Agribusiness Report: David Downs - Benefits of building the agritech ecosystem

David Downs

COMMENT:

They say it takes a village to raise a child. You could also say it takes many parties to create effective agritech.

Over the past year, a taskforce made up of multiple government agencies has been working together to define an Industry Transformation Plan (ITP). Government officials from MBIE, NZTE, Callaghan Innovation, Mfat and MPI have worked with industry and with the research sector to develop it.

The base assumption of the ITP is that New Zealand has high quality agritech, but we are not in the leadership position globally we could be – in terms of the levels of creation, adoption and export of agritech.

A core finding of the plan is that it is the ecosystem which is so important for creating effective agritech. Not the biological ecosystem – although of course that is also involved – but the support network of companies, government agencies and other parties.

Central to the development of good agritech is the interaction between the creator of Agritech (the 'company', although of course they are not always), and the user of Agritech (the 'farmer'). Agritech in our definition spans agriculture, horticulture, apiculture, aquaculture, etc… but the phrase 'farmer' will have to make do.

This interaction between companies and farmers is critical – if farmers won't adopt technology, then companies don't have a market. Similarly, if agritech companies can't produce products and services which add value at a reasonable cost, then there is no incentive for that adoption.

This relationship between the farmer and the company often has other parties involved – the sales agents or channels. Anecdotally, I'm told that farmers don't listen to marketing messages from agritech companies, but they do listen to the farmer next door, or the stock agent they have known for 30 years.

Even more fundamentally, there is a relationship with the end beneficiary of the farmer's work and the land and water. New Zealand's rich and varied landscape allows for a variety of growing systems and farming practices, and our agritech needs to be responsive to all types. Similarly, global consumers today – particularly post-Covid 19 – want high quality, secure, safe and healthy food. If that food can be grown productively, sustainably and with a low impact on the environment, it's a great reinforcement of the New Zealand story.

In addition, there are also a host of other critical components to the ecosystem:
Research organisations have a big role to play – without their efforts there would not be novel technology or ideas to take to market. New Zealand has world-class research and our government spend on agritech research is high, but we have to work harder at commercialisation and turning this research into value in terms of products. Relative to other countries, our rate of technology spinouts from the research sector is low.

Government has a key role too. As a regulator of the food supply system, government policies and legislation can have a direct and material effect on the effectiveness of the whole ecosystem.

As a funder, government chooses which 'horses to back' in the research area. As a provider of support, government agencies surround and assist companies and farmers to develop, adopt, market and sell their technology. All of the government agencies involved in the agritech ITP have focussed teams looking into the agritech space, ensuring that government has the skills and experience to help companies and farmers when they need it.

All companies need people, and in agritech we need skilled experts in many different types of technology – robotics, sensing, agronomy, data science, aviation. This means the education sector has a key role in the ecosystem as well.

This need for skilled people comes all through the value chain of the agritech system, including the end user of the technology. Tomorrow's farmer will need a knowledge of drones and robots as much as they will need to know sheepdogs and tractors.

The fuel of the research and product cycle is capital. With longer product development cycles than other technology sectors, the role of the investors and capital markets is critical. Some commentators would attribute New Zealand's relative slow grow in agritech over the past 20 years to a lack of investment capital, but we are seeing that ease now. The Elevate fund from New Zealand Growth Capital Partners is likely to see a focus on agritech. That is just one intervention we will see in this area.

When looking at the ecosystem, I also want to make special mention of the role of industry bodies and support. We are lucky to have Agritech New Zealand, which has been on the scene for a few years, acting as a consolidator of the sector and a conduit between the industry and government.

They've been a true partner with government in defining what the sector requires, and then working on the detailed steps we need to go through. As the ITP is rolled out over the next two years, I expect that the industry will play a large part in that, coordinated by Agritech NZ.

There are other parties in the ecosystem too – overseas collaborators, competitors, media commentators – making it a rich and diverse system. As our work with the Industry Transformation Plan shows, there isn't a single intervention or change to be made, but all parts of the ecosystem need to be considered to ensure that New Zealand can maintain a global leadership position as one of the best places in the world to develop agritech.

The whole village needs support, in order to raise the best children possible.