Contrary to his theory, 200 years later the world’s population has become much larger and some parts of the world enjoy a higher standard of living than they had two centuries ago. What Malthus failed to foresee were technical advances, vaccinations and pesticides that would make it possible to feed the enormous rise in human population.

For most of the 20th century, we managed to stay ahead in the Malthusian race between food supply and growth.

A recent report by PricewaterhouseCooper, Temasek and Rabobank highlighted that Asia currently struggles to feed itself, investing in technological innovations that are critical for meeting the shifting demands.

As supply chains are stretched, there is poor quality and high wastage across the agriculture chains. Environmentalists have warned that the world’s food supply is already jeopardized by climate change.

The ultimate solution will thus inevitably lie in introducing further new technologies that will increase food quality, streamline supply chains and improve access to goods between nations. The advancement of the Fourth Industrial Revolution will answer the evolving challenges and needs around the industry.

The good news is we are embracing the world of agritech, which is the use of technology and digital innovation in agriculture and food to increase yields and efficiency across the value chains. Globally, agritech is a small but growing industry of startups.

A study by McKinsey shows that agriculture lags behind other sectors like transportation, media and commerce in terms of digitization. Digitization of the retail market is already underway and it has been suggested that we are now seeing digitization from the supply chain’s side as well. This will trigger a significant shift in how food is produced and delivered to households.

Observers believe that the North America, Europe and Asia, continents with large farming land bases, will be a major trial ground for these agritech investments. The advent of digital technology is utterly necessary if one hopes to avoid Malthus’ doomsday predictions.

Agritech investment in 2018 increased by more than 40 percent, about US$17 billion, a staggering rise from $2 billion in 2013. Big investors, such as Softbank, Google, Temasek and other wealth funds are participating in the agritech investment boom as they believe the industry would be significantly transformed by technology.

Multiple rounds of funding received by startups like Indigo, Farmers Business Networks, Beyond Meat, Plenty and Impossible Food are redefining the agritech investment landscape. As we move into 2020, we expect that a more diverse universe of investors will support these start-ups, alongside increased venture capital (VC) funds entering the arena. This has motivated the growth of investors to support market scaling, with more attention to new innovations like farm drones, high-tech factories, indoor farming, artificial intelligence software, alternative plant-based protein and more.

To illustrate, one of the largest investment rounds by the Investment Corp Dubai put $203 million into the startup Indigo for the microbial segment. Jeff Bezos and Softbank in 2017 invested in a vertical farming startup called Plenty.

Alibaba in 2018 launched an AI-backed agriculture tool to boost revenue for Chinese farmers. Further, in 2019, Beyond Meat went public in the United States, its stock price rising 200 percent from their initial public offering (IPO) price of $25.

Based on a survey, 58 percent of investors chose investment in agri-biotechnology as the category most sought after in 2020 and 56 percent opted for innovative food.

Traditionalists are skeptical about the industry being disrupted by technology because of the complexity of its supply chains and rigid regulations and the biggest initial barrier to bringing new technology to farmers is cost, apart from concerns about return of investment.

Unlike downstream segments such as e-commerce, food delivery, or other consumer-facing platforms, there is unfortunately no unicorn company or clear example of how an ideal agritech company could be a sustainable business and profitable.

Therefore, agritech startups need to experiment in order to find a suitable business model. Moreover, they need to collaborate with many stakeholders such as government, enterprises, or even other agritech startups. Additionally, companies need to get innovative about how to introduce and get their products into the hands of farmers.

Investors and VCs believe more IPO will have the power to metamorphose the scene. The most likely answer to the cost issue is enabling mass production and the widespread use of these technologies.

Meanwhile, continuing research into the opportunities offered is essential.

The World Economic Forum has joined with the ASEAN Secretariat to form a partnership called Grow Asia. Its main mission is to improve the productivity and sustainability of agriculture. They provide training, R&D centers and the introduction of the latest technology. Most importantly, they also engaged with about 500,000 smallholder farmers from five different ASEAN countries.

The harsh reality is that we have to react quickly and effectively to bring farming and the agricultural industry from the old traditional industrial age into a modern and digital one. In this respect, it is hardly a surprise that there is limitless potential in agritech since our appetite for food is present and we all need to eat.

Undoubtedly, there will be more people on Earth and, finally, the optimistic scenario that would allow smallholder farmers to gain access to the new technology, practices and markets can create an independent and profitable farmer economy.

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