Australia dominates globally in swimming; we’re not so good at ice hockey. It’s not hard to figure out why- we live in a country surrounded by water, and yet have very little ice. In other words, we double down on a unique strength, competing where we have an advantage.
There’s another massive opportunity where Australia has a significant advantage. This strength is also born largely from our geography and natural assets. It’s an opportunity to create thousands of jobs, generate billions of dollars in economic growth, and be recognised as a global leader.
But rather than seize this opportunity, we are instead choosing- at all levels of government and industry- to largely ignore it.
We are a country with abundant sunlight, arable land, and climate variation. And we’re very good at maximising and adapting to these natural conditions to produce food and fibre. In fact, we export nearly 80% ($49.2 billion) of our produce and rank in the top 15 of the global export leaders in food and fibre — not quite as good as our swimming, yet still punching well above our weight.
But alongside our impressive export track record in meat, wheat, wool and much more, are the innovations that underpin this production: scientific discoveries that make our crops more climate resilient, technologies that make production more efficient, and new business models that enable us to rapidly respond to changing consumer demands. Despite their role in making us a globally recognised food exporter, the potential to export these innovations is going unnoticed by politicians and industry leaders.
There is a huge opportunity for Australia to become a world leader in the export of agrifood innovation. These innovations are vital in helping us meet our target of $100B of farm gate output by 2030. But exporting agritech is a fundamentally different opportunity than exporting agricultural produce. And agritech has some unique advantages: it is unconstrained, highly aligned to our strengths, and best of all… it’s massive.
For example, the agritech opportunity is free from the constraints that limit our potential to produce more food and fibre. Factors such as how much land and water we have, climate variability, and trade policies mean that hitting even our most aspirational production targets will only allow us to feed perhaps 100 million people; a mere 1.3% of the global population.
The agritech opportunity however, is limited only by our ambition- we have world class agricultural research and are uniquely positioned to develop solutions for every production agriculture industry in the world.
And this opportunity is huge. Today, the global market for agritech products and services is estimated at $500B and is expected to grow to $730B in the next three years; an annual growth rate of 8%. If we choose to recognise and invest in Australia’s agritech potential, we could easily aspire to $20B or more in economic value.
The Federal Government is about to release its National Innovation Agenda, but Australia will not play a big part in this multi-billion-dollar market without a major change in priorities and a shift in mindset across our federal and state governments, research bodies, and agritech industry.
At the federal level, we must focus on the growth of the agritech industry. For example, let’s set up an Industry Growth Centre for Agritech. We could use a similar model to the one found in the mining industry, where we have a centre for mining technology services as well as a seperate centre for resources. Similarly, Australia’s centre for food also needs a complimentary but separate centre for agrifood tech. This would allow for multi-agency support across innovation, energy, agriculture and food, while attracting investment and building Australia’s brand and as an innovation nation.
The focus at the state level then, can be on supporting the growth of companies, creating 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 approach, away from policies that force states to compete with each other, toward economic incentives that will help agritech companies grow.
Our research organisations too must evolve. Instead of fixating solely on the quantity of intellectual property we produce, we must change the definition of success to include accelerating the adoption of scientifically-validated, Aussie-originated innovations. This looks like recognising the immense value of our “know how,” and leveraging it to ensure Australia has the most efficient and lowest global cost of scientific validation for our products and services. Farmers globally will see an Aussie agritech product and be confident that they carry the stamp of scientific credibility that we are already so well known for.
And finally, the Australian agritech industry must mature, becoming independent of the farming sector so it can become an economy of its own, while also delivering maximum support for the profitability and growth of production agriculture. To do this, we must continue to grow the AusAgritech Association, the peak body for this new, high potential industry.
As a nation we are sitting at a crossroads. We can continue to go down the current path, focusing solely on increasing our production of food and fibre. Or, we can choose to also invest in the agrifood tech opportunity.
Either way, Australian farmers will benefit. But only in an environment in which our governments, research sector, and industry stop ignoring the opportunity at our doorstep, will we be billions of dollars better off.
Note: this article was originally published in the Australian Financial Review
Tenacious Ventures Management Pty Ltd (CAR 001275760), Tenacious Ventures Management Partnership, LP (CAR 001298484), Tenacious Ventures Fund II Management Partnership, LP (CAR 001298483), and Tenacious Ventures Fund II Staple Co Pty Ltd (CAR 001298487) are Corporate Authorised Representatives of Sandford Capital Pty Ltd (ABN 82 600 590 887), Australian Financial Services Licence No 461981, and are authorised to provide advisory and dealing in connection with investments to wholesale clients only.