How can the digitalization improve the sustainability in agriculture?
We live in a world with limited resources. Ignoring that fact, led us to become a throwaway-society. Most business models are based on waste and producing new products. Today the fact of limited recourses became reality. Industries ran out of certain natural resources or are about to run out of resources. The human population must rethink certain industries and find new concepts to deal with our limited resources. How can digitalization in agriculture help solve that problem?
The development of agricultural about 12’000 years ago, changed the way humans lived. They switched from nomadic hunter-gatherer lifestyles to permanent settlements and farming. This had a disruptive impact on the development of the human population. Cities were built and civilizations grew from approximately five million people (10’000 years ago) to soon 8 billion today worldwide (Society, 2019). Now agriculture has become an elementary important industry. With the increase of the population, the need for food and goods has increased dramatically as well. What did that have for an impact on the different aspects of sustainability?
The ecological sustainability has become a critical factor in this agriculture industry. Huge landscapes are needed to cultivate the amounts of goods needed around the world. Consequently, forests are disappearing, immense amount of water is needed daily and pesticides to increase the harvest cause gigantic damage to the environment. The ecological sustainability clearly is not the priority of today’s agriculture, and the balance of the ecosystem is in danger. Most prominent imbalance is the climate change. Agriculture has big stakes in this imbalance and lack of ecological sustainability.
How about the economic sustainability? The main goal of economic sustainability is to employ existing resources optimally so that a responsible and beneficial balance between business and society can be achieved over the longer term (Osburg, 2017). This balance isn’t given in many parts of the agriculture. It has come to an overexploitation of natural resources (IMD, 2012). Examples of this overexploitation are almost endless. Fish stocks in waters, forests, mineral resources to just name a few. Therefore, whole economies ran out of business.
And last, the social sustainability is a society’s ability and desire to build procedures and structures that support future generations’ demands. It influences how a country’s wealth is distributed long term. The structures and procedures in agriculture mostly around the world are not designed to support future generations. Farmers mostly aren’t connected to the market at all (WEF Agriculture 4.0, 2012). The salaries of the farmers are dramatically underpaid and prevent a sustainable growth of living standards. But unlike the ecological and economic aspects of sustainability, the investors don’t benefit directly from the positive outcomes of social sustainability. But the social component of sustainability thinking emerges as a critical success factor for our planet’s long-term future well-being’ (Osburg, 2017)
Potentials through digital transformation
How can sustainability in agriculture profit from digitalization? What are the potentials in the different aspects of sustainability? The ecological sustainability can be improved immense through new digital solutions. Simple sensors for example given through the possibilities of “Internet of Things” can collect data in real time on the fields and in the environment. This data combined with clever analytics and visualization tools, will help the industry to better understand how the farmers, nature and animals interact with each other and their surroundings. Farmers may use these analytics to find patterns that would allow them to engage in more sustainable behavior, such as reducing the use of pesticide to a bare minimum or forecasting natural disasters and saving costs before they occur. New technologies in agriculture bring lots of potential for economic sustainability. Machines use less fuel, can harvest natural resources more efficient and less damaging. Watering plants with smart technologies can reduce the amount of water used immense and so on. All these new technologies come with a price. A price that a lot of farmers can’t afford.
The principle of “shared economy” could make a fundamental difference. Platforms, which could enable such a shared economy could be built easily and the sharing process could be mostly digitalized. The access through the whole industry (farmers, manufacturer, investors etc.) worldwide would be possible. Starting with the farmers, connecting the farmers to the economy and end consumer could have the biggest impact on social sustainability in agriculture. Today the farmers are exposed to the main players in retail and the stock exchange. The contact and exchange with the end consumer are zero. Marketplaces could be digitalized. The processes from the farmer to the end consumer (E2E) could be digitalized leading to a whole digital transformation of the agriculture industry. The collected data through this digital transformation could give the society insights about the current struggles of the farmers and would lead to understanding of shortage of certain products. Price models could be explained more transparent with self-regulated algorithm, since the need for middlemen aren’t necessary anymore that can oversteer this process today.
Risks in achieving sustainability in agriculture
The new possibilities through digital transformation of the agriculture industry to achieve a higher sustainability sound very promising. The implementation and establishment of some new solutions seem realistic and don’t sound like science fiction at all. Digital trends like IoT, Connectivity and shared economy already have proven themselves. In my opinion there are two main risks that should be highlighted at this point. Frist, these innovations proposed above need trust to be implemented and result in success and more sustainability (Rogers, 2010). Trust of the farmers and of course end consumers. Especially the shared economy or the digital marketplace need to be trusted before the economy wants to use it. According to the research of Rachel Botsman, the shift of the known environment to the unknown environment happens with trust in the basic idea. Once the idea is trusted, the community must trust the platform. Is my money safe, is my data safe etc. Last the interaction on this platform with other people must be trustworthy. This principle must be respected, when facing the new possibilities in sustainability coming with digitalization
Figure 1: The trust stack (Botsman 2016)
Second risk I would like to highlight is the drivers of change, in this case sustainability. Unfortunately, the motive “make the world a better place” or “improve People’s Lives” isn’t the top driver for change (Edelmann, 2015). When aiming for more sustainability in agriculture the main drivers of change should be considered. “Technology” itself or “Business Growth Targets” are a huge driver for change (see figure 2 below). When trying to implement new solutions for a better sustainability in agriculture, the solution should include new technology and target a business growth goal
Figure 2: Perception of importance of Innovation drivers (Edelmann, 2015)
Sustainability has become more important than ever in today’s economy and society. Human population ignored the overexploitation of natural resources for too long. It has resulted in serious damage of the environment but also economy. New business models based on new possibilities through digitalization and technologies are desperately needed. Especially in agriculture these changing business models could result in better sustainability. If the consumers believe and trust in the idea and whole solution and the business models provide a business growth, I see true potential and soon change in this agriculture industry. But it is very important, that these new business models aren’t based on ideologies on making the world a better place. The world needs new solutions, that are based on facts and provide a certain profit to all parties.
- Edelmann, 2015. Edelman trust Barometer 2015, New York: Edelman trust Barometer.
- IMD, 2012. Building the business case for sustanable agriculture, s.l.: Center for Corporate Sustainability Management.
- Osburg, T., & Lohrmann, C. (2017). Sustainability in a digital world. Springer International.
- Gensch, C. O., Prakash, S., & Hilbert, I. (2017). Is Digitalisation a Driver for Sustainability? In Sustainability in a digital world (pp. 117-129). Springer, Cham.
- Aksin-Sivrikaya, S., & Bhattacharya, C. B. (2017). Where digitalization meets sustainability: opportunities and challenges. Sustainability in a digital world, 37-49.
- Rogers, B. a., 2010. Rachel Botsman. http://rachelbotsman.com/thinking/, 22 11 2016.
- Society, N. G., 2019. The Development of Agriculture. National Geographic , RESOURCE LIBRARY (19.08.2019), p. 2.
- Video, Global Food Vision WEF Agriculture 4.0, The New Vision for Agriculture | Gold Winner, Deauville Green Awards 2013 – https://www.youtube.com/watch?v=Fg9yUVMIJhc, 09.12.2021
- Video, How will the technology impact the farming?, https://www.youtube.com/watch?v=fi4JiPW4AY8&feature=youtu.be, 07.12.2021
- Video, The circular economy: Going Digital, The circular economy: Going Digital – https://www.youtube.com/watch?v=CQYAtHuU89Q, 11.12.2021
About the Master Digital Administration
This article was written as part of the Master’s programme in Digital Business Administration at BFH Wirtschaft. The programme provides the relevant skills to help shape the digital future of business and society. Thanks to current live cases from companies in the digital transformation, the study programme is strongly practice-oriented and provides hands-on experience in the use of current and emerging digital technologies.