Technology is transforming every industry, and now it’s coming to agriculture. Over the past six years, a growing number of AgTech startups have developed technologies to help the agriculture industry feed our growing population without destroying the planet.
While the nascent industry is gaining momentum, a new white paper produced by The Kauffman Foundation and Donald Danforth Plant Science Center finds that we need more investment and entrepreneurship to fuel the “Evergreen Revolution,” or sustainably produce 70 percent more food by 2050. The paper, AgTech: Challenges and Opportunities for Sustainable Growth, begins to quantify the AgTech sector – which includes integrated genetics, physical inputs, information technology and smart machinery- and outlines opportunities for innovation and investment.
One of the report’s key findings is that given the size of the agriculture industry – global net farm income is $120 billion and farm assets are around $2 trillion – there is a huge opportunity for investments in AgTech. Estimates that biofuel production will increase by 800 percent by 2050 and that food prices will increase by 50 percent by 2030 are just two examples of the industry growth that’s expected in the coming years.
And then there are also more and more promising, venture worthy startups who are looking for capital. The paper examined a dataset of over 900 AgTech startups compiled by Cultivian, a venture fund focused on food and agricultural technologies, between 2006 and 2012. Of those companies, 80 percent are focused on improving the value chain through technology inputs, crop production, animal production, agricultural processing and manufacturing and distribution.
And over the last six years, 132 AgTech startups have sought funding annually, with 38 percent of the companies located in the U.S. Heartland, the twelve states in the north-central United States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. Because of the high concentration of companies in the Heartland, as well as the concentration of some the world’s largest agribusiness, chemical and farming companies, the report advocates for making the region the “epicenter for development of a comprehensive innovation ecosystem and entrepreneurial economy around the emerging AgTech sector.”
All in all, the report does a nice job of illuminating the opportunities for AgTech and what’s needed to accelerate innovation. It calls for more education and human capital development, investment and non partisan collaboration. We’ll certainly be following along to see if and what Kauffman does to nurture this ecosystem.
This post originally appeared on Forbes on May 22, 2014.