Sector not prepared for technical disruption

A new agrifood sector report has found that New Zealand farmers have been quick to adopt smart farming techniques, but few are preparing for major technological disruption.

The report, funded through Microsoft's Academic Programs initiative and prepared by researchers from the Massey Business School, examined the impact of cloud computing and other potentially disruptive technologies on the sector.

Researchers interviewed both technologists and members of the agrifood industry - and found there was a gap between how the two groups perceive the future.

"In the agricultural industry people are making really pragmatic business decisions to invest heavily in technology," says lead researcher Professor Stephen Kelly.

"But they firmly believe that tomorrow will be like today, just with more technology added.
"Meanwhile the technologists are predicting change at an unprecedented rate, causing major disruption to business practices and models."

Professor Kelly says the significance of the findings should not be underestimated as there could be major implications for the sector.

"What the agrifood sector is currently doing is brilliant, they are agile, very accepting of new technology and continually looking for better ways of doing things. But most aren't visualising what the industry will look like in 10 years time."

He says New Zealand should prepare for the arrival of large, global corporates that can produce so efficiently that cost structures could be halved in a relatively short period of time.

"If that happened, most New Zealand businesses would not be able to compete using their current business models. There are only a few ways to compete: follow a corporate model but you need a lot of capital; find a niche, which is getting increasingly difficult; or take a collaborative network approach.

"Collaboration would allow smaller firms to get the benefits of associating with larger pillar firms that are better resourced and integrated into global networks."

While technological developments will lead to improvements in efficiency and production, the report also recognises the potential for technology to improve environmental sustainability and better manage biosecurity risks.

"Better monitoring and control systems are seen as key to reducing negative environmental impacts and closing biosecurity gaps," Professor Kelly says.

"Cloud computing and the collection and sharing of more and more data means the industry can work together to improve practices in this space, and they know that's important for their relationship with consumers and the New Zealand public."

Microsoft chief technology officer Russell Craig says the research adds to the collective understanding of the opportunities and challenges in the agrifood sector.

'It was particularly interesting to see that potential disruptions in the sector need more attention, and that the sector needs to embrace that disruption - we see opportunities for local economic development, creation of new tech-based businesses, and an increasing focus on the overall sustainability of the sector," he says.

"That's why this is a valuable report which, added to the public domain, will foster discourse about the best ways to sustainably grow these industries in the future.'

* The full report Disruptive Technology in the Agrifood Sector can be downloaded from: http://bit.ly/agritech-report