Digital has changed business forever – and the agricultural sector is no exception. The digitisation of applications, processes and technologies is giving the sector the opportunity to become more insight-driven, efficient and productive. Some of the biggest players in the agricultural market are investing millions into digital.
Our research, which surveyed 30 international senior executives from various industries across the agricultural sector, reveals there is considerable untapped potential. However, many companies in the agro-science, machines & equipment and technology industries are struggling to position themselves. Our definition of digital agriculture encompasses three areas:
The digital agriculture market is predicted to triple to $15 billion by 2021. This growth includes the value of software, algorithms, platforms and links between farming and technology hardware. The highest market potential is seen in North America (33% of total global potential), followed by Europe (24%) and South America (19%).
Senior executives also expect digital agriculture to create 11% respectively 10% more value than traditional agriculture from time savings and increased output. 42% predict time savings of more than 10% and 46% foresee an increase in output of more than 10%.
The benefits of digital agriculture compared to traditional agriculture (% respondents)
Participants across sectors are focusing on the development of three solutions – platform, algorithms and communication. Together, these components make up an ‘ecosystem’ which builds the foundation for an effective future business model – vital in ensuring the success of digital agriculture.
The focus of digital agriculture development activities
Despite 87% of respondents viewing digital agriculture as an opportunity for future business, just 28% of companies have established an organisation within their business devoted to it. Of those that do have a dedicated organisation, most are machines & equipment and technology companies.
Our view is that companies should establish their own organisation to develop innovative business models for digital agriculture more quickly and in a more focused manner.
To ensure a more successful market entry into digital agriculture, business leaders need to: