Survey findings also reveal a healthy appetite for collaboration, yet challenges around consumer understanding, funding and economic uncertainty remain.
Changing consumer preferences, such as the demand for alternative meat products, are a major driving force with regard to the adoption of emerging technologies amongst agrifood companies, according to a new report by Economist Impact commissioned by SGInnovate1. However, the findings also suggest that more consumer education and engagement will be needed to increase acceptance of these food products being created by emerging technologies.
Launched today, the Food 4.0: Technology in Agriculture and Food report was developed by Economist Impact, with the support of SGInnovate, to uncover the drivers and challenges behind emerging technology adoption in the agrifood sector. The full report comprises primary and secondary research components, including a quantitative survey of 100 companies across key global agrifood hubs, as well as in-depth interviews with business leaders and experts.
“The agrifood sector faces a myriad of challenges on a global scale, from navigating food insecurity to the increasing pressure to decarbonise. So, if we are to achieve our “30 by 30” goals for food production in time, we need to be armed with a better understanding of the sector’s innovation priorities and the role emerging technologies can play in addressing these gaps,” said Dr Lim Jui, chief executive officer of SGInnovate. “This report serves as an important primer for the Deep Tech community and offers an overview of where support is urgently needed, be it investments, partnerships or technological expertise.”
Findings from the survey revealed that 81% of business leaders in the agrifood industry consider changes in customer preferences, as critical factors in influencing their organisations’ decisions to adopt emerging technologies – on par with the need to improve business operations and reduce costs (79%). Even when set against the backdrop of economic disruption and the pandemic, 68% still believe that these changing preferences will continue to exert a positive influence on decisions to adopt technology.
However, it appears more consumer education and continuous engagement about the use of emerging technologies in agrifood production is needed. While these preferences may serve as a catalyst for change, one in two respondents (50%) see these consumer perceptions as likely barriers to the actual adoption of technologies over the next five years.
Companies are also similarly divided on issues of market hesitancy regarding new products in this sector. Some of the top reasons they cited include challenges around accepting food products developed with these new technologies (53%), as well as a low awareness and understanding of the products’ benefits (41%). Price is also a major stumbling block (48%), and only 51% of businesses are confident are that their customers would be willing to pay a higher price for products developed with emerging technologies.
Climate risk and resilience are major priorities for agrifood businesses
In line with other sectors, agrifood businesses recognise the important role of technology in mitigating the impact of climate change. Both the need to develop climate resilience (77%) and their commitments to sustainability (75%) were recognised as major drivers of emerging technology adoption. Furthermore, 71% of respondents indicated that sustainability is playing a big part in companies’ decisions to integrate technology in their products and services.
“Emerging technologies offer possibilities to help address the many challenges surrounding food security, sustainability and safety,” said Pratima Singh, senior manager for Policy & Insights at Economist Impact. “Technologies can help enhance the productivity of agricultural land, improve crop resilience, reduce food waste in the supply chain and cater to changing consumer preferences and habits.”
Companies themselves are also recognising the value of these efforts. Enhancements to the sustainability value of their products was the most reported benefit (51%) businesses experienced following the adoption of emerging technologies.
Financial concerns hindering adoption of emerging technologies
While agrifood businesses recognise the strategic advantages of these emerging technologies, high initial or overall cost (41%) and lack of funding (34%) remain significant barriers hindering the adoption of emerging technologies currently. Furthermore, these financial challenges are expected to continue. Close to six in 10 businesses (58%) cited limited funding and investment sources as a major challenge for emerging technology adoption over the next five years.
The situation may also be exacerbated by the current economic and business climate. Almost two in three business leaders also see the impact of COVID-19 (63%) and the inequality in economic recovery (63%) as even bigger bottlenecks for emerging technology adoption over the next half a decade.
Agrifood businesses are ready to collaborate
With all these challenges, collaboration between different stakeholders in the ecosystem is already recognised as being critical to driving innovation and accessing new technologies, and the majority (74%) agree that many collaboration opportunities exist in the area of research and development (R&D).
The top two current methods of gaining access to emerging technologies were through collaborations with academia (57%) and start-ups (50%), which could be a signal of the sector’s readiness to embrace modes of partnership such as Open Innovation. Future intentions further suggest that companies are becoming equally open to pursuing various methods of accessing technologies, from M&A (42%) to IP licencing (39%), in-house R&D (41%), as well as partnering with start-ups (41%).
“Agrifood companies of all sizes have their work cut out for them, and more effort needs to be channelled towards engaging and educating stakeholders, investors and especially consumers. Once again, this demonstrates how the advancement of Deep Tech requires more than just looking at the technologies themselves, but also the mobilisation of the community and the talent needed to sustain its momentum,” said Dr Lim.
He added, “This unique, integrated approach is something SGInnovate is well-positioned to address, especially through our work connecting academia, corporates and startups, to deliver lasting, positive impacts on our agrifood systems.”
To download the Food 4.0: Technology in Agriculture and Food report, visit SGInnovate’s website.
References
1 Survey methodology for The Food 4.0: Technology in Agriculture and Food report was commissioned by SGInnovate and produced by Economist Impact. The findings shared in this press release are based on a survey of 100 business leaders in the agrifood industry from seven key agrifood business hubs: Australia, Israel, the Philippines, the Netherlands, Switzerland, Singapore and the United States. The survey was conducted and completed in August 2021.
The full report combines insights from the survey, one-on-one expert interviews and proprietary secondary research from Economist Impact.
