The recent research by the Observatory Smart Agrifood of the School of Management of the Politecnico di Milano offers us a picture of the Italian market of Agriculture 4.0.

Digital innovation, notes the Observatory, enters the agrifood chain with solutions that increase the competitiveness of the entire sector. And that improve quality and traceability of the Made in Italy food.

133 already exist, continues the Observatory, the technological solutions for traceability present on the Italian market. In addition, 44% of the companies that adopted them improved efficiency and effectiveness, reducing time and costs.

The boom of Agriculture 4.0

But it is that of Agriculture 4.0 the area of greatest ferment, with over 300 solutions 4.0 already available. They are mainly geared towards precision agriculture and to a lesser extent to interlinked agriculture, the so-called Internet of farming. These are employed by 55% of 766 agricultural enterprises interviewed in research. The Centre stresses that age and the title of study do not significantly affect the adoption of 4.0 solutions.

The growing technological supply pushes a rapidly expanding agricultural market 4.0. Market that in 2018 reaches a value between 370 and 430 million euros. With a +270% in one year. It is about 5% of the total and 18% of the European one. And it is generated by more than 110 suppliers between established players and startups.

In this favourable context, startups that offer digital solutions to the agricultural and agri-food sector are also continuing in their innovative drive. There are 500 startups worldwide, with a total of 2.9 billion dollars of investments raised. They are mainly active in eCommerce (65%) and Agriculture 4.0 (24%).

Italy is in front of all other European countries for its multitude. But with just EUR 25.3 million of funding, which is equal to 1% of the total funding, it still appears marginal in terms of its ability to raise capital.

The Global Market in Agriculture 4.0

The global market for Agriculture 4.0 is worth $7 billion (double compared to last year), of which 30% is generated in Europe. Growth is even faster in Italy, where the market has a value between 370 and 430 million euros (+270%). The latter, for about 80% is generated by innovative offers of already established actors in the sector. And about 20% of emerging actors (especially startups) solutions that offer innovative digital systems and technology consulting services.

The Observatory has mapped 110 companies in the sector: 74% established brands and 26% startups. These offer over 300 agricultural 4.0 technological solutions, with very different roles and positioning along the supply chain.

49% of companies are providers of advanced solutions such as Internet of Things (IoT), robotics and drones. 22% of data analysis solutions, 16% of machines and equipment for the field. Then 7% produce components and electronic instruments, while 3% of them are agricultural production.

The most frequent solutions are systems that can be used across several agricultural sectors (53%). They are followed by those directed to the cereal sector (24%), fruit and vegetables (24%) and wine (16%). The focus on the Internet of Farming, which is enabled by 14% of the solutions offered, is growing, although very slowly. Almost 80% of the solutions are applicable during the cultivation phase, 13% support the planning phase. In addition, 4% stock monitoring and 3% company logistics.

In Italy awareness grows

A survey conducted by the Observatory on 1,467 farms shows that Italian companies are increasingly aware of the opportunities offered by paradigm 4.0 (85% of the 766 respondents). And how they increasingly use agricultural-oriented solutions 4.0 (55%).

Control of production costs and increase of production are the most urgent needs for companies. While the requirements related to data acquisition, processing and interpretation are considered important but not yet priority.

55% of farms say they use advanced machinery or technologies for crop planning, sowing, cultivation and harvesting. Among these, 45% have been doing so for more than five years. 30% of entrepreneurs are under 40 and a third are graduates, but age and qualifications do not significantly affect the adoption of 4.0 solutions. On the contrary, the size of land and the reference sectors. Under 10 hectares only 25% of farms adopt 4.0 solutions, compared to 65% of those above 100 hectares.

Digital Transformation and Blockchain

Digital technologies have a major impact on the efficiency and effectiveness of food traceability processes. 30% of companies adopting digital traceability solutions detect a reduction in data entry errors and the risk of tampering. 27% notice a decrease in the costs required for the activation of traceability procedures and 21% a saving of time for data collection.

Processes and relationships in the supply chain also benefit from these solutions. In particular, with regard to the costs of managing the stocks (15%), the reduction of the food waste (14%) and the consolidation of the relationships of supply chain (13%). 13% of companies also found sales to be increasing. While 14% highlight the need to focus on solutions to improve certification processes.

The 133 technological solutions for food traceability available on the Italian market intervene in the processes of unique identification, data acquisition, registration, analysis, integration and transmission. 59% of these solutions are still traditional: they transform data into digital and require an important human contribution. The most popular are software platforms for data recording, integration and processing (62%). Follow solutions that combine hardware and software tools (30%) and hardware tools such as IoT sensors and barcode readers (8%). Among the most advanced (42%), the most used are RFID (Radio-Frequency Identification, 20%), Cloud (19%), Big Data Analytics (14%) and IoT sensors (10%).

Interest in the application of blockchain and distributed ledger technologies in the food chain is growing. There are 42 international and Italian projects mapped from 2016 to 2018, more than doubled in the last year. These initiatives are implemented in a number of areas in 24% of cases. 21% are devoted to the meat supply chain, 17% to fruit and vegetables and 10% to cereals. In 50% of cases, there was a strong leadership role for distribution and transformation actors.

Startups

There are 500 international startups funded that offer digital solutions to the agricultural and agri-food sector surveyed by the Observatory, founded since 2012, for a total of 2.9 billion dollars of investments collected. The United States confirms its area with the highest density of startups (37%) and financing for new businesses (41%). They are followed by Europe (30% of startups and 35% of funding) and Asia (20% of startups and 20% of investments).

After the US, the individual countries most virtuous for ability to channel finance on new businesses are the United Kingdom (19%), Germany (12%), China (8%) and Israel (2%). Italy is the European country with the largest number of startups, but it has only a percentage of the total amount of finance received by new companies, with only €25.3 million.

International startups are divided between technology (31%) and service providers (16%), retailers (34%) and catering service providers (19%). More than half of startups (55%) are aimed at private customers, only 5% are active in a niche market. L While 37% offer technology services or products only to companies, in particular agricultural or zootechnical holdings (68%) and processing industries (10%).

Areas of interest

L’eCommerce is the main area of interest for startups, with 65% of new international companies active and an impact on financing of 84% of the total. Most eCommerce startups offer B2c solutions for the purchase of agri-food products (eCommerce Food, 57%), with innovative business models that aim to bring together agricultural producers and end consumers.

Following are the Food Delivery startups, platforms that compare the offers and allow you to order dishes (36%) and the re-groupers, platforms aimed at promoting the exchange of information, agricultural products and equipment (7%). Almost a quarter of the startups, however, operate in the Agriculture 4.0 (24% of startups and 11% of total funding). Here emerge mainly digital solutions for remote monitoring of land and crops (69%). They are followed by data analysis and integration services to support farmers in decision-making (27%). And from soil mapping tools and crops from crop yield data or drone images (24%). More marginal startups offer solutions to improve food quality (8%) and sustainability (4%) and those in precision livestock (3%).

Among the most relevant technologies for innovation in the agricultural sector are the data. 94% of startups in Agriculture 4.0 use them. 56% use IoT technologies to collect and transmit real-time data on environmental conditions and to monitor machine activities. Drones (24%) and robots for field activities (3%) follow. Data are also valuable for food quality. 78% of startups in this area are used, while 75% use the IoT.

The complete research of the Observatory Smart Agrifood of the School of Management of the Politecnico di Milano is available at this link.

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