solve many of its challenges. Agricultural management software, precision agriculture and predictive analytics, robotics and drones, sensors and intelligent irrigation are some of the areas where startups are bringing disruption to the sector.
Technology is changing the lives of consumers and businesses at unprecedented speed, and the agricultural sector is no exception. Those who do not follow this transformation will become obsolete faster than you can imagine.
Agrifood companies will necessarily have to start looking at startups as a source of innovation and technology. In an increasingly global and networked world, the ability of a given company to remain disruptive is reduced, since no one has all the knowledge and skills to innovate alone. It is necessary to innovate together and nowadays we are seeing an unprecedented movement, where big companies collaborate with startups.
Who is Amazon or Uber of agriculture? What are the business trends that are emerging globally? Identifying these disruptive models will be key to understanding how the agricultural sector will evolve over the coming decades.
I believe that collaboration with startups is a new source of innovation for agrifood companies. Traditionally, innovation is developed through internal R&D nuclei or in collaboration with entities within the scientific and technological system, such as universities or research centres.
And why are startups this new source of innovation for established companies? Because startups have in their essence what established companies do not have and that in the global world we live in is the key to success: agility.
Two of the general principles of this agility are:
1. Rather than spend months planning and researching, startups accept that everything they own on the day they start is a series of untested assumptions (i.e. they just have good guesses ...).
2. Startups use the “Get Out of the Building” approach, ie "go out into the street" to test their hypotheses, gathering evidence to see if they are true or false. In this process, a great deal of emphasis is placed on the agility with which startups can build a Minimum Viable Product (MVP), which is then presented to potential users. After feedback, startups review their hypotheses and change or validate it depending on the results.
This agility in developing solutions is one of the great advantages of working with startups, since much of the hard work is already done, and the solution (usually) is built. The company will act as a scale and distribution machine, leveraging startup technology and accelerating its time to market.
But like in everything in life, the picture is not all rosy. Working with startups may be a difficult task at the outset, since they are two very distinct worlds with different languages.
The entry of a partner entity that facilitates this relationship between startups and companies is crucial for successful partnerships. This entity should know startups and understand the needs of the companies. In Portugal, one of the entities that has fostered this process of collaborative innovation is INOVISA, through the cropUP initiative.
The goal is to support entrepreneurs and startups to develop solutions that bring innovation to the sector, on the one hand, and, on the other hand, to support companies in the agrifood and forestry sector to collaborate with startups. An agtech innovation ecosystem is being created around the world and Portugal cannot be left out. It is crucial that more entrepreneurs look to the agricultural sector as a potential market for their technological solutions and that more companies in the sector absorb this innovation. As Portugal is highly qualified in terms of technical staff related to technology and being a country with excellent agriculture, we will have all the ingredients to be able to create several competitive agtech businesses on a global scale.
Cristina Mota Capitão