Capitalizing on the Megatrends

By: Dr. Kohl

One of the most powerful books that I was assigned to read during graduate school at Cornell University a number of years ago was Megatrends, by John Naisbitt.  In his original book and later editions, Naisbitt was keen at identifying trends that would shape our businesses and lives.  Recently a number of people have asked me what megatrends will evolve in agriculture throughout the remainder of the decade.  Observations and interaction with players in the industry have allowed me to not only identify trends but more importantly see how individuals and businesses are empowered to capitalize on them.

A New Wave of Players

In the past two years of globetrotting with agricultural audiences, one observation comes to mind.  More young people under 40 years of age, women active in management and ownership, and minorities are attending educational events in agriculture.  These people see agriculture as an opportunity, rather than “you can’t do” or “why would you want to”, which is frequently a comment from the senior generation.  These groups in particular are empowered, lifelong learners, hungry for information and new ideas that can be implemented and executed.  They emphasize business, financial, and risk management skill sets in their education, and are very willing to be mentored or have a peer advisory group to assist them.  In seminars, this group brings a whole new energy to the table, with diverse experiences, education, and backgrounds.

Man Versus Machine

A major megatrend in business, particularly in agriculture, is automation replacing the human element.  This is a global megatrend that threatens employment opportunities across many disciplines.  A recent visit to a Canadian dairy producer found the implementation of robotic milkers.  This not only allowed him to cut labor costs, but provided a means to attract a highly skilled labor force, empowered by the data output to operate and manage the business.  Output quality skyrocketed, meeting the needs of a changing consumer marketplace, but implementing the technology also allows him flexibility for his family, and the opportunity to operate the business at a later stage of life. 

On two separate visits, an apple grower and processor and soybean producer and processor had both implemented automation because of high minimum wage requirements.  Again, quality increased; however, from a risk management standpoint, labor and personnel challenges, and possible legal issues were substantially curtailed.  Many segments of agriculture are automating not only as labor reduction, but increasing yields and efficiency, as well as a means to attract younger talent who enjoys working with and using technology.

A Global Mindset and Volatility

The phrase “think globally, act locally” has never been more relevant than it is today.  However, with a global mindset comes increased volatility in revenues and costs. The empowered agribusiness person sees greater volatility as an opportunity rather than just a challenge. An eye on emerging global trends, while focusing on sound business planning and risk management, provides the financial and management shock absorber as well as a means to capitalize on opportunity.

Domestic and Global Consumers

Relating to domestic and global consumers, the 50-100-70 rule applies.  This rule was drawn from a futuristic paper written by one of my former students at Cornell University, Jeff Simmons, President of Elanco. In the year 2050, the world’s population will require 100 percent more food, and 70 percent of this food must come from efficiency-enhancing technologies. He further discusses that access to safe, proven efficiency-enhancing technology requires protecting three rights.  The first right is ensuring the human right of access to affordable food. The second is protecting a consumer’s right to food choice. The third is creating a sustainable food production system, which is an environmental right. 

Agriculture in the future will be empowered by the fact that some will profit with operations that are local, natural, or organic, while for others the midsized traditional operation will work well, and for many, operating a large complex business often comprised of multiple family members or outside partners will lead to success.  The skill set needed regardless of the model is one that is observant, business-minded, and networked with key players inside and outside of the industry.

People

Is your business a talent magnet?  This question is being heard across the agriculture and agribusiness horizon. Developing a business culture that attracts and retains talented people, who are emotionally intelligent, regardless of the skill or the position, will be critical for financial success.  A new trend of advisory teams is emerging in the agricultural landscape.  They can take an average or good business to a great business.

While there are many other megatrends, these are five that are most prominent and are having a tremendous impact on North American and global agriculture.