The Antifragile Future of Agriculture: A Call for Systemic Change
Christine R. Gould is the founder and CEO at GIGA Futures, which works with food and ag companies on strategy, partnerships, and market positioning.
The views expressed in this article are the author’s own and do not necessarily represent those of AgFunderNews.
A Moment of Realization
“This industry is dead. I’m out,” a well-respected ag biotech founder declared to me over drinks in Davos last month. The stark contrast between the multi-billion-dollar influx into pharma at the J.P. Morgan Biotech Conference in San Francisco and their own struggles to scale a pilot project over three years could not have been clearer.
Frustrated with investments that seem trivial and stakeholders who lack a grasp of genuine innovation, this founder encapsulates the feelings of many in our sector. While the sentiment of frustration resonates, the accompanying conclusion misses a crucial point about the future of agrifood.
Recognizing the Problem
Over the past decade, I have witnessed influential, mission-driven entrepreneurs lose faith. Unable to secure funding that aligns with their vision or validate their solutions beyond pilot tests, many are either giving up or retrenching their ambitions to fit a system reluctant to embrace disruption.
The lack of successful scale-up stories serves to dishearten those striving for innovation. Our sector’s potential remains grossly underestimated, leading to a climate where innovation feels stagnant. And it isn’t merely a coincidence; rather, it’s indicative of profound structural issues that require equally deep structural solutions.
A Culture of Resignation
In the agrifood landscape, incumbent companies dominate, holding essential assets like distribution channels, regulatory sway, and customer relationships. Scaling an innovative solution often necessitates navigating through these dominant players, which can stifle true innovation.
When Leaps by Bayer unveiled its Ag Playbook, it was meant to be a resource for startups and investors, offering insights into the daunting path to market for biological inputs. However, it also conveyed an unmistakable message: “This is our territory; adhere to our rules.” This approach prioritizes adherence to an existing system rather than fostering the creation of a new, innovative one.
The Cycle of Retrenchment
When FMC Ventures ceased operations early this year, one of the industry’s more progressive players signaled a retreat to core offerings. This elicited further caution from other corporate venture capitalists, constricting their focus to ‘adjacent and obvious’ risks.
Simultaneously, generalist venture capitalists, weary of agrifood exits, often follow suit, leading to a drain of essential risk capital that is crucial for fostering future innovation.
Failing to Fill the Void
Despite government discourse surrounding urgency and transformation, funding and policy frameworks seem unequipped to bridge the funding gap. At a recent UN food-systems meeting in Addis Ababa, efforts to connect startups with investors fell short, underscoring a disconnect between public commitments and private action.
Farmers, under pressure to sustain thin margins, often prioritize immediate, cost-effective solutions, creating a short-sighted market model that reinforces existing paradigms, despite the pressing need for innovation.
Imagining a Future Rooted in Antifragility
A paradigmatic shift in agriculture is imperative. Drawing lessons from security and defense sectors, where preparation for volatility is standard practice, could provide guidance. Agriculture remains unprepared, relying heavily on outdated models.
Critical Questions to Address
- How will the sector respond if key chemicals become economically or legally unviable?
- Can we acclimate to future climatic challenges if current crop varieties fail?
- Can we adapt our existing infrastructure to accommodate innovative solutions rapidly?
Four Pillars of Investment for Antifragile Agriculture
Transforming the industry requires fundamental investment strategies:
- Engines of New Growth: Focus on exploring opportunities in underserved crops and regions rather than just squeezing margins from existing products.
- Diverse Portfolios: Embrace diversity in investment, understanding that some ventures may fail but provide valuable learning opportunities.
- Scaling Infrastructure: Develop networks and partnerships that expedite the transition from pilot projects to widespread implementation.
- Circular Innovation Mechanisms: Create systems to reuse insights and resources derived from unsuccessful projects for future benefit.
Learning from Successful Models
Companies across various sectors exemplify how to design for growth and adaptability. For instance:
- AB InBev’s ZX Ventures operates with its own leadership and budget to focus exclusively on innovation beyond core products.
- Amazon Web Services began as a separate entity that could leverage existing capabilities without the constraints of its parent retail model.
- Cisco’s Hyperinnovation Living Labs brings together industry leaders for rapid, collaborative prototyping.
Celebrating a New Set of Values
Success in agriculture should not be gauged purely through financial gains or established partnerships. Stories of open-sourcing solutions, unlikely collaborations, and transformative outcomes should take center stage in discussions, promoting a culture that embraces intelligent risk-taking.
The Path Forward
Currently, the choice in agriculture isn’t between innovation or stagnation; it’s between a system that crumbles under pressure versus one that thrives amidst uncertainty. Building a resilient, antifragile structure is not merely advisable; it is essential.
It is critical for boards, executives, and investors to prioritize long-term growth and innovation strategies that defy the status quo. My work today involves assisting leaders in constructing these transformative systems in the real world. The first step lies in making a conscious choice to embark on this journey. Why not take that first step today?
