by Jaleh Daie, Ph.D., chairman/founder of AgFood Tech at the Band of Angels
“Nothing lasts forever. Everything is a change waiting to happen.”
The ides of March, vintage 2020 was a moment in history that brought home the notion of back to basics like no other time in modern history: without food, health, and shelter, economic metrics need not apply.
In this two-part series, I will present a case that at this post pandemic juncture, along with global mega trends such as rapid growth in world population, and middle-class expansion in Asia, we must exploit the convergence of digital age with biology century and Asia century to invest in sustainable and resilient food systems. The backdrop of a bioeconomy offers great opportunities for investment across the broad AgFood innovation spectrum to help farmers and consumers, and to mitigate environmental impact, all bolstered by a new generation of biologists (Gen B).
Part I. The Bioeconomy Era: Is a Biology Generation Born with Convergence of Digital Age and Bio Century?
State of Play
The world population will reach 10 billion by 2050, more than half of which is Asian, requiring 70 percent increase in food production. As Asia rises, the middle class in Asia Pacific alone will be five times that of Europe and 10 times North America. Food security dynamics in Asia are complex. While Asia is home to nearly two-thirds of the world’s hungry, the rapid rise in the middle class has put enormous pressure on protein demand. To meet such demand, production must increase by more than 50 percent by 2030.
Global food security challenges are so vexing because of the dichotomy of hunger and obesity. Nearly 700 million are hungry, including 260 million on the brink of starvation, yet more than two billion are overweight with poor metabolic health due to malnourishment. Therefore, to truly address global food security, we must place equal emphasis on nutrition to remedy another pandemic—chronic illnesses and the associated metabolic ailments. The recent United Nations Global Report on Food Crisis warns that “the world is at risk of widespread famines of ‘biblical proportions.’” It is becoming increasingly clear that we cannot continue inefficient past practices, and that the only way to avert this tragedy is through transformative innovation in food production and distribution.
In many developing economies, especially in greater Asia, food and agriculture value chains have been major pillars of GDP, employment, and social stability. Even before the COVID-19 pandemic, the world had been facing food and nutrition challenges. Post pandemic the system is facing additional stress, forcing both food importers and exporters to rethink their short- and long-term food security plans with full consideration of the fact that decades of globalization have resulted in centralized production and distribution systems, creating fragilities in the supply chains.
Moreover, food has always been a national security concern. Increasingly, food and agriculture are considered core foci of national security. For example, the EU Commission just released its Farm to Fork and Biodiversity strategy aiming to create a more “robust, secure and sustainable food system”. China has allocated large sums of funds to innovation in food and agriculture, and Singapore has announced their 30×30 Strategy to produce 30 percent of their food needs by 2030. Clearly, national security considerations are going beyond trade and availability issues to self-reliance and maintaining sustainable, regionally produced food. This priority is almost foreordained since agriculture is one of the least digitized industries and is ripe with ample opportunities and low hanging fruit for a digital roadmap to a food secure future. Thankfully, appetite for innovation in critical need areas such as health, food, and agriculture are strong, and the true and tested mantra of disrupt or be disrupted persists.
It is too early to know how long the current displacements will last, what fallouts will impact food availability patterns, and how food importers and exporters might realign with shifting supply and demand patterns. To achieve the massive goal of global food security, international coordination and cooperation are essential. Yet, geopolitical tensions are rising with bifurcation of alignments among G7 and G20 nations at a time when ensuring the integrity and cohesiveness of the global health and food supplies and their respective industries is essential. The knee-jerk reaction has been one of “you are with us or not.” For example, China has been extending carrots to Europe, Africa, and others in its sphere of influence with health supplies, but tensions are rising as it faces a backlash for how it handled information sharing about the COVID-19 outbreak
The Convergence of Biology Century and Asia Century in the Digital Age
The convergence of digital and biology ushered in and is unleashing the bioeconomy era. According to a McKinsey report (Bio-Revolution, May 2020) over 60 percent of all global physical input could be made using biological means, using currently available technologies. A legacy of COVID-19 is a sure acceleration of this mega trend. The rise of the Asian middle class has had an enormous impact on food, especially animal protein demand.
The pandemic upended normalcy, especially how, where, and what food we buy and eat, going back to the basics of food, health, and shelter in a span of a few weeks. The behavior changes and rapid pace of adoption of new ways of life have been nothing short of astonishing. The great acceleration of remote-machines-robotics-digital pulled forward five years of digitalization in a mere five weeks, resulting in several new trends, most of which will be with us for the foreseeable future, and likely permanently.
As we work to meet the immediate food challenges, and address shifting consumption patterns, consideration must be given to whether sustainability, climate change, and sustainable development goals will remain focal points as they were before the pandemic when there was consensus on global issues such as climate change, reflecting a sense of the greater good (for all of us, everywhere). In just a few weeks we seem to have swung to a me, here mindset. Widespread hoarding of supplies, including by nations, breaking supply chains, and asset devaluation offer clues. However, this is neither the time nor a reason to ignore important macro issues. Agriculture is a major contributor of greenhouse gas emissions and thus must become sustainable and central to addressing climate change—killing two birds with one stone.
Post Pandemic Fall-Outs and Emerging Trends
The post pandemic represents many disharmonies- macro and micro crosscurrents are vexing and fraught with dichotomies, paradoxes, bifurcations, and divergences, making prediction of how and where things will ultimately settle difficult. Many SMEs are facing financial hardship or closure. Big is getting bigger, as big box retailers are increasingly selling non-essentials leading to acceleration of SME closures.
We may be entering an era of back to basics in which economic expansion may take a back seat to securing food supplies and protecting public health. More importantly, the winners in this race will be those who can rapidly translate these challenges into pragmatic and positive outcomes to maintain their competitive edge. Against this backdrop of major challenges and a fraught post- COVID-19 world, several themes are unfolding, each of which offer great investment opportunities:
— Deglobalization. Decades of globalization and centralization in pursuit of efficiency and profit have laid bare the weaknesses along the entire food value chain. Global food supply chains are breaking as growers and labor-intensive food processing centers face labor shortages. There is a new model of just-in-case vs the current just-in-time one. The weaknesses point to the need for more distributed systems of the supply chain to prevent a single weak link to cause a domino effect. When, where, and how such disruptions result in food scarcity and inflationary pressures is not clear but could exacerbate global food insecurity.
— Local and regional production, reshoring, and onshoring are getting due attention as nations aim to become more self-reliant using indoor and vertical farming, among other things. At the micro level we are witnessing a flight to suburbia in search of “earth”, revival of victory gardens, and urban farming around big cities.
— High unemployment. A prolonged period of high employment is setting in, requiring new ways to ensure accessibility of affordable healthy food for all. High unemployment would lower demand in discretionary spending and disruptions in food supplies would mean inflationary pressure for essential consumer staples. No one would win under such a scenario (for example, while cattle prices are falling, meat retail prices are rocketing up and meat packers cannot profit from the situation). This bifurcation will test the resilience of our systems. Despite such turbulence, I am confident that innovation in AgFood tech along with appropriate policies can address such emerging themes.
— Homing, home cooking, ecommerce, direct to consumer (DTC) and home delivery of food, especially locally grown are taking hold. While consumers’ exodus to online had already happened, food was the outlier with modest moves. Not any longer.
— Heightened health awareness is leading to discerning consumers demanding clean, healthy food at reasonable prices, delivered to them in convenient, hygienic, and mostly touchless ways. Automation and robotics will provide solutions and could see rapid expansion in use. Robots are expected to become commonplace.
— Food for health and food as medicine are taking new meaning and are becoming mainstream, from nice to do to must do. Genetic advances are enabling personalized nutrition leading to customized diets as wellness tools. Functional ingredients are finding their way into more foods as consumers rethink their food intake choices.
— Biologists have known for over 20 years that the 21st century belonged to biology. Now, the public at large is fully aware of the unbound power of biology–both destructive and its miraculous ability to solve troubling problems in health, agriculture, food, fiber, energy, and materials. There is talk of AgFoodShot—a serious national commitment in pursuit of biological discoveries, inventions, and applications.
— New biotech and synthetic biology tools such as gene editing are solving longstanding problems. Many products are already in the market and a full pipeline is awaiting entry. Governments are likely to ease regulations to fast track commercialization of new biology-based critical needs and products.
A Path Forward: Harnessing the Power of Biology
As we navigate this brave new world of uncertainties, a decades-long generational shift is unfolding with the emergence of a consumer- and health-centric era. The post-pandemic world is fraught with vulnerabilities in the global food supply chains, potential shortages, widespread hunger, and the dichotomy of inflation in necessities and deflation in luxuries. In the short-to-medium term it is hard to know how various crosscurrents will play out. In the long run, it is certain that human ingenuity will overcome the challenges to build a resilient food system. We will innovate our way out of this crisis too, as humanity has done over millennia.
This new era of bioeconomy, digital agriculture, and food, and biotech is here to stay. It is unfolding in the most astonishing and rewarding ways. My realistic hope, and indeed, expectation, is that this crisis will spawn a global Sputnik 2.0: the emergence of a biotech generation – Gen B – much as the launch of the Sputnik spaceship kicked the baby boomer generation into choosing science and technology careers in large numbers during the century of physics and chemistry. Gen B is the new Gen Z.
Despite the pains and tragedy of loss of life, hunger, and poverty, one thing is clear – the human ingenuity will, at some point and fashion, help resolve the current uncertainties and challenges. The winners will understand, embrace, and exploit the enormous momentum in the bioeconomy and will profit from it. Governments and nations must facilitate and help advance the cause of ensuring healthy, affordable food through innovation in sustainable agriculture. They can sharpen their competitive edge by heeding the opportunities presented by the bioeconomy and ceasing the dawn of the century of biology.
NOTE: An Asia/Australia-focused version of this article appeared in an essay by Jaleh Daie in Disruptive Asia, Volume 4, May 2020.
ABOUT THE AUTHOR
Dr. Jaleh Daie is a global thought leader and partner at Aurora Equity investing alongside family offices in early stage startups. She is board director and Women in Technology International Hall of Famer. Concurrently, she is chairman/founder of AgFood Tech at the Band of Angels. She started her career at UW-Madison and Rutgers University where she achieved the rank of full professor in six years, was first woman chair of an agronomy department, founder and chief executive of an interdisciplinary center, and senior science advisor to the president. Simultaneously, she managed three administrative operations while running an externally funded research program resulting in over 100 peer reviewed papers in top journals, was elected as president of the national Association for Women in Science and first woman chairman of the Council of Scientific Society Presidents, among other roles. Dr. Daie has served as head of STEM at the David and Lucile Packard Foundation and the administration of three presidents. She serves on several boards and is recipient of numerous awards, including a Congressional Citation for her advocacy of women and minorities.
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