With An Aim To Make Food Accessible And Equitable, The GCC Agtech Revolution Has Begun The industry enablers that can successfully fundraise and commercialize their technology today will become the Teslas and SpaceXs of the agtech world tomorrow.
By Stuart Oda •
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The coronavirus pandemic brought to light the interconnectedness of our global economy and the fragility of our supply chain, particularly when it comes to fresh food. In reaction to these disruptions, governments around the world have announced various incentive programs to promote local food production in an effort to improve food and nutritional security.
One of the most prominent of these programs was announced on April 8 by the Singapore government: US$30 million grant to help local farmers ramp up food production in the city state to accelerate their "30x30" initiative, an ambitious plan to produce 30% of the country's nutritional needs by 2030.
Not to be outdone, in the span of a few short years, the UAE has elevated agricultural technology from the fringes into the spotlight. Agtech is now talked about in the same breath and institutional circles as space exploration and artificial intelligence (AI).
Examples of the UAE's commitment to food security abound: the world's first Ministry of State for Food Security was established in 2017, Abu Dhabi's AED1 billion Ghadan Agtech initiative was launched in 2019, and Dubai's Food Tech Valley was announced in 2021. Needless to say, the UAE government has actively supported the development of the agtech ecosystem.
This has, of course, all been in the pursuit of realizing the ambitious UAE Food Security Strategy put forth by UAE Minister of Climate Change and Enviroment, H.E. Mariam bint Mohammed Saeed Hareb Almheiri, with the ultimate goal of becoming the most food secure country on the planet by 2051.
With strong backing from the UAE government, the private sector has started building out the physical and digital infrastructure to achieve the UAE Food Security Office's mission to enable "all citizens and residents of the UAE to have access to healthy, safe, nutritious and sufficient food at reasonable prices in all circumstances, including emergencies and crisis."
Related: The Need For Innovation In The Middle East's Food Supply Chain
Image courtesy Alesca Life.
While the scale and solutions may vary, the private sector companies deploying the latest technology to localize food production fall into two broad categories: "integrator operators" and "industry enablers."
Integrator operators work closely with global equipment suppliers to purchase or license technology to build commercial-scale farms. Their business model is focused on owning and operating farms and selling branded fresh produce. This group often launches small-scale pilot projects to validate the performance and robustness of the systems in the harsh Middle Eastern climate, and then proceed to larger-scale commercial deployments. One of the standout integrator operators in the region is Pure Harvest, an operator of high tech greenhouses growing premium quality, fresh produce year round across the Middle East.
The obvious advantage of this model is time-to-market and lower entry barriers, and these companies have been instrumental in kickstarting the first wave of tech-driven local food production and community engagement.
However, integrator operators often outsource R&D to their technology partners, and future operational improvements and critical equipment access depend almost entirely on external suppliers. Therefore, the long-term competitiveness of integrator operators depends on their ability to scale quickly, diversify their supplier base, and internalize core technical competencies to maintain their operational profitability.
The second group leading the agtech revolution in the GCC are the industry enablers. Many of the industry enablers have spent nearly a decade or more developing patented hardware, software, and automation systems to sell to businesses and governments looking for turnkey indoor farms and agtech solutions. Industry enablers innovate at the material, component, and source code level, ranging from proprietary light emitting diode (LED) modules and micro-controllers, to custom operational management software and AI/machine learning applications.
My company, Alesca Life, is one of the leading industry enablers in the region with partnerships and projects in the UAE and Saudi Arabia. Their turnkey indoor farms have been deployed for government agencies, state-owned entities, and corporate customers to localize food production for food security projects, employee dining halls, and residential real estate communities.
Industry enablers in the agtech ecosystem share the same challenges and opportunities as other hardware-centric industries like autonomous vehicles and spacetech. They require significantly more time and funding to develop and commercialize their core technology, but this investment translates into medium to long-term competitiveness and profitability. The industry enablers that can successfully fundraise and commercialize their technology today will become the Teslas and SpaceXs of the agtech world tomorrow.
Regardless of what "the new normal" shakes out to be, residents in the UAE and broader GCC region can be hopeful that the agtech revolution is very much underway, and that fresh and nutritious food will only become more accessible and equitable, as the industry continues to grow and mature.
Related: Building New Ecosystems: The Food Tech Revolution Is Here
