Internet of things equipment leads plans for investment plans in new technology

Of the businesses planning to invest in new technology in the next year, 37 per cent will spend on internet of things systems, CBA says.
Of the businesses planning to invest in new technology in the next year, 37 per cent will spend on internet of things systems, CBA says.

FARMERS are growing more adventurous with new technology with a sharp upswing in uptake of integrated digital systems forecast, but the daunting pace of change and poor connectivity are holding many agribusinesses back from investing in upgrades.

Regional innovation like efficient smart farm equipment generates $19 billion in additional earnings a year and one in two regional business are pursuing innovative initiatives, compared to 43 per cent of metro businesses, according to Commonwealth Bank of Australia’s (CBA) Equip report.

But one third of business are not exploring opportunities in new technology, according to a separate report CBA commission from Royal Melbourne Institute of Technology University.

CBA said farm innovation centres on fuel efficient and low carbon emission technology, like new model harvesters and tractors.

A previous report from Rabobank found farmers are not as enthusiastic about sensor based technology.

It said just 23 per cent of farmers used common production monitoring technology such as soil moisture probes, pump management, weather stations, drones, or livestock identification technology.

And from this modest cohort less than 70pc used the data to improve on-farm decisions while less than 40pc noted an improvement in profitability from the use of sensors.

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Despite the relatively slow uptake, with 52pc of business indicating they are not prepared for the impact of new technology, there are encouraging signs for new investment target advanced sensor technology.

Connected devices operating an internet of things (IoT) will be the largest area of new investment, and the average proportion of revenue invested in emerging technology is nearly 7pc, CBA said.

CBA found 37pc of agribusinesses planning to invest new technology will do so in IoT in the next 12 months, while the next most popular investment plans involve hybrid batteries, WIFI connected equipment, sensors and then drones.

But no surprise regional Australia’s tyranny of distance and sluggish communication infrastructure expansion is taking its toll.

Meanwhile, new technology is flourishing across the ditch, as New Zealand capitalises on widespread broadband and narrowband networks (see here and here).

It should be noted, government and industry are working on solutions to spread profit-boosting tech across more paddocks.

CBA executive general manager regional and agribusiness banking, Grant Cairns highlighted connectivity and familiarity with rapidly growing range of new solutions on the market.

“It’s no surprise the old issue of connectivity to digital networks is holding people back,” Mr Cairns said.

“And it still surprises me just how many people are aware of the technology, but there doesn't seem to be many who are aware of best practice on how to implement it.

He said family business succession would impact the rate of technology take-up over time, but for now it was corporate farm enterprises that find more room in their budget for technology.

“There is great interest from younger farmers who are coming back to family farm after their tertiary studies and they are the leaders in those businesses on innovation and technology adoption.

“But I would say family farmers are still mostly at stage of testing and trialling, rather than making big investments.

“You see that more at a corporate level right now, they’ve got money to test and trial new things.

“That contrasts to a family business, which typically have a closer handle on the land and day-to-day farm management. They will apply innovation incrementally, rather than making big game changing innovations.”