Agriculture Tech Market to Reach $700 Billion by 2030

Published September 5th, 2019 - 06:12 GMT
The components of the Fourth Industrial Revolution such as Big Data, the Internet of Things, and artificial intelligence are being integrated throughout the agriculture supply chain.
The components of the Fourth Industrial Revolution such as Big Data, the Internet of Things, and artificial intelligence are being integrated throughout the agriculture supply chain. (Shutterstock)
Highlights
Digital penetration in the field was just 0.3 per cent in 2018 compared to 2.5 per cent for financials

The technology segment for the agriculture industry is expected to jump from a market size of $135 billion today to around $700 billion by 2030, representing a 15 per cent compound annual growth rate, UBS Global Wealth Management's Chief Investment Office in its latest report.
 

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While growing food sustainably to meet the demand to feed a growing, urbanizing population will be one of the greatest challenges, the world is on the cusp of a new agricultural revolution, the report said.

According to the UN, food production globally accounts for 40 percent of land use, 30 percent of greenhouse gas emissions, and 70 percent of freshwater consumption. About 2 billion extra people will live on the planet by 2050 – up from just under eight billion today – and global demand for food is expected to increase by roughly 60 percent. At the same time, roughly one billion people will enter the middle class.

According to the study, the way food is farmed, shipped, and consumed will be driven by innovations like vertical farming, laboratory-grown food, and algae aquaculture. The components of the Fourth Industrial Revolution such as Big Data, the Internet of Things, and artificial intelligence are being integrated throughout the agriculture supply chain.

"The concept of vertical farming, for instance, has the advantage of requiring 95-99 percent less water compared to traditional methods. In regions where water scarcity is common, such as in the UAE, this is an obvious advantage. In addition, we believe it presents a genuine opportunity for investors who wish to invest in more sustainable food production" said Wayne Gordon, editor-in-chief of the report and commodities analyst at UBS Global Wealth Management.

Until recently, agriculture lagged all other industries in terms of disruption. Digital penetration in the field was just 0.3 per cent in 2018 compared to 2.5 per cent for financials and close to 12 per cent for retail. But this figure is set to spike – investment in agriculture-related technology hit $16.9 billion last year, up 43 per cent from 2017, according to AgFunder.

At the same time, technology should not be viewed as the "enemy" of natural, abundant and affordable food, find UBS CIO. Raising agricultural productivity, safeguarding environmental health, and satisfying evolving consumer preferences can be achieved by applying new technologies.

"Several trends have moved food and agriculture up the broader sustainable living agenda. Governments are increasingly paying more attention to the United Nations’ 17 Sustainable Development Goals (SDGs) and the Paris Climate Change accord, which clearly indicates an emerging awareness that societies need to change and become more sustainable," said James Purcell, head of Sustainable and Impact Investing at UBS Global Wealth Management. 


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