Content uploaded by Andrei Mikhailov
Author content
All content in this area was uploaded by Andrei Mikhailov on Nov 22, 2018
Content may be subject to copyright.
Innovation in agribusiness: the case of agricultural technology new ventures
Andrei Mikhailov
Msc student on Management of Technology and Innovation at Federal University of Rio Grande do Sul
Fernanda Maciel Reichert
PhD professor on Management of Technology and Innovation at Federal University of Rio Grande do
Sul
Dieisson Pivoto
PhD on Agribusiness at Federal University of Rio Grande do Sul
Abstract
The present study aims to characterize a new type of business ventures – agtech companies. Researchers
conducted 3 interviews with the owners of agtechs located in Agtech valley and then by using a
quantitative approach, collected secondary data of 74 firms from the Brazilian largest agricultural
technology Science Park. This article contributes to the literature by characterizing the emerging type of
new technology-based ventures within the agribusiness context. The results show that agricultural
technology new ventures are involved in virtually all high technology agricultural activities and are among
the key solutions for the changes the agribusiness sector needs to go through to face productivity and
sustainability pressures. In addition, the findings suggest agribusiness can be a source of high technology
innovations. This brings considerable implications for the agribusiness studies.
Keywords: agtech; agricultural technology; innovation; agricultural technology new venture.
1. INTRODUCTION
Agricultural sector is one of the oldest and world’s largest economic sectors, with farm assets at
around US$ 2 trillion and net farm income of around US$ 120 billion (Dutia, 2014). In the last century,
with the emergency of manufacturing, chemical and biological technological innovations applied into the
crop production and pest control, the raw agricultural output saw considerable growth. Each year the world
population increases in more than 75 million people (World Bank, 2017) and it is expected to reach 9 billion
people by 2050 (FAO, 2009). Crop and meat consumption is growing in a number of emerging countries
(Dutia, 2014). There is also the phenomenon of “industry convergence”, where sectors beyond the
traditional fiber or food industries, such as bioenergy, bio-based plastic sector and pharmaceutical industry
are using agricultural raw materials (Boehlje, Roucan-Kane & Broring, 2011). This three-fold effect
contributes to enhancing final demand for agricultural crop production in the medium and long-term. In
addition, faced with increasing scarcity of natural resources, such as arable land and water, the agribusiness
sector needs to change to push the agricultural productivity to a new level.
These necessities make the agribusiness innovation one of the most relevant subjects for the world
food security and potential prosperity and growth of national economies. Thus, the number of new ventures
within agribusiness context is growing (Gray, Boehlje, Amanor-Boadu and Fulton, 2004). Agricultural
technology new ventures are key agents in the process of promoting management and technological changes
within the sector, so agribusinesses can achieve this goal.
The situation of this type of new ventures is that, unlike most other agribusiness companies, such
as food, beverages and tobacco (low-tech), chemical pesticides and agricultural machinery and equipment
(medium-tech), they may operate in high technology intensity fields, including information and
communication technology (ICT), advanced robotics and biotechnology. The concept of “agricultural
technology new ventures” is new for both business and academic literature and studies on it are still scarce,
therefore, the following question becomes relevant: what are the agricultural technology new ventures
and main features?
Particularly in the context of agricultural technology new ventures (agtechs) studies, one country
becomes an opportunity for researchers. Brazil is a relevant country to be analyzed by agribusiness
researchers, since it is one of the four largest food-producing countries (USDA, 2017) and the world’s
leader in tropical agricultural research (Embrapa, 2017). The country has the required economic scale for
testing a wide range of agricultural technologies, and it has the Agriculture School Eusébio de Queiroz of
State (ESALQ) University of Sao Paulo (USP), which is one of the Latin American and Caribbean (LAC)
top agribusiness schools. Likewise, Agtech Valley in Piracicaba city - one of the largest LAC agricultural
technology ecosystem, is also located in Brazil.
Thus, the present study aims to characterize the agtechs through a quantitative approach, by
conducting, firstly, interviews with agtech founders and then, a quantitative analysis of 74 companies. For
this purpose, we selected companies located in Piracicaba city and ESALQ agricultural technology Science
parks. Our results suggest that agricultural technology new ventures are usually small and medium new
ventures, which aim, by using different types of high technology, to reduce production costs and optimize
farm management within processes of planting, growing and harvesting of agricultural products, and to
connect the farms to its suppliers or consumers by digital platforms. Likewise, we found that initial capital
required to open an agtech is compatible with capital of other new ventures, in other words, the financial
contingencies seems to be reduced for agtechs at least at the initial stages of the business.
This article is structured as followed: section two presents a conceptual background; section three
describes the method used; the main findings are described in section four and; discussion is made in section
five; finally, there is a conclusion.
2. CONCEPTUAL BACKGROUND
The following literature review is composed by two subsections: the first one conceptualizes the
term “agtech” by applying academic and business literature review. The second subsection shows data on
agtech acquisitions as well as main agtech business accelerators.
2.1 Agricultural technology new ventures
Agriculture is the oldest economic sector in the world (Dutia, 2014). Until the mid 20th century,
the agricultural sector has been stimulated mainly by the manufacturing industry. After that, agribusiness
went through considerable changes due to chemical and biological innovations, and therefore fertilizers and
pesticides became more important (Dutia, 2014). In the end of the last century, new technologies emerged,
such as nanotechnology and biotechnology, mainly driven by big multinational companies. Nowadays,
since the agriculture sector still lacks the use of digital technologies (Jackson, 2016), it is opening
opportunities for a few high-tech innovations such as information and communication technology (ICT).
For that reason, agricultural technology new ventures are starting to take place on the market of agricultural
innovation activities (i.e. Agfunder, 2016; Cbinsights, 2017).
Although there are only few studies that focus on agricultural technology new ventures
1
, virtually
none of them being an article. Some business and professional reports contribute to understand this type of
business and to build a definition for the term. For instance, Gray, Boehlje, Amanour-Boadu and Fulton
(2004) used the terms “new ventures” and “agricultural innovation” within an article that aimed to assess
agricultural innovation. However, the focus of the study was predominantly on agricultural innovation
framework and value-added agricultural new ventures, but not so much on high technology companies. In
contrast, Dutia (2014) work used the term “agtech” to refer to emerging economic sector, which is
sustainable agricultural technology and “agtech startup” to refer to agricultural technology new ventures.
For him, innovation in agtechs could meet the demands of increasing population pressures and necessity of
more sustainable crop production.
Similarly, Dutia (2014) suggested a new approach for the agtech value chain, starting from
technological inputs, passing through crop and animal production, agricultural processing, manufacture and
distribution, and finishing on final consumption, such as food, fiber and energy products. In addition, he
cited several new companies that operate within the agtech sector. Robotics for agricultural activities, bio-
based processing and information technology inputs are among the fields those companies take part of.
In the same year, Nature Biotechnology (2014) published a report named “digital farming attracts
cash to agtech startups”. In this report, agricultural technology new ventures were treated as high-
technology start-ups which used, among other, microbiological knowledge, gene manipulation techniques,
artificial intelligence approach and even robots to increase yields, improve pest control and help farmers
make better decisions. Nature food security outlook (2017) focused on describing some of the most modern
agricultural technologies, such as drones for precision spraying, sensors and multispectral cameras, some
agtechs were cited also. Thus, Wolfert, Ge, Verdouw and Bogaardt (2017) argue that new technologies
such as internet of things (IoT) and cloud computing are expected to leverage the development of the use
of ICT in farm management cycle, as well as the introduction of more robots and artificial intelligence in
the agriculture sector.
Likewise, more recent work on agtechs include a range of business reports, such as Agfunder
investing report (2016), Cbinsights agtech report (2017) and some other. The CBinsights report (2017) is
particularly important as it brought a compilation of major agricultural technology new ventures, data on
venture capital investments, sector acquisitions and main business incubators and accelerators. In addition,
the agtechs may operate within robotics and drones manufacturing, precision agriculture and predictive
analytics, smart irrigation, farm management softwares, animal data, next generation farms and digital
marketplaces technologies (CBinsigths, 2017).
It can be supposed that once the term “ag tech” frequently refers to agricultural technology as a
sector (Dutia, 2014; Agfunder, 2016; Radicle, 2017), the term “agricultural technology new ventures” or
“agtech start-up” or simply “agtechs” characterizes the new technology-based ventures, frequently start-
ups, acting within high technological agribusiness activities (Nature Biotechnology, 2014; Agfunder, 2016;
Cbinsights, 2017). According to Samuel R. Allen, CEO of the John Deere company, “in the not-too distant
future, precision agriculture may evolve to the point that farmers will be able to monitor, manage and
measure the status of virtually every plant in the field…Precision farming is a big deal. It is in area almost
certain to shape, if not define, the future of our industry” (John Deere, 2016).
2.2 Agtech aquisition and general data
CBinsights (2017) pointed out that there is a growing interest in agribusiness multinational
companies (MNC) funding, acquiring or sustaining hubs that help promote the creation and development
1
Searching ("ag tech*" OR "agtech*" OR "agri tech*" OR "agritech*") OR (("agriculture technology*" OR
"agricultural technology*" ) AND "new venture*") in search engines Scopus and Web of results have shown
that only five publications have fitted the criteria, including Dutia (2014) publication, and two Nature report
(2014, 2017).
of agtech companies. For instance, in the US market the corporations investment in the agtechs increased
from 5% in 2013 to 24% in the period from January to October of 2017 (CBinsights, 2017). Table 1 shows
the largest agtech acquisitions since 2013.
Table 2- Largest agtechs acquisitions from 2013 to 2017
Source: CBinsigths, 2017
As it can be observed at Table 1, “The Climate Corporation”, which is the agtech with biggest
valuation (of US$ 1.1 billion), received US$ 108.8 million in capital from the investors until the acquisition
date. The main field of the company acts is ICT, thus it aims to provide a set of farm-related information to
its customers, as well as to support the farmers’ decision-making process.
The second biggest acquisition occurred in 2017, when John Deere acquired “Blue river
technology”. This agtech is specialized in smart agriculture machinery and equipment, including drones,
and until the acquisition, was able to raise more than US$ 30 million in investment. Finally, acquisition by
DuPont in 2017 of “Granular”, which is the agtech specialized in farm management activities, was the third
biggest agtech deal.
Apart from a number of acquisitions, the number of multinational companies starting to take part
in agtech accelerators is constantly growing. For instance, according to CBinsights report (2017), Bayer is
involved with “AgTech accelerator” and “Radicle – accelerating agtech innovation”. DuPont, one of the
worlds’ biggest chemical companies, has presence in “Cultivation corridor”, “Iowa AgriTech Accelerator”
and “Radicle – accelerating agtech innovation”. John Deere is involved with “Cultivation corridor” and
“Iowa AgriTech Accelerator”. In addition, Syngenta, the MNC specialized in seeds and chemicals for
agriculture, takes part on “AgTech accelerator” and LandLakes, agribusiness and food company, in
“Techstars”.
Likewise, the world economy has observed a fast growing number of accelerators, business
incubators, science and technology parks and even venture capital firms focused specifically on
agribusiness technology companies. According to Agfunder, in 2016 at least 20 new accelerators dedicated
to agricultural technology startups have been founded, and the companies at the seed-stage received 77%
more investment than in the previous year (Nature biotechnology, 2017).
Specifically, in Brazil, there is an accelerator SPVentures, which focusses considerable part of its
investments on agtechs (SPVentures, 2017; CBinsigths, 2017). Likewise, in the context of agribusiness,
currently Brazil is one of biggest food producers as well as one of the largest agricultural commodities
exporter. Still, the Brazilian agribusiness not always held this position. A good example of that is that in
the beginning of 1960s the country used to import up to 30% of all internally consumed food (Scheinkman,
2017, p. 13).
Scheinkman (2017) argues that a gradual transformation of Brazil from food importer in 1970s to
largest agricultural commodities exporter in the XXIs occurred partially through adaptation of north seeds
and cultures to tropical agriculture climate. This managed to be achieved with the participation of the
Brazilian Company of Agribusiness (EMBRAPA), a state Brazilian company, currently with 2463 PhD and
MSc researchers (EMBRAPA, 2017), which aims to develop technological innovations for Brazilian
agribusiness. Their achievements generated technology improvements that allowed the agricultural
exploitation of Cerrado - biome which is responsible for almost half of country’s grain production
(Scheinkman, 2017, p. 13).
In addition, the country has Agriculture School Eusébio de Queiroz of State University of Sao
Paulo (ESALQ-USP), which conducts agricultural R&D since the beginning of the twentieth century. In
1994 within Esalq was created an agricultural and zootechnical business incubator, which later became the
biggest agricultural technology science park of Brazil.
3. METHOD
The present article is a descriptive and exploratory study which uses a quantitative and descriptive
approach with predominantly secondary data gathering (Figure 1). Additionally, three interviews with
CEOs and managers of three agtechs was conducted.
The interviews, complemented with information on website of the agtechs, took place in September
of 2017 in Piracicaba city, also denominated as AgTech Valley. The quantitative phase focused on agtechs
located at Esalqtec Science Park - biggest agricultural technology park of the country. It is essential to argue
that Piracicaba city has less than 0,2% of country’ population (IBGE. 2017), but it concentrates around
18,6% of all Brazilian agtechs (ESALQ, 2017), and for that reason represents an opportunity for analyzing
a considerable number of agtechs from a range of different technological fields. By using this approach,
authors aimed to collect wider range of information on agricultural technology new ventures.
Figure 1 – research approach
The second phase occurred in December of 2017, when researchers conducted a quantitative
analysis of all 74 associated and incubated companies of Esalqtec science park. The Esalqtec operates
within Agriculture School Eusébio de Queiroz of State University of Sao Paulo (USP) – Esalq University,
which is one of the first agribusiness R&D producer of the country (Scheinkman, 2017, p. 13). The analysis
occurred exclusively through secondary data gathering, aiming to collect information on companies’
activities, main technological field applied, foundation date, firms’ legal nature and current equity capital.
It is important to point out that data on firms’ legal nature, foundation date, once not available at the website,
was collected through Receita Federal - Internal Revenue Service of Republic of Brazil.
4. RESULTS
The description of main findings is divided between two sections. The first one shows information
provided by the agtech owners. The second presents a quantitative study of incubated and associated firms
of Esalqtec.
4.1 Interviews
In this section, we present the main points of conducted interviews, as well as the context of
companies’ foundation, main difficulties and the managers’ perception about the sector of agtech in Brazil.
All companies are new ventures under four year old which operate within different fields of agriculture
technology as are in different stages of product commercialization as well.
Alpha company
The following interview was conducted directly with the company’ owner, who has PhD degree in
Veterinary medicine related field, and by the date of the interview, the company, named Alpha, had been
operating for eight months. According to the interviewed, Alpha started its activities after initial investment
coming from public funding state program, which aims to promote startups and new ventures development.
Currently, Alpha has four employees and all of them, including the owner, receive a monthly payment from
the public investment funding organization. Two of the employees have a Bachelor degree and two are
undergraduate students. The purpose of the company is to create a software that intends to enhance the meat
quality control for the retail and wholesale commercialization. Some countries, particularly Australia and
United States use meat quality control similar to that one, but in Brazil, which is one of the biggest meat
producing countries, it is still considerably underdeveloped. The company now is concerned with
developing a prototype of the service to be commercialized, and has no considerable background on how
the created service could be commercialized. It argues that possible options are partnerships with meat
packing industries and quality certificates for meat producers. According to the company’s CEO, one of
the difficulties of agtechs in Brazil is the financial sourcing during the pre-commercialization stage;
additionally, these types of investment usually come from public agencies, while private investments
become available only at the later stages of new venture growth. According to him, that happens because
“In Brazil the private investor needs the final product, he rarely invests in ideas”.
Beta company
Two business partners founded Beta company two years ago. The first one has a Bachelor degree
in agronomy and a PhD in biology related field. The other founder has MSc degree in other field and is
Master of Business Administration (MBA), and is about to start his PhD studies. The idea of their business
appeared seven years ago, when one of the founders worked in the MNC related to agribusiness. The
company has a product that allows to investigate the effect of plant diseases (insects, fungi, plants) through
mechanical appliance that inoculates the disease inside the plant and thus provides a controlled environment
to investigate the hindquarters effects. In other words, the Beta company is involved in a creation of “in-
field” disease analysis lab. According to the founder, the company business is about R&D activities, they
already have a product prototype that currently is being tested in some farms. Company has ten employees
with specific academic background, for instance, among them there are employees with a Bachelor degree
in chemistry, a Biologist, a Mechanical engineer that works on process management and even an
Agricultural technician. Still, the interviewed founder considers the team “quite small” for the research
purposes. Additionally the founder argued that one of the main difficulties of their business, that is,
agricultural disease-related R&D is the scalability, which contrast with ICT companies, but also is not
common among other biology and biotechnology companies. Therefore, there is always a motivation to
“sell the venture [to the bigger company]”. The owner added the difficulty in sourcing financial resources
especially in the first stages of new venture, and that for agtech is important to consider the angel
investment. Similarly, the founder stressed the importance of establishing goals and making plans for new
ventures activities, otherwise “you will not get there”. In contrast, the Beta actively uses external counseling
and consultancy services in order to make better planning, and intends to move to a new location in order
to provide the required physical structure for company growth.
Gama company
This interview with third company was conducted with a sales manager. According to him, the
company was founded as a spin-off of a larger one, and begun its activities in 2014. Still, the solid
commercialization, according to interviewed, started around 2015. Their business is about integrated farm
management technology and the founder of the company has MSc degree in the same field. Additionally,
the company received investment from private investors, with amount of more than US $ 500.000.
Currently the company has a relatively representative client portfolio, having more than 20 clients mainly
among big farms of at least 2000 ha. As told before, the agtech is a high technology company which offers
high-tech solutions for quiet low-tech sector, which is agribusiness. To overcome the difficulties related to
commercialization of their products, the company provides training for agribusiness consultants, which, in
turn, translate the obtained information into the more easily understandable language for the final client,
the farmer. The trainings, according to the manager, provide in depth discussion of presented issues, and
their level can be compared to a level of graduate programs in agribusiness. The company is not limiting
its’ activities to Brazil, and is planning in the future to expand to African as well as European continent.
According to the interviewed manager, the main problem in transform a startup into a successful company
is to generate a unique value proposition to the client and one that would be difficult to the competitors to
imitate. Likewise, the interviewed argued that recently, during his university career, he had some lessons
on agricultural digital technologies, but they were radically less detailed and developed compared to the
solutions that agtechs currently offer to the market.
4.2 Esalqtec science park
In total, EsalqTec Science Park has seventy-four companies, including nine incubated firms and
sixty five associated firms, with different types of linkage with it. Among incubator firms, it can be found
out companies that work with biotechnology (IBI agentes biológicos), information and communication
technology (TIC), such as Smartagri, chemical sector (Orion quimica) as well as aquaculture (Symbiotec).
Besides there are only nine firms being incubated, there are four more companies which has its headquarters
or a laboratory inside the incubator facilities. In total, among seventy-four associated and incubated firms
of EsalqTec, eighteen are located either in business incubators or science parks.
In addition, it was found that thirty-one companies are in Piracicaba city. Twenty-eight firms are
located at the SP state, but not at Piracicaba. Six companies have their headquarters in Brazil, but outside
SP state. Finally, five firms are located internationally. For instance, Biomin is in Kansas, USA, Merieux
nutrisciences, multinational company (MNC) working in twenty-one countries with food quality and
agrochemical products, among other fields, has its’ headquarters in Chicago, USA. Novozymes, on the other
side, is a Dutch company specialized in biotechnology and is one of the world leaders in biological
solutions.
Table 3: age of the companies and equity capital, mean (in US $) and standard deviation
Source: elaborated by the authors (2017)
As it can be observed in Table 2, for the companies that were founded less than one year ago, the
mean for equity capital is US $ 2.778,00 and it’s important to add that the smallest value was less than US$
1000.00 and the biggest was more than US$ 6000.00. In the case of companies which has age of at least 1
year ago but not more than 3 years, the mean is US$ 10406,00. By analyzing this numbers, it can be
hypothesized that, even Brazil is considered middle income economy (World Bank, 2017), the entry
barriers in terms of need for initial financial capital required for starting an agtech, can be low. It’s essential
to consider that among companies of first two layers, five are either incubated or have its headquarters
inside of the business incubator or science park. This, as frequently pointed by the scientific literature, helps
companies to decrease financial cost such as rent spending, offer the use specific technical installations and
equipment and to provide access to human resources.
In addition, it can be found that companies with age between 1 and 2,99 years showed more than
four-fold increase of equity capital (3,75) comparing with companies that have less than one year. Similarly,
companies with age between 3 and 4,99 years presented almost two and half times increase (2,21) in terms
of equity capital when compared to companies of the previous age group. From this number, it can be
hypothesized that those companies which stay in the market tend to increase their equity capital year by
year. Authors identified five main technological fields applied by the companies. Information and
communication technology (ICT) was the most used one, having twenty three firms using it as a main
technological source for its core activities. Fifteen companies showed chemical field as the main source of
technology, among them authors found out different types of organization, such as laboratories (ASR
laboratory), research institutes (Instituto de Homeopatia Rural) and MNC, such as Merieux nutrisciences.
The third most used technological field was a biotechnology, that is, genetic manipulation applied for better
disease control and crop productivity. Among the firms working with it researchers can cite such firms as
Itatijuca biotech, Invitro palm, Gênica inovação biotecnológica. In addition, two companies operated in
biology and/or microbiology field, that is, they used the microorganisms for improving agriculture
production or disease control. Agromic is one of those, founded in 2004, provides microorganisms for crop
cultivation, but without genetic modification. Fit instrument technology was the only company identified
working with a field of physics, specifically electromagnetic nuclear resonance for agricultural needs.
Finally, eighteen companies used not specific scientific field to conduct their activities and was mainly
specialized, among in consultancy or operation management services.
Authors analyzed society structure of identified firms. Researchers found that the majority of
analyzed companies (36 out of 46) had structure as “company limited”. Among those thirty-three were
“entrepreneurial society limited” and two were “simple society limited”. Six companies were identified as
“anonymous closed society” and one as “private association”.
From these results, it can be hypothesized that founders of agtechs seek to limit it financial
responsibility while conducting business activities. Thus, considering the risk that new technology venture
presents for owners and investors (Hyytinen et al., 2015), from the one hand, and agribusiness sector
uncertainties from the other hand (Boehlje et al., 2011), this decision seems to be in line with presented
scenario. Concerning the funding process, within one of the companies, as identified on its website, all the
founders was benefited by FAPESP governmental fund, that is, the SP state fund that invests in the new
ventures at seed stages.
In sum, thirty out of fifty-five Esalqtec companies have less than 7 years, and particularly four out
of six directly incubated companies with available foundation date have begun their activities less than 4
years ago. These numbers are close to Zahra, Ireland and Hitt (2000) cut-off of 6 years for a new ventures.
Additionally, it is important to argue that among associated companies, there are some large agribusiness
companies which are not necessary technological companies, and therefore the percentage of new ventures
within high technological intensity companies may be even higher than it did. Likewise, agtechs are
engaged also in high-technology industries, such as precision instruments and communication instruments,
aeronautics (OECD, 2011) through the launching of products and services such as drone production,
precision agriculture, advanced sensors, “in-field” labs;
5. DISCUSSION AND IMPLICATION OF KEY FINDINGS
All three interviewed companies, from different growth stages, present different necessities. The
Alpha company, at the pre-commercialization stage, needs to develop an applicable product prototype. The
Beta company already has a product prototype and needs to create a scalability to start the product mass
commercialization. Finally, the Gama company already has a considerable client portfolio, but, as stated
by the interviewed manager, is still a start-up, not a mature company (Freeman; Engel, 2007), and is still
taking part of the investment rounds with venture capitalists (VCs).
In addition, we hypothesize the following possibility: once tropical climate allows to harvest up to
three yields on the same land unit each year, it will be easier to test some new technological appliances
developed in Brazil than doing the same under conditions of temperate climate. In other words, Brazilian
territory as well as other tropical climate land units may be a good alternative to test new agricultural
technologies than to do the same within the countries of colder climates. That fact could be an argument
for government and Brazilian’s public institutions to increase a financial and managerial support for agtechs
in order to stimulate the economic growth and development.
We argue another feature of agtechs: in general, their growth stages has longer duration than the
other business ventures. This issue was also was pointed out by the founder of Gama company. Therefore,
this statement is in line with Boehlje et al. (2011), they argue that the agribusiness is subjected to the
biological production processes characterized by long production cycles, which means that in general
production adjustments to changing conditions may be slow lethargic. Particularly, the scalability
difficulties is even more prominent for those agtechs operating within biotechnology field. The implication
of these findings is that the business incubators and Science parks managers need to pay attention to this
issue once imposing incubation time limits to agtechs. The agribusiness and technology policy-makers need
to do the same for concession of governmental grants. Finally, those who invest in agribusiness will need
to be more patient concerning the speed of the financial returns.
Likewise, we argue the diversity of firms that compose Esalqtec Science Park. It includes a wide
range of companies, from small size new ventures to MNC and research institutes. Researchers identified
also a number of technological field used by agtechs, such as TIC, biotechnology, biology and
microbiology, chemical field, but the nanotechnology field was missing. This finding fits the Parisi et al.
(2014) argument, who stated that nanotechnology is a marginal sector in the technological agriculture due
to scalability difficulties and sometimes not enough economic interests from the market. However, the
presence of such a diverse number of high technology fields show to the research community and to the
market that, unlike a number of scholars used to thought, agribusiness can be a large source of technological
innovations.
Governments, investors and food security organizations need pay more attention on innovations
coming from this sector in order to deal with the pressures of population growth, industry convergence and
higher food consumption. Thus, the agribusiness companies do not need to look always beyond the industry
borders to meet with the high technology innovations: they can found it within the industry also.
6. CONCLUSION
Respecting the objective of the present article, we suggest that agtechs are usually small and
medium new ventures, sometimes start-ups, which aim, by using any kind of high technologies, to
improve the process of planting, growing and harvesting of agricultural products, or facilitating the
farm management or connection of the farm or farmer to its stakeholders, like clients or suppliers.
Besides the contributions of the article, we argue some limitations. For instance, due to the
difficulty on finding articles about agtech sector, we needed to use business and technical reports instead
of academic literature. Esalqtec Science Park, despite being one of the major agricultural technology hubs
of LAC, is located only at Piracicaba city, so we cannot generalize the finding to the whole agtech
population. Likewise, the use of secondary data in the quantitative analysis limited the range of information
available to the researchers. Finally, this study is one of the first academic articles about agtechs and so the
obtained results showed difficult to be compared with other studies.
For the future studies, we suggest to deepen the agtechs analysis by conducting case studies with
bigger number of firms, and to apply a quantitative study not with secondary, but with field data as well.
The interconnectedness of different knowledge fields within agricultural technology fields is relatively
common, so the typology for agtechs’ main knowledge sources and agtechs as well need further studies.
As argued by Dutia (2014), agribusiness is one of the world biggest economic sectors and it is imperative
for the academic and business scholars to pay attention to the changes that occur there.
REFERENCES
Agfunder. Available at: https://agfunder.com/ Accessed at: October 10th, 2017
Boehlje, M., Roucan-Kane, M., & Bröring, S. (2011). Future agribusiness challenges: Strategic uncertainty,
innovation and structural change. International Food and Agribusiness Management Review, 14(5), 53-82.
CB Insight. Available at: https://www.cbinsights.com/research/agriculture-tech-market-map-company-list/
. Accessed at September 3th, 2017.
Dutia, S. G. (2014). Agtech: Challenges and opportunities for sustainable growth. innovations, 9(1-2), 161-
193.
Embrapa. Available at: www.embrapa.org Accessed at: dec 15th 2017
Esalqtec. Available at: https://agfunder.com/ Accessed at: 14th December 2017
Faostat Data. Available at: http://www.fao.org/faostat/en/#data Accessed at: 17th December, 2017
Freeman, J., & Engel, J. S. (2007). Models of innovation: Startups and mature corporations. California
Management Review, 50(1), 94-119.
Freeman, J., & Engel, J. S. (2007). Models of innovation: Startups and mature corporations. California
Management Review, 50(1), 94-119.
Gray, A., Boehlje, M., Amanor-Boadu, V., & Fulton, J. (2004). Agricultural innovation and new ventures:
assessing the commercial potential. American Journal of Agricultural Economics, 86(5), 1322-1329.
Boehlje, M., Roucan-Kane, M., & Bröring, S. (2011). Future agribusiness challenges: Strategic uncertainty,
innovation and structural change. International Food and Agribusiness Management Review, 14(5), 53-82.
John Deere. Available at: https://www.deere.ca/en_CA/corporate/our_company Accessed at: 14th
December 2017
Hyytinen, A., Pajarinen, M., & Rouvinen, P. (2015). Does innovativeness reduce startup survival
rates? Journal of Business Venturing, 30(4), 564-581.
IBGE – Brazilian Institute of Research and Statistics. Available at: https://www.ibge.gov.br/ Accessed at:
20th march, 2018
Kazanjian, R. K. (1988). Relation of dominant problems to stages of growth in technology-based new
ventures. Academy of management journal, 31(2), 257-279.
King, R. P., Boehlje, M., Cook, M. L., & Sonka, S. T. (2010). Agribusiness economics and
management. American Journal of Agricultural Economics, 92(2), 554-570.
Nature biotechnology (2017). Digital farming attracts cash to agtech startups, vol 35. Available at:
https://www.nature.com/nbt/ Accessed at: 14th December 2017
Nature food security outlook (2017). The future of agriculture, vol. 544
OECD Isic Revision 3. Available at: https://www.oecd.org/sti/ind/48350231.pdf Accessed at: 14th
December 2017
Parisi, C., Vigani, M., & Rodríguez-Cerezo, E. (2015). Agricultural nanotechnologies: what are the current
possibilities? Nano Today, 10(2), 124-127.
USDA - United States Department of Agriculture. (2017). World agricultural production report. Foreign
Agricultural Service. Circular Series, WAP 12-17, December 2017.
Vieira Filho, J. E. R., & Fishlow, A. (2017). Agricultura e indústria no Brasil: inovação e competitividade.
World Bank Data. Available at: https://data.worldbank.org/ Accessed at September 3th, 2017.
Zahra, S. A., Ireland, R. D., & Hitt, M. A. (2000). International expansion by new venture firms:
International diversity, mode of market entry, technological learning, and performance. Academy of
Management journal, 43(5), 925-950.
