The agriculture industry today faces a set of unprecedented challenges, centered on adapting to the needs of a changing world: Feeding the world’s growing population with minimal new land use – By 2050, the world’s population will increase to 9.6 billion people, requiring double the current global crop production and 70% more food than today. In addition to population growth, improving quality of life also contributes to increased resource needs. Agriculture must meet this growing demand using only 5% more land while minimizing use of resources.
Preserving scarce natural resources while increasing production – Agriculture consumes 70% of the world’s fresh water and produces 25% of the world’s carbon dioxide. As production scales to meet growing demand, the current emissions and resource use trajectory is not sustainable. As a result, firms are seeking ways to increase end-product yield, reduce waste, and lower energy and water use while maintaining world-class performance.
Global shifts in diet and taste – With an expanding global middle class, demand for more expensive, resource-intensive foods like red meat and dairy is increasing. Food preferences are also changing – for instance, the growing taste for wheat-based foods in Asia is reshaping the global wheat supply and demand picture.
Despite industry advances in the early 20th century, global crop yields cannot keep pace with the growing demand. In order to overcome this challenge, while protecting the earth’s precious natural resources, the agricultural industry must embrace the new wave of technological innovation. Advanced technologies such as big data, cloud computing, the Internet of Things (IoT), analytics, drones, and more are rapidly transforming every aspect of agricultural operations.
Precision farming techniques are a prime example of how today’s technologies are revolutionizing the industry. With sensors that continuously measure soil parameters, equipment that detects precisely the right amount of fertilizer to spray on a given plant, and aerial imagery analysis, farmers can ensure the right mix of water, nutrients and crop protection materials are being distributed to a given area. Big data and advanced analytics can be used to predict short-term weather and the effect on a given farm to ensure that the right quantity and mix of products is available when needed. These techniques result in optimized yields and reduced environmental impact, helping the industry sustainably feed the world for the long term.
Investments in this new wave of technology are increasingly investments in digital transformation. Digital transformation is a new way of thinking and operating that starts with the way firms enable customers to interact with them, establishing connections that extend well beyond the purchase of a product. At its core, digital transformation requires systems of intelligence. Digital feedback loops that enable organizations to draw better insight out of data, and convert that data to intelligent decisions and action. And it isn’t simply about technology—systems of intelligence represent the combination of technology, people, and process that enable these feedback loops and define an organization’s competitiveness and ability to change an entire industry landscape. It’s about seizing the opportunity to fundamentally change product and service offerings and to expand into new business models.
Agricultural players that digitally transform will be better positioned to meet their goals. For example, precision farming tools that utilize advanced technologies provide farmers with an unprecedented amount of meaningful information on optimizing day-to-day operations, reducing ambiguity and increasing yield. And firms that enable these kinds of services will have the strongest customer relationships. Powerful platforms that are optimized for mobile use allow farm operators, seed companies, equipment manufacturers and others to bring their insights directly to the field. Flexible communication tools and comprehensive, secure data-sharing platforms enable increased collaboration and collective innovation.
Agricultural firms must increase productivity while finding innovative ways to do more with less. That means the future of agriculture lies in smart farming and digital transformation, with systems of intelligence that include cloud computing, big data platforms, IoT, predictive analytics and other new capabilities. Digital transformation involves taking advantage of these technologies to better engage customers, transform products and services, empower employees and optimize operations. With an end-to-end portfolio, decades of industry experience, a comprehensive partner ecosystem, and highly scalable cloud infrastructure, Microsoft is in a unique position to help agritech startups build industry-specific solutions, scale across global markets and grow with industry-leading partnerships and access to deep technology, business and marketing resources.