IDB, WEF
- | April 26, 2024
Guillermo Foscarini and Guillermo Foscarini
Agribusiness presents a great opportunity to increase value creation in a sector that is two to three times more effective at reducing poverty than any other, including manufacturing and services.
Agribusiness presents a great opportunity to increase value creation in a sector that is two to three times more effective at reducing poverty than any other, including manufacturing and services, according to a report on the progress of the digital transformation of agribusiness in Latin America and the Caribbean (LAC).
There was something in the IDB Invest report, developed in collaboration with Accenture, that caught our eye: our region accounts for 18% of the world’s food production and only 10% of its economic value. These percentages indicate that digital technologies are the most efficient lever to address this key challenge for promoting development.
The agribusiness sector is increasing its efficiency and production factor because of digital technologies. Additionally, the trend towards more sustainable practices and the reduction of precious resources, such as land, water and labor, make it imperative to find solutions that allow agribusinesses in LAC to compete with their products in international markets.
The study suggests that the digital transformation of agribusinesses in the region is still at an early stage. Most agribusiness chains have some degree of digitalization, often supported by legacy systems that have been adapted to meet specific needs and lack integration capabilities with other systems or a strategic perspective.
In summary, while agribusinesses in the region understand the benefits of digital technologies, they are still looking to develop a visio for digital transformation.
Based on digital maturity assessments and interviews with senior executives, the report identifies the top six challenges that agribusinesses face on their digital transformation journey.
Internal challenges:
Organizations are not fully aligned, making it difficult to implement and reap the benefits of new digitally-driven initiatives.
Insufficient resources to carry out digital transformation initiatives.
External challenges:
Digital solutions help agribusinesses be more efficient, productive, safe and environmentally friendly. They can be categorized based on their digital maturity level as Basic, Enabling and Next-level. However, the adoption level depends on the agribusinesses’ unique needs.
Basic solutions help to manage effectively an organization’s resources and collect relevant data that can be leveraged to make better decisions.
Enabling solutions leverage the data generated along the value chain, helping organizations achieve higher levels of efficiency and productivity.
Next-level solutions can further boost an organization’s productivity, helping it gain a considerable competitive advantage and get ahead of emerging market trends.
Regardless of the digital maturity level, a long-term vision and an ambitious digital transformation mindset are key for agribusinesses to reap the benefits of digital solutions.
Although the digital transformation challenges are not simple and rely on multiple variables, the report recommends some steps that agribusinesses can take to boost their digital maturity level.
Although digital transformation is not a one-size-fits-all path, our study shows that it can help agribusinesses address the challenges and become key drivers of development in the region.
• Download the full report to learn more about these challenges and solutions.
• We have also created a course where you can learn how to apply proven best practices by global companies and make the most of digital transformation in your business.
• Access the report, the webinar we streamed about it and the on-line course here.
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