Agri-Technology (agritech) in Israel-Barriers and Opportunities
In recent years, two global trends have been observed in the agricultural sector. The increasing global demand for food, in conjunction with the decreasing supply of resources for food production, is the main motivation for the development of the agritech industry. The demand for food around the world is influenced by population growth and the increasing quality of life around the world. These trends are expected to continue during the next few decades. On the supply side, the ongoing reduction of agricultural land in favor of residential and commercial purposes, as well as the global climate change which affects agricultural productivity, makes it difficult to supply enough food and water globally. If current trends continue, by 2050 caloric demand will increase by 70 percent, and crop demand for human consumption and animal feed will increase by at least 100 percent. Such a scenario reinforces the need for the adoption of new technologies and innovation throughout all of the elements of the food chain.
Since its inception, the Israeli agriculture industry is familiar with many of the newly relevant challenges in global agriculture, due to the Mediterranean climate and shortages in water. These difficulties forced Israeli farmers to understand that the key to success in Israeli agriculture is advanced research and technologies. This understanding evolved into an impressive infrastructure of research and development in Israeli universities, which itself led to the success of companies in the field of bio-agriculture and seed production.
The report introduces the main players in the Israeli agritech industry ecosystem; companies, academia, government and investment funds. Each of these players has different abilities and incentives. The Development of entrepreneurial and industrial clusters depends on the interaction between the different institutions and individuals that make up the sector.
In the course of this research, dozens of interviews with managers from agritech companies in Israel were conducted in order to examine the challenges and barriers facing the Israeli ecosystem. To further investigate the barriers, a questionnaire was sent to 225 companies (35% responded). From these we saw that the main challenges that are facing the companies are: the long development cycles and high risk in innovation in the sector, which results in difficulties in attracting investment, the conservatism of farmers that makes it hard to ensure that relevant products will be implemented, the transfer of knowledge from academia to industry, and the low and volatile profit margins. In addition to the challenges that the companies are dealing with, there are relatively few new entrepreneurs in the field of agritech, despite the high potential with regard to tech-transfer from existing technologies in software and hardware which can impact and optimize the systems and methods of farming.
Based on these findings, the report reviews several policy recommendations regarding government support in agritech. Implementation of the recommendations will assist the development of the industry by leveraging the agricultural R&D in Israel.