WITHOUT its own significant agriculture sector, Singapore presents an intriguing strategic puzzle for innovators and policy makers when it comes to the country’s role in agricultural technologies: What is our role?
As South-east Asia’s agricultural sector undergoes significant digital transformation, Singapore has the potential to become an innovation hub not just when it comes to growing plants in skyscrapers, but also for innovations that address the significant market failures and inefficiencies in the highly fragmented agriculture sector in South-east Asia.
The country’s potential as a leader in vertical farming is widely acknowledged, but this is only one part of a broader opportunity. The second opportunity is located among the 71 million small farms in the region, which grow the bulk of the grains, oils, fruits and vegetables we consume.
Digital tools are set to transform these farms; tools such as financing platforms, pest trackers, farmer training, satellite monitoring and logistics planning. The agriculture industry makes up over 10 per cent of the region’s gross domestic product, and is valued at over U$620 billion annually. While it is difficult to estimate the future size of the agritech industry, the declining availability of labour in rural areas suggests it could be significant.
There are three potential areas where we can add the most value. Firstly, Singapore as a home to corporate innovation labs; secondly, as a provider of early stage venture capital for technology development; and finally, as a builder of deep and back-end technologies. Each role complements the others, and together amount to a significant player in the sector.
Singapore is home to the Asian headquarters of the bulk of not only the input manufacturers who supply farmers with fertilisers and crop protection products, but also the trading firms who offer farms a channel to market. Over the last two years, we have seen many of these firms establish their agritech innovation labs here. With corporate partners so vital in the early stages of new innovations, the island is already the go-to location for startup founders seeking to take a novel technology to corporate agribusiness decision makers.
We also house the leading investors in agritech. Agritech sits at the intersection of two important trends in venture capital (VC) investment. VC’s are increasingly looking for investments in business-to-business platforms, and also have an increasing interest in “deep” intellectual property-driven technologies. As VC’s continue to invest along these themes, Singapore offers a compelling to location for agritech founders to not only secure investment but also incorporate their firms.
Finally, Singapore is well positioned to build back-end technologies that support agritech. The deep skills base and research capabilities here will allow firms to construct the credit scoring algorithms, weather forecasting and plant health models that front-end developers and innovators can build upon.
Most front-end agritech founders will – rightly – want to locate themselves and their team close to their farmer customers. This will give them the ability to integrate rapidly with farmers and find market fit for their solution. With this reality in mind, Singapore is positioned to provide support including the investment, corporate partnerships and deep back-end technologies that founders will need to reach scale.
Carefully considered, Singapore has a meaningful role to play in the sector. Like so many other elements of the country’s success it will take an outward looking, partnership driven approach to succeed.
The Senior Minister for Trade and Industries’ announcement on May 31 that trade development agency Enterprise Singapore will establish an Agriculture Open Innovation Lab here by the first half of 2020 suggests that we are well positioned to see this potential realised.
• The writer is director of knowledge and innovation at Grow Asia, a partnership between the World Economic Forum and the Association of Southeast Asian Nations focused on inclusive and sustainable agricultural development in South-east Asia.