When disruptive technology disrupts absolutely

Has disruptive technology become the preserve of the industrialized world at the expense of the agriculture sector?

Ehtesham Shahid

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When a leading business school professor of strategy and technology management speaks on the subject of digital business transformation, he is bound to make compelling arguments, and illustrate them with examples. And if the subject happens to be the disruption of traditional business models, with the coming of age of digitalization, then it reaches another level.

That’s what I watched unfold earlier this week at a forum organized to discuss business transformation across the Gulf countries by virtue of diversification and digitalization. There were insights on the subject from academics, analyses of macro trends by economists and success stories shared by small to large businesses and semi-government organizations.

It became obvious that a lot of progress has been made in terms of the adoption of latest technologies. Yet, everyone agreed, that more needs to be done to fully benefit from the innovation that is continuously shaping the world around us. The term repeated the most during the session was disruptive technology – referring to a technology that displaces an established one and shakes up the industry.

The examples ranged from driverless cars to drones for parcel delivery and even microchips in shoes to help target market segments. The professor explained how business leaders can face the challenges of this “new world order” by building teams with fresh perspective. He laid emphasis on encouraging collaboration among team members and fostering innovation and creativity.

A huge number of those on the wrong side of the digital divide are yet to benefit from cutting edge technologies as they are too far down the value chain

Ehtesham Shahid

Preaching to the converted

There was hardly something you could disagree with, except one – isn’t this preaching to the converted? Governments and businesses around the world by and large realize the potential of technology, especially those of the disruptive kind. They are doing everything they can to tap this potential and make goods and services cost-effective, efficient and freely available.

The problem lies elsewhere i.e. the large areas where the real benefits of such technologies are yet to reach. What makes business sense – or reaches economies of scale – gets monetized fairly quickly and hence gets implemented. In the developed world, mechanisms are available to turn a blueprint into a feasible business plan or a policy that benefits the needy.

It is not quite the same everywhere else though and a huge number of those on the wrong side of the digital divide are yet to benefit from cutting edge technologies as they are too far down the value chain.

The discrepancy is brilliantly summed up in a paper produced by a capital markets advisory services firm. “Agriculture has been a ‘Cinderella’ sector of the economy for decades, marginalized for 100 years by growth of the industrial sector and then for the past 20-30 years by the extraordinary growth of the technology and financial services sector.

According to the Hardman Agribusiness paper, with estimates of peak human population continuing to rise, the existential importance of agriculture, has brought the sector back into political and economic focus. This is why more needs to be done to integrate latest technology with where it is needed the most.

The obvious question

Yet, I had to walk up to the professor to ask the obvious question. Why are these so-called disruptive technologies concentrated in areas that have already benefited from them, at least to some extent? Why isn’t more being done in the agriculture sector, for instance, where it is probably needed the most?

The professor indeed had an answer. “Of course it is happening. Drones are being used to catch tuna fish. Informed deforestation is being done based on data related to the condition of the tree etc.” Yet one could sense that this is few and far between.

What about access of these technologies at a large scale for the benefit of farmers? Wouldn’t that be “disruptive” in the real sense and benefit the poorest of the poor? Indeed, he said, this is needed and is also beginning to happen, “but not yet at an industrial scale”.

That explains it all. Agriculture may have given way to industrialization and then to services, but for anything to become beneficial at the mass level, it has to acquire “industrial” scale, not an agricultural one. There is no disrupting this cycle for the moment.
Ehtesham Shahid is Managing Editor at Al Arabiya English. For close to two decades he has worked as editor, correspondent, and business writer for leading publications, news wires and research organizations in India and the Gulf region. He loves to occasionally dabble with teaching and is collecting material for a book on unique tales of rural conflict and transformation from around the world. His twitter handle is @e2sham.

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