Agritech: Australia’s next big export opportunity

May 28, 2021

This article was originally published for the Cosmos Weekly’s Next Big Thing essay series

In 2015, I had the opportunity to move to Australia from the US. As someone who had been studying and working in the rapidly emerging agritech space, observing its explosion onto the global tech scene in 2012, I was excited to move to a country with such strong foundations in agriculture and ag research. I assumed that the Australian agritech innovation ecosystem would also be thriving: commercializing and exporting Australia’s great research and the ‘know-how’ of Aussie farmers. But when I arrived in 2016, I discovered that this was not the case. I was surprised to find that very little was established in Australia to harness the potential of entrepreneurship and innovation to transform the food and ag system.

Over the past 6 years, I, and many others, have been working on addressing this challenge and helping Australia to capitalize on this global opportunity. We now have several accelerator and incubator programs, such as SproutX, Farmers2Founders, Grow Lab, Cultiv8, AgFrontiers, and Rocket Seeder, supporting agrifood tech entrepreneurs and catalyzing hundreds of new startups annually. We also have a national network of agritech Meetups, connecting over 4,000 current and aspiring agritech innovators across Australia, and an industry body, AusAgritech, dedicated to advancing the sector. And finally, we have a growing community of investors, including: Tenacious Ventures, Australia’s first specialist agrifood tech venture capital firm; the Grain Innovate Fund, established by the Grains Research & Development Corporation (GRDC); and a growing number of generalist venture capital, angel, and corporate investors focusing on agritech.

But despite the significant progress we’ve made in establishing an agritech innovation ecosystem in Australia, compared to countries like New Zealand, Israel, and the Netherlands, where agritech has received significant, systemic support from government and the private sector, we are still in our infancy. Our grassroots initiatives, while impressive, are still nowhere near enough to truly capitalize on what is a massive, global, and growing opportunity.

Embracing agritech as a main act, rather than a sideshow

In Australia, the overarching paradigm is that agritech is a tool in service of national goals to increase farmgate output from roughly $60 billion per year today to $100 billion by 2030. Policy initiatives across the sector make it evident that government and industry see agriculture- production of more and/or better food and fiber- as the economic opportunity, while agritech is merely a means to that specific end.

This mindset puts Australia at risk of missing out on a multi-billion dollar opportunity that we are uniquely well-placed to capture. Yes, adopting agritech will help make Australian farmers more profitable and resilient. And this is an important goal that is worth pursuing. But our capacity for agricultural production is fundamentally limited by our natural resources: access to and quality of land, energy, and water. Australia’s agritech opportunity, in contrast, is virtually unconstrained.

Today, the global market for agritech products and services is estimated at $500B. It is expected to grow to $730B in the next three years- an annual growth rate of 8%. If we choose to recognize and invest in Australia’s agritech potential, we could easily aspire to $20B or more in economic value in addition to the benefits we’ll deliver to food and fiber production.

In fact, just as I assumed from the outside looking in before I moved here, Australia is incredibly well-positioned to be a global leader and exporter of agritech. We have world class agricultural research and diverse production systems, so we are uniquely positioned to develop solutions for every production agriculture industry in the world. We also have an extremely variable climate, meaning Aussie farmers are facing climate challenges earlier than most. Being the proverbial canary in the coal mine is an opportunity to turn an inherently limiting factor for production agriculture into a strength, if we shift our gaze to commercializing and exporting our solutions.

And indeed, we already have examples of Australian agritech startups paving the way. Companies such as AgriWebb, Regrow, Soil Carbon Co, AgriDigital, Agworld and more are exporting locally created innovations to the world, and creating jobs and economic growth along the way.

Seizing Australia’s agritech opportunity

To fully seize the opportunity to become makers, not just takers of agritech, we cannot continue to rely only on the hustle of grassroots innovators and investors. We need a paradigm shift at the policy and industry levels.

We need federal policies that set out Australia’s ambitions for agritech and pave the way for success in ways that are complementary to, but separate from, growth in food and fiber production. This will take collaboration between the agriculture, education, innovation, and energy departments, to name a few.

At the state level, we must focus on supporting the growth of agritech companies. For example, state governments can create incentives to reduce the costs of scaling up and competing internationally, as well as programs that bring skills and jobs to regional areas. This is a fundamental shift in our approach to date: away from policies that force states to compete with each other (e.g., pulling agritech companies from one state to another), and toward economic incentives that will help agritech companies grow.

We also need our research organizations to shift focus from intellectual property generation, toward enabling commercialization of solutions. Instead of fixating solely on the quantity of IP we produce, we must change the definition of success to include accelerating the adoption of scientifically-validated, Aussie-originated innovations. We can aspire to ensure Australia has the most efficient and lowest global cost of scientific validation for our products and services, such that farmers globally look to Aussie agritech products for their scientific credibility.

And finally, we need producers, and the agriculture sector that supports them, to shift their mindset towards being more than just customers of innovation. Insight and participation from those closest to the challenges we are trying to solve is crucial to ensuring we have viable products that add value on- and off-shore.

Is Australia ready to be a maker, not just a taker?

I’m fortunate to spend 100% of my time thinking about the future of agriculture, especially for Australia. Each week, I am humbled and inspired by the innovative Australian primary producers, researchers, and entrepreneurs building solutions to the world’s most pressing problems in food and agriculture. But grassroots efforts from passionate individuals is no longer enough- the competition is too strong, and the global challenges we’re attempting to solve are too large.

We must create a supportive environment that equips our innovators to make the most of their talents, and in turn, enables Australia to be globally competitive in agritech, as well as globally competitive in food & agriculture. The opportunity is here and it’s massive; the only question is whether we’re willing to seize it.

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This article was originally published for the Cosmos Weekly’s Next Big Thing essay series

Some examples in this article were adapted from this article, originally published in the AFR.

Sarah Nolet is co-founder and General Partner at Tenacious Ventures and founder and CEO of Agthentic Advisory. She also serves on the Industry Innovation and Science Australia Board, is a founding council member of the Australia New Zealand AgriTech Council, and sits on the board of the Australian Agritech Association.