By: Lourival Monaco
In 2015, The McKinsey Global Institute released its Industry Digitization Index. Agriculture stood out as being far behind in the digital revolution, and the food industry ranked only slightly better Despite years of experimentation with digital technologies and some enterprise-specific and sector-wide gains, the pace of digital technology development has continued to outstrip agri-food sector gains, leaving significant opportunities for improvement. A 2016 study by Accenture and the World Economic Forum a potential reason for this challenge. Digital advance is driving combinatorial impacts at an ever-increasing rate. Technologies such as mobile communication, cloud computing, artificial intelligence, sensors and analytics, among others, are being combined to drive unparalleled opportunities for value creation and related profit pools. Keeping pace with this change is a challenge for any industry, but it is especially difficult in an industry sector as complex, geographically dispersed and asset-intensive as agri-food.
However, the very characteristics that make change difficult in this sector are also the foundation of opportunity. Recently, the OECD highlighted significant opportunities to improve productivity, sustainability, safety, risk management, access to markets, tailoring of value and managerial capacity across the complex sector through various forms of digital transformation, effectively driving a value additive “data cycle” from farm-to-fork. In addition, the study notes that the adoption and application of digital technologies in the agri-food sector could produce benefits for society that equal, or even surpass, the value created for the industry, positioning digital technology as a potentially viable path to achieve corporate social responsibility goals – enabling those in the sector to do well, while doing good.
The potential for digital technologies to positively impact the agri-food sector, and broader society, is thus well recognized. The challenge is understanding how to accelerate progress and realize the promise of these technologies.
To gain insight into means to spur and navigate the digital transformation of the agri-food space, DIAL Ventures, in partnership with the Institute for Innovation Science at Purdue University, led by professor Joseph Sinfeld, has begun a research effort that aims to answer two specific questions:
· What success factors must be in place to achieve digital transformation in the agri-food industry?
· How can the vision of a digital agri-food industry be achieved in an accelerated and risk-mitigated manner?
A methodology called Comprehensive Success Factor Analysis (CSFA), developed by the Institute for Innovation Science at Purdue University, will be used to address these questions. This methodology is an iterative multi-stage process that overcomes the fundamental limitations of traditional methods to obtain a plurality of perspectives, examines a challenge at multiple levels of abstraction, contextualizes the problem frame and explores a comprehensive scope.
The results of this analysis will be a list with hundreds of success factors that need to be considered to achieve the digital transformation DIAL Ventures aims to do. Those success factors will be grouped into 15 categories:
1. Infrastructure development/maintenance to support the needs of beneficiaries in the context of the chosen theme area
2. Equipment/Supplies that are required to support development
3. Workforce/Talent to cater to the requirements of the beneficiary populations
4. Capital/Finances to support activities that advance progress in the theme area
5. Practices/Mechanisms that need to be followed to improve existing conditions
6. Awareness among intended participatory/beneficiary populations about existing conditions and means to improve them
7. Motivation among intended participatory/beneficiary populations to improve existing conditions
8. Enabling Strategies to overcome existing barriers that prevent the adoption of improved practices
9. Adoption/Habit Conversion on the part of engaged populations/stakeholders in favor of behaviors/practices that enable improvement in existing conditions
10. Outcome/Evaluation measurement mechanisms for evaluation of progress toward targeted goals
System robustness components
11. Sustainability of various parts of the system
12. Resilience capacity to overcome disruptions/disturbances that may hamper progress
13. Security/Safety concerning the quality of life and access to resources
14. Policies that support advancement in the chosen theme area of interest
15. Government/Leadership support and involvement in attaining goals set for the theme
Understanding these success factors, the relationship between them and the pools of value each can unlock will help DIAL Ventures create its strategy for the future.
This strategy, unlike the usual “moon shot approach,” which seeks best-in-class solutions and thus requires a high level of technological maturity, will be based on a second path that has historically been lower-risk and expeditious relative to moonshots. It is termed a “lily pad approach” and forms the foundation of an “enabling innovation strategy” that entails the proactive pursuit of a series of developments of lesser initial capabilities than the goal, but that each offers practical value in building toward a more complex and capability-rich outcome. Lily pads have practical value and drive learning and capability development, thus accelerating progress at a reduced risk in pursuing a longer-term vision.
DIAL Ventures is excited to launch this research project in partnership with the Institute for Innovation Science at Purdue University, and sharing the results.
DIAL Ventures, the innovation arm of the Purdue Applied Research Institute, tackles big problems facing the U.S. and the world such as food safety, supply chain efficiency, sustainability, and environmental impact. DIAL Ventures creates new companies that drive innovation in the agri-food industry which, in turn, makes a positive impact on our lives and lifestyles for years to come.
If you are interested in becoming a DIAL Ventures Fellow or Corporate Partner, contact us at email@example.com.