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Singapore, a potential agri-food powerhouse in Asia: report
SINGAPORE and other Asian cities namely Bangalore, Beijing, Hong Kong, Mumbai, Shanghai, Shenzhen and Tokyo have the potential to become global agri-food innovation powerhouses that catalyse development, funding and collaboration across the food and agricultural sector, according to a recent report.
These cities have the potential characteristics prevalent in successful global agri-food tech hubs such as Tel Aviv, St Louis, San Francisco and Rotterdam that provide a positive regulatory environment for startups and investment, technical expertise, talent and a strong pool of investors, according to the “Asia Food Challenge Report” by PwC, Rabobank and Temasek Holdings.
They will also be able to export technology and knowledge across Asia to improve food production and ensure a healthy, sustainable future.
“By creating space for innovation, encouraging public-private sector interaction and drawing in entrepreneurs, such hubs will play an outsized role in driving investment and innovation in the region,” said the 62-page report, which highlights the sizeable and attractive opportunity for innovation in Asia’s agri-food space, and was released on Wednesday, in conjunction with a three-day Asia-Pacific Agri-food Innovation week held in Singapore.
Technology will be crucial to help solve Asia’s food challenge and this requires investments across the agri-food chain. For now, the report highlighted that the requisite investment has not yet materialised although it represents a large-scale opportunity for those able to foster innovation successfully.
Asia is seeing a “far reaching” demographic change. By 2030, its population will be 250 million larger with the growing population increasingly residing in megacities.
Some 65 per cent of the world’s middle-class population will reside in Asia by the next decade, who will seek more from their food supply chains such as more nutritious, fresh and safe produce delivered conveniently and on demand. But the agri-food industry is struggling to keep up with growing populations and urbanisation, resulting in high wastage and poor quality as supply chains are stretched and broken.
On the whole, the report noted that the lack of investment in the agri-food realm in Asia poses a key barrier to the uptake of new technology. It cited several factors for that, including the complexity and diversity of Asia, its distance from the core operations plus less attractive regulations. These were findings based on a PwC Asian Agrifood survey this year.
The other challenge is the “immaturity” and “pre-commercial nature” of many technologies which mean longer timelines for investment returns. This could disincentivise investors looking to reap returns, such as like traditional private equity or venture capital (VC) firms.
In this context, the report said that private equity, as well as VC and accelerators, will play a major role in driving such investments.
Over and above these, Asia’s diversity in terms of economies, rules, currencies and dietary habits also pose a range of specific challlenges. For example, the report said that Asian farms tend to be much smaller than their American or European counterparts, with lower capacity or capability for investment in technology, which renders many innovations from elsewhere less relevant.